July 7, 2015
Earlier this month, I read the book The Effortless Experience, by Matthew Dixon and Nick Toman. The authors compiled some fantastic, real world research that challenged conventional thinking when it comes to the customer experience and customer service. The book provides data challenging traditional customer service and its effect on customer spending, loyalty, and recommendations.
The research behind the book was compiled by surveying over 125,000 customers, 5,000 customer service reps, and 100 companies. Since it was one of the best books I have read on this subject, I wanted to review some of the main points and ideas introduced in the book.
Above and Beyond Customer Service Doesn’t Pay
After surveying over 125,000 customers, the authors found that “wow” customer service experiences don’t increase loyalty any more than just meeting customer expectations, but when an organization doesn’t meet the customer’s expectations it almost always creates disloyalty.
Basic service, where you just meet customer expectations, doesn’t create increased loyalty. There is very little difference in loyalty creation between a customer that has been delighted and a customer that just received basic service. As you can see from the graph, the customer loyalty curve plateaued between a customer that was wowed and a customer that was just provided basic service that met expectations.
Service Interactions That Require Customer Effort Drive Disloyalty
The second finding was one of the most interesting. Generally speaking, when a customer reaches out to an organization for an issue or inquiry, customer loyalty falls. Actually, customers that initiate an interaction to the contact center are almost 4 times less loyal towards that organization.
Some of the biggest drivers that cause dissatisfaction are:
- multiple transfers
- repeating information
- incorrect information
- multiple interactions
- switching channels
- complicated processes
Reducing Effort by the Customer Mitigates Disloyalty
94% of customers that have “low effort” interactions are more likely to buy from the company again. Companies should focus on playing defense and providing a low effort experience instead of delighting the customer. The main point is, if a company makes it easy to resolve a customer issues, it will increase loyalty significantly.
The 4 main pillars to create an effortless experience are:
- Channel stickiness – Provide an easy process to resolve issues without switching channels. If you provide an IVR or website self-service option, make sure that it works correctly and the customer doesn’t have to initiate another interaction to resolve the issue.
- Keep it simple – When explaining solutions to customers, whether via the web or phone, keep the wording as simple as possible.
- Avoid future issues – Train customer reps to foresee future issues and prevent them. For example, when I called my coffee machine company to request a part replacement, they sent two parts because they had a high rate of failure when customers tried to install that part the first time, and usually called back requesting another part.
- Experience Engineering – Train agents to use language that makes the interaction easier. Use advocacy, and take a position of active support that makes the customer feel that the service rep is on their side. Use positive language, and use terms that prevent negative reactions. These are strategies rooted in basic psychology that make the customer feel important.
Try to create a customer perception that the interaction was effortless. For example, a major airline that had cancelled all flights due to inclement weather generated a lot of angry customer calls. One airline found that when receiving calls from customers trying to book another flight, instead of telling them right away that there is no flight available for 12 hours, they would put the customer on hold for 2-3 minutes and then get back on the phone and tell the customer that after trying all possible flights they couldn’t find another flight until later that day. By creating the perception that they tried to search for a flight, even though they knew that there weren’t any flights available, the customer perceived the outcome as a better experience than an immediate answer.
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Matt Dixon, is a managing director of strategic research at Corporate Executive Board. He has an unrelenting drive to find the answers to questions senior executives often take for granted. For more than 15 years, Matt has worked to uncover truths behind many pillars of conventional wisdom that is costing companies dearly in terms of wasted money and lost market opportunity.