Make an Effort All Over Again
Reprint: R1007L
The notion that companies must go above and across in their customer service activities is so entrenched that managers rarely examine it. Just a report of more than than 75,000 people interacting with contact-center representatives or using self-service channels institute that over-the-height efforts brand niggling difference: All customers really desire is a simple, quick solution to their trouble.
The Corporate Executive Board's Dixon and colleagues depict 5 loyalty-building tactics that every company should adopt: Reduce the need for repeat calls past anticipating and dealing with related downstream bug; arm reps to address the emotional side of client interactions; minimize the need for customers to switch service channels; elicit and apply feedback from disgruntled or struggling customers; and focus on trouble solving, not speed.
The authors also introduce the Customer Try Score and testify that information technology is a better predictor of loyalty than customer satisfaction measures or the Cyberspace Promoter Score. And they brand available to readers a related diagnostic tool, the Client Effort Audit. They conclude that we are reaching a tipping betoken that may presage the end of the telephone as the main aqueduct for service interactions—and that managers therefore take an opportunity to rebuild their service organizations and put reducing customer effort firmly at the core, where it belongs.
The Idea in Brief
Conventional wisdom holds that to increase loyalty, companies must "please" customers by exceeding service expectations. A large-calibration study of contact-heart and cocky-service interactions, nevertheless, finds that what customers really want (just rarely become) is simply a satisfactory solution to their service issue.
Reps should focus on reducing the endeavour customers must make. Doing then increases the likelihood that they volition return to the company, increase the amount they spend there, and speak positively (and non negatively) about it—in other words, that they'll go more loyal.
To run into customers' expectations, reps should anticipate and head off the need for follow-up calls, address the emotional side of interactions, minimize the demand for customers to switch service channels, heed to and acquire from disgruntled customers, and focus on trouble solving, not speed.
The idea that companies must "delight" their customers has become so entrenched that managers rarely examine it. But ask yourself this: How often does someone patronize a company specifically considering of its over-the-top service? Yous can probably recall of a few examples, such as the traveler who makes a point of returning to a hotel that has a specially attentive staff. Just y'all probably can't come upwardly with many.
Now ask yourself: How often exercise consumers cutting companies loose because of terrible service? All the time. They exact revenge on airlines that lose their bags, cable providers whose technicians continue them waiting, cellular companies whose reps put them on permanent hold, and dry out cleaners who don't understand what "blitz order" means.
Consumers' impulse to punish bad service—at to the lowest degree more readily than to reward delightful service—plays out dramatically in both telephone-based and self-service interactions, which are most companies' largest customer service channels. In those settings, our enquiry shows, loyalty has a lot more to do with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the service experience might be. Notwithstanding most companies take failed to realize this and pay dearly in terms of wasted investments and lost customers.
To examine the links between customer service and loyalty, the Customer Contact Council, a partitioning of the Corporate Executive Board, conducted a study of more 75,000 people who had interacted over the phone with contact-eye representatives or through self-service channels such as the web, voice prompts, chat, and email. We also held hundreds of structured interviews with customer service leaders and their functional counterparts in large companies throughout the globe. (For more than detail, encounter the sidebar "Well-nigh the Inquiry.") Our research addressed 3 questions:
- How important is customer service to loyalty?
- Which customer service activities increase loyalty, and which don't?
- Tin companies increment loyalty without raising their client service operating costs?
Ii disquisitional findings emerged that should bear upon every visitor's customer service strategy. First, delighting customers doesn't build loyalty; reducing their effort—the work they must do to get their trouble solved—does. Second, acting deliberately on this insight tin can assistance improve client service, reduce customer service costs, and decrease client churn.
Trying Too Difficult
According to conventional wisdom, customers are more than loyal to firms that get above and beyond. But our research shows that exceeding their expectations during service interactions (for example, by offering a refund, a gratis product, or a free service such as expedited aircraft) makes customers only marginally more than loyal than simply meeting their needs.
For leaders who cut their teeth in the service department, this is an alarming finding. What contact center doesn't accept a wall plastered with letters and eastward-mails from customers praising the extra work that service reps went to on their behalf? Indeed, 89 of the 100 customer service heads we surveyed said that their chief strategy is to exceed expectations. But despite these Herculean—and costly—efforts, 84% of customers told us that their expectations had non been exceeded during their almost recent interaction.
One reason for the focus on exceeding expectations is that fully 80% of customer service organizations use customer satisfaction (CSAT) scores as the primary metric for gauging the customer'southward experience. And managers oftentimes assume that the more satisfied customers are, the more loyal they will exist. But, like others before us (about notably Fred Reichheld), we find trivial relationship between satisfaction and loyalty. Twenty per centum of the "satisfied" customers in our written report said they intended to leave the company in question; 28% of the "dissatisfied" customers intended to stay.
The picture gets bleaker nonetheless. Although customer service tin do lilliputian to increment loyalty, information technology can (and typically does) do a great bargain to undermine it. Customers are four times more probable to get out a service interaction disloyal than loyal.
Another way to think about the sources of customer loyalty is to imagine 2 pies—one containing things that drive loyalty and the other containing things that drive disloyalty. The loyalty pie consists largely of slices such as product quality and brand; the slice for service is quite small-scale. But service accounts for most of the disloyalty pie. Nosotros buy from a company because information technology delivers quality products, dandy value, or a compelling make. We get out one, more often than not, considering information technology fails to deliver on client service.
Make it Like shooting fish in a barrel
Permit's return to the primal implication of our inquiry: When it comes to service, companies create loyal customers primarily by helping them solve their problems quickly and easily. Armed with this understanding, nosotros can fundamentally alter the emphasis of customer service interactions. Framing the service challenge in terms of making information technology like shooting fish in a barrel for the customer can exist highly illuminating, fifty-fifty liberating, especially for companies that take been struggling to please. Telling frontline reps to exceed customers' expectations is apt to yield confusion, wasted fourth dimension and effort, and costly giveaways. Telling them to "brand it easy" gives them a solid foundation for action.
Telling reps to exceed customers' expectations is apt to yield confusion, wasted fourth dimension and effort, and costly giveaways.
What exactly does "make it easy" hateful? Simply: Remove obstacles. Nosotros identified several recurring complaints about service interactions, including 3 that focus specifically on client effort. Customers resent having to contact the company repeatedly (or be transferred) to get an issue resolved, having to repeat information, and having to switch from one service aqueduct to another (for instance, needing to telephone call after trying unsuccessfully to solve a problem through the website). Well over half the customers nosotros surveyed reported encountering difficulties of this sort. Companies can reduce these types of endeavor and measure out the effects with a new metric, the Customer Effort Score (CES), which assigns ratings from 1 to v, with five representing very high effort. (For details, see the sidebar "Introducing the Customer Attempt Score.")
We evaluated the predictive power of iii metrics—customer satisfaction (CSAT), the Net Promoter Score (NPS), and a new metric we developed, the Client Effort Score (CES)—on customer loyalty, defined every bit customers' intention to go along doing business concern with the company, increase the amount they spend, or spread positive (and not negative) word of rima oris. Not surprisingly, CSAT was a poor predictor. NPS proved ameliorate (and has been shown to exist a powerful guess at the company level). CES outperformed both in customer service interactions.
CES is measured by request a single question: "How much effort did you personally have to put forth to handle your request?" It is scored on a scale from ane (very low effort) to 5 (very loftier effort). Customer service organizations can use CES, along with operational measurements of such things as repeat calls, transfers, and aqueduct switching, to bear an "effort audit" and meliorate areas where customers are expending undue energy. Many of the companies we work with use CES to intervene with customers at risk of defecting.
We found the predictive power of CES to be stiff indeed. Of the customers who reported depression effort, 94% expressed an intention to repurchase, and 88% said they would increase their spending. Simply i% said they would speak negatively most the company. Conversely, 81% of the customers who had a difficult time solving their problems reported an intention to spread negative discussion of mouth.
We believe that the superior performance of CES in the service environment derives from two factors: its ability to capture customer impressions at the transactional level (equally opposed to NPS, which captures more-holistic impressions of a company) and its power to capture negative experiences as well as positive ones.
A related diagnostic tool, the Customer Effort Audit, tin be downloaded at http://www.executiveboard.com/salesandmarketing/CCC-CustomerEffortAudit.html.
During our study, we saw many companies that had successfully implemented low-client-attempt approaches to service. Following are v of the tactics they used—tactics that every visitor should prefer.
one. Don't just resolve the current issue—head off the side by side i.
By far the biggest cause of excessive customer try is the need to telephone call dorsum. Many companies believe they're performing well in this regard, considering they take strong commencement-contact-resolution (FCR) scores. (Meet the sidebar "What Should You Measure?") Notwithstanding, 22% of repeat calls involve downstream issues related to the problem that prompted the original call, even if that problem itself was adequately addressed the showtime time effectually. Although companies are well equipped to anticipate and "forward-resolve" these problems, they rarely do so, generally because they're overly focused on managing phone call time. They need to realize that customers approximate the attempt they expend not just in terms of how an individual call is handled merely likewise according to how the company manages evolving service events, such as taking out a mortgage or setting upwards cable service, that typically crave several calls.
Bell Canada met this challenge by mining its client interaction data to understand the relationships among various customer issues. Using what information technology learned virtually "result clusters," Bell began training its reps non only to resolve the client's primary issue but also to anticipate and address mutual downstream issues. For case, a high percentage of customers who ordered a particular feature called back for instructions on using it. The visitor'due south service reps now give a quick tutorial to customers nearly key aspects of the feature earlier hanging up. This sort of forward resolution enabled Bell to reduce its "calls per event" by sixteen% and its client churn past 6%. For circuitous downstream bug that would take excessive time to address in the initial call, the company sends follow-upwardly e-mails—for case, explaining how to interpret the first billing statement. Bell Canada is currently weaving this issue-prediction approach into the telephone call-routing experience for the customer.
Fidelity uses a like concept on its self-service website, offer "suggested side by side steps" to customers executing sure transactions. Often customers who change their address online phone call later to order new checks or ask well-nigh homeowners' or renters' insurance; therefore, Fidelity directs them to these topics earlier they leave the site. Twenty-five per centum of all cocky-service transactions on Fidelity's website are now generated by similar "side by side issue" prompts, and calls per household have dropped by 5% since the policy began.
two. Arm reps to address the emotional side of customer interactions.
20-four percent of the repeat calls in our report stemmed from emotional disconnects betwixt customers and reps—situations in which, for case, the client didn't trust the rep's information or didn't like the respond given and had the impression that the rep was just hiding backside general visitor policy. With some bones instruction, reps can eliminate many interpersonal issues and thereby reduce repeat calls.
One Britain-based mortgage company teaches its reps how to heed for clues to a customer'due south personality type. They quickly appraise whether they are talking to a "controller," a "thinker," a "feeler," or an "entertainer," and tailor their responses accordingly, offering the customer the remainder of particular and speed appropriate for the personality type diagnosed. This strategy has reduced repeat calls by a remarkable 40%.
Ane company teaches its reps how to heed for clues to a customer'south personality type and tailor their responses accordingly.
The lighting company Osram Sylvania sifts through its call transcripts to pinpoint words that tend to trigger negative reactions and drive echo calls—words similar "can't," "won't," and "don't"—and coaches its reps on alternate phrasing. Instead of maxim "We don't accept that particular in stock," a rep might explain, "Nosotros'll take stock availability for that item in two weeks." Through such simple changes in language, Osram Sylvania has lowered its Customer Effort Score from ii.8 to 2.two—xviii.v% below the boilerplate nosotros run across for B2B companies.
LoyaltyOne, the operator of the AIR MILES advantage programme, teaches reps to probe for information they can utilize to improve position potentially disappointing outcomes. A rep dealing with a client who wants to redeem miles for an unavailable flight might learn that the caller is traveling to an important business meeting and use this fact to put a positive spin on the demand to book a unlike flying. The rep might say, "It sounds like this is something y'all tin't exist belatedly for. The Monday morning flying isn't available, but with potential delays, you'd be cutting it close anyway. I'd recommend a Dominicus evening flight so that y'all don't run a risk missing your meeting." This strategy has resulted in an 11% decrease in echo contacts.
three. Minimize channel switching by increasing self-service aqueduct "stickiness."
Many companies inquire, "How tin we get our customers to get to our self-service website?" Our research shows that in fact many customers accept already been in that location: Fifty-seven percent of inbound calls came from customers who went to the website first. Despite their desire to accept customers plow to the web, companies tend to resist making improvements to their sites, bold that merely heavy spending and technology upgrades will induce customers to stay there. (And even when costly upgrades are made, they often prove counterproductive, because companies tend to add complicated and disruptive features in an attempt to go along up with their competitors.)
Customers may become overwhelmed by the profusion of self-service channels—interactive vocalism response, websites, e-mail, conversation, online support communities, social media such equally Facebook and Twitter, and so on—and often lack the power to make the best pick for themselves. For example, technically unsophisticated users, left to their own devices, may go to highly technical online back up communities. As a upshot, customers may expend a lot of attempt bouncing betwixt channels, merely to pick up the phone in the end.
Cisco Consumer Products now guides customers to the aqueduct information technology determines will suit them best, on the basis of segment-specific hypotheses generated by the company'due south customer experience team. Language on the site's habitation page nudges applied science gurus toward the online support community; those with less technical expertise are steered toward knowledge articles by the promise of simple step-past-step instructions. The company eliminated the eastward-mail option, having found that it didn't reliably reduce client effort. (Our inquiry shows that two.4 east-mails, on average, are needed to resolve an issue, compared with 1.7 calls.) When Cisco Consumer Products began this program, in 2006, only xxx% of its customer contacts were handled through cocky-service; the figure today is 84%, and the volume of calls has dropped accordingly.
Travelocity reduced customer effort just by improving the assist section of its website. Information technology had learned that many customers who sought solutions there were stymied and resorted to the phone. By eliminating jargon, simplifying the layout, and otherwise improving readability, the visitor doubled the use of its "top searches" and decreased calls by 5%.
4. Utilise feedback from disgruntled or struggling customers to reduce customer effort.
Many companies conduct postcall surveys to measure internal performance; however, they may neglect to employ the information they collect to learn from unhappy customers. Merely consider National Australia Group'due south approach. The company has frontline reps specifically trained to call customers who have given it low marks. The reps focus beginning on resolving the customers' problems, but they likewise collect feedback that informs service improvements. The company's issue-resolution rate has risen past 31%.
Such learning and intervention isn't limited to the phone channel. Some companies monitor online beliefs in guild to identify customers who are struggling. EarthLink has a dedicated team of reps who step in as needed with clients on its self-service website—for example, by initiating a chat with a customer who has spent more than 90 seconds in the knowledge middle or clicked on the "Contact Us" link. This program has reduced calls by 8%.
v. Empower the front end line to deliver a low-effort experience.
Incentive systems that value speed over quality may pose the single greatest barrier to reducing customer try. Most customer service organizations still emphasize productivity metrics such as average handle time when assessing rep operation. They would be better off removing the productivity "governors" that get in the mode of making the customer'due south feel easy.
An Australian telecommunication provider eliminated all productivity metrics from its frontline reps' performance scorecards. Although handle time increased slightly, repeat calls savage by 58%. Today the company evaluates its reps solely on the basis of curt, direct interviews with customers, essentially asking them if the service they received met their needs.
Freed to focus on reducing customer attempt, frontline reps tin can easily choice low-hanging fruit. Ameriprise Financial, for example, asks its customer service reps to capture every example in which they are forced to tell a client no. While auditing the "no'south," the company found many legacy policies that had been outmoded by regulatory changes or arrangement or process improvements. During its first year of "capturing the no'southward," Ameriprise modified or eliminated 26 policies. It has since expanded the program by asking frontline reps to come up with other process efficiencies, generating $1.2 1000000 in savings as a result.
Some companies have gone even further, making low client effort the cornerstone of their service value proposition and branding. S Africa'due south Nedbank, for instance, instituted an "AskOnce" hope, which guarantees that the rep who picks up the phone volition own the customer's issue from start to finish.
The firsthand mission is clear: Corporate leaders must focus their service organizations on mitigating disloyalty by reducing customer effort. But service managers fretting virtually how to reengineer their contact centers—departments built on a foundation of delighting the client—should consider this: A massive shift is under way in terms of customers' service preferences. Although most companies believe that customers overwhelmingly prefer alive phone service to self-service, our most recent data testify that customers are, in fact, indifferent. This is an of import tipping point and probably presages the end of phone-based service equally the primary channel for customer service interactions. For enterprising service managers, it presents an opportunity to rebuild their organizations around self-service and, in the process, to put reducing client effort firmly at the core, where it belongs.
A version of this article appeared in the July–Baronial 2010 issue of Harvard Business Review.
Source: https://hbr.org/2010/07/stop-trying-to-delight-your-customers
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