2014 Harvard Business Review Surveyed More Than Seven Thousand People
Reprint: R1007L The notion that companies must go above and across in their customer service activities is so entrenched that managers rarely examine it. But a written report of more than than 75,000 people interacting with contact-center representatives or using self-service channels institute that over-the-tiptop efforts brand little departure: All customers really want is a simple, quick solution to their problem. The Corporate Executive Board's Dixon and colleagues draw v loyalty-building tactics that every company should prefer: Reduce the demand for repeat calls by anticipating and dealing with related downstream issues; arm reps to address the emotional side of customer interactions; minimize the need for customers to switch service channels; elicit and employ feedback from disgruntled or struggling customers; and focus on problem solving, non speed. The authors too introduce the Client Try Score and evidence that information technology is a better predictor of loyalty than client satisfaction measures or the Net Promoter Score. And they brand available to readers a related diagnostic tool, the Client Effort Audit. They conclude that nosotros are reaching a tipping point that may presage the cease of the telephone as the main channel for service interactions—and that managers therefore accept an opportunity to rebuild their service organizations and put reducing customer attempt firmly at the cadre, where it belongs.
The Idea in Cursory
Conventional wisdom holds that to increase loyalty, companies must "delight" customers by exceeding service expectations. A big-scale report of contact-centre and self-service interactions, however, finds that what customers really want (simply rarely get) is only a satisfactory solution to their service issue.
Reps should focus on reducing the endeavour customers must brand. Doing so increases the likelihood that they will render to the company, increase the amount they spend at that place, and speak positively (and not negatively) most it—in other words, that they'll become 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 need for customers to switch service channels, heed to and acquire from disgruntled customers, and focus on problem solving, non speed.
The thought that companies must "please" their customers has go so entrenched that managers rarely examine it. Only ask yourself this: How frequently does someone patronize a company specifically because of its over-the-elevation service? You tin can probably think of a few examples, such as the traveler who makes a point of returning to a hotel that has a particularly attentive staff. But yous probably can't come up with many.
Now enquire yourself: How often do consumers cutting companies loose because of terrible service? All the time. They verbal 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 cleaners who don't understand what "blitz gild" means.
Consumers' impulse to punish bad service—at least more readily than to reward delightful service—plays out dramatically in both phone-based and cocky-service interactions, which are nigh companies' largest client service channels. In those settings, our enquiry shows, loyalty has a lot more to practice with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the service experience might be. Still near companies accept 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 Quango, a division of the Corporate Executive Board, conducted a study of more than 75,000 people who had interacted over the phone with contact-center representatives or through self-service channels such as the spider web, voice prompts, chat, and e-mail service. Nosotros also held hundreds of structured interviews with client service leaders and their functional counterparts in large companies throughout the earth. (For more than detail, meet the sidebar "Near the Research.") Our research addressed 3 questions:
- How of import is customer service to loyalty?
- Which client service activities increase loyalty, and which don't?
- Can companies increase loyalty without raising their customer service operating costs?
Two critical findings emerged that should bear on every visitor's customer service strategy. Beginning, delighting customers doesn't build loyalty; reducing their effort—the work they must do to get their problem solved—does. Second, interim deliberately on this insight can help ameliorate customer service, reduce customer service costs, and decrease client churn.
Trying Also Difficult
According to conventional wisdom, customers are more loyal to firms that go above and beyond. Just our research shows that exceeding their expectations during service interactions (for case, by offer a refund, a costless product, or a free service such as expedited shipping) makes customers only marginally more 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 have a wall plastered with letters and e-mails from customers praising the extra work that service reps went to on their behalf? Indeed, 89 of the 100 customer service heads nosotros surveyed said that their master strategy is to exceed expectations. Simply despite these Herculean—and costly—efforts, 84% of customers told the states that their expectations had not been exceeded during their most recent interaction.
One reason for the focus on exceeding expectations is that fully 80% of customer service organizations employ customer satisfaction (CSAT) scores every bit the primary metric for gauging the customer's feel. And managers oftentimes assume that the more satisfied customers are, the more loyal they will be. But, similar others earlier us (most notably Fred Reichheld), we find trivial relationship between satisfaction and loyalty. Twenty percentage of the "satisfied" customers in our study said they intended to leave the visitor in question; 28% of the "dissatisfied" customers intended to stay.
The picture gets bleaker yet. Although customer service can do piffling to increase loyalty, information technology can (and typically does) practice a keen bargain to undermine information technology. Customers are four times more likely to leave a service interaction disloyal than loyal.
Another mode to think nigh the sources of client loyalty is to imagine 2 pies—one containing things that bulldoze loyalty and the other containing things that drive disloyalty. The loyalty pie consists largely of slices such equally product quality and brand; the slice for service is quite pocket-sized. Only service accounts for near of the disloyalty pie. We buy from a company because information technology delivers quality products, great value, or a compelling brand. We get out i, mostly, because it fails to deliver on customer service.
Make It Piece of cake
Let's return to the key implication of our research: When it comes to service, companies create loyal customers primarily by helping them solve their bug chop-chop and easily. Armed with this understanding, nosotros can fundamentally modify the emphasis of client service interactions. Framing the service claiming in terms of making information technology easy for the client tin can exist highly illuminating, fifty-fifty liberating, especially for companies that have been struggling to please. Telling frontline reps to exceed customers' expectations is apt to yield confusion, wasted time and effort, and plush giveaways. Telling them to "make it like shooting fish in a barrel" gives them a solid foundation for action.
Telling reps to exceed customers' expectations is apt to yield confusion, wasted time and try, and costly giveaways.
What exactly does "make it piece of cake" mean? Simply: Remove obstacles. We identified several recurring complaints well-nigh service interactions, including three that focus specifically on customer effort. Customers resent having to contact the company repeatedly (or be transferred) to get an upshot resolved, having to repeat information, and having to switch from one service channel to another (for instance, needing to call subsequently trying unsuccessfully to solve a problem through the website). Well over one-half the customers we surveyed reported encountering difficulties of this sort. Companies can reduce these types of effort and measure out the effects with a new metric, the Customer Effort Score (CES), which assigns ratings from one to 5, with v representing very high effort. (For details, encounter the sidebar "Introducing the Client Effort Score.")
We evaluated the predictive power of iii metrics—customer satisfaction (CSAT), the Cyberspace Promoter Score (NPS), and a new metric we developed, the Customer Effort Score (CES)—on customer loyalty, defined as customers' intention to go on doing business organisation with the company, increase the amount they spend, or spread positive (and not negative) give-and-take of mouth. Not surprisingly, CSAT was a poor predictor. NPS proved amend (and has been shown to be a powerful gauge at the visitor level). CES outperformed both in client service interactions.
CES is measured by asking a single question: "How much effort did you personally have to put forth to handle your request?" It is scored on a calibration from 1 (very depression effort) to v (very high effort). Client service organizations can use CES, along with operational measurements of such things equally echo calls, transfers, and channel switching, to conduct an "effort audit" and improve areas where customers are expending undue energy. Many of the companies we work with use CES to intervene with customers at chance of defecting.
We found the predictive ability of CES to be stiff indeed. Of the customers who reported low effort, 94% expressed an intention to repurchase, and 88% said they would increase their spending. Simply 1% said they would speak negatively about the company. Conversely, 81% of the customers who had a hard time solving their bug reported an intention to spread negative discussion of rima oris.
Nosotros believe that the superior performance of CES in the service surroundings derives from two factors: its ability to capture customer impressions at the transactional level (as opposed to NPS, which captures more than-holistic impressions of a company) and its power to capture negative experiences also as positive ones.
A related diagnostic tool, the Customer Endeavor Audit, can exist downloaded at http://world wide web.executiveboard.com/salesandmarketing/CCC-CustomerEffortAudit.html.
During our written report, we saw many companies that had successfully implemented low-customer-try approaches to service. Following are 5 of the tactics they used—tactics that every visitor should adopt.
1. Don't simply resolve the current issue—caput off the next one.
By far the biggest cause of excessive customer effort is the need to call back. Many companies believe they're performing well in this regard, because they have stiff first-contact-resolution (FCR) scores. (See the sidebar "What Should You Measure?") However, 22% of repeat calls involve downstream issues related to the problem that prompted the original call, even if that problem itself was fairly addressed the first time effectually. Although companies are well equipped to anticipate and "forrard-resolve" these issues, they rarely do so, mostly because they're overly focused on managing call time. They need to realize that customers gauge the effort they expend not just in terms of how an individual call is handled but besides according to how the company manages evolving service events, such as taking out a mortgage or setting upwards cable service, that typically require several calls.
Bell Canada met this challenge by mining its client interaction data to understand the relationships among various customer issues. Using what it learned nearly "consequence clusters," Bong began training its reps not merely to resolve the client's primary result merely besides to conceptualize 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 company's service reps now give a quick tutorial to customers nigh key aspects of the characteristic before hanging up. This sort of forward resolution enabled Bong to reduce its "calls per event" by 16% and its customer churn past 6%. For complex downstream issues that would accept excessive fourth dimension to address in the initial call, the visitor sends follow-upwards due east-mails—for case, explaining how to interpret the showtime billing statement. Bell Canada is currently weaving this issue-prediction approach into the call-routing experience for the customer.
Fidelity uses a like concept on its self-service website, offering "suggested next steps" to customers executing sure transactions. Ofttimes customers who change their accost online phone call later to social club new checks or enquire about homeowners' or renters' insurance; therefore, Fidelity directs them to these topics before they get out the site. Xx-five percentage of all self-service transactions on Allegiance's website are now generated by similar "next upshot" prompts, and calls per household have dropped by 5% since the policy began.
2. Arm reps to accost the emotional side of client interactions.
Twenty-four percent of the repeat calls in our study stemmed from emotional disconnects between customers and reps—situations in which, for instance, the customer didn't trust the rep's information or didn't similar the answer given and had the impression that the rep was merely hiding backside general company policy. With some bones instruction, reps tin eliminate many interpersonal issues and thereby reduce echo calls.
One Britain-based mortgage company teaches its reps how to listen for clues to a customer's 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 rest of detail and speed appropriate for the personality blazon diagnosed. This strategy has reduced echo calls by a remarkable 40%.
1 company teaches its reps how to mind for clues to a customer's personality type and tailor their responses appropriately.
The lighting company Osram Sylvania sifts through its phone call transcripts to pinpoint words that tend to trigger negative reactions and drive repeat calls—words like "can't," "won't," and "don't"—and coaches its reps on alternate phrasing. Instead of proverb "Nosotros don't have that detail in stock," a rep might explain, "Nosotros'll accept stock availability for that particular in two weeks." Through such simple changes in linguistic communication, Osram Sylvania has lowered its Customer Effort Score from 2.8 to two.2—18.5% below the average nosotros see for B2B companies.
LoyaltyOne, the operator of the AIR MILES reward program, teaches reps to probe for information they tin can use to better 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 of import business meeting and use this fact to put a positive spin on the need to book a different flight. The rep might say, "It sounds similar this is something you tin't be late for. The Mon morning flying isn't available, but with potential delays, you'd be cutting information technology shut anyhow. I'd recommend a Sunday evening flight so that you don't risk missing your meeting." This strategy has resulted in an xi% decrease in repeat contacts.
iii. Minimize aqueduct switching by increasing self-service channel "stickiness."
Many companies ask, "How can nosotros get our customers to go to our self-service website?" Our research shows that in fact many customers have already been there: Fifty-7 pct of inbound calls came from customers who went to the website outset. Despite their want to have customers turn to the spider web, companies tend to resist making improvements to their sites, assuming that only heavy spending and technology upgrades will induce customers to stay there. (And even when costly upgrades are fabricated, they oft testify counterproductive, because companies tend to add complicated and confusing features in an endeavor to keep up with their competitors.)
Customers may become overwhelmed by the profusion of self-service channels—interactive vocalism response, websites, e-mail, chat, online support communities, social media such as Facebook and Twitter, so on—and frequently lack the power to make the best choice for themselves. For case, technically unsophisticated users, left to their own devices, may go to highly technical online support communities. As a effect, customers may expend a lot of try billowy between channels, just to choice up the phone in the cease.
Cisco Consumer Products at present guides customers to the channel it determines will suit them best, on the basis of segment-specific hypotheses generated by the company's customer feel squad. Language on the site's dwelling page nudges applied science gurus toward the online support community; those with less technical expertise are steered toward noesis articles past the promise of simple step-by-step instructions. The company eliminated the e-mail choice, having found that it didn't reliably reduce customer effort. (Our research shows that 2.iv e-mails, on average, are needed to resolve an consequence, compared with 1.7 calls.) When Cisco Consumer Products began this programme, in 2006, only xxx% of its client contacts were handled through self-service; the figure today is 84%, and the volume of calls has dropped accordingly.
Travelocity reduced customer effort just by improving the help section of its website. It had learned that many customers who sought solutions in that location were stymied and resorted to the phone. By eliminating jargon, simplifying the layout, and otherwise improving readability, the company doubled the use of its "top searches" and decreased calls by 5%.
4. Apply feedback from disgruntled or struggling customers to reduce client try.
Many companies conduct postcall surveys to measure internal performance; however, they may fail to use the data they collect to acquire from unhappy customers. But consider National Australia Group's approach. The company has frontline reps specifically trained to call customers who accept given it low marks. The reps focus get-go on resolving the customers' issues, just they also collect feedback that informs service improvements. The company's issue-resolution rate has risen by 31%.
Such learning and intervention isn't limited to the phone aqueduct. Some companies monitor online beliefs in lodge to identify customers who are struggling. EarthLink has a defended team of reps who step in every bit 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 noesis middle or clicked on the "Contact U.s.a." link. This program has reduced calls by 8%.
5. Empower the front line to deliver a low-attempt experience.
Incentive systems that value speed over quality may pose the single greatest bulwark to reducing customer effort. Most customer service organizations nevertheless 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's experience like shooting fish in a barrel.
An Australian telecommunications provider eliminated all productivity metrics from its frontline reps' performance scorecards. Although handle time increased slightly, repeat calls brutal by 58%. Today the visitor evaluates its reps solely on the footing of brusk, straight interviews with customers, essentially asking them if the service they received met their needs.
Freed to focus on reducing customer endeavour, frontline reps tin can easily pick low-hanging fruit. Ameriprise Financial, for example, asks its customer service reps to capture every instance in which they are forced to tell a client no. While auditing the "no's," the company establish many legacy policies that had been outmoded past regulatory changes or organization or process improvements. During its first year of "capturing the no's," Ameriprise modified or eliminated 26 policies. It has since expanded the program by request frontline reps to come up upwardly with other procedure efficiencies, generating $ane.2 million in savings as a result.
Some companies have gone even further, making low customer effort the cornerstone of their service value suggestion and branding. Southward Africa's Nedbank, for instance, instituted an "AskOnce" promise, which guarantees that the rep who picks up the phone will own the customer's result from start to finish.
The immediate mission is clear: Corporate leaders must focus their service organizations on mitigating disloyalty by reducing client attempt. But service managers fretting almost how to reengineer their contact centers—departments built on a foundation of delighting the customer—should consider this: A massive shift is nether style in terms of customers' service preferences. Although nearly companies believe that customers overwhelmingly prefer alive phone service to cocky-service, our well-nigh contempo data show that customers are, in fact, indifferent. This is an of import tipping signal and probably presages the end of phone-based service as the master channel for customer service interactions. For enterprising service managers, it presents an opportunity to rebuild their organizations effectually self-service and, in the process, to put reducing customer effort firmly at the cadre, where information technology belongs.
A version of this commodity appeared in the July–August 2010 issue of Harvard Business Review.
Source: https://hbr.org/2010/07/stop-trying-to-delight-your-customers
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