Customer service and customer loyalty

Companies love touting stories of when their customer service staff have gone above and beyond the call of duty to delight a customer in resolving what might have otherwise been a negative situation.

But a new book postulates that not only are strategies that aim to the delight the customer difficult to implement, they are also unlikely to materially improve a customer’s loyalty. An easier path to repeat business may simply be to make customers happy by reducing the effort they are required to make when things go wrong.

That is the finding of CEB's new book The Effortless Experience, co-authored by senior director and executive advisor for CEB, Rick DeLisi, with Matt Dixon and Nick Toman. Based on five years’ research by DeLisi and CEB, The Effortless Experience demonstrates how delighting the customer only works in a small percentage of instances.

“Not only is that not sustainable, it’s not even achievable,” DeLisi says. “First of all, it doesn’t happen that often. Secondly, when it does happen, it invariably costs the company more, in terms of staff time, and in terms of give-backs and concessions.

“Our global benchmark data across all industries and all geographies in both B2B and B2C business models is that customers’ expectations are exceeded only 16 per cent of the time. And customers whose expectations are exceeded aren’t typically any more loyal than customers whose expectations were met.”

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DeLisi says companies will find greater reward through determining those factors that lead to disloyalty, and working to correct them.

“The ultimate determinant of future loyalty for a customer who just had a problem or an issue is the degree of effort that was required on the customer’s behalf to resolve the issue,” DeLisi says.

DeLisi has identified four practices that organisations can reduce the effort that customers have to make to resolve issues.

The first of these he has dubbed ‘next issue avoidance’, and requires the business to anticipate potential follow-on issues that a customer may experience and strive to resolve these on their first interaction.

“We know that unnecessary call-backs or multiple contacts to resolve the same central issue is a high driver of high effort,” DeLisi says. “The idea of ‘next issue avoidance’ is thinking through related issues and trying to diagnose and solve those right now while the customer is on the phone or that online session.”

Another strategy is dubbed ‘service stickiness’ and takes advantage of a customer’s propensity to visit a company website to find contact details when pursuing an issue.

“We think a get number of those follow-on phone calls are unnecessary or could have been avoided if the website made it more clear as to what issues can be resolved online, and instilled a higher sense of confidence in that customer that their issue was fully resolved,” DeLisi says.

“Every company should look at their website and look at the first place where their service phone number is to be found. Wherever that is on the website, the company ought to, right next to the phone number, have two or three links of commonly-resolvable issues that can be fully resolved in self-service on the website.”

DeLisi also recommends that companies adopt the concept of ‘experience engineering’, as exemplified by having customer service representatives modify the language they use to be more approachable. This also includes more clearly explaining processes and procedures, such as why a customer might be asked to read out their ID number having just entered it into the IVR.

“Experience engineering is based on the concept that even though there are any number of things that you might have to do that are some degree of effort for you, there are any number of ways to reduce your perception of that effort and how it feels.”

This also means reducing the use of negative language, particularly use of the word ‘no’.

“Sometimes the answer isn’t yes, but the opposite of yes doesn’t have to be ‘no’,” DeLisi says.

Finally, he says organisations should strive to improve the actual working environment for customer service representatives, particularly through driving better peer support, so that more advice is shared between colleagues. This can lead to representatives feeling that they have better knowledge and better control over customer interactions.

“This doesn't require a massive reorchestration of a customer service operation,” DeLisi says. “It really is more like a refocusing. Nothing we are talking about costs a company more or requires them to fire their entire staff. Everything we are talking about can be done with the resources and budget they have now, but now galvanised and focused much more clearly on this singular goal.”