Brands that do the best in engaging their customers will be the ones that have long-term advantages over those who do not, according to experts who discussed the topic in the recent Loyalty 360/Kana webinar: If You Love Your Customers, Don’t Break Their Hearts: Minimize Effort to Maximize Loyalty.
The more effort a customer has to make, the worse the customer service and the ore likely the customer is to change suppliers, an issue that starts with poor measurement of customer service, according to Estaban Kolsky, principal and founder of ThinkJar.
“We have a significant problem with metrics in the last five to 10 years, especially when it comes to customer service,” Kolsky said. “Customer service has always been driven by efficiency metrics: How well do we do something. For example, efficiency metrics in the call center look at things like how quickly a call is answered, how quickly an issue is resolved, etc.”
Since costs were closely tied to the overhead of the toll-free number, the less time the agent spent on the phone, the lower the call center’s expenses, Kolsky explained. The call center was considered to be a cost center.
“Efficiency works great if a company is focused on what it is trying to do,” Estaban said. “But it doesn’t work at all in a place where you need to track what a customer says, what a customer feels and what a customer thinks about the company.”
Eighty percent of companies use customer satisfaction as an effectiveness metric, Kolsky explained. With that metric, the important factor isn’t how long a phone call took, but whether or not the customer was satisfied with the interaction.
“We’re moving away from company centric to customer centric,” Kolsky said. But customer satisfaction is not a good metric to track overall. A customer’s satisfaction will be related to a collection of interactions with the company, not necessarily the most recent one. As a result, the company won’t have good information on what specifically to do to improve customer satisfaction.
Customer satisfaction should only be a single portion of what a company measures, according to Kolsky. The company should also measure the loyalty of the customer, the efficiency of the process, the performance of the agent and other factors to develop an end-to-end effectiveness and efficiency index.
“It’s not about making one measurement that accounts for the entire interaction, it’s about breaking the interaction into several different pieces and measuring each one separately,” Kolsky said. “If something goes up or down by an excessive number, you have the tools you need to know what happened.”
Effort is a difficult metric to track and follow, Kolsky explained. High effort means different things to different people. With “fuzzy” metrics such as this, it’s important to use a frame of reference to better quantify the metric and to ensure that the metric correlates to a KPI for the company (e.g., sales, customer churn, etc.).
By using a “customer journey map” that tracks a customer effort throughout the interaction, the firm can see what parts of the process need to be improved. Two of the most important metrics to track, according to Kolsky, is if the customer received what he or she wanted or if he received what he or she needed in the right time, place and format.
Scott Hays, senior director of product marketing for Kana, added that one of the things that can break up the relationship between the company and the customer is customer effort.
“The harder you make if for customers to do business with you, whether it is a customers to do business with you, the less likely they are to stay around,” Hays explained. “We do believe there is a strong cause and effect relationship between minimizing the effort, which maximizes the loyalty. If you provide good service, it’s expected and your loyalty will remain level. If you provide great service, loyalty will go up, but not that significantly. If we compare it to bad service, you’re loyalty is going to plummet. The effort you put into providing good service is going to do more because you’ve eliminated bad service, than really striving to outdo yourself with great service.”
According to a 2010 Harvard Business Review study:
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Delighting customers doesn’t build loyalty; reducing their effort – the work they must do to get the problem solved – does.
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Acting deliberately on this insight can improve customer service, reduce customer churn costs and decrease customer churn.
The study found: “Loyalty has a lot more to do with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the customer service experience might be.”
“Do excellent with the good,” Hays said.
According to Forrester Research, 45 percent of U.S. online adults will abandon their purchase if they can’t find a quick answer to their question. Sixty-six percent say that valuing their time is the most important thing a company can do to provide a customer with a good online experience. Twenty-nine percent prefer to use online customer service rather than a live person.
Customers have high standards, limited patience and a lot of options with other suppliers,” Hays said. “If customer effort is high, customers will switch suppliers. But some initiatives that reduce the customer efforts (e.g., Web self-service) actually increase switching costs and make it harder for them to switch.”
Customers also what to be able to use their preferred channels to contact customer service, Hays said. Though Web self-service is by far the least costly way of providing customer service, it may not provide the customer with the preferred results. Only 29 percent want Web self-service. So if a company should focus on reducing costs for other channels, like providing agents with what they need to helping customers, such as a robust desktop that provides a variety of customer information in order to quickly and efficiently meet a customer’s needs.
“They want you to know your stuff, that’s how you show that you care,” Hays said. So agents should have knowledge management, process management, case management and other essential tools at their fingertips so they know their products, services and systems as well as when and how to get help and understanding how to follow up with customers.
Related: white paper from Loyalty 360 and KANA Software, Minimizing Effort to Maximize Loyalty.