Does bowling customers over with unexpectedly great service build loyalty? Or is it enough to make sure they can do just what they want to do quickly and easily?
In 2008, the US Corporate Executive Board (CEB) challenged the widely accepted notion that the best way to generate customer loyalty is to delight customers with surprisingly wonderful customer service interactions. Their much more prosaic take on loyalty was that customers just wanted to get tasks done quickly and easily so they could move on.
Five years after Customer Effort Score (CES) was introduced – and three years after Harvard Business Review (HBR) published initial research about the measure – it’s back in the news. British Telecom, a CES early adopter, commissioned Henley Business School to look at it again.
Does Effort Impact Churn?
The report, ‘Customer Effort: Help or Hype’ indicates that customer effort is a strong predictor of loyalty, particularly for complex and high-effort interactions. Researchers found that low effort scores reduced customer loss by a whopping 40% as compared to loss on high-effort scores, for significant reduction in churn.
These findings are particularly important for businesses that are seeking to reduce customer service costs by encouraging customer self-service. If transactions are at all complex, it is essential to create a user experience that minimizes customer effort. Remember, it is not good enough for you to think that not much effort is required. Make sure your customers think so too, by implementing a CES program in which they can tell you what makes a transaction effortful as well as just how effortful it is.
For banks, insurance companies, Telcos and energy companies, increasing customer self-service can have a significant and positive impact on profitability, but only if it does not alienate customers and lead them to defect to competitors.
The findings are clear: Yes, delight matters, but how you wow your customers matters more. Amaze them by how easy it is to change account details. Surprise them by how quickly they can complete transactions. Get them telling their friends about how they got the service they needed in a flash, without long waits or ambiguous instructions.
Gather customer feedback on how they score transactions and listen to find out exactly what they feel is difficult. Use that insight to design low-effort self-service interactions that delight your customers, and delight you with the impact on your business.