There is no doubt that having repeat customers is crucial to sustainability. New customer acquisition takes more time, money, and effort than keeping existing ones – hence converting customers into loyal ones should be a priority for any sales and marketing professional.
Many turn to gimmicks to create a loyal base. How effective these activities are would vary, since relying on hype and gimmicks could really be a hit or miss. Just ask many of the businesses that rode the Groupon hype in the recent years – many have found out that flash discounts aren’t exactly the best way to entice repeat customers.
So how should business approach in gaining customer loyalty?
Satisfaction Does Not Automatically Translate to Loyalty
In their book The Effortless Experience, Nick Toman and Rick Delisi of CEB (with bestselling coauthor Matthew Dixon) explores the new developments in managing customer loyalty. Their study revealed some trends that challenge existing assumptions and conventional wisdom.
A key finding reveals that customer satisfaction does not automatically lead to customer loyalty. The study found that both customers whose expectations were exceeded and customers whose expectations were simply met are about the same in their levels of interest to do business again.
So it appears that the hype behind always exceeding customer expectations should be met with a degree of reservation. While it is still a good idea to make sure customers are happy, you may want to balance out the effort. There appears to be some diminishing returns to the idea of trying to exceedingly please everyone.
Reducing Customer Effort is More Important
If the drive for delight doesn’t necessarily secure customer loyalty, then what does? Focusing on what makes customers disloyal, the researchers found that customers tend to take their business elsewhere if they are required to exert extra effort with the product or service, especially if they are facing issues.
This means that working to resolve issues with minimal effort from the customer end appears to be the key to driving loyalty.
The study provides a framework for what is called effortless experience, but let us give our thoughts on what other practical things businesses could apply to lessen customer effort and inspire loyalty.
Minimize Potential Causes of Issues
Added effort drives disloyalty, which means businesses should focus on preventing any difficulty from arising in the first place. This may be done by providing excellent user experience (UX) that minimizes potential issues.
For most online businesses, this boils down to providing an efficient UX that reduces the likelihood that users will make a mistake. Error prevention has been a core part of usability heuristics. The system should be logical and have certain constraints.
Usability also requires fast and seamless interfaces. Now that users demand instantaneous results, Google reveals that more than half of mobile sites are abandoned if the pages take more than 3 seconds to load. Aside from product design, a business with digital services should also ensure timely access through a distributed infrastructure such as cloud hosting coupled with content delivery networks, to ensure that audiences across the globe have similar levels of service.
Improve Customer Engagement
With the rise of millennials as the leading consumer demographic, it is interesting to see that businesses should be prepared to interface with customers at multiple fronts. While businesses think that helplines are still the preferred way to address customer complaints, an increasing number of people avoid phone calls and prefer other channels like email and social media.
One way to address this is to have a guided self-service functionality if customer doesn’t want to call. The challenge though, is to organize the self-service system well enough for customers to resolve their issues quickly. This requires careful planning and an understanding of the process from a customer’s point of view.
A few key pointers include implementing tool tips and suggestions, as well as featuring default queries for quick access to typical areas of concern. Guide users through the more specific details that may originate from or relate to the issue they have chosen. For unique issues or problems, the system should have a way to manage such an occurrence. Having a “call now” button handy in the mobile app or website also helps.
Enhance Customer Support
In such cases where customers truly need to talk to someone from your support team, representatives should be empowered with autonomy and latitude to resolve issues. One of the frustrating parts of interacting with customer service is when the conversation hits a wall with the helpdesk not knowing what to do or not being authorized to do anything beyond the script. Customers would either hang up in frustration or demand to escalate the issue to a supervisor. Either way, this pushes away customers, and your business gets a bad reputation.
Perhaps the best company to serve as example to this kind of customer service is Zappos where helpdesk reps are given authority to be creative in resolving customer issues. One may argue that this may reinforce the idea that they are still simply focusing on satisfaction. However, a balance between great user experience and reducing transactional friction should be the aim here.
Low Effort Results in Loyalty
The age of fads and gimmicks to entice customers to buy again is challenged by the idea that loyalty is brought about by effortless interaction, which can include a seamless and frictionless user experience, as well as easier engagement with the company post-sales.
Photo courtesy: Pixabay
“One of the frustrating parts of interacting with customer service is when the conversation hits a wall with the helpdesk not knowing what to do or not being authorized to do anything beyond the script”. In other words. The person working in the helpdesk doesn’t need to know anything. You just can hire anyone who can read a script. So you can keep the costs low. You can cover about 90% of the questions in the script. So what to do with the other 10%? That is the big question.