Why do our customers have to bother to contact us?
It’s amazing how many types of interactions customers have with companies that are inherently expressions of dissatisfaction such as “Where’s my order?”,“I don’t understand my balance”, “My bill is wrong/too high”, or “I’m missing my X, Y, or Z.” In most cases, these indicators of issues or “friction” represent as much as 80% of the contact volumes and costs to fix the problems. What an opportunity to make it easier for customers and save costs. In addition, this addresses what my co-author and I have been saying for years with The Best Service is No Service1, Your Customer Rules!1, and The Frictionless Organization3: “Why do our customers have to bother themselves to contact us?”
If anything, the proportion of these types of problems is rising in other human-assisted channels like chat. The reason is that greater use of self-service is changing the contact mix. As customers make more use of self-service for routine transactions, the customer-facing channels get a higher proportion of complaints and problems. For example, these days customers don’t chat to ask about their balance, but they do chat to question why the balance is not what they expected or to get details about a transaction they don’t recognize.
What this means is that the interactions in assisted channels are an amazing data source about the effort customers have to go to and the friction that exists for the customer. It’s also fantastic feedback to analyze instead of investing in surveys with low response rates and biased results.
The reason we wrote our new book The Frictionless Organization is that we discovered after interviewing customer experience leaders around the world that getting rid of these irritating contacts and the associated friction is such a huge opportunity for them. We also saw that this Understand step is the most important form of “voice of the customer.”
In the book we observe that some of the most successful businesses have tried to create operations where we never have to make contact for the wrong reasons. Airbnb, Amazon, Netflix, Uber, and Xero are organizations with high market caps but they are also some of the easiest to deal with. This isn’t by accident.
This post explores the first step in the process which is about understanding the friction that exists so that the cost, priorities, and solutions become clearer. This can be great data to galvanize a business around customer issues and help reduce this friction.
It’s easy to say “Let’s reduce the rate of contact” but much harder to do it. There are three critical elements to Understand:
- The quantum of friction (both the C and the X of what we call CPX).
- The nature of friction
- The true cost of friction
1. Understanding the quantum of friction: The C and the X of CPX
The first element to Understand is to assess and track the rate of problem contact relative to key parameters of the business. This is a great measure of the level of friction in a business.
The first focus is the C of what we call CPX, namely the total number of assisted contacts across all channels: calls, emails, chats, messages, letters, and so on. It’s valuable just to start to add up the volume of contacts across channels. We realize some channels may be cheaper than others but it’s still useful to be able to look at the total of all these channels of customer effort because only that gives the complete picture. If a company has 2 million calls (per year) and 1 million chats and 500,000 email messages, the C (contact) would be 3.5 million. We don’t count automated contacts in this analysis because they are different – those are transactions and inquiries that the customer is choosing to make. In the example shown, calls, chat, and email are all rising at an absolute level.
The absolute number of contacts is important (3.5 million contacts a year) but without the business context it tells only half the story. Contact volumes only make sense when we compare these trends relative to business drivers and growth metrics. In this instance, the X of CPX is the number of policies in place, and contacts per policy reveals almost no change with a slight uptick in January 2020 despite the investment in new channels and new self-service tools.
X could be onboardings (as it is for United Airlines), units per order shipped (Amazon), or active subscribers (Vodafone). The X needs to be the measure of business size and growth. This can lead to some great insights. A major subscription service analyzed “contacts per device type” as their CPX. This showed that eight of the ten devices they offered had contact levels more than double the best two devices. The organization stopped selling the high effort devices and customer contacts dropped while profitability improved. That kind of analysis is repeatable in many organizations. For example, it might show that certain types of mortgages or insurance policies have disproportionate contact rates. So, the first level of understanding is to know the rate of contact and its trend against key business drivers. It’s a very powerful indicator of the ease of doing business.
1. Understanding the nature of friction: contact at the right level of detail
It’s one thing to understand the rate of customer contacts via a CPX type measure. It’s even harder to get the right level of understanding of what makes up these contacts.
Organizations have tried for years to get this right and it is hard to do, but it is well worth the work. Here are some lessons we have learned the hard way:
- 80 or more reasons for contact are too many and nothing will seem like it’s worth actioning.
- More than that (one place had 2500 possible combinations) means that most will never be used and there will a large amount of incorrect selection, and no one will trust them. One company we know discovered that its marketing team was re-creating contact reasons since it never believed the ones coming out of customer service.
- With 20 or fewer reasons you’ll that they don’t change much and it isn’t clear who owns what.
- If it isn’t clear which areas of the business are accountable, then it may be the wrong level of detail
- The contact reasons aren’t there to produce “root cause analysis”; they tell you why customers think they need to make contact and will lead to root cause analyses by business process experts.
- Your front-line staff can help you get these right as they handle these contacts day in and day out. We find that one workshop will typically get you the top contact drivers and the language customers use.
- If the proportions never change week by week, then they may not be at the right level of detail.
- If the reasons blend very different issues, then the level of detail is probably wrong; “My bill is late” is different from “My bill is wrong”.
There are now some great tools through speech and data analytics to help you track contact against reasons continuously. However, we’ve also learned that you have to teach these tools what to look for. An analytics tool doesn’t know that “My bill is late” and “Where’s my bill?” are the same thing, for example. The tools need to be shown what to search for so don’t use them too early in the process. One trick is to use the customer’s language: Rather than “Invalid password attempt”, the customer will probably say “I can’t log on” or “My password doesn’t work”. Thinking in this way can help because the analytics has to search for this customer terminology. Same for agents when they have to select the best reason code.
What has got harder is that there are now more channels in which contact is occurring and frictions are being identified. Chats and messages can be as much a source of dissatisfaction and friction as a call or email.
The good news is that it is possible to use similar categorization across a business. For example, if a customer has an issue logging on, they may call or chat about it but the reason is the same. It’s important to understand these contact reasons across channels and bring the data together so that the total contact picture and the full extent of friction is understood. The tools can help do this as well because chats and messaging are in text form that can be analyzed more easily than speech (which often needs converting to text first). The problem is now more complex but as a result it’s important to understand what is going on across as well as within each channel.
2. Understanding the true cost of friction
One reason that many problems don’t get actioned is that the true costs aren’t well understood because related costs are often isolated in different parts of the business. For example, the cost of refunds may be with a product owner or finance area, but the costs of contact are in customer care. Often problems logged to customer service get actioned by others and these “downstream” costs are far greater because, for example, they might involve a truck and a repair crew, a replacement product, or writing off revenue in some form. In The Frictionless Organization we describe how bringing these costs into the equation makes the impact of these frictions far clearer and builds the case to take action.
The third step in “Understand” is to associate these costs with the contact reasons. That sounds easy, but it’s often hard to do since it’s often not a one-to-one relationship. Perhaps 50% of contacts of type “A” result in sending a repair crew but sending a repair crew varies in cost and complexity. There may be other types of associated costs such as hand-offs forced by business rules. At one company we found that over 60% of contacts resulted in a work item for another area. The costs in customer service were just the tip of the iceberg of the real work involved. Worse still, these handoffs were often delayed and resulted in repeat contacts and further complaints, so the costs were even higher than they first appeared.
As organizations have centralized and pooled more data, it is now easier to understand and associate these other costs of friction. However, it does take analysis to work out what to associate and where to source the data. One possible technique is the old “Staple yourself to an X”4 or “Follow the X”. This is a process analysis technique that tracks an issue through the business and along the way gathers information on costs, frequency, and timing. Once that is understood, the associated costs can be allocated and reported with the reasons for friction.
These three levels to Understand are among five different mechanisms we discuss in The Frictionless Organization. The book describes some other Understand mechanisms such as discovering the rate of repeat contact as a key point of friction and assessing the customer impacts and reactions to different types of friction. Each of those would need a separate post in its own right. Understanding friction is hard, but it is very invaluable to drive customer-focused improvements that improve customer experience and cut costs.
1 Bill Price & David Jaffe, The Best Service is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs, Wiley, March 2008. There are 7 “Principles” of Best Service starting with “Challenge Customer Demand for Service, Instead of Coping with Demand.” Also covered in many of my earlier posts in CustomerThink including https://customerthink.com/the-best-service-is-no-service-turns-10-going-strong/
2 Price & Jaffe, Your Customer Rules! Delivering the Me2B Experiences That Today’s Customers Demand (Wiley/Jossey-Bass 2015). There are 7 Customer Needs that Lead to a Winning “Me2B” Culture; each Need breaks down into a total of 39 Sub-Needs.
3 Price & Jaffe, The Frictionless Organization: Deliver Great Customer Experiences with Less Effort, Barrett-Kohler, Spring 2022. There are 9 steps to become frictionless starting with #1 Understand.
4 The award-winning article “Staple Yourself to an Order” in Harvard Business Review has spawned numerous “staple yourself to X” analyses.