Is Being a Frictionless Organization Now an Essential Strategy?

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Published with permission from the artist

Organizations have spent much of the last decade declaring that “Customer Experience is our #1 priority.” Customer experience measurement exists in most companies and every customer process seems to have a survey.

Yet, there seems to be plenty of evidence suggesting that customers are no happier now than they were twenty to thirty years ago; for example, the ACSI’s overall US customer satisfaction score in 2021 was slightly lower than its 1994 baseline level1. That doesn’t seem like a great outcome given all the effort and cost that goes into customer experience management, measurement, and improvement.

Back in 2008 when David Jaffe and I wrote The Best Service is No Service2, we were trying to get organizations to focus on why contacts were occurring and in effect how to reduce effort for customers. Since 2008 the problem seems to have got even more complex. Many businesses have added channels of interaction like webchat and social media and created multiple forms of self-service for customers like mobile apps. Surveys have been added to measure some of these channels, asking customers “How well did that work for you?” but there still doesn’t seem to have been a step-change in customer happiness.

Low Effort Innovators

However, there are some businesses, particularly newer “Innovators”, that seem to have understood that making themselves almost free of problems and easy to deal with is a strategic recipe for success. Companies like Airbnb, Amazon, N26, Tesla, Uber, and Xero have created products and experiences that work so well that customers love them and their growth has followed.

What all of these companies have in common is the drive to become frictionless in every aspect of their product design and delivery, support, and upgrades. These “Frictionless Organizations” have made their products and services so effective that customers never have to make contact for the wrong reasons. They have all redefined whole industries or parts of industries and left older-style businesses floundering to compete.

Frictionless Strategy

David and I decided to write another book about The Frictionless Organization since we felt this was now an essential strategy3. While much has been written about “digital disruption” we felt that it was the lack of friction and effort for customers that was part of the secret sauce of these businesses.

Amazon isn’t just successful because it has digital stores, it’s successful because they work so well. We wanted to document this strategy and the way that any business — Innovators or existing businesses that we call “Renovators” — could pursue this frictionless strategy.

What we found is that everything in Frictionless Organizations works simply and easily for customers and their staff, especially frontline teams. They have figured out that becoming frictionless is a “whole of business” challenge, not just for the customer care or marketing teams to solve.

The results are compelling: Higher revenue rates, lower customer contact rates, less customer churn, and more engaged frontline workers. This in turn has led to delivering true competitive advantage, enabling business survival to ward off other Innovators or Renovators, and enjoying returns higher than companies that lag behind them.4

Xero Simplifies Solution and Support

Let’s see how one Innovator continues to reduce friction.

Wellington, New Zealand-based Xero aims to “simplify everyday business tasks” for small businesses, accounts, and bookkeepers”5 and now has over 3 million customers around the world. The company’s purpose is “to enable the small business economy to thrive through beautiful software, advice, and connections.” As a native cloud provider, Xero exemplifies how

Innovators are frictionless and intend to remain so. They obsess about the ease of use of their products, recognizing that small businesses are time-poor and not experts in accounting.

Xero did recognize that customers would still need support. However, instead of offering an inbound phone or email channel, Xero promotes “digital support for a digital company” by offering answers to a wide range of queries in Xero Central, including 1,900 hours of video content. With 96% of the questions answered in this online portal, Xero then sets up outbound calls for the remaining 4%, assigning the most appropriate consultant to contact the customer within two hours.

Xero Central also operates as a community platform where customers can share their questions or usage experiences with other customers in a “customer to customer,” or C2C, format. Using ML (machine learning) and AI, Xero can also anticipate the next questions or issues raised in Xero Central by watching and comparing behavior with other customers.

According to Xero’s chief customer officer, Rachael Powell, Xero wants their “customer experience to be outrageously positive” while recognizing that “the goalposts keep moving” and that “we need to anticipate what customers might need in the future.”

Getting the Payoff

Xero is a great example of a company that has enabled help and support to be as simple as possible through digital means.6 The organizations covered in the book are similar to Xero in that they focus on where friction exists and how to remove that friction. This saves huge amounts of money by:

  • Streamlining processes that take less time for customers and for staff.
  • Displacing routine work with robotics process automation (RPA).
  • Reducing returns and refunds, saving effort and costly make-good concessions.
  • Meeting the expectations of customers, cutting the need for queries and contacts.
  • Building more effective websites, apps, and other channels that reduce contacts, complaints, and queries about how these channels work.
  • Replacing assisted contacts with self-service channels that customers want to use.

Is Friction a Problem for Your Organization?

What are the questions that you can ask to determine if your organization is producing friction or removing it? Try out these seven questions; if you answer “No” to any of them, it’s time to measure friction, remove root causes, and begin becoming frictionless.

1) Do you understand the cost and volume of all customer contracts across your business?

“Yes” means “We have clear reporting of the cost of our contact channels every week and every month.”

2) Do you understand the top 25 to 50 reasons for contacts by total cost and how they are

changing?

“Yes” means “We can easily track improvements in contact volumes and costs across a

limited number of mutually exclusive reasons, none defined as “Other.””

3) Do you understand which departments drive contacts and hold those executives

responsible to fix them?

“Yes” means “Customer service informs the other departments, and the entire executive team pulls together to reduce points of failure and friction. We have had many successes and tell stories about them to spur more.”

4) How has the rate of customer contacts trended over time?

“Yes” means “Our contacts per X (where X = active customers, orders, claims, etc.) has fallen over a sustained period by Y% per year.”

5) To what extent have your customers adopted and exploited your self-service?

“Yes” means “Our customer self-service is now our dominant mechanism for our customers and is very popular. X% [a widely known number] of those who use it complete their goal.”

6) How well do your systems and processes predict and preempt contacts?

“Yes” means “We spot problems and tell customers before they even know about them.”

7) How effective have you been in improving the customer experience?

“Yes” means “We have data that show our customer experiences are simpler, take less effort, and are applauded by customers.”

In my upcoming posts I will introduce some key learnings from the book and answer questions like:

  • How can you understand where friction exists and how its trending?
  • How can you hold the right people accountable and work out what to fix first?
  • What strategies help reduce friction and deliver value?

Notes:

1 ACSI is the longest-running and one of the most frequently cited cross-industry measures of customer satisfaction for U.S. companies: https://www.theacsi.org/national-economic-indicator/us-overall-customer-satisfaction

2 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. Also covered in many of my earlier posts in CustomerThink including https://customerthink.com/the-best-service-is-no-service-turns-10-going-strong/

3 From Bill Price & David Jaffe’s forthcoming book The Frictionless Organization: Deliver Great Customer Experiences with Less Effort, Barrett-Kohler, Spring 2022

4 See Jon Picoult’s blogs including https://watermarkconsult.net/blog/2019/01/14/customer-experience-roi-study and his recent book From Impressed to Obsessed

5https://www.xero.com/us/

6 Medallia webinar, February 2021.

2 COMMENTS

  1. CES and NPS suffer from the same issue, in my opinion, a presumption that a complex problem has a simple solution.

    Neuroscience shows that the brain weighs six factors when it evaluates options: context, payoffs, costs (which include effort), delays, risks, and personal preferences. True, the brain calculates higher value when effort is less, and studies have shown that reducing effort increases habituation. However, context matters: people also choose to do things because they’re hard, not because they’re easy–like going to the health club or climbing Everest.

    So while reducing effort is a worthwhile pursuit and delivers benefits (including business benefits) in certain domains, it’s also important to note that like NPS, it’s no silver bullet–simply because you reduce effort doesn’t automatically mean your customers will be more loyal. Value is a complex thing, and the results you get from reducing effort will vary tremendously depending on the context of your business.

  2. Ed, thanks for your comment. One of my daughters majored in Neuroscience so I should also check with her! I agree with you that context matters. What we learned from the organizations that we studied, including a bunch of detailed interviews, is that effort and complexity hurt, and that less effort and simplicity help a lot. For example, Tesla challenges its engineers by saying “the best part is no part” and as a result has built low maintenance vehicles. They have taken a completely different approach than the 100 year old manufacturers that are trying to address the same complex problem.

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