Proving the ROI of Reducing Customer Effort


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I originally wrote today’s post for GetFeedback. It appeared on their site on February 27, 2020.

As a follow on to the post, Four Actions to Take on Customer Effort Feedback, you’re likely going to need to prove the ROI of reducing customer effort. In this post, I’ll talk about five steps to prove the ROI.

So you’ve taken the time to listen to customers in order to understand the experience they’re having with your brand. You’ve uncovered some real pain points for customers – parts of the experience that require more effort on their part than they expected or deserve! It’s time to take action and make some improvements. [maybe a link here to the previous article on how to take action on CES]

But, first things first: before any improvements can be made to the experience, you’ve got to prove that there are benefits to investing in those improvements. Your executives don’t just allot resources because you came up with a great idea. You’ve got to sell the idea to get those resources.

Make no mistake; there are real benefits to improving the customer experience. You’ve just got to do your homework, build the business case, and prove it.

McKinsey reported that a European energy company listened to customers and learned that it took new customers 18 steps to set up their accounts. Eighteen steps! Talk about customer effort. They identified redundancies and more in the process. With improvements in place, the steps were cut to just five. They reduced costs by 40-50%. Customer complaints dropped, as did the number of agents handling those issues, by 80%!

Gartner noted that “96% of customers with a high-effort service interaction become more disloyal compared to just 9% who have a low-effort experience. Disloyal customers are likely to cost the company more — they spread negative word of mouth and cease future purchases.”

In addition, they found that “low-effort experiences reduce costs by decreasing up to 40% of repeat calls, 50% of escalations, and 54% of channel switching. Overall, a low-effort interaction costs 37% less than a high-effort interaction.”

Showing what other brands have accomplished is great, but showing what your organization can do is key. If you can uncover and show those kinds of results with the data you have available in your organization, you’ll be treated like royalty! Unfortunately, for many, that data isn’t readily available or accessible – or it takes time to show those kinds of returns, time that you don’t have because customer expectations shift, and customers will vote with their wallets and their feet and move on to the next brand sooner rather than later.

It’s important to note that not all immediate benefits realized or value delivered as a result of reducing effort are monetary, though ultimately the outcome is monetary. For the customer, the improvements may first deliver emotional (feel good/security) or functional (convenience, choice, speed) benefits. By reducing customer effort and, hence, improving the experience, brands see happy, loyal customers who…

  • Are less price sensitive
  • Stay longer, spend more, buy other product lines, churn less
  • Are more likely to forgive
  • Have fewer complaints
  • Want to help them improve, succeed, and grow
  • Help other customers (e.g., answering questions on online forums)
  • Will evangelize for the brand

As you can see, the outcomes of each of those are, ultimately, financial. As a result of all of that, brands see…

  • Reduced call volumes
  • Decreased marketing and advertising
  • Fewer gimmicks and promotions
  • Additional revenues
  • Competitive insights (from the feedback)
  • Process improvements and cost efficiencies (as a result of acting on feedback)

This latter point about process improvements is a great reminder that there is certainly a spillover effect happening when it comes to effort. Spillover effect is the tendency of one person’s efforts and emotions to affect how other people around her feel. This spillover effect can occur between two employees, an employee and her manager, an employee and her spouse/partner, employees and customers, customers and employees, etc.

In other words, when employees are frustrated because processes are broken, policies are outdated, or the technology they’re using is cumbersome (how many times have you called customer service and heard the agent say, “I’m sorry; my computer is really slow today”), then it impacts how she’s able to do her job. When the employee can’t serve her customers the way they deserve to be served, the customer pays the price.

When we make the job easier for employees – whether it’s through tools, training, or updated processes and policies – they’re happier, more productive, and better able to deliver quality work, resulting in a better experience for them and for customers, too.

This reminds me of The Service-Profit Chain, which is really the best way to visualize the entire chain or connection between employees and customers. I scanned the image below from The Service-Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value by James L. Heskett, et al.

From this graphic, it’s clear that the chain begins with employees and their experience, including tools, workspace, workplace, and more. To view the graphic and to learn about the five steps to prove the ROI, check out the original post on GetFeedback’s site.

We tend to overvalue the things we can measure and undervalue the things we cannot. -John Hayes

Image courtesy of Pixabay.

Republished with author's permission from original post.

Annette Franz
Annette Franz is founder and Chief Experience Officer of CX Journey Inc. She is an internationally recognized customer experience thought leader, coach, consultant, and speaker. She has 25+ years of experience in helping companies understand their employees and customers in order to identify what makes for a great experience and what drives retention, satisfaction, and engagement. She's sharing this knowledge and experience in her first book, Customer Understanding: Three Ways to Put the "Customer" in Customer Experience (and at the Heart of Your Business).


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