I’m sure by now most of you have seen the article, “Stop Trying to Delight Your Customers” in the July-August issue of the Harvard Business Review (pp. 116-122 if you read it the old-fashioned way). In the article, Dixon, et. al., report on their 3-year survey of more than 75,000 B2C and B2B customers about their recent service interactions with live agents and self-service contact center applications.
To provide a quick summary of a very thought-provoking article, their study found little correlation between the customer satisfaction score, which organizations have traditionally used to measure how good a job they’re doing, and customer loyalty. They found that exceeding customer expectations by offering a refund, a free product, or a free service makes customers only marginally more loyal than simply meeting their needs. They state, “…loyalty has a lot more to do with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the service experience might be.”
I don’t know about you, but my expectations for service are pretty minimal these days. If I can have an interaction with someone who can understand what my issue is and solve my problem, I’m pretty happy—delighted actually! I don’t need a free refund, a free product, or free shipping.
OK…maybe I do need free shipping, particularly if I’m returning a pair of too-tight shoes to Zappos. Turn now to page 41 in the same issue or read online. The title? “Zappos’s CEO on Going to Extremes for Customers.” Wait! Should we go to extremes for customers? Should we stop trying to delight them? Is the Harvard Business Review bipolar? There’s a lot that Tony Hsieh has to say about achieving exceptional service that I agree with—like making customer service a priority for the whole company, not just a department, and offering free shipping both ways to make transactions risk free and easy. That’s what I would expect from a company I wanted to do business with. On the other hand, doing a surprise overnight shipment for loyal repeat customers who chose free ground-shipping would not make me a more loyal customer, nor would finding me five local pizza delivery places in Santa Monica as mentioned was done for a Zappos customer. Nice touch, but those above-and-beyond things will not make me a loyal customer. The strategy does seem to be working for Zappos, though, as they’ve gone from 1.6 million gross revenue in 2000 to over 1 billion in 2010.
Coming back to the first article, the authors found that delighting customers doesn’t build loyalty; reducing their effort—the work they must do to get their problem solved—does. As a result, they developed (and trademarked) a new metric: the Customer Effort Score™ measured on a scale of 1-5 by asking, “How much effort did you personally have to put forth to handle your request.” The idea is that companies create loyal customers by helping them solve their problems quickly and easily.
As someone who has spent the last 15+ years helping businesses improve their customer service, I must say that I love the thought behind this newly-coined Customer Effort Score™. Too many companies try to “delight” customers without first tending to the basics. If you really want to delight customers, you need to start with the basics:
- First, define what each of your customer segments expects from you in the way of customer service, then measure the gap between your service offering and their expectations. I’ll bet that making it easy for your customer to do business with you (meaning a low Customer Effort Score™) is going to be up there at the top of the list.
- If your company isn’t meeting expectations, strive to do so. This involves hiring the right people, training them in product knowledge and customer service skills, supporting them with the proper technology, and making sure your processes are customer-friendly.
- Once you’ve met your customers’ expectations for service, you can work on exceeding them. This is the step where you need to be cognizant of any tradeoffs between exceeding expectations and the cost of doing so.
- Finally, when you’re consistently exceeding expectations, then and only then are you in a position to talk about going to extremes to delight customers.
Free shipping and surprise overnight delivery would not be working for Zappos if they had surly reps on the phones, were often out of stock, or frequently shipped the wrong product. They are able to go to extremes—profitably—because they’ve engineered their whole company around the customer.
Have you defined your customers’ expectations from their vantage point, not yours? If not, start today. Strive to meet those expectations, make it easy to business with you, then you and your customer can both soar to the extremes of delight.
Delighted to see the concept of “customer effort” getting a good airing. In ‘The Best Service Is No Service” this is paramount.
Companies being quoted, like Zappos, for doing great things are subjects of their own PR/word of mouth/story telling – its harder to be known for doing basic things really well year after year after year. But this is key to real success with customers for companies like first direct, and key to why their existing customers forgive them when something complex screws up.
I think it was Reicheld Sasser & Jones circa 1993 in HBR who showed this lack of correlation between sat scores and buying behaviours. They also showed the strength of the correlation/lack of correlation varied by industry and by customer segment. They also showed that very satisfied customers did show correlation – the early beginnings of thinking behind net promoter scores. So “customer sat isnt enough” is old news but it needs as much publicity as it can get in business.
What is clear to many advanced customer experience professionals, but is often unclear to the general business manager, is that:
1) The first role of contact point is to not exist, to do themselves out of a job, to be brilliant at identifying why customers had to make contact and pushing back into the business to stop it happening short term and log term. Reducing customer effort.
2) The second role of the contact point is to be the eyes and ears of the business and the voice and arms of the customers – to know what customers know, identify the common sense solutions to “dumb things” that we inflict on customers and staff – and to fight for it to happen. Furthermore to give voice to customers positive ideas and suggestions, their intelligence about the market. Above all these connections are the role of the customer services or customer experience director these days. Being good at running operations isn’t enough.
3) Achieve “Brilliant basics” for customers by focusing on what causes them to have to contact (demand management), how answers and solutions are provided ( knowledge management) and how operations are optimally run (operations management). Of these many knowledge management in its widest sense is neglected in traditional companies, less so in online businesses.
The result of all this, and more, is to drastically reduce customer effort and in direct correlation, reduce business effort provided it becomes a way of working, not just a project. We’ve seen this time and again with reductions in effort of 80% over 3 to 5 year periods.
And it makes it a great place to work – you are heard, you really help customers and then the wonderful and extreme experiences for customers can take place. Both because people are in that mood and because the business can afford it.
When we researched outstanding businesses like first direct, Amazon, Google, eBay, we quickly stopped looking for the silver bullet and called the series “100 things you can learn from …”. It’s not just one aspect that makes them great companies to do business with. “What is important is having all the elements together as a system. It must be practiced every day in a very consistent manner – not in spurts – in a concrete way on the shop floor” “What is important is having all the elements together as a system.” Fujio Cho, President Toyota Motor Corporation