Building Customer Loyalty is Easier Than You Thought

The natural response to improving customer service is for businesses to expend time, resource and money on enhancing service and trying to delight the customer free offers, vouchers, benefits in kind.

But does the benefit of delighting customers justify these costly recompenses?

Research from the Harvard Business School points to a fallacy in the idea that customers must be "delighted" to remain loyal.

The Dixon, Freeman and Toman research showed that 20 per cent of "satisfied" customers intended to leave the company in question i.e. were disloyal; but interestingly, 28 per cent of "dissatisfied" customers intended to stay i.e. remain loyal.

Loyalty, it found, has more to do with delivering on basic promises than it does with top-end service excellence. It's all about making it easier for customers to do business with you; reducing the customers’ effort.

If we look at some recent research from Transactis, this shows that 81 per cent of customers will question the competency of an origanization if they are asked to repeat information that the origanization already holds. Why? Because increasing customer effort not only decreases customer satisfaction, but more importantly, decreases both customer loyalty and potential increased spend.

Auditing Customer Effort

And there are tools out there that help to measure such Customer Effort, such as Alcatel-Lucent Enterprise's recently launched Customer Effort (CE) Audit tool. Such tools are designed to enable origanizations to identify which particular aspects of a customers experience are causing them the most problems, rather than wait until a particular service problem actually occurs.

The CE Audit takes a wide variety of interaction parameters some measurable e.g. number of contacts, number of channels used, interaction durations, transfers, resolution lapsed time, total conversation time, and some assessable e.g. agents knowledge, agents attitude, complexity of IVR menus and scores them according to the impact they have on the overall business transaction; which will vary market to market, individual to individual.

Origanizations can then start to understand the customer experience from their customers’ point of view, identify which areas in particular are requiring too much effort and ultimately address the issues.

The tool also takes into account that it is not only the number of events that are significant in scoring customer effort, but that some events can have a multiplier effect on the impact to the customer.

It is therefore important to not only count the events, but to also weight their impact based on how they affect the customer. This will generate a Customer Effort Index that can be used to assess the magnitude of the effort needed to complete the business transaction.

An example of how this impact would be applied is as follows:

Prevention is better than cure.

In my experience, key events affecting customer effort are mostly measurable, and in most cases, are in fact avoidable. It is often the symptoms that are measurable for example repeat calls but these will in turn direct us to problem areas, allowing more detailed root cause analysis to be done.

Prevention is much better than cure, and companies understanding the symptoms of customer effort will be able to develop such preventative care. Because the more we can understand each customer conversation and how customers react to them, the better we can provide customer service that meets their needs, and so be proactive in reducing their effort.

Build a differentiated customer experience.

A Customer Effort Audit will enable you to:

Understand if customers are finding it hard to business with you, through using the Customer Effort Score. Carry out detailed Customer Effort Audits to understand those Customer Effort Scores

Use the output of the Customer Effort Audits to build the case for developing a preventative care programme across all customer contact channels.

Build a cross channel conversation management environment with access to relevant customer information and relevant contact information.

Apply appropriate business rules to this information to provide a differentiated and personalised customer experience.

Companies don't have to spend more money to increase customer satisfaction - they just need to focus on solving customer issues in ways that make it easier for the customer, ensuring they expend the least effort possible.

About the Author

Alcatel-Lucent is a leader in mobile, fixed, IP and Optics technologies, and a pioneer in applications and services. Alcatel-Lucent includes Bell Labs, one of the world's foremost centres of research and innovation in communications technology. Info: www.alcatel-lucent.com.