Easy Does It: Improving Customer Loyalty by Reducing Effort
By Dr. Nicola Millard, Customer Experience Futurologist, BT
Loyalty is in decline, some say it is dead, but studies are showing that customers will come back to organizations if they make it easy for customers to do so. Effort is not a new concept but is it really worth the effort? For businesses, the effort – or lack of –may provide a key measure for customer loyalty. Reducing customer effort, i.e. the customer’s perception of the amount of energy they have to spend in an encounter with an organization, seems to be a better predictor of customer loyalty than delighting customers.
Customer effort (CE) can be a great global judge on a company’s customer service process. Essentially, effort influences the customer’s perception of satisfaction, value and convenience in doing business with an organization.
Data revealed that the negative consequences of high effort experiences are greater than the positive. A customer who assesses a company as “difficult” is much more likely to defect than a customer who is “dissatisfied.” This makes CE a very powerful indicator to show how the experience across different channels – such as the contact center, interactive voice response (IVR) and social media – are impacting customer service and loyalty.
The question is how can companies leverage customer effort to maximize both customer loyalty and satisfaction? Here are a few ways that customer effort can impact businesses for the better:
1. Measure it. In the same way companies measure their customer satisfaction or Net Promoter scores, companies should also measure their CE score to help monitor and adjust customer experiences. BT has pioneered a simple customer “net easy score” to easily gauge customer effort. BT found that customers who had ranked them as being “easy” showed a 40 percent reduction in their propensity to churn when compared with customers who ranked BT as “difficult”. This reinforces findings from a 2010 study published in Harvard Business Review which found that 94 percent of customers who reported low effort expressed an intention to repurchase and 88 percent said they would increase their spending with a company.
2. Step into the customer’s shoes. One of the strengths of CE is that it can be used throughout the customer lifecycle to identify actions that need to be taken to make it easier for customers to interact with the company, from the overall experience to specifics like the website, contact center and IVR. It can also identify “trapped customers” who might appear loyal with other measures but are actually unhappy and would switch companies if another option was available.
3. Enable data-centered designs. The CE approach has the ability to produce actionable data that can be used to help design customer experiences. Companies using this measure are finding that “effort” is providing them with loyalty data that goes beyond customer intention and into actual customer behavior. Additionally, analysis of the CE metrics can enable companies to make bigger improvements on the customer experience. For instance, when looking at the routes a customer took through an IVR system, companies can figure out ways to simplify the process and help customers resolve problems more quickly.
4. Go beyond customer service. While customer effort is usually led by the customer service organization, the same principles apply for other areas of the business, such as manufacturing, supply chain processes and accounting. “Easy” can become a key drive across all areas of the business, enabling more efficient processes, better design and increased customer satisfaction.
Overall, customer effort is worth the effort and produces tangible benefits. These benefits can be seen by direct measures, such as changes in customer retention figures, or by indirect measures such as a reduction in complaints or an increase in positive word of mouth.
No longer can the goal be to simply please every customer in every situation in order to retain loyalty. Instead, effort should be targeted to delighting customers where they value it most, by addressing the areas where CE is too high and maintaining service levels where companies exceed customer expectations.