Customer Loyalty: Not The Holy Grail For Service
Service | Nov 21, 2018 | 2 min read
Customer service leaders have long searched for a concrete way to tie exceptional service to the holy grail of business—customer loyalty. It’s been a quest of sorts, searching high and low for guidance on how to consistently deliver service that wows. The standing theory assumes that exceeding customer expectations and delivering a DELIGHT experience repays exponentially with increased loyalty.
This strategy works well for certain brands—specifically, brands that have built their entire corporate reputations on providing this type of exceptional service. The Ritz Carlton is a great example of just such a company, where everyone from the front desk to room service to janitorial staff is empowered to make customers happy in unexpected ways.
Not surprisingly, however, this strategy is not realistic for every company (likely including yours), partly because this service ethos comes with much higher operating costs. But there is good news for those struggling to provide customers with royal treatment: our research, while part of CEB, shows (and the graph below illustrates) that you don’t have to delight customers to maximize their loyalty in a customer service interaction. In fact, meeting customer expectations—not exceeding them—is the best approach for 99 percent of contact centers.
At first, you may be disappointed to learn that simply meeting expectations is the grail you seek, but think about it for a moment. Meeting expectations is HARD! Customers have never been more informed, more savvy, more connected with each other than they are today.
Customer expectations are in fact a moving target because today’s customer expects a bare minimum level of service that is quite different than yesterday’s bare minimum. Yesterday, you just needed to be polite and professional, cite company policy, and send customers on their (unmerry) way. Today, that strategy gets you nowhere. Today’s customers look for a more tailored experience where your service staff is empowered to treat them like an individual, advocate for them, and resolve their problems. Customers aren’t looking to be best friends with your customer service team … they are looking to get what they want with as little effort as possible. Simply being polite and professional (soft skills 101) doesn’t solve problems.
Bottom line: over the course of a service interaction, companies can do many things to make a customer more DISloyal. The best way to prevent this from happening is to focus on making it easier for customers to resolve their issues. Interestingly, when we dig into the data on what drives customer effort, we learn that nearly two-thirds is in the eye of the beholder; it’s perception. Good news: your service reps can influence the way your customers feel about their level of effort during an interaction, and the customer effort score will show it. As a customer service organization, greater loyalty is all about the skills you give your service reps.
The business case is strong for this kind of strategy; customers with low-effort experiences are more likely to repurchase and increase spend and are less likely to speak negatively about your company when compared to customers with high-effort experiences. If you can create an Effortless Experience and your customer effort score reflects that, you’ve found the holy grail of customer service. Visit us at www.challengerinc.com/service/ to learn more.
Lauren Pragoff is the Director for Challenger's Service practice. In her role, Lauren manages several tailored product offerings designed to help companies in their journey to become low-effort service organizations.