Customers buy from a company that delivers a solution for their problems and offer the best value. Customers leave or quit a company because it failed to deliver on expectations or customer service.
Matthew Dixon, Nick Toman, and Rick DeLisi in their new book, The Effortless Experience: Conquering the New Battleground for Customer Loyalty offers some fascinating facts about customer service and loyalty:
- Exceeding expectations, e.g. by refunds, free product, or service, makes a customer slightly more loyal. It is very costly with marginal increased benefits.
- Little correlation between being satisfied and loyalty – 20% of satisfied customers will leave while 28% dissatisfied will stay,
- Customers are four times more likely to leave a service interaction disloyal than loyal.
- 84% of customers said that their expectations were not exceeded during the last interaction.
Companies fail to understand the customer journey – what the customer experiences and cares about after installation until the next purchase. Customers care primarily about two things: 1) getting things done efficiently and effectively and 2) getting their problems resolved quickly and efficiently. It means having a product or service that delivers on expectations and, in times when it does not - being able to reach someone quickly and conveniently, customer representatives who can make real-time decisions, resolving issues during the first company contact without being passed around or starting the conversation all over again, to have a company contact take ownership of the customer problem and resolution, and lastly, to keep a promise of when the customer will get a reply or resolution. Dixon, Toman, and Freeman called it "making it easy for the customer", creating loyal customers primarily by resolving their problems easily and quickly (ref. 1).
I can think of 3 companies who excel at developing customer loyalty:
- American Express
I was impressed when I watched JetBlue deal with a cancelled flight in Baltimore. They offered a stranded customer the next scheduled flight out of Baltimore or another earlier flight out of Ronald Reagan Airport in Washington, DC – with JetBlue paying for the taxi ride there. The JetBlue representatives were engaged and empowered. I saw complimentary snacks and drinks on carts out at the gate for stranded passengers waiting for the next flight out. So not only was JetBlue addressing issues no. 1 (getting stranded customers onto an alternative flight), it was proactive to address corollary issues – crowded gates with stranded, hungry, and thirsty passengers.
Amazon just does it right. Most frequent requests, e.g. product returns, order tracking, cancellations, can be done online and almost instantaneously without human interaction and they reply to online inquiries within 24 hours, if not much faster. Should you have to call, there is the option to have them call you back and they will know exactly which order or situation you were calling about. In many cases, people will prefer one channel to interact, either online or telephone. People do not like to switch “channels” unless they have to and even then, do not want to repeat their needs from scratch.
The representative always seem to know your last conversation with them so you don’t have to start from the beginning…and they take care of you in one interaction.
What’s Killing Most Companies in Loyalty
1. Pushing Customer Service Efficiency. Customers can feel the pressure when a customer support representative is trying to rush and end a call at the expense of listening, understanding, diagnosing and solving the customer problem. Customers don’t get angry, they get even,
2. Compartmentalizing groups and bureaucracy – No one likes to be passed around and having to start the conversation over. The worst is being transferred and lost, then having to start over. (At the very least, companies should take down the contact information so that they can call the customer back if lost.)
3. Untrained or outsourced customer service – customers get frustrated dealing with off-shore or contract staff clearly reading from or consulting scripts with programmed replies.
4. Incomplete Product Releases – incomplete/poor documentation, incomplete help in products, un-intuitive user interfaces or operation, not fixing known bugs lead customers to initiate contact, yet these are things that could be could have been foreseen and corrected prior to product introduction. A company skimping on user training leads to more calls to customer support. Remember the saying: “A stitch in time saves nine”.
Companies are focused on innovation which, in most of cases, refers to product innovation. Product innovation is only part of the customer experience, the majority of the experience will be customer and company interactions, and those interactions will determine how the customer thinks about doing business with the company in the future.
Steps to "Make It Easy"
Companies try to profile, map the process for customers, and understand the problem(s) prior to the initial sale. The next steps (which are rarely taken) is to do similar exercises to be in the customer’s shoes when they need to solve problems after the initial sale:
1. What are the most common reasons or problems that a customer may need to contact you for assistance, e.g. product return, product assistance, down machine during warranty period?
2. How many of these reasons or problems could be proactively resolved so the issues go away, e.g. better documentation, product enhancements, including extra pieces for assembly?
3. What channels, e.g. online FAQ, online chat, telephone, are available for the customer to contact your company for assistance?
4. Flow chart the steps with company contact name and time required in each channel to get a problem resolved, e.g. steps to return an item with full refund.
5. Identify the obstacles in each flowchart (step 4) that prevent resolution with the first company contact.
So understand how a customer interacts with your company after the sale. Eliminate the obstacles. Empower your staff to solve problems instead of hiding behind policy statements. Ensure that they find it easy to get the resolution and answers they want and through the first contact.
Ref 1: Stop Trying to Delight Your Customers by Matthew Dixon Karen Freeman Nicholas Toman - Harvard Busoness Review July - August 2010