IA Summit 12: Happiness is Overrated
I really enjoyed Happiness is Overrated. Misery is Money by Dave Burke. This session focused on how customer service affects customer retention and why it is so important to focus on the customer service of the unhappy customers. It is based on a study published by the Corporate Executive Board.
Customers Leave Because of Bad Service
The Corporate Executive Board (CEB) study is a 3 year study that surveyed over 75,000 customers across multiple mediums and industries worldwide. They found that 89/100 of the customer service heads they surveyed said their primary strategy was to go above and beyond. Zappos is an example of a type of company that is known well for their customer service efforts. However the study also found that this extra effort made only a little difference to customer loyalty. 84% of customers surveyed said that their expectations weren’t met with their most recent company interaction.
The study found that while customers primarily stay for a product and partially due to the brand, the main driving factor for customers leaving is poor customer service.
The main reason customers become unsatisfied is because of effort. The more work the customer has to do to get their problem solved, the more likely they will leave. The most typical culprits of effort are repetition and channel switching. Repetition happens when people have to contact customer support over and over for the same issue. Channel switching takes place when the channel the user is trying to use doesn’t support the desired task. An example of this is reaching a department who can’t solve the problem.
Channel switching is a big problem, because departments may be logging calls like this as a success, as the customer is successfully redirected. However, this is really a failure, because the issue still hasn’t been solved, and it causes repetition. This is an example of a company metric versus a consumer metric.
“22% of repeat contacts come from downstream issues related to the original contact, even if the original contact “resolved” the problem.”
Focus on the Right Metrics
Current metrics are identifying the issues. The Customer Effort Score outperforms the Net Promoter Score in predicting behavior. The Customer Effort Score asks:
“How much effort did you personally have to put forth to handle your request?”
This is measured on a scale of 1 (very low effort) to 5 (very high effort).
Some additional metrics that can be focused on are the number of calls per event, or an audit of every time a customer is told “no” and why. These types of metrics will help identify the customer service problems that cause people to leave.
Focus your service teams on the unsatisfied customers and reduce their effort. Get rid of repetition and channel switching and zoom out your metrics.
Read Stop trying to delight your customers a full report provided by CEB and featured in the Harvard Business Review.