Your Customer Service Duty

Posted: March 7, 2011 in CRM
Tags: ,

There’s good news for any manager who has grown exasperated with trying to delight customers through “over the top” service.  You may be working too hard and the benefits are not forthcoming.  We’ll do anything to keep customers because they tend to buy more from us and the cost of replacing them if they leave is so high.  But according to a study published in Harvard Business Review, “Stop Trying to Delight Your Customers” by Matthew Dixon, Karen Freeman, and Nicholas Toman, vendors would be better off sticking to their service knitting instead of looking for ways to “delight” them.  This is not to say that the customer experience is unimportant, just the opposite.  The question is what constitutes the customer experience from the customer’s perspective.

“Stop Trying to Delight Your Customers” is important because it is so thorough.  According to the article, which first appeared in HBR in July 2010, “the Customer Contact Council, a division of the Corporate Executive Board, conducted a study of more than 75,000 people who had interacted over the phone with contact-center representatives or through self-service channels such as the web, voice prompts, chat, and e-mail.”  The researchers also held hundreds of structured interviews with customer service leaders.

Their conclusions mirror what some people in CRM have been saying for a long time.  Customers’ opinions of service quality, and their experiences, are determined by how well the vendor attends to the matter at hand — meeting the customers’ needs.  According to the study, refunds, freebies and the like are only marginally effective at making customers loyal.  What works exceedingly well on the other hand is attention to the basics.  From the report, top loyalty eroding problems include:

  • 56% report having to re-explain an issue
  • 57% report having to switch from the web to the phone
  • 59% report expending moderate-to-high effort to resolve an issue
  • 59% report being transferred
  • 62% report having to repeatedly contact the company to resolve an issue

Most interestingly the report points to a new metric that has greater predictive value for customer loyalty than customer satisfaction or even the Net Promoter Score (NPS) — the Customer Effort Score or CES.  The CES measures customer effort as ranked by the customer, on a scale of 1 to 5 with 5 being very high effort.  Think of it like the friction in a customer service encounter, the lower the friction, the lower the customer’s effort and the happier and more loyal the customer.

The article’s findings and recommendations paint a picture of how any company — without massive investment in the latest fad technology can make itself easier to do business with.  Often removing service friction is as simple as removing old policies and procedures that no longer apply, making websites easier to navigate and anticipating the customer’s next need based on the case information.  For instance, the authors cite a situation with Bell Canada in which a high percentage of “customers who ordered a particular feature called back for instructions on using it.”  By anticipating the next call and routinely providing instructions, Bell Canada “reduced its ‘calls per event’ by 16% and its customer churn by 6%.”

Is it really that simple?  Apparently.

This is all very interesting to me because for a couple of years I’ve been trying to raise the issue that no matter what else we do in the customer service interaction, we need to ensure that we solve the customer’s problem.  While it seems rudimentary, I feel we’ve lost sight of the idea amid the need to reduce call time, deflect issues to other channels and cross sell or up sell.  I have gotten to the point that I am recommending to clients that they adopt policies that equate customer resolution with a duty to the customer spelled out in black and white.

The idea of duty might seem odd to some but the idea isn’t new and I have written about it before.  You can trace it back through American and English Common Law to the Magna Carta.  It may seem unusual but the idea of a vendor’s duty to a customer was codified into law in the great charter — the first example of a constitution-like document in Western Civilization.

Among the duties in question is the reception an innkeeper owes to a customer and it is still in force today.  If you’ve ever arrived at a hotel with a reservation and for one reason or another there were no rooms available you might have been surprised at the level of service the hotelier provided to find you a room at a competitor’s place.  But they weren’t just being nice, the hotel has a legal “duty to receive” and that goes all the way back to June 15, 1215 at Runnymede.

Taking a duty-based approach won’t solve every problem associated with providing customer service.  But the CES metric and the stories quoted in the HBR article make it clear that customer service is where a company “re-sells” itself to a customer, regardless of whether or not the customer takes a cross sell recommendation.

So there’s something to be learned from the HBR study as well as from the hospitality industry.  We couldn’t find better sources or better examples of how all businesses ought to provide customer service.

 

Comments
  1. andrewboyceschultz says:

    Wow – my favorite part of the article was the historical fact from Runnymede! But great points – I don’t care how fanatical people are in trying to help me if I have to give my account number and birthday to 3 different people in one call.

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