UNREASONABLE IDEAS: the inflexion-point blog

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” George Bernard Shaw, Maxims for Revolutionaries

Why focusing on delighting your customers is a stupid strategy

Posted by Bob Apollo on Fri 16-Aug-2013

If you read the profiles of many of the heads of customer service on LinkedIn (or the service areas of their company’s websites), you might be forgiven for concluding that they were almost all focused on the lofty goals of “exceeding customer expectations” and/or “creating customer delight”. Maybe your organisation claims to do the same.

The Effortless ExperienceBut ground-breaking recent research by the CEB (the organisation that brought you “The Challenger Sale”) makes a strong case for all this talk of delighting customers being a misguided and - for almost every company on the planet bar a few shining stars - ultimately unprofitable strategy.

As anyone who has had cause to phone O2’s customer service line (note: other mobile phone companies offer an equally awful experience) will recognise, I think most of us would be prepared to sacrifice the occasional opportunity to have a truly “wow” experience in return for not ever having to suffer any more of the much more common “doh!’ experiences.

An Effortless Experience?

The CEB’s research (spanning nearly 100,000 customers) found that there is almost no discernable increase in loyalty amongst customers whose expectations were exceeded compared to those whose expectations had simply been met - but that there was a precipitous decline in loyalty amongst those who had been disappointed by their service experience.

The full details will soon be revealed in “The Effortless Experience” by Matthew Dixon, Nick Toman and Rick Delisi - due to be published in September of this year. But the authors were kind enough to let me have an advance copy, and I thought it worth whetting your appetite by sharing a few of their conclusions.

Customers just want it to be easy

It turns out that the overwhelming majority of customers aren’t looking to have their expectations exceeded. They simply want their service experience to be easy. Here are three findings that particularly stood out for me:

1: A Strategy of Delight Doesn’t Pay

Far from loyalty increasing when expectations are exceeded, the study found that loyalty pretty much flat-lines once expectations have been met. But it also found that most organisations grossly underestimate the negative loyalty generated by service experiences that fell below the customer’s expectations.

As the authors point out, for most companies (if you work for Nordstrom or Zappos, ignore this) trying to achieve delight is unprofitably expensive - but a failure to get the service basics right is punishingly unprofitable. You will lose customers, and they will share their bad experience with many others to create a vortex of negative word of mouth.

2: Customer Service Interactions Tend to Drive Disloyalty, not Loyalty

The study found that most customer service interactions did more harm than good - and there’s a good reason why: customers tend to call customer service when they have a problem, and because the majority of customer service interactions fail to fully, quickly and effortlessly solve the problem, they tend to make things worse - in many cases, much worse.

They found that positive service experiences generated relatively little positive word of mouth when compared to positive product experiences - but that negative service experiences generated FAR more negative word of mouth than negative product experiences.

There’s some simple and obvious psychology behind this: positive product experiences are a reflection of our own wisdom - and so we want to share them. But negative service experiences make us feel disrespected and angry, and we want to help our friends and colleagues avoid going through the same.

3: The Key to Mitigating Disloyalty is Reducing Customer Effort

Finally, the study found that disloyalty is directly related to the degree of effort the customer has to go through in order to get the problem completely resolved. This isn’t just about being able to claim “First Call Resolution” (FCR): it’s about making sure that the customer doesn’t suffer related downstream problems.

In fact, obsessing about FCR statistics turns out to be dysfunctional, since it encourages the CSR to mark the call closed when there may still be some as-yet-undiagnosed issues that are going to manifest themselves later on. The CEB talk about “next issue avoidance”, and it's a factor that really sets good service organisations apart from the rest.

Having to make more than one call, having to repeat information as you get passed around the organisation in a vain attempt to get to someone who can do something, and being told that an apparently sensible option “isn’t corporate policy” - these all contribute to making the customer feel frustrated, uncomfortable, unloved and ultimately disloyal.

If you don’t yet believe the importance of this, consider the following statistic: 96% of customers who had a high-effort service experience reported being disloyal, compared to only 9% of customers who reported a low-effort experience. The message is clear - your primary goal must be to make the service experience as simple, straightforward and easy as possible for your customers and if you don’t, they will leave.

In Summary

I hope that this brief and inadequate précis makes you want to get hold of your own copy of the book as soon as it is released. You can pre-order the Kindle version from Amazon UK here - and you might also like to visit the CEB’s website for the book here.

So tell me: how does this shape up against YOUR experiences as a customer? And how good a job is your customer service team doing in making it easy for your customers to have their problems resolved. Oh, and if you’ve got any “doh!’ experiences (or even any “wow!”) experiences you’d like to share, please add a comment.

Topics: B2B Marketing, B2B Sales, The Challenger Sale

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