Every business wants to have loyal customers – but loyalty is always a rather strange concept in business. We often only discover that a customer isn’t loyal when they never speak to us again! We’ve had ‘customer recommendation’ and ‘customer delight’ as benchmarks for loyalty for a while – but happy customers may still go to the competition, so measuring satisfaction might not be the best way to test loyalty.
A survey of 75,000 customers published in 2010 in the Harvard Business Review made a startling statement – you don’t have to delight your customers, you just need to make it easy for them! This seemingly went against all the common wisdom about customer satisfaction that had gone before it.
Some 94 per cent of customers who found it easy to deal with an organisation – who had used low amounts of effort – said they’d buy from that company again. And 88 per cent of them said they’d spend even more money with that company the next time. Whereas 81 per cent of the customers who had a hard time dealing with a company – who used high amounts of effort – said they’d tell people about their bad experience.
Ever since then, customer effort has been a hot topic of conversation.
To be honest, ‘customer effort’ isn’t new – it’s been around since the 1940s. It focuses on how easy a customer finds it to buy things and then set them up – whether it’s a new cooker or broadband service. It measures the customer’s whole experience, from start to finish. It looks at how long customers spend researching a product, talking to a salesperson face to face, waiting in a queue, phoning a helpdesk or complaining to the company. And it asks them how much effort they put in to reach their goal or solve their problems.
Easy does it!
But is customer effort really worth the effort? To find out we’ve just done some research on companies that have used customer effort as a way of analysing their business performance. The research, ‘Customer Effort: help or hype?’, points strongly towards ‘effort’ (or ‘easy’) being a good indicator of customer loyalty. These companies have found that customer effort isn’t just hype and produces tangible benefits – such as increases in customer retention, reduction of complaints and increase in positive word of mouth. Make the effort to make it easy for your customers to do business with you and the likelihood is that they will stay with you – easy does it!
If you want to hear more about this kind of thing, I’ll be presenting a session at the BT for Retail Summit 2013 on 22-23 May at Whittlebury Hall, Northamptonshire. You can get more information and register for the event here.
Posted by Dr Nicola Millard, Customer Experience Futurologist, BT