Effortless Engagement: Making it easy to be a customer

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1 Effortless Engagement: Making it easy to be a customer Professor Moira Clark Maximising Value through Relationships

2 Effortless engagement: Are we working our customers too hard? What do we mean by customer effort? Understanding the different types of customer effort How to map out the customer effort journey Key future steps to building customer loyalty

3 Objectives of a company Get customers Keep customers Grow customers Customer loyalty can be defined as: Customers intention to keep doing business with the company, to increase the amount they spend and to spread positive word of mouth 3

4 Net Promoter Score: LSE report Advocacy drives growth surveys: 83% Phone surveys: 90% 4

5 Customer Effort - what s it about? Research into the impact of effort on customer loyalty started in 1940 s Gained momentum in 2010 with the HBR article

6 The Customer Effort Score HIGH PREDICTIVE POWER FOR REPURCHASING CES NPS CSAT The Customer Effort Score Outperforms the Net Promoter Score and customer satisfaction measures in predicting behaviour. LOW Source: HBR article - Stop Trying to Delight Your Customers by Matthew Dixon, Karen Freeman, and Nicholas Toman HIGH PREDICTIVE POWER FOR INCREASED SPENDING 6

7 Stop trying to delight customers? The HBR article challenged the premise that companies must strive to delight customers by exceeding service expectations. Their large scale study (75,000 respondents) of contact centre and self-service interactions found that what customers really want is. a satisfactory solution to their service issue. Source: HBR article - Stop Trying to Delight Your Customers by Matthew Dixon, Karen Freeman, and Nicholas Toman

8 The Customer Effort Score How much effort did you personally have to put forth to handle your request? 1 (very low effort) to 5 (very high effort). Of the 75,000 B2B and B2C customers who reported low effort, 94% expressed an intention to repurchase and 88% said they would increase their spending. Conversely, 81% of the customers who had a hard time solving their problems reported an intention to spread negative word of mouth. Source: HBR article - Stop Trying to Delight Your Customers by Matthew Dixon, Karen Freeman, and Nicholas Toman

9 What is customer effort? Customer effort is a customer s perception of the amount of time and energy that he/she has to spend in an encounter with a brand or an organisation. It is different from the objective amount of time and energy. It is the nonmonetary cost of consumption. It can be a global judgment or a judgment about a single encounter. 9

10 Why measure effort? Drives advocacy, value for money and loyalty Churning customers tend to have had difficulty in doing business with you and spread negative word of mouth BT research shows > 40% difference in churn between easy and difficult BT research points to CE as the number one driver of advocacy among BT customers

11 Why measure effort cont? Drives advocacy, value for money and loyalty High actionable feedback tells you what drives your customers mad! Applicable to all channels and all businesses Engages and resonates with staff Low effort = low cost for everyone!

12 Dimensions of customer effort 1. Queuing and waiting time 2. Transaction/consumption time 3. Cognitive energy 4. Emotional energy 5. Physical energy

13 Types of effort Cognitive effort Web site difficult/easy to navigate Information too much/ too little Directions to site complicated/easy Prices gocompare.com Instructions on product /service difficult/easy to understand Complaints procedures difficult/easy to understand

14 Don t overload with choice

15 Types of effort Emotional effort People relationship staff, other clients Inability to access the right people, processes or procedures Complaints not being properly dealt with Being kept waiting Safety and security

16 Example: reducing cognitive and emotional effort for diabetic patients 16

17 Types of effort Time effort Waiting / queuing in any channel Simplified procedures to shorten time effort Explaining things again and again Being given the run around Distance travelled Telepresencing/

18 Telepresence

19 Non present presence Now you can be in two places at once

20 Drivers of customer effort B2C Customers want: Information & explanation Decision making help Reassurance Flexibility Availability and access Professional customer-contact representatives Customers do not want: Surprises unmet expectations Slow and lengthy processes

21 Drivers of customer effort B2B Customers want: Access to decision makers Responsive company quick to react A contact point that is easy to get hold of The company to really listen to me An individualised approach to business

22 Effort and loyalty are correlated: it isn t just hype! B2C Companies The rate of customer loss for the easy scores was found to be significantly less than for the others and showed a 40% reduction in their propensity to churn. Invest in the lower end of recommendation scores, minimising the no and unlikely responses, rather than moving customers from probably to definitely Negative effort experiences were a stronger loyalty indicator than positive 22

23 Effort and loyalty are correlated: it isn t just hype! B2B Companies Effort questions added to annual surveys identified trapped customers - those who indicated they would remain customers but were at risk if another supplier was available B2B companies had specific examples where customer defections were prevented due to CE led improvements 23

24 What does being easy to do business with mean? Matching customer expectations to actual effort value propositions Handling exceptions well Having good end-to-end processes for the customer - being 'joined up'. Clear sign-posting about what companies are doing and what you need to do and when Consistency of engagement - so that it doesn't matter who you speak to. Knows you when you are a returning customer identifies you quickly Understands and takes into account your preferences Doesn t waste my time It s pleasurable and relaxing Delivers on promises The perception is that they work around you feels like it is tailored consulting you/engaged in the process makes you feel you are in control

25 Easy does it not effort Companies found that while CES is understandable to both customers and employees, more accurate results were achieved by phrasing the question as how easy was it rather than how much effort was needed. 25

26 CES: Make it easy to be a customer Companies create loyal customers by making it easy for them to be a customer: helping them to solve their problems quickly and easily Making It Easy to be a Customer

27 Measuring CES: The Net Easy Score: NES Overall how easy was it to get the help you wanted from BT today? Extremely easy Very easy Fairly easy Neither Fairly difficult Very difficult Extremely difficult The % of easy - % difficult = Net easy score

28 Global Ease of Doing Business Priorities Special analysis project reveals focus areas to improve EODB Priorities based on Global Results Tech Services: Technical Assistance Tech Services: Technical Support Website Fulfillment: Time and Effort to Order Products/Services Tech Services: Software Download Process Fulfillment: Meeting Delivery Needs Products: Time to Adoption Areas of focus to improve EODB for customers Account Team: Responsiveness Account Team: Commitment to Business Success Leverage and maintain strong performance in these key areas EODB key driver analysis project conducted using FY11 results

29 Customer Effort Score Time effort of the BAA T5 journey Business Class lounge Gates Boarding 5 Security 4 Bag drop 3 2 Car park Signs 1 Location of terminal Toilet Restaurants Touchpoints In Time Sequence

30 Not all touch points and channels are equal Some are more important in driving satisfaction Some are important in reflecting brand differentiation Some are important in driving customer retention or referrals Some may not be important at all. This means that not all touch-points / channels are equally important, so resources need to be allocated differently

31 Customer Experience Score Time effort of the BAA T5 journey Business Class lounge Gates Boarding 5 Security 4 Bag drop 3 2 Car park Signs 1 Location of terminal Toilet Restaurants Touchpoints In Time Sequence

32 B2C vs B2C B2C guidance, focus on customer contact points: Equip staff to address the emotional side of customer interactions. 24% of the repeat calls stem from emotional disconnects between customers and reps! Minimise channel switching by increasing channel stickiness. 57% of inbound calls come from customers who went to the web site first! Empower the frontline to deliver a low-effort experience. Incentive schemes that reward speed over quality pose the greatest threat to reducing customer effort 32

33 B2C vs B2B B2B guidance, think customer centric: Start with the customer service function. 22% of repeat calls involve downstream issues related to the problem that prompted the original call. Spread the message throughout customer facing functions Use customer feedback from unhappy or struggling customers to reduce customer effort! 33

34 Actions and summary Put Make it Easy to be a Customer on your boardroom agenda Galvanise everyone's thinking around Easy Talk about it, educate staff, make Easy part of the culture Be customer-centric - Ask staff What would the customer think? Clear the obstacles to making it easy Challenge practices, procedures and systems that make it difficult to be a customer Make it easy to be a customer

35 Thank You Professor Moira Clark Maximising Value through Relationships