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View all blog posts under Articles View all blog posts under Business Administration. Whether you are already in a managerial position or plan to pursue one after earning an MBAchances are you already have or will have to conduct staff reviews. One of the clearest benefits of regular reviews is the opportunity to improve the overall performance in the workplace. Taking the time to analyze the work produced by your staff over the last year, or any period you wish to review, is the perfect opportunity to find areas that need attention.

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The notion that companies must go above and beyond in their customer service activities is so entrenched that managers rarely examine it. But a study of more than 75, people interacting with contact-center representatives or using self-service channels found that over-the-top efforts make little difference: All customers really want is a simple, quick solution to their problem. The authors also introduce the Customer Effort Score and show that it is a better predictor of loyalty than customer satisfaction measures or the Net Promoter Score.

And they make available to readers a related diagnostic tool, the Customer Effort Audit.

Why you need good business ethics

They conclude that we are reaching a tipping point that may presage the end of the telephone as the main channel for service interactions—and that managers therefore have an opportunity to rebuild their service organizations and put reducing customer effort firmly at the core, where it belongs. A large-scale study of contact-center and self-service interactions, however, finds that what customers really want but rarely get is just a satisfactory solution to their service issue.

Reps should focus on reducing the effort customers must make. But ask yourself this: How often does someone patronize a company specifically because of its over-the-top service? You can probably think of a few examples, such as the traveler who makes a point of returning to a hotel that has a particularly attentive staff. Now ask yourself: How often do consumers cut companies loose because of terrible service?

All the time.

In those settings, our research shows, loyalty has a lot more to do with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the service experience might be. Yet most goods have failed to realize this and pay dearly in terms of wasted investments and lost customers. Service failures not only drive existing customers to defect—they also can repel prospective ones. Our research shows:. To examine the links between customer service and loyalty, the Customer Contact Council, a division of the Corporate Executive Board, conducted a study of more than 75, people who had interacted over the phone with contact-center representatives or through self-service channels such as the company, voice prompts, chat, and e-mail.

We also held hundreds of structured interviews with customer service leaders and their functional counterparts in large companies throughout the world. During a three-year period, we surveyed more than 75, B2C and B2B companies about their recent service interactions in major non-face-to-face goods, including live phone calls, voice prompts, web, chat, and e-mail. The companies represent dozens of industries, ranging from consumer electronics and packaged goods to banking and travel and leisure, in North America, Europe, South Africa, Australia, and New Zealand. Although our research focused exclusively on contact-center interactions, it makes intuitive sense that the findings need to face-to-face encounters as well.

Second, acting deliberately on this insight can help improve customer service, reduce customer service costs, and decrease customer churn. According to conventional wisdom, customers are more loyal to firms that go above and beyond. But our research shows that exceeding their expectations during service interactions for example, by offering a refund, a free product, or a free service such as expedited shipping makes customers only marginally more loyal than simply meeting their needs.

For leaders who cut their teeth in the service department, this is an alarming finding. Indeed, 89 of the customer service he we needed said that their main strategy is to exceed expectations.

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And managers often assume that the more satisfied customers are, the more loyal they will be. But, like others before us most notably Fred Reichheldwe find little relationship between satisfaction and loyalty. The picture gets bleaker still.

Although customer service can do little to increase loyalty, it can and typically does do a great deal to undermine it. Customers are four times more likely to leave a service interaction disloyal than loyal. Another way to think about the sources of customer loyalty is to imagine two pies—one containing things that drive loyalty and the other containing things that drive disloyalty. The loyalty pie consists largely of slices such as product quality and brand; the slice for service is quite small.

But service s for most of the disloyalty pie. We buy from a company because it delivers quality products, great value, or a compelling brand. We leave one, more often than not, because it fails to deliver on customer service.

Armed with this understanding, we can fundamentally change the emphasis of customer service interactions. Framing the service challenge in terms of making it easy for the customer can be highly illuminating, even liberating, especially for companies that have been struggling to delight. Simply: Remove obstacles. We identified several recurring complaints about service interactions, including three that focus specifically on customer effort. Customers resent having to contact the company repeatedly or be transferred to get an issue resolved, having to repeat information, and having to switch from one service channel to another for instance, needing to call after trying unsuccessfully to solve a problem through the website.

Well over half the customers we surveyed reported encountering difficulties of this sort.

Companies can reduce these types of effort and measure the effects with a new metric, the Customer Effort Score CESwhich ass ratings from 1 to 5, with 5 representing very high effort. Not surprisingly, CSAT was a poor predictor. NPS proved better and has been shown to be a powerful gauge at the company level.

CES outperformed both in customer service interactions. Many of the companies we work with use CES to intervene with customers at risk of defecting. We found the predictive power of CES to be strong indeed. We believe that the superior performance of CES in the service environment derives from two factors: its ability to capture customer impressions at the transactional level as opposed to NPS, which captures more-holistic impressions of a company and its ability to capture negative experiences as well as positive ones.

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During our study, we saw many companies that had successfully implemented low-customer-effort approaches to service. Following are five of the tactics they used—tactics that every company should adopt. By far the biggest cause of excessive customer effort is the need to call back.

They need to realize that customers gauge the effort they expend not just in terms of how an individual call is handled but also according to how the company manages evolving service events, such as taking out a mortgage or setting up cable service, that typically require several calls.

Tracking repeat calls within a specified period we recommend seven to 14 days is not only easier than measuring FCR but also casts a wider net, capturing the implicit, or nonobvious, reasons customers call back, such as related downstream issues or an emotional disconnect with a rep. A word of caution: Tracking repeat calls instead of using FCR inevitably makes performance appear worse.

However, we believe that it is a far better way to spot and eliminate sources of undue customer effort and that it can help companies boost loyalty in ways FCR cannot. Bell Canada met this challenge by mining its customer interaction data to understand the relationships among various customer issues. For instance, a high percentage of customers who ordered a particular feature called back for instructions on using it.

For complex downstream issues that would take excessive time to address in the initial call, the company sends follow-up e-mails—for example, explaining how to interpret the first billing statement. Bell Canada is currently weaving this issue-prediction approach into the call-routing experience for the customer. With some basic instruction, reps can eliminate many interpersonal issues and thereby reduce repeat calls.

A rep dealing with a customer who wants to redeem miles for an unavailable flight might learn that the caller is traveling to an important business meeting and use this fact to put a positive spin on the need to book a different flight. Despite their desire to have customers turn to the web, companies tend to resist making improvements to their sites, assuming that only heavy spending and technology upgrades will induce customers to stay there. And even when costly upgrades are made, they often prove counterproductive, because companies tend to add complicated and confusing features in an attempt to keep up with their competitors.

Customers may become overwhelmed by the profusion of self-service channels—interactive voice response, websites, e-mail, chat, online support communities, social media such as Facebook and Twitter, and so on—and often lack the ability to make the best choice for themselves. For example, technically unsophisticated users, left to their own devices, may go to highly technical online support communities.

As a result, customers may expend a lot of effort bouncing between channels, only to pick up the phone in the end. Our research shows that 2. Travelocity reduced customer effort just by improving the help section of its website. It had learned that many customers who sought solutions there were stymied and resorted to the phone. Many companies conduct postcall surveys to measure internal performance; however, they may neglect to use the data they collect to learn from unhappy customers.

5 reasons to hold regular performance reviews

The company has frontline reps specifically trained to call customers who have given it low marks. Some companies monitor online behavior in order to identify customers who are struggling.

Incentive systems that value speed over quality may pose the single greatest barrier to reducing customer effort. Most customer service organizations still emphasize productivity metrics such as average handle time when assessing rep performance. Today the company evaluates its reps solely on the basis of short, direct interviews with customers, essentially asking them if the service they received met their needs.

Freed to focus on reducing customer effort, frontline reps can easily pick low-hanging fruit. Ameriprise Financial, for example, asks its customer service reps to capture every instance in which they are forced to tell a customer no. Some companies have gone even further, making low customer effort the cornerstone of their service value proposition and branding. The immediate mission is clear: Corporate leaders must focus their service organizations on mitigating disloyalty by reducing customer effort.

Although most companies believe that customers overwhelmingly prefer live phone service to self-service, our most recent data show that customers are, in fact, indifferent. This is an important tipping point and probably presages the end of phone-based service as the primary channel for customer service interactions. For enterprising service managers, it presents an opportunity to rebuild their organizations around self-service and, in the process, to put reducing customer effort firmly at the core, where it belongs.

Stop trying to delight your customers

You have 1 free article s left this month. You are reading your last free article for this month. Subscribe for unlimited access. Customer service. Stop Trying to Delight Your Customers.

To really win their loyalty, forget the bells and whistles and just solve their problems. Reprint: RL The notion that companies must go above and beyond in their customer service activities is so entrenched that managers rarely examine it. Most customers encounter loyalty-eroding problems when they engage with customer service.

Karen Freeman is managing director at Corporate Executive Board. Partner Center.