What will lowering customer effort mean for your organisation?
Your firm is under enormous pressure to drive customer loyalty and increase their lifetime value. You know that lowering customer effort is the way to achieve this (especially if you read our first blog – Do your customers really want to be delighted?).
If you are easy to do business with, of course customers will keep coming back and will spend more money. Seems obvious, right?
But there’s one big thing in the way of your strategy to minimise customer effort: the C-suite. The challenge is that inevitably there are those C-suite executives who get it – and then there’s everyone else.
And because lowering customer effort is a company-wide endeavour, you cannot rely on leaps of faith to get it across the line. You need to be able to demonstrate what a lower customer effort will mean for the organisation. In short, you need to talk numbers.
So before you head to the boardroom, we’ve taken the liberty of preparing some questions you might be asked, along with some very convincing responses:
1. How can you prove that low effort equals loyalty?
While the 2010 Harvard Business Review article, “Stop trying to delight your customers”, might have been the first to prove that low effort equals loyalty, it was certainly not the last. In October 2013, UK-based research revealed that the easier the brand experience, the more likely customers will remain loyal.
The research used a Customer Effort Score for nine retailers, asking 1,000 customers to rate the ‘effort’ of an experience on a five point scale, where one equals very low effort and five equals very high effort. The results showed that customers reporting ‘low effort experiences’ are more likely to go out of their way to keep using a brand.
The same result was found in a CEB Customer Contact Council study titled “Inside the Low Effort Organisation”. Here again, findings proved the higher the effort, the more disloyal a customer would become.
While the research focused on UK brands, the takeout can be applied globally: to improve loyalty, brands should focus on making it easy for customers and remove unnecessary obstacles.
2. What about return on investment?
With any new strategy, the decision always comes back to the bottom line. The reality is that without hard dollar benefits, a strategy to lower customer effort will never get off the ground. So what is the ROI of becoming an effortless company to do business with?
Firstly, the good news is that focusing on customer effort can actually mean your business can operate more efficiently. Think about all those unnecessary steps and bureaucracy you have to manage at present. You are looking at your business from a “make it simple” perspective. By making your offer simple, it naturally follows that you will increase speed to market, promote innovation and, ultimately, boost profits.
Secondly, it’s important to remain realistic that lowering customer effort is a long-term strategy. It might require some up-front investment in the short-term but the company will reap the rewards of loyal customers for years to come.
Need proof? Siegel and Gale’s Global Brand Simplicity Index 2013 shows an undeniable correlation between “simple” organisations and their market value. In fact, its Simplicity Portfolio has beaten the average global stock index by 100% since 2009.
Need more proof? Forrester’s report titled “The Business Impact of Customer Experience” shows how a stock portfolio of customer experience index leaders made significant gains in performance compared to customer experience laggards.
How much gain? A cumulative 43% gain in performance over a six-year period (2007 to 2012), compared to a 33.9% decrease for a portfolio of customer experience laggards.
But it’s not only about market value. Being easier to do business with you means you expend less effort and money to service your customers. Think about the times you have called a company to reorganise a delivery, cancel a service or dispute a bill.
The time and effort these calls cost you as the customer have been matched or exceeded by the company. Whether within the contact centre or elsewhere across the company, eliminating this extra effort means the company will enjoy immediate bottom line savings.
3. How does low customer effort work in action?
Now’s the time to talk specifics. Bring your argument to life using the journey of one customer through various interactions with your brand. Show the impact of lower customer effort on your customer contact centre, explaining how it will lower call times, improve contact centre performance and decrease costs.
For your closing argument, attribute a dollar figure to this customer to demonstrate how a more loyal customer will make more repeat purchases, of higher value, therefore increasing their customer lifetime value.
It’s no secret that the C-suite measures customer profitability as a gauge for long-term success; lowering customer effort is a no-brainer.
In our next blog, we’ll question whether the traditional measures of customer experience are still cutting the mustard. Do you know how much it costs you to deliver a satisfied customer?
Scott McMillan - General Manager - Business Consulting, Salmat
Scott McMillan is Salmat\'s General Manager of Business Consulting. He has a passion for driving exceptional customer experiences through multi-channel environments. He believes that finding the right equilibrium between people, process & technology can create real world opportunities for all organisations. A strong proponent of finding the right â€˜mix\' is ensuring you evangelise the â€˜outside in thinking\' principles.