A lot customers face obstacles when contacting their supplier. They have to contact the organization repeatedly, are being transferred all the time, have to repeat information and have to switch channels to get an issue resolved. Unsatisfied customers, due to bad customer service is bad for business. Customer service companies can reduce these types of effort by using a new type of metric: the Customer Effort Score (CES).
This new metric, introduced by the Customer Contact Council, rates the customer effort while solving a problem during a contact event. It has a big advantage above the other metrics, because it measures at a transactional level. The CCC evaluated the predictive power of CES in terms of customer loyalty, increase in amount customers intending to spend (in the future) and spreading positive word of mouth, next to the Customer satisfaction score (CSAT) and the Net Promoter Score (NPS).
The CSAT score proved to be a poor indicator, because the research shows no connection between customer satisfaction and customer loyalty after interaction events. NPS did better, but it is obtained by asking customer the question "Would you recommend us to a friend of family?" on a 0 (negative) to 10 (promoter) scale. CES is measured by asking the question "How much effort did you personally put forth to handle your request?" on a 1 (very low) to 5 (very high) scale.
The CCC found strong evidence about the predictive power of CES. 94% Of the customers who reported a low score on effort, told they had an intention to repurchase. 88% Told they would increase their spending. Just 1% expressed not to talk positively about the company. On the other hand 81% of the customers who faced hard times solving their issues reported to spread negative word of mouth.
What also came up in the research was the importance of failures in customer service experienced. It does not only affect existing customers, it can also stops prospective customers. 25% Of the customers are likely to say positive things about the service experience, while 65% will tell about their frustrations after their bad service experience. When having a positive service experience, 23% of the customers surveyed told 10 or more people about it. But on the other hand, when the customer experienced a negative customer service, almost half of them would tell 10 or more people about it.
This post is part of a series of blogs about the relationship between customer satisfaction and loyalty. Which has been a research project form the Customer Contact Council and is published in the Harvard Business Review, edition july/august 2010.
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Customer service is a natural feedback mechanism that many companies have ignored over the last several years. As more attention was placed on acquiring new business, many organizations were satisfied to lose some of their client base customers as new ones were plentiful and always walking in the door.
ReplyDeleteOver the past decade, customer satisfaction suffered immensely as upper management reduced internal resources and implemented automated phone systems and/or outsourced the function to other countries. With those strategies came customer frustration and eventual erosion of their business.
http://myprvideo.com/customer-loyalty-satisfaction/
I second your point, profits seemed more important than customer service. Now the time has arrived to approach customer service from a different perspective. Zappos, Virgin and Amazon are great examples.
ReplyDeleteI am agreed that unsatisfied customers, due to bad customer service is bad for business. Research has shown a high percentage of businesses and organizations fail to realize that the impact of a poor customer service experience can lead to a drop in profits, lost of customers and generated bad word of mouth.
ReplyDeleteSmall Business Answering service