Five Customer Service Myths Busted

Ask any company today what their number one priority is and chances are the overwhelming majority would respond with, “Our customers, of course.” Most companies today are not only mindful of customers’ needs, they have put systems in place to ensure the customer is the focal point. In fact, entire industries have sprung up around the globe, dedicated to helping companies differentiate themselves in how well they meet customer expectations. The idea that companies must “delight” customers by exceeding their service expectations is now so entrenched that managers and service reps rarely even question it. Companies devote untold time, energy, and resources towards trying to go above and beyond for their customers and, in turn, inspire their undying loyalty.

However, more than five years of research in the customer service and support space shows that “delighting” customers simply does not predict repeat sales, share of wallet or positive word-of-mouth. Through these findings, we have come to understand that companies in pursuit of the ideal customer experience are often overlooking far more meaningful drivers of the customer experience – the very elements that materially impact customer loyalty and drive commercial performance.

Reducing customer effort is the most important thing your company can do to better serve customers.

In no particular order, here are the top five service myths related to the ideal customer experience…

Myth #1: Delighting customers in service interactions drives loyalty.
Reality: Simply meeting baseline customer expectations in service interactions drives the same loyalty benefit as exceeding expectations.

Research clearly shows that delighting customers, while it may seem like the “right answer” does not lead to commensurate loyalty. In many cases, those grateful letters that customers send detailing how they were delighted are followed by no further advocacy, no incremental spend, and in many instances a phone call to cancel their service or return their product. The next myth details why this is the case…

Myth #2: Customer service positively impacts customer loyalty.
Reality: Customer service largely drives disloyalty.

Most leaders think of customer loyalty as a single “pie.” The reality is that loyalty really behaves like two separate pies – one for positive gains in loyalty, and the other is disloyalty. The positive pie is driven by things like the brand, product quality, and value. The negative pie, however, is dominated by customer service. Why? Because service reps are engaging customers who are already in a sub-optimal state of mind. At the very least, they just have a question. More commonly though, they have a concern or an issue they need resolved. The primary goal of customer service is to mitigate disloyalty, not drive positive gains in customer loyalty. In short, if customer service were a sport, you’d place your bets on the stronger defense, not  on the stronger offense.

Myth #3: Customers want to be showered with discounts, givebacks, and WOW moments.
Reality: Customers want ease. Getting customers back to their already busy lives quickly matters more than anything.

The greatest driver of disloyalty is the amount of effort you require your customers to put into their service experience. This includes having to call multiple times, repeating information, channel switching (e.g. starting in Web and ending up on the phone), being transferred, getting road-blocked by policies and procedures, and the general hassle factor that most service interactions create.

Simply stated, reducing customer effort is the most important thing your company can do to better serve customers.

Myth #4: Your customers want to talk to you.
Reality: Your customers would much rather self-serve.

Most companies manage their service operations to the preferences of a 77-year old customer. That’s the age where customers prefer the phone 2.5x more than self-service, which is the ratio that most executives believe customers prefer to interact with their company. But consider that nearly 60% of all phone interactions saw the customer start on the company’s website. Companies are forcing customers to switch from self-service to phone – and creating significant customer effort along the way. The trick isn’t getting customers to try to self-serve, it’s getting them to stay in those channels. It’s what customers want, and what our CFOs want, so why aren’t we focused there?

Meeting baseline customer expectations in service interactions drives the same loyalty benefit as exceeding expectations.

Myth #5: Customers will be satisfied by having many choices in how they interact with a company.
Reality: Customers want to be guided to the simplest, easiest resolution possible.

Only 16% of customers are steadfast in their service channel preferences (the majority of who view the phone as the ONLY option for their service needs). The remaining 84% of customers prefer guided resolution, where a company essentially recommends the best way to resolve an issue. Herein lays the problem. Most service websites have between 25 and 45 initial choices for a customer to make when trying to resolve an issue – each choice equally right or wrong. The lowest effort websites aren’t the ones trying to “keep up with the Joneses.” Instead, they are focused on simplicity and clarity. Amazon.com epitomizes guided resolution, where customers select their issue in a series of 3 drop down menus and are then prompted as to the best channel to interact with Amazon. What’s more amazing, is when the phone is recommended, the customer is asked to input their phone number and a rep from Amazon calls and immediately starts to resolve that specific issue.

image courtesy of mirror.co.uk