The one sentence summary

The idea that delighting customers increases loyalty is wrong – it’s all to do with delivering on basic problems and minimizing customer effort.

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WHAT THE BOOK SAYS 

  • Everyone knows that the best way to create customer loyalty is with service so good that it surprises and delights. But everyone is wrong.
  • All the data in the book comes from a massive survey of nearly 100,000 customers. It asked three questions:
    1. To what extent does customer service matter in driving customer loyalty?
    2. What are the things that customer service can do to drive customer loyalty?
    3. How can customer service improve loyalty, while also reducing operating costs?
  • The main findings are:
    1. A strategy of delight doesn’t pay
    2. Satisfaction is not a predictor of loyalty
    3. Customer service interactions tend to drive disloyalty, not loyalty
    4. The key to mitigating disloyalty is reducing customer effort
  • Customers view only 20% of the companies they deal with as unique.
  • Loyalty has three types: repurchase, share of wallet, and advocacy. 60-80% of customers who defect were satisfied or very satisfied at the last survey.
  • 96% of customers who had high effort experiences were disloyal, but only 9% with low effort ones. So the role of customer service is to reduce customer effort.
  • Customers define effort in many ways: taking more than one contact to resolve a problem, generic service, having to repeat information, and being transferred frequently (channel switching).
  • Bad word of mouth has additional power. 45% of people with something positive to say about a company tell 3 people. 48% with negative things to say told 10 other people.

WHAT’S GOOD ABOUT IT

  • 57% of callers try to solve the problem themselves on the web, and 34% are on the website when they call. This means that many websites aren’t good enough for them to self-serve – they can’t find the information they need, the information is unclear, or they just wanted the phone number.
  • FCR = First Contact Resolution. Companies are obsessed with it, but they aren’t measuring it properly. Their data says their FCR is 76%, but customers say it is 40%. This is because there are often unforeseen subsequent problems related to the issue. So the key to stopping these secondary calls is Next Issue Avoidance: anticipating what else might happen after we resolve this issue.
  • When it appears that there is nothing we can do, there is actually. This is experience engineering, and includes understanding the distinction between what customers have to do (78% of companies focus on this), and how they feel after the interaction (only 27% of companies concentrate on this). Advocacy, positive language, and anchoring expectations all help here – it all adds up to alternative positioning of the response.
  • Overall, make it easy for customers to navigate information, provide information that is jargon-free and trustworthy, and make it simple for them to weigh up their options.

WHAT YOU HAVE TO WATCH

  • The book slows down a bit at the end, but the main findings are fascinating.