• June 10, 2015
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

The Secret to Loyalty Is Less Effort, Speakers at Interactive Intelligence's Interactions Assert

INDIANAPOLIS — It doesn’t pay to delight customers.

Customers are delighted only 16 percent of the time, but achieving that result increases costs by 10 percent to 20 percent, according to research delivered by CEB during Tuesday’s keynote presentation at Interactions 2015, Interactive Intelligence’s annual user conference.

Furthermore, delighting customers doesn't guarantee their loyalty, Matthew Dixon, group leader of the financial services and contact center practice at CEB, told the 2,000 attendees at the conference.

Loyalty, Dixon said, equates to repurchasing, share of wallet, and positive word of mouth, but the true test of loyalty comes when something goes wrong.

Disloyalty, he added, results when customer effort is high due to repeated contacts, channel switching, transfers, having to repeat information, robotic service, unnecessary policies and processes, and added hassles. "Reducing customer effort mitigates disloyalty," he stated.

He cited CEB research that found that when customer effort is low, 94 percent of consumers will make additional purchases from the company, 88 percent will increase the company’s share of wallet, and 81 percent will spread positive word of mouth about the company. Conversely, disloyalty is 96 percent when customer effort is high.

Dixon offered three tips to help companies reduce customer effort. First, companies should increase channel stickiness, an area highlighted by customers' reluctance to use the phone to reach companies. While three to five years ago, 66 percent of customers relied on the phone, today only 28 percent do so. At the same time, 57.7 percent of customers will first visit a company's Web site to resolve issues, and 35.5 percent were on the company’s Web site when they called an agent.

To make channels sticky, companies should emphasize ease of use over choice. "Too much choice overwhelms," Dixon said. "The more choices we offer, the more [customers] get confused."

Firms should also simplify Web site language. Dixon recommended that companies use the Gunning Fog Index to determine the age and education level needed to understand their Web site content. "By simplifying the language on our Web sites, customers are more likely to stay on them," he said.

Dixon also recommended that companies invest in next-issue avoidance to eliminate the reasons why customers call back. When they do, 54 percent of the time it's because an issue wasn't resolved on the first go-around, and 46 percent of the time it's because the company failed to resolve issues related to the initial problem, he said.

The third piece of Dixon’s puzzle is experience engineering. When contact center agents position themselves as true advocates for the customer, customer effort decreases 74 percent. When agents use more positive language, even to relay bad news, customer effort decreases 73 percent. When agents anchor, or strategically sequence one option within a range of other less appealing options, customer effort decreases by 55 percent, according to the CEB research.

Also presenting was Robert Herjavec of ABC’s hit show Shark Tank, an author, entrepreneur, and founder of the Herjavec Group; he said that loyalty results when companies deliver "an optimal customer experience." A popular motivational speaker, Herjavec also outlined a 10-point plan for achieving your goals:

  1. Burn the ships—defined as being committed to an ideal.
  2. Test the waters before you jump in.
  3. Know that everyone lies.
  4. Bring a compass.
  5. Know that if your competitors can’t catch you, they can’t overtake you.
  6. Train for a marathon.
  7. Hunt for your own dinner.
  8. Know that there is no such thing as a work-life balance.
  9. Know that life is hard.
  10. Work hard, have fun, be nice, and play fair.

"The most important thing is to have people remember you," he said.

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