Why Your Churn Rates Are Too High: Too Much Customer Delight

We’ve all been sold on the concept of “customer delight,” but is it the most effective strategy for reducing churn? While creating positive customer interactions is important, investing lots of time and resources in “delight” can make companies neglect the real drivers of loyalty. Let’s discuss the right goals for customer experience efforts. Here’s why focusing on an “effortless” customer experience is a better place to channel your team’s energy. 

What’s Wrong With Delight?

Nothing, of course. It’s great when customers feel like a service provider does something wonderfully unexpected. The problem is that it’s often unrealistic to do at scale and detracts focus from delivering what consumers want: easy, reliable, and affordable service. Making a moment special is far less valuable than making every interaction easy and satisfying. 

Research from Gartner shows that customers prioritize effortless interactions over moments of surprise and extreme satisfaction. Their survey of almost 100,000 consumers found that 96 percent of those who endured high-effort customer experiences reported being disloyal, compared to only 9 percent of customers with low-effort experiences. The biggest frustrations:

• The need to contact a company more than once.
• Being treated like a number. 
• Having to repeat information.
• The perception that it takes additional effort to resolve an issue.

Other industry research has shown that customer delight is costly—sometimes prohibitively. 

McKinsey research shows that consistency is the most important characteristic for driving customer loyalty. Its study revealed that delivering a consistent experience across channels, building trust through reliability, and proactively communicating were critical predictors of loyalty. 

Savvy CX leaders understand that consistently satisfying customers is about making customer relationships effortless—avoiding problems whenever possible and streamlining resolution when issues arise.

How to Deliver More Effortless Experience

Delivering effortlessness has both “reactive” and “proactive” components. The process should start by analyzing current customer experience to identify the big opportunities to reduce the customer’s burden. Here are some thought starters for your evaluation:

What are the most common needs or requests for your contact center and frontline teams? Take a fresh look at common service requests. They are affecting the largest number of customers and can be easy to overlook as business as usual. Is there a way to eliminate this stumbling block from the customer journey all together? If not, can you proactively alert customers to avoid it becoming a problem? If not, can you reimagine the user experience to ensure a path of least resistance when the issue does arise? 

What’s the rate of adoption for self-service solutions you may offer on your website or mobile app? Lots of companies have spent millions building destinations for service needs only to find that many of their customers still utilize traditional, high cost service channels. Consider bringing digital self-service into traditional service channels to make it more accessible and to respect the customer’s channel of choice. Visual IVR, for example, offers simple digital self-service experiences to those that choose to call in. 

Are there predictable situations driving high customer frustration? For example, does the expiry of initial service discounts lead to many inbound calls, complaints and even service cancellations? Abrupt price changes are a great time to send proactive alerts to mitigate customer confusion and frustration. Service outages are another great example where communication can eliminate a large number of service requests. Triggered text messages can go a long way to show consumers you are aware of the problem and working hard to fix it. 

Have you optimized less common customer workflows like changing service addresses or account ownership? If you make it easy for people to accomplish what should be straightforward tasks, you can make these transitions smooth and painless. 

These are great places to start to minimize the customer burden. Once you feel this is in a good place, it’s time to drill into your customer experience to identify specific friction points that require attention. Here are a few common ones to consider: 

• Can customers log in and verify their identities easily? Can you simplify those processes with biometrics or other technology to eliminate the need to submit or update passwords every time they connect?
• Do your processes require users to input information already known by the company? Data is the currency of the digital age. If you are going to ask a customer to provide information, don’t ask them to supply data you already have available. If your business struggles to get information from one internal system to another, invest in digital solutions that can easily access data from multiple systems. 
• What punitive service charges frustrate customers most? While penalties for excess data usage, for example, may generate significant revenue for the company, they likely impact churn even more significantly. Communicate to customers who are approaching their account limits. Provide transparency into how and why penalties are being applied. Nobody likes penalties, but consistent communication and clear information can greatly reduce dissatisfaction.
• Are there patterns in customer behavior that signal an opportunity to suggest a better service plan? If customers are engaging in behaviors better suited to other programs, why not tell them. Call me crazy, but if customers are regularly exceeding their limit, educate them on a more cost-effective service tier. Call me crazier, but if you see a customer is not fully utilizing their current service or plan, suggest downsizing to the most cost-effective tier. In the short term this might appear to be leaving money on the table, but it will remove friction from the relationship and build trust, which reduces churn and ultimately extends lifetime value.

While creating positive customer interactions is important, prioritizing effortless CX can be a more sustainable approach to reducing churn. By focusing on ease of use, clear communication, and efficient problem solving, you’ll create a loyal customer base that appreciates a reliable service experience, even if it doesn’t involve fireworks. After all, sometimes the best customer experience is the one that happens seamlessly, in the background, without requiring extra effort.

Chris Filly is vice president and head of marketing at Callvu.