Delighting Customers Costs More Than it’s Worth…and Other Surprising Findings

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What? Did I really just type that?

I recently attended a conference where Matt Dixon, a group leader at CEB, presented on making your customer experience unique. I asked him if I could recap his excellent presentation and he agreed.

I expected him to cover the benefits of surprising and delighting your customers, but I couldn’t have been more wrong!

Joshie the Giraffe

Joshie the Giraffe

He started his talk somewhat as I’d expected. He told a great story of how the Ritz Carlton surprised and delighted a guest at one of their resorts. That guest was staying at the Ritz with his wife and very young son.  When they returned home, they realized they had left their son’s beloved stuffed animal, Joshie, at the resort. The little one was beside himself, crying, apoplectic, etc. So the father told the boy that Joshie had decided to stay on at the hotel for a few extra days to have some ‘Joshie time.’ It bought Dad some time anyway to find a Joshie replacement.

But then a surprising thing happened. The Ritz Carlton called the father to tell him that they had left a member of their party behind. The father expressed his relief and owned up to the white lie he had told his son. The next day, a box arrived at their home from the Ritz. Inside was of course Joshie, but in addition, these pictures were also included.

Joshie having some 'me' time

Joshie having some ‘me’ time

Talk about the Ritz going above and beyond and saving the day!

But then Matt’s presentation took an unexpected turn. Matt said that the CEB set out to do some research on customer loyalty. They embarked on a 7-year project to study customer service and customer loyalty and concluded that delighting the customer doesn’t actually pay off with increased loyalty. Customer service CAN efficiently and effectively drive loyalty, but not in the way described above.

The CEB study was a large one, and included over 125,000 customers, 5,000 customer service reps, and 100+ companies and it produced 3 main findings:

  1. Delight doesn’t pay. In fact, delighting increased operating costs 10-20% and only succeeded in delighting 16% of the time!

2. Customer Service drives disloyalty. This one might not be entirely surprising. Sometimes companies can raise the ‘sleeping dogs’ who have just not gotten around to cancelling your service until you remind them that they have it. But it’s also because service interactions, according to this study, makes a customer 4x more likely to be DIS-loyal! And it’s because customers aren’t actually satisfied after their interactions.

3. The key is to mitigate disloyalty by reducing the customer service effort. He cited examples that tend to tick customers off: having to call back multiple times, getting transferred around, having to repeat your name and issue over and over again.

And the key to reducing customer service effort is in figuring out how to do things like:

  • Make self-service easy

Let  your customers solve their own problems so that they don’t have to call you. The CEB research showed that the lower the effort required by the customer, the higher the repurchase rate (94% repurchase for low effort vs only 4% for high effort). And they spend more. AND, word of mouth, in a bad way, is way higher for ‘high-effort required’ customers. So when customers are unhappy, they share at a much higher rate than happy customers. And the beauty about making the customer experience easy, is that your costs will go down – according to CEB, by 37%! Why? Because, among other reasons, your customers will have less reason to call you back.

  • Avoid the next issue a customer may have (by anticipating it).

A few months ago, Matt broke a part off of his Dyson vacuum cleaner. So he called to get a replacement. The rep easily helped figure out the model he had and therefore the part that was needed. And she said she was going to send him two of them. Matt asked why two (and also explained a bit about what he does), since he really didn’t think he’d break the part again. And she explained that it’s a little tricky to attach the part, and sometimes customers will snap off the connector while trying to click it in place. Once that happens, the part won’t stay on the vacuum, so you’ll need another one. And once you snap it off once, you understand how to make sure you don’t do it again. She said it’s less expensive for them to send out two of the parts right away, than to take another call from the customer because they broke the connector.

It turns out the KISS (keep it simple, stupid) principal is alive and well and can help you garner customer loyalty!

 

Get Your Twitter On: The Changing World of Customer Service

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It’s no secret that social media is playing a bigger role than ever when it comes to customer service. Customers expect responses fast when they tweet to a brand. A study by Lithium (social software provider), found that 72% of consumers who tweet a complaint expect a response within one hour! Twitter understands the role it plays in enabling Customer Service and  recently removed the 140 character limit for direct messages. Now brands can direct message responses to customers without worrying about how many words they are using.

I recently attended a Content Marketing World (aka @CMIContent) Twitter chat. They cover great marketing topics that I find relevant. If you’re curious about something, it’s a great way to gain insights (and no one needs to know you’re there!).

Last week’s chat was about social media and customer service, with @jaybaer. I thought I’d recap some of the content that was shared because it was so good.

The first question to get us rolling was: How has social media changed the game for customer service? Here are some of the responses:

@mikemyers614: (social media) means the lights are always on and the “phone” must always be answered. We’re all 24/7 now.

@dmboutin: brands are accessible where people are already spending their time, instead of a 800 # in the fine print

@sgoldberger12: Social Media Has Amplified It. Those Who Engage Expect Quick Answers. Customer Service Is Ever More Important.

@ardath421 (social media) means that customer service needs to be served up wherever the customer wants it

@LeadPath (social media) allows us to respond at real time to customer concerns and feedback. It lets us engage with our customers

On the topic of how B2B is different from B2C in social media:

@LeadPath: With both B2B and B2C you need to remember you’re talking to customers.

@mewzikgirl: the advancement and immediacy of response/resolution in B2C has changed expectations, and B2B has to grow and adapt

The key thing to remember is that you are still talking to people, in both B2B and B2C.

On whether you should answer all questions posed to your company in social media:

‏‏@dmboutin: Yes. Look at cost of customer acquisition & retention then tell me addressing all concerns isn’t worth it

@Magnani_Dot_Com: The user doesn’t see all the messages being answered, they simply see theirs going unanswered.

‏@LUCYrk78: It’s 100% realistic. You make the time and team to ensure customers are listened to. It’s today’s expectation.

@netvantage: Realistic, no, but that doesn’t mean you shouldn’t try.

‏@CTrappe “Thanks for your tweet” is not that great of a #custserv response.

‏@flinds: An effort should be made to address all complaints on (social media), even if just to tell them to email. Being noticed goes a long way.

 There were many suggestions on dealing with negative comments online.

@mikemyers614: Removing or editing is a dangerous thing. Chances are if one person says it, 10 more are experiencing it. Deal with it. Fast.

@Jaybaer : Respond to every hater, both the Offstage Haters (phone, email) and the Onstage Haters (social, review sites, forums).

Jay has a book about to be published on this very topic that I can’t wait to read. It’s called “Hug your Haters: How to Embrace your Complaints and Keep Your Customers.”

He adds: But my best tip is the rule of Two. Never respond more than twice online. Take it offline.

I wrote a post a while back on dealing with trolls. That might help too. You can read it here.

And on handling positive comments, the common answer thread was to turn those commenters into brand advocates by acknowledging them, retweeting them, doing something nice for them, asking them if you can use them as a recommendation. What others say about your business is so important. 90% of customers are influenced by reviews!

My daughter works for a minor league baseball team and sometimes is assigned to tweet during the games. She seriously texted me this just this afternoon, and I swear I did nothing to prompt it!

I’m so proud.