This article also appeared in Finweek Magazine in their 13-Dec-2012 issue
If you were asked, “Do you need to delight your customers?”, you’d probably say yes without hesitating. The concept of customer delight has become so ingrained that we seldom question it. But does your company really need to delight your customers? New research suggests otherwise.
Putting yourself in the shoes of a customer, ask yourself: how many companies do you use specifically for their exceptional service? Probably only a few. The more important question should be: how often do customers leave companies because of shocking service? The answer here is that it happens all the time.
We recently were without ADSL connectivity for 6 weeks. The provider blamed Telkom, and Telkom blamed the provider. Both were so busy trying to pass the buck and to save face, that they completely forgot about the customer caught in the middle. We escalated the issue and threatened to leave the provider after 15 years as their customer. At this point, we got lots of talk about all the bells and whistles that they provided compared to their competitors. Honestly, who cares about this stuff? When you’re the customer and you’re not getting what you’re paying for, you don’t care about the added extras. All you want is to get what you paid for, and to get it quickly and easily. In our case, all we wanted was a working Internet connection. After six weeks of daily phone calls to the service provider’s customer call centre, the service provider eventually worked together with Telkom to solve the problem. But it was a case of too little too late. After 15 years of loyalty, this was all it took for us to switch to another ADSL provider.
There is a valuable lesson here.
Delighting customers is overkill. It doesn’t make them loyal. If your company does the basics well – solving customers’ problems quickly, or even better, preventing issues before they happen – you don’t need the bells and whistles.
This is supported by the Customer Contact Council’s recent research on over 75,000 people to assess the relationship between customer service and loyalty. The findings, discussed in Harvard Business Review, were an eye-opener:
- Delighting customers doesn’t make them loyal. Decreasing their effort – the work they need to do to get their problem fixed – does. By acting intentionally on this finding, companies can boost customer service, lower the costs of customer service and reduce loss of customers.
- Stop trying too hard. Traditional business thinking proposes that customers are more loyal to companies that go above and beyond. However the research showed otherwise. Surpassing customer expectations during service interactions (e.g. by offering a refund or a free product) makes customers only slightly more loyal than simply meeting their needs. So as a manager, you have to ask yourself whether these costly extra efforts are really worth it. Managers often assume that more satisfied customers are more loyal. Also not true. According to the research, the link between customer satisfaction and loyalty is very tenuous at best – satisfied customers switch suppliers all the time. However, more importantly, there is a very strong relationship between customer dissatisfaction and disloyalty. According to ActionCoach.com, an overwhelming 95% of dissatisfied customers don’t return and don’t complain. So we may buy from a company because it offers quality products or services, good value or a strong brand. But we leave a company because it doesn’t deliver on customer service.
- Aim to meet, instead of beat, customers’ needs. No more “Under-promise and over-deliver”. Just keep it to “Promise and deliver”. So do what you say you will do. In practical terms, make sure what your marketing promises is the same, and not greater than, what your other divisions deliver.
- Quick and easy. Companies build loyal customers by helping them fix their problems fast, and with as little work as possible. As a manager, it is critical to remove the hurdles that prevent customer resolution. These include customers having to phone the company over and over again to get the problem sorted, having to repeat the issue to different staff members, and so on. Stop using bizarre metrics like shorter phone-call time. Rather, reward staff for problem-solved calls, in other words, for interactions where they genuinely fix the customer’s problem (however, the customer must feel the issue is closed, it shouldn’t be a case of the staff member being eager to log the issue as “closed” without fixing it).
Sadly, as a nation we don’t seem to stand up enough against bad service. Maybe it is the government monopolies (Telkom, Eskom, Jo’burg Water, etc.), where lack of alternatives means we cannot defect after poor service. Often, the problem is that no matter how bad the service is, there isn’t a realistic alternative. If I leave Telkom or Eskom, who else can I go to? And when the lack of alternatives means you cannot leave, you are forced to accept bad service, and customer apathy sets in.
The bystander effect is also at work here. When there is a water outage, a power cut or a pothole in the road, do you always report it to Jo’burg Water, Eskom or Dial Direct’s now-disbanded Pothole Brigade Initiative? In many cases, we don’t because we think someone else will report it, so we don’t need to. However, because almost everyone thinks this, no-one ends up reporting it, and bad service goes undocumented. To stop the indifference to bad service, each of us needs to say “So what if somebody has already reported it, I still need to do it on my end, just to make sure it gets resolved.”
OUTA (Opposition to Urban Tolling Alliance) showed us that we do have a voice and we can use it to stand up against issues we feel strongly about. Thanks to social media channels like Twitter and YouTube, even the man in the street can now take a stand. And we can break the cycle of indifference to bad service. “United Breaks Guitars” is the most powerful example yet of how social media empowers consumers to retaliate if they are ignored or mistreated, tarnishing the brand of big corporates. In 2008, United Airlines broke musician Dave Carroll’s $3,500 Taylor guitar on a flight stop-over and offered no compensation. His “United Breaks Guitars” video on Youtube went viral. With almost 13m hits, United Airlines felt the social media backlash from millions of airline travellers who could identify with Carroll’s experience.
Customer service isn’t rocket-science. You don’t have to surpass their expectations. Just give customers what they pay for and solve their problems quickly and easily. Because good customer service is so hard to come by nowadays, getting the basics right can help keep your customers loyal and make you stand out from your competition.