improving customer loyalty

The Real Secrets to Improving Customer Loyalty

Despite what we learned in marketing and business school, and has become entrenched in conventional wisdom for decades, “delighting” your customers is not the answer to delivering the ultimate customer experience and improving customer loyalty.

So what is the secret then?

To answer that, we need to firstly look at what influences people to buy, and what drives them away.

Why do people buy, and why do they leave?

People buy a product or service because it fixes a problem or fulfills a need.  Shari Leviston, author of Heart and Sell: 10 Universal Truths Every Salesperson Needs to Know  identified seven primary emotional reasons for buying: safety, adventure, significance, relationships, health and wellness, success/sense of purpose, growth and education.

But the emotional fulfillment ends when the customer service part of the transaction fails.

The following alarming statistics show how critically important the customer service part of the total customer journey really is.

  • 55% of consumers have intended to make a purchase, but backed out because of poor customer service. (American Express)
  • 82% of consumers have stopped doing business with a company because of bad customer service. (Zendesk)
  • 86%are willing to pay up to 25% more for a better customer experience. (RightNow)
  • 52% of consumers have made more purchases from a company after having a good customer service experience. (Zendesk)

It’s fairly conclusive from these stats, that the customer service experiences your customers have have a big impact on their decision to remain loyal or move their business elsewhere.

If customer service is that important, why doesn’t dazzling service improve loyalty?

Great question.

Harvard Business Review surveyed 75,000 consumers in North America, Europe, South Africa, Australia, and New Zealand to discover what impacted customers’ intention to continue doing business with a company, increase their spending, or say good things about it. The surveys and interviews explored consumers’ interactions in contact centres via live phone calls, voice prompts, web, chat, and email.

The key findings of the three-year survey provide the answers.

  • First, delighting customers doesn’t build loyalty. Reducing customer effort – ie: the work they must do to get their problem solved—does.
  • Second, acting deliberately on this insight can help improve customer service, reduce customer service costs, and decrease customer churn.

It all boils down to making it easy for the customer.

This simply means meeting basic expectations by removing the obstacles which really frustrate your customers.  Give them fast and efficient service.  That’s what they really want.  There is no need to go over the top.

Of course in some instances exceptional service will delight and have an impact on loyalty and foster glowing reviews – eg: to turn around a situation when things go wrong,  or if you’re paying for a luxury brand.

But for most of the time, customers just want hassle free, good service that quickly answers their questions or fixes their issue.  Yet too often these basic needs are not being met.

  • 55%say easy access to information and support can make them fall in love with a brand. (RightNow)

3 Tips for making customer service easy

1 – Make identification and verification easy

To maintain security and reduce fraud, it’s essential that callers are authenticated.  Making callers enter their information into the IVR, then repeat it to the live operator, and then again if they’re transferred to another operator, is frustrating, time wasting, and downright ludicrous. Yet it happens a lot.

  • The average time to verify the identity of a caller using Personal Verifiable Questions (PVQs) is 45-90 seconds.
  • With the Premier Contact Point voice biometrics module it takes approximately 5-10 seconds and significantly reduces fraud risk.

2 – Anticipate the next issue

Bell Canada reduced its “calls per event” by 16% and its customer churn by 6% by reviewing customer interaction data to understand the relationships among various customer issues. They found that a high percentage of customers who ordered a particular feature called back for instructions on using it. So they trained their customer service team to deliver a quick tutorial on key aspects of the feature before hanging up. Not only does this resolve the customer’s primary issue, it anticipates and reduces downstream issues.

Premier Contact Point’s call recording module makes call recording filtering and retrieval fast and easy.  When combined with our business insight reports you have the ability to quickly identify trends and implement strategies to reduce repeat calls and increase first call resolution.

3 – Empower your team to deliver a low-effort experience

Not transferring callers to other team members will significantly ease customer frustration (and handling time.)

It may never be 100% achievable, but there are several things you can do to reduce the number of callers who need to be transferred.

  1. Offer self-selection options through your IVR system (sales, accounts, customer service, technical etc) so they are queued for the right “department”. Don’t offer too many options, or too many levels as this in itself can be very frustrating. See IVR Design Tips.
  2. Use an Automatic Call Distribution facility to provide advanced call queuing and routing and intelligently direct calls to the right team member. IVR and ACD solutions work together to provide faster, more efficient service.
  3. Empower your team members to take ownership of each call from beginning to end, by giving them regular training to increase their knowledge and skills, and removing KPIs that value speed over quality – such as Average Handling Time.

South Africa’s Nedbank instituted an “AskOnce” promise, which guarantees that the team member who picks up the phone will own the customer’s issue from start to finish.

An Australian telecommunications provider eliminated all productivity metrics from its team members’ performance scorecards. Although handling time increased slightly, repeat calls fell by 58%.

Most importantly – allow your customers to give feedback, and act on it

Most companies are using some kind of customer survey to measure customer sentiment – see 3 Ways to Measure Customer Satisfaction in a Contact Centre.

Whilst these automated survey systems are good for measuring sentiment in different ways, they are limited, in that they don’t provide the customer with the opportunity to voice their opinions.

Conducting post-call surveys where people can provide details of what they found frustrating or unsatisfactory will give you the exact information you need to pin-point actionable improvement areas.

The HBR article cites the case study of National Australia Bank. NAB uses specifically trained team members to call customers who have given it low marks. The team members focus first on resolving the customers’ issues, and then collect feedback that helps identify service improvements. The bank’s issue-resolution rate has risen by 31%.

In summary, the secret to improving customer loyalty is quite simple – just give them what they expect – easy customer service. Sometimes companies get so caught up in matching every competitive service feature and catering for every possible need,  that the original objective “to deliver customer service” becomes overly complicated.

Understanding what your customers really want, simplifying your processes and removing obstacles, really is the key to keeping your customers loyal.  Don’t make it hard.

Premier Contact Point Helps You Deliver Efficient Service

Delivering a fast and efficient customer experience starts with the right technology. Cloud-based Premier Contact Point is the solution for effectively managing customer identification, self-service, call routing and much more. We make it easy for your team to deliver what your customers want and expect.

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