Stop trying to charm your customer – that's not how you'll win over more loyal customers. This is a difficult and costly strategy for the company and, worse, it fails to proportionally increase customer loyalty. This is according to Gartner in partnership with CBE. In this post, see the main myths about customer loyalty.
It's not a new idea that the secret to staying competitive is investing in customer experience. Because of this, many companies invest time and money trying to delight their customers, but unfortunately, this strategy has only led to increased costs and almost no customer loyalty.
The key to a loyal customer lies in the effort they put into achieving their goal. Identify where your customers expend the most effort, implement improvements, and you will have a significant impact on customer loyalty.
In this article, we'll debunk 4 major myths about customer loyalty, which will make you rethink your strategies and help you with valuable tips that truly impact this area, so you never waste time or money again.
Myth #1: Exceeding customer expectations increases brand loyalty
The truth is: exceeding expectations, or delighting customers, can create moments of "well-being," but this has no impact on loyalty or on them doing business with you again.
A customer delight strategy brings a 10 to 20% increase in costs (returns, discounts, promotions, etc.) and the delight only happens 16% of the time.
Simply meeting your customer's expectations – consistently – will allow you to have a significant and positive influence on their loyalty
Online reviews can be an excellent way to gain more loyal customers and reduce the cost of acquiring new customers for the company.
Check it out: How complaints can help you build customer loyalty.
Myth #2: Customer Service interactions do not affect customer loyalty
The truth is: a customer is four times more likely to become disloyal after a negative customer service interaction. This is because customer service interactions often involve a significant disloyalty factor: actions that require the customer to exert more effort to achieve their goal.
The main factors of disloyalty:
- Repeat contacts;
- Having to switch customer service channels;
- Repeating information;
- Robotic service (impersonal, without the "human touch");
- Politics and bureaucratic processes;
- Other general factors of inconvenience (such as waiting time).
Check it out: Customer Effort Score: Measuring customer effort
Myth #3: High-effort customer service interactions are uncommon
The reality: 30% of all customers said they put in a high level of effort to resolve a problem.
There's more:
- 57% reported having to switch channels (from the web to the phone).
- 56% of all customers said they had to explain a problem again.
- 62% said they had to contact the company repeatedly to resolve a problem.
While adding multiple contact channels and options can be beneficial for both business and consumer, ensure that these do not confuse the customer, require more effort on their part, and ultimately increase company costs unnecessarily.
Check out: 6 common mistakes that impact customer effort.
Myth #4: Customer effort has little impact on business
The truth is: customers who have high-effort customer service experiences report being more disloyal and spending less than those who have low-effort experiences.
The customer's effort does matter!
A company's time and money are best spent creating service experiences that focus on low effort for its customers and consistently meeting their expectations.
High-effort experiences lead to:
- 96% disloyalty;
- 4% repurchase rate;
- 4% increase in customer spending;
- 81% negative word of mouth.
Low-effort experiences lead to:
- 9% disloyalty rate;
- 94% repurchase rate;
- 88% increase in customer spending;
- 1% negative word of mouth.
Want to learn more about customer experience? Check out What is customer success: Deliver results with loyalty.
6 steps to promote a low-effort experience for your customer and increase their loyalty
Customer effort:
Customer effort has two parts: what customers should do during a service interaction and how they feel while doing it. Both are important, but a better experience comes from improving how customers feel, so focus on that first.
Customer effort is driven by:
- 36% of what customers have to do.
- 64% of customers feel this way.
1. Identify the sources of effort
Start by conducting a Customer Effort Score (CES) survey . If you have a low average, it means there's a lot of room for improvement in the customer experience .
Identify your customer's pain points throughout the service journey – use empathy. Put yourself in your customer's shoes and see how much effort you need to put in to achieve your goal.
Rate each process performed and identify what can be improved or eliminated along the way to minimize the effort required.
2. Monitor the efficiency of customer service channels
- Make sure that self-service channels are 100% functional so that customers don't need to switch channels during their journey.
- Make sure you have good service integration across your channels.
- Make sure to guide customers to the best channel for each type of objective.
3. Adopt a proactive stance
Utilize practices such as "next problem to be solved," going beyond resolving the first call to avoid potential subsequent calls. By mapping out your customer's next questions or problems, you can prevent them and ensure minimal effort for your customer, consequently leading to a better experience.
Use customer feedback to anticipate potential problems and identify pain points.
Check out these 3 reasons why you should start using review management in your network of establishments immediately:
4. Act on the emotional factor to influence perception
Utilize emotion to lessen the perceived effort required, teaching your representatives how to manage customer interactions through psychological and behavioral practices. Making the process more enjoyable is even more necessary when the number of things the customer needs to do or the complexity of the interaction cannot be altered.
5. Prioritize flexibility and autonomy
Ensure flexibility in processes and provide a degree of autonomy in decision-making, giving your team greater freedom to manage individual interactions. This approach streamlines processes and prevents strain on customer relationships.
6. Measure impact and expand
Becoming a low-effort organization is not an individual process. Teams must work together to:
- To determine the impact of low-effort investments
- Expand the principles of low effort throughout the organization and
- Continuously reassess to identify areas for change.
The purpose of this content is not to convince you that delighting the customer is wrong, but to broaden your horizons on what "delighting the customer" really means and its relationship to customer loyalty, so that you can invest your time and money correctly.
Our advice is to first focus on doing the basics – consistently meeting your customer's expectations. Customer loyalty is related to how easy it is to do business with you.
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The information in this article was extracted from studies conducted by Gartner and CBE. The links for further information can be found below:
