So you’ve taken the time to listen to customers in order to understand the experience they’re having with your brand. You’ve uncovered some real pain points for customers–the parts of the experience that require more effort on their part than they expected or deserve. Now it’s time to take action and make some improvements.
But, first things first: before any improvements can be made to the experience, you’ve got to prove that there are benefits to investing in those improvements. Your executives don’t just allot resources because you came up with a great idea. You’ve got to sell the idea to get those resources.
Make no mistake; there are real benefits to improving the customer experience. You’ve just got to do your homework, build the business case, and prove it.
McKinsey reported that a European energy company listened to customers and learned that it took new customers 18 steps to set up their accounts. Eighteen steps! Talk about customer effort. They identified redundancies and more in the process. With improvements in place, the steps were cut to just five. They reduced costs by 40-50%. Customer complaints dropped, as did the number of agents handling those issues, by 80%.
Gartner noted that “96% of customers with a high-effort service interaction become more disloyal compared to just 9% who have a low-effort experience. Disloyal customers are likely to cost the company more—they spread negative word of mouth and cease future purchases.”
In addition, they found that “low-effort experiences reduce costs by decreasing up to 40% of repeat calls, 50% of escalations, and 54% of channel switching. Overall, a low-effort interaction costs 37% less than a high-effort interaction.”
Showing what other brands have accomplished is great, but showing what your organization can do is key. If you can uncover and show those kinds of results with the data you have available in your organization, you’ll be treated like royalty!
Unfortunately, for many, that data isn’t readily available or accessible–or it takes time to show those kinds of returns, time that you don’t have because customer expectations shift, and customers will vote with their wallets and their feet and move on to the next brand sooner rather than later.
The benefits you should expect from a good Customer Effort Score
It’s important to note that not all benefits tied to low-effort are monetary, though ultimately the outcome is monetary.
For the customer, the improvements may first deliver emotional (feel good/security) or functional (convenience, choice, speed) benefits. By reducing customer effort and, hence, improving the experience, brands see happy, loyal customers who:
Are less price-sensitive.
Stay longer, spend more, buy other product lines, churn less.
Are more likely to forgive.
Have fewer complaints.
Want to help them improve, succeed, and grow.
Help other customers (e.g., answering questions on online forums).
Will evangelize for the brand.
As you can see, the outcomes of each of those are, ultimately, financial. As a result, brands see:
Reduced call volumes.
Decreased marketing and advertising.
Fewer gimmicks and promotions.
Additional revenues.
Competitive insights (from the feedback).
Process improvements and cost efficiencies (as a result of acting on feedback).
The Service-Profit Chain
This latter point about process improvements is a great reminder that there is certainly a spillover effect happening when it comes to effort. The spillover effect is the tendency of one person’s efforts and emotions to affect how other people around them feel. This can occur between two employees, or an employee and their manager, or even an employee and their spouse/partner, etc.
In other words, when employees are frustrated because processes are broken, policies are outdated, or the technology they’re using is cumbersome (how many times have you called customer service and heard the agent say, “I’m sorry; my computer is really slow today”), then it impacts how they’ll be able to do their job. When the employee can’t serve customers the way they deserve to be served, the customer pays the price.
When we make the job easier for employees–whether it’s through tools, training, or updated processes and policies–they’re happier, more productive, and better able to deliver quality work, resulting in a better experience for them and for customers, too.
All of this reminds me of The Service-Profit Chain, which is really the best way to visualize the entire chain of connection between employees and customers. I scanned the image below from The Service-Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value by James L. Heskett, et al.
From this graphic, it’s clear that the chain begins with employees and their experience, including tools, workspace, workplace, and more.
I share this because, when you’re asked about the return of investment (ROI) of reducing customer effort, you’ve got to step back and show the requestor of said ROI the big picture, that it starts with reducing effort for employees and ends with some great outcomes for the business.
With all that in mind, I’d like to show you how to, step by step, build the business case and show the ROI for reducing effort and improving the experience–for employees and for customers.
How to prove the ROI of low effort
The first thing you need to do is listen to customers, capture their Customer Effort Score (CES), and ask them for details behind the score, i.e., what happened that caused you to put forth more effort than you expected? You’ll then need to identify the root cause for every pain point, create a plan for how to fix each one, and then prioritize the multiple pain points and plans.
Once you’ve got the improvement plans outlined, follow these steps for each initiative.
Step 1
Start with identifying and defining each initiative. What is it? Add a description of what it is, what the work entails, and how much it’s estimated to cost. Provide enough details so that the person reviewing it really understands what it is and what time, effort, and resources will be required to implement it.
Step 2
Next, you’ll want to outline how this initiative will impact the employee. Will it decrease effort for the employee? Will it make their job easier? How will the employee benefit? How will it make them more productive? How will that productivity translate to better customer experience? What training will be required for employees?
Step 3
Then you’ll need to do the same for the customer. What will the impact be for the customer? How will the customer benefit? How will her experience be different once the improvements are made? In what ways will it create value for the customer?
Step 4
Executives love metrics. If the improvement is made, which metrics– including employee, customer, and operational metrics–will be impacted? How? How are any of these metrics linked? And how are they linked to outcomes?
Step 5
And, finally, explain how that initiative and its benefits will affect or drive business outcomes. Which outcomes? Revenue, growth, cost savings, etc.? How? By how much? Quantify as much as you can.
To help you get started, I’ve included a graphical depiction of the steps outlined above.
If you can present your work in this snapshot format, with the details behind it on another page (or five!), you’ll be well on your way to not only impressing your executives but also giving them all the information they need to make informed decisions.
It’s important that, through these steps, you tell the change story. Tell the story of how the change for the employee will affect customers. Be clear on that connection and where and how that happens. Ultimately, the entire story goes like this: happy employees lead to happy customers who lead to happy shareholders.
As you tell that story, you should include some details about what happens if the improvement isn’t made. It’s always wise to share the other side of the story and say: “Here’s what we need to do and why. But here’s what happens if we don’t make this change. Here are the outcomes of doing nothing.”
That’s a great note with which to wrap up. What if we just do nothing?
One of the most frequently asked questions I hear from customer experience professionals who are listening to customers, getting feedback about the experience and are excited to improve the customer experience is: “How can I show ROI for my executives?” It’s a fair question, as we know that improvements often require financial investments (and other resources), and yet, at the same time, it makes me scratch my head.
If the fear is that financial investments to improve the customer experience compete with other budget line items–are those other line items winning business, keeping customers, or driving more revenue? What’s ultimately competing with the customer for your resources?
What if we do nothing? Need me to name a few brands who are learning this lesson the hard way right now?
The Customer Effort Score: Complete Guide
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About the guest author
Annette Franz is the founder and chief experience officer of CX Journey Inc.
She’s got 25 years of experience in both helping companies understand their employees and customers and identifying what drives retention, satisfaction, engagement, and the overall experience—so that, together, you can design a better experience for all constituents. She has worked with both B2B and B2C brands in a multitude of industries. Connect with her: www.cx-journey.com | @annettefranz | @cxjourney | LinkedIn | Facebook