The customer experience industry has transformed significantly in the ten years since Matt Dixon's book, The Effortless Experience, was published. And a lot more has changed in the two years since the onset of the COVID-19 pandemic.
Shelbi Scott, director of customer success at Momentive, recently sat down with Matt Dixon to discuss the main drivers of disloyalty and tactics CX leaders can leverage to drive loyalty over the next decade.
Continue reading or watch the webinar on-demand to learn why it’s better to play great defense—reducing friction points and making service easier tomorrow than you make today.
The conventional wisdom about customer experience
Nearly 15 years ago, Dixon and his team conducted a global study to test whether the conventional wisdom about customer experience—set forth by Phil Kotler, the grandfather of modern marketing—still rang true.
Kolter said, "It is no longer enough to satisfy your customers. You must delight them."
Which Dixon says translates to providing an “over-the-top, delightful, exceptional service experience.” However, through his team’s research, Dixon found that the reality is the opposite. Below are their three significant findings.
Finding #1: Delight doesn’t pay
Customers aren’t seeking bad experiences. Instead, there is a “gap between what companies think, and what customers say regarding their level of loyalty if a company simply does what they expect,” said Dixon.
“When we go past meeting expectations, we reach a point of diminishing marginal returns,” he continued. “We spend a lot of time and energy trying to delight our customers, and they don't really pay us back with any incremental loyalty.”
If going above and beyond doesn't drive greater levels of loyalty, what is the impact of service on customer loyalty?
Finding #2: Service drives disloyalty
Often customer service engagements yield disloyalty rather than loyalty. A customer is four times more likely to express disloyalty than loyalty after a service encounter.
“What the data says is that we take that customer in a bad state of mind, and by the way we handle the interaction, we actively make it worse, not better,” said Dixon.
You may be wondering, ‘How can I determine what’s making customers unsatisfied during service encounters?’ That brings us to Dixon’s third finding.
Finding #3: Mitigate disloyalty by reducing effort
Customers reach out to Service in a state of need. However, the overwhelming majority of customers (96%) who have high-effort experiences display disloyalty toward the brand.
Dixon says rather than surprise and delight, brands must play great defense to make customers less disloyal. That starts by ensuring customers aren’t experiencing considerable effort like repeat contacts, robotic service, switching channels, and more.
The business case for effortless experiences
Customers who have low effort experiences are far more likely to repurchase and increase spending, which benefits an organization's top line. The same customers are also less inclined to speak negatively about a company or brand, especially on social media.
A low-effort experience isn't just better for your customers, it's actually also better for your company because it's a lot cheaper.
-Matt Dixon, author of The Effortless Experience
The bottom-line benefit to delivering effortless experiences is that it costs significantly less. According to benchmarking data Dixon’s team collected from analyzing several thousand companies, minimizing high-effort experiences reduces costs by 37%.
Next, let’s discuss how to achieve low effort in your company.
The 4 pillars of a low-effort service experience
Delivering a low-effort service experience isn’t going to happen overnight. But by employing the four pillars outlined below, your organization will decrease customer effort.
Pillar #1: Channel stickiness
The first area that low-effort companies embrace is a “self-service” model. Dixon’s study found that 84% of customers value ease over choice.
Rather than overwhelming our customers with numerous decisions, research shows that it's better to make their experiences with your organization easy. As Dixon elaborated, “[customers] don't care whether they're engaging through self-service, web preference...or live service.”
Contrary to many C-suite executives' beliefs, Dixon said, “Customers don’t want to talk to front-line employees, but they’re still calling.” Nearly 60% of customers who engaged with a service agent had already visited a company's website before dialing support; 35.5% were on the company’s website while talking to a representative.
Dixon explained that if you guide customers to channels that will be the lowest effort, “their preference goes out the window, and they will go with what you recommend.”
The goal is to provide recommendations that aid a simple, intuitive, self-service experience.
Pillar #2: Next issue avoidance
Dixon said the worst question for service representatives to ask customers at the end of a phone conversation is, “Have I fully resolved your issue today?” The question is commonly used to measure first-contact resolution (FCR), or the number of service tickets resolved during the first customer interaction.
But, Dixon said often, FCR doesn't do what it's designed to do. Most companies believe they effectively solve issues during the first interaction in 76% of service interactions. But when the same customers are asked, only 40% agree. Where is the disconnect?
Ask yourself: “Why do our customers call us back?”
Dixon said to start by answering the question, “Why do our customers call us back?” Two reasons drive customers to reach out to Service teams a second time: explicit and implicit issue failures.
Explicit issue failures: When you didn't solve the customer's problem
Implicit issue failures: When customers call back to address something related to their original issue but not the problem they originally called about
Employ next issue avoidance
Take a service experience Dixon encountered, for example. He called Dyson’s customer service to report a broken vacuum piece. The representative asked questions about the vacuum model and ultimately determined she’d send two replacement pieces.
When Dixon inquired why she’d be sending two replacements, the service agent explained that the part is challenging to install. Therefore, it’s often broken during installation (which brings the customer and service agent back to square one).
This is a prime example of next issue avoidance. As Dixon explained, the representative didn’t just solve this issue. Instead, she forward resolved a potential future problem.
Pillar #3: Experience engineering
Equipping service employees with the language skills required to de-escalate challenging situations is known as experience engineering. Experience engineering techniques will make service engagements easier for customers when operated successfully.
Throughout a service interaction, customer effort increases when callers experience many issues, including continuously being transferred to other departments. However, two-thirds of the effort equation is not what the customer had to do but their perception of the experience.
Language delivers a low-effort experience
As Dixon explained, low-effort organizations “teach their people experience engineering techniques, language rooted in behavioral economics and human psychology designed to make a hard experience…feel like a low-effort experience.” Dixon’s team tested language techniques that enable teams to deliver a lower-effort experience: advocacy, positive language, and anchoring.
Employing advocacy language means taking a position of active support on behalf of the customer. Rather than saying, “Our policy prevents me from doing that," say, “Let's see what we can do together to get you back on track." Dixon’s study found that customer effort decreases by 77% when advocacy language is employed.
Adopting terms that prevent adverse reactions reduces customer effort by 73%. Take Disney, for example. If you ask an employee when the park closes, they won't say the park closes at 9pm. Instead, they say the park is open until 9pm. Disney’s research has shown that when parkgoers receive the same message positively, they’re a lot happier.
Providing customers with choices that are strategically beneficial to the company—and making a choice seem to be within the customer’s best interest—is known as anchoring.
Dixon’s team worked with a cable company that told them one of their highest effort call scenarios is when they have to explain to the customer, "Sorry, we can't reboot your router remotely.” Instead, they must send a technician to repair it.
The cable company started giving customers a choice: “We have an all-day service window tomorrow, or I can give you a two-hour window, but the next two-hour window is not available for three days.” The company found that every customer picks the all-day service window when given the option.
Pillar #4: Frontline control
Finally, low-effort companies give front-line employees more control. Dixon’s team found that service representatives fall into one of seven statistically defined profiles:
“When you ask hiring managers who they'd like to hire with their next open position, they say more empathizers,” Dixon explained. “But it turns out those are not the people who deliver the lowest effort experience,” he continued. The research found that controllers actually deliver lower-effort experiences.
The controller says, "What the customer wants is not an apology. They want assurance that they're talking to somebody who's a product knowledge expert and can resolve the issue swiftly.”
Related: Download The 2022 State of CX Report to learn the unique skill sets necessary to be proficient in the new era of customer experience.
How to start reducing customer effort
When asked how to get started reducing customer effort, Dixon said, “We can't manage what we can't measure.” He suggests beginning by tracking customer effort score (CES), a loyalty metric used by companies to measure the level of effort that a customer experienced with a particular interaction.
Dixon says CES is a “great predictor of disloyalty, great tie in with Net Promoter Score®…because really what we're talking about is identifying those detractors.” (Check out GetFeedback’s free CES templates to start measuring customer effort today.)
“The best way to get started, aside from measurement and reducing customer effort, is to look in the mirror,” he continued. “What you'll find is when you start to make the job easier for your people, that will translate to them making the experience easier for your customers.”
Watch the webinar, Matt Dixon reflects on The Effortless Experience: Does it still matter?, to learn more strategies you can leverage to minimize high-effort experiences.