The Customer Experience Podcast
The Customer Experience Podcast

Episode · 1 year ago

56. 3 Customer Experience Myths Debunked & Set Straight w/ Ethan Beute


The most economically valuable thing you can do is to meet customer expectations.

Meet the expectations. Not exceed customer expectations. Not surprise and delight your customers at every turn. Actually, the best way (economically and experientially) to serve your business and especially your customers is to meet their expectations.

I’m Ethan Butte, here today on The Customer Experience Podcast to share my appreciation for a book that I’m, yes, late to the party on. It’s called The Effortless Experience: Conquering the New Battleground for Customer Loyalty by Matthew Dixon, Nick Toman, and Rick DeLisi

The first chapter of The Effortless Experience starts out by calling out myths that tend to be overlooked by marketing, sales, and leadership — but which are highly relevant to these people and their organizations. There's so much focus on customer delight and the so-called “wow moments,” but not enough focus on something much simpler and more economically valuable: meeting customer expectations and reducing their effort.

  1. Delighting customers in the service channel does not pay.
  2. Customer service drives disloyalty, not loyalty.
  3. The key to mitigating disloyalty is reducing customer effort.

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Ninety six percent of customers who hadhigh effort experiences reported being disloyal, compared to only nine percent of customers withlow effort experience. The single most important thing you can do today is tocreate and deliver a better experience for your customers. Learn how sales, marketingand customer success experts create internal alignment, achieved desired outcomes and exceed customer expectationsin a personal and human way. This is the customer experience podcast. Here'syour host, Ethan Butte. The most economically valuable thing you can do isto meet customer expectations. Notice that I didn't say exceed customer expectations or surpriseand delight year customers. The most economically valuable thing you can do is tomeet customer expectations. My name is Ethan bwed. I'm the host of thecustomer experience podcast and the cohost of the B tob growth show. I hostthe C X Series on the show and... this episode I'm going to sharea handful of awesome takeaways from a book that I'm late to the party on. It was published more than five years ago. It's called the effortless experience. It's by Matt Dixon, Nick Toeman and Rick De Lacy. Dixon,by the way, also co authored the Challenger sale and the challenge own yourcustomer. And these may not be revelations to the more well studied customer successexperts who listen to the show, but likely will be for everyone else,as it was for me. I am only going to share some takeaways fromthe first chapter of the book, and this chapter, as well as thegreater portion of the book, is based on research with ninety seven thousand consumersand hundreds of executives inside businesses serving these customers. So here's the setup anda quote from the book. What if you got up in front of theteam and, instead of asking them to delight your customers, you ask themto make things as easy as possible for...

...your customers, and you told themto do this by focusing on a small set of actions, like avoiding situationswhere the customers likely to have to call back, not transferring customers when theycan handle the issue themselves, not asking customers to repeat themselves, not treatingpeople in a generic manner and so forth. By the way, those are fourof the most annoying things to the customer. Surveyed and likely, ifyou've looked at your own customer feedback or you looked at your own experience asa customer, these things annoy you as well. So what this chapter doesis open up by dispelling a couple of myths that are typically off the radarof marketing, sales and leadership, but they're highly relevant to these people andto the entire organization. You know, there's so much focus on customer delightin wow moments, but not enough focus on something much simpler and more economicallyvaluable, meeting customers expectations and reducing their effort. Three takeaways from the chapter. Delighting customers in the service channel does...

...not pay. Number two, customerservice drives disloyalty, not loyalty, and number three, the key to mitigatingdisloyalty is reducing customer effort. So let's focus on that first one. Delightingcustomers. Delight is not the fully sensible and most effective mission of the CSorganization. A lot of the stories that we hear are typically what they call, quote unquote, lottery ticket logic. We tend to over celebrate the raremoments of delivering above and beyond and overspend on training toward moments of wow.I'm going to quote them here. There's virtually no difference at all between theloyalty of those customers whose expectations are exceeded and those whose expectations are simply met. Loyalty actually plateaus once customer expectations are met. So what do they meanwhen they say loyalty? They define it with three specific behaviors. One isrepurchasing, continuing to buy from you.

Number two is share of wallet,buying more from you over time, and number three is advocacy, saying Nicethings about you to other people. So again, there's no difference in loyaltybetween customers whose expectations are exceeded versus those who are simply met. And,of course, when they interviewed senior leaders, exceeding expectations comes with much higher operationalcosts. So higher cost for no particular benefit. I'm going to quotethem again. The data show that, an aggregate, customers who are movedfrom a level of below expectations up to meets expectations offer about the same economicvalue as those whose expectations were exceeded. And, of course, exceeding expectationsis more expensive for us from an operational standpoint. So the goal here isbasic competence, professional service and getting the fundamentals right, solving the problem andgetting people back to their day. Point one, delighting customers in the servicechannel doesn't pay. Point two, customer...

...service interactions tend to drive disloyalty ratherthan loyalty. You know, here at Bombomb we have amazing customer success andcustomer support people and we often get those very positive replies about how a particularteam member of ours made someone's Day or really over delivered for a customer.But an aggregate, and I'm quoting from the effortless experience here, any customerservice interaction is four times more likely to drive disloyalty than to drive loyalty.And worse, and I'm quoting here, those customers we make disloyal are muchmore likely to spread that disloyalty to other potential customers through negative word of mouth. And even worse, and finally, and I'm quoting again here, fortyfive percent of the people who had something positive to say about a company toldfewer than three people. By contrast, forty eight percent of people who hadnegative things to say reported that negative speak... more than ten people. Sothose positive experiences are shared less, those negative experiences are shared more, andwe're four times more likely to drive disloyalty any time someone gets into our supportchannel by phone or email or elsewhere. Final quote here. We pick companiesbecause of their products, but we often leave them because of their service failures. So the goal is self service, product service, great product and serviceexperience, so that people don't need to get into your customer service channel inthe first place. Finally, point number three from the first chapter of theeffortless experience. The key to mitigating disloyalty is reducing customer effort. This isthe third one in the chapter, of course, because it teas up therest of the book. It's all about reducing effort. Four of the fivedrivers of disloyalty are about additional effort that customers must put forth, and you'vealready heard them at the top of this episode. In rank order, theyare requires more than one contact to resolve...

...the issue. Number two, genericservice, treating people like a number, noncommittal responses, corporate speak. Numberthree, having to repeat information. I know that's a frustration for me.You told one service rep you know this piece of information or this number andyou have to tell the next person the same thing. Right. People hatehaving to repeat information. Number four perceived additional effort to resolve. This remindsme of an episode I released with Mike Red Board of hub spot, whoreally drove home the point in that podcast conversation that the customers reality is thereality. So their perceived additional effort to resolve, even if on our sideof it, as the service provider, we think, oh, wasn't thatbig a deal, if the customer perceives it as such, it is abig deal period. It is a matter of fact. Finally, transfers gettingbounced around. Now, if you're not a very large organization's probably doesn't happenso much, but if you're in a medium to large organization, you mayhave to bounce people around. The more... do that, the more effortand the more perceived effort and the greater likelihood of producing disloyalty. Here's howcommon they are. Fifty six percent of the cut stomers interviewed again. Abouta hundred thousand people interviewed. Fifty six percent said they had to re explaintheir issue during a service interaction. Fifty nine percent had a higher perceived additionaleffort to resolve the issue. Fifty nine percent also said they were transferred duringa service interaction. Finally, sixty two percent of people said it took morethan one contact to resolve the issue. This produces frustration because it requires effortand therefore it produces disloyalty. Ninety six percent of customers who had high effortexperiences reported being disloyal, compared to only nine percent of customers with low effortexperience. I'm going to say that one more time. Low effort experience,only nine percent of people were disloyal. High effort experience. When we're askingour customers to spend time and energy,...

...mental and physical and emotional, ninetysix percent of the people in high effort experiences were disloyal. To close,here their four principles of creating low effort service. Number one, low effortcompanies minimized channel switching by boosting the stickiness of self service channels. This preventscustomers from having to reach out in the first place. Number two, headoff the potential for subsequent calls by having employees practice next issue avoidance, beinga little bit proactive. Hey, now that we've addressed what's really on,your mind right now. Let me tell you about something upcoming. Proactively avoidingfuture issues a huge value to the customer because it reduces effort. Number three, succeed on the emotional side of the service interaction. One or more chaptersof the book go through Experience Engineering Tactics very specific things you can do tomanage this. If you've been listening to the customer experience podcast, you knowthat video is a great way to manage...

...that emotional side of the service interaction. Fourth and finally, here and power front line reps to deliver a loweffort experience by using incentive systems that value the quality of the experience over merelyspeed in efficiency. It's really easy to measure and reward speed and efficiency.It's a little bit more difficult to get at quality, but quality in effortreduction is a big, big deal. It's a huge value driver in yourbusiness. Their book goes into way more detail on all of these topics.I just wanted to share my appreciation for the book and the provocative opening thoughtsin that first chapter. The single most important thing you can do today isto create and deliver a better experience for your customers. As an individual asa team and as an entire organization. Reducing effort is a great way todo that. I hope you found this valuable. If you did subscribe tothe customer Experience Podcast, you can find... in your favorite podcast player and, while you're there, take a minute and leave a review or drop arating. It's super helpful to the podcast into people evaluating whether they might getsome value out of it too. Thanks so much for listening. My nameis Ethan Butte and I welcome any feedback on linkedin or in my email inbox. Ethan at Bombombcom. Clear Communication, human connection, higher conversion. Theseare just some of the benefits of adding video to the messages you're sending everyday. It's easy to do with just a little guidance, so pick upthe official book rehumanize Your Business. How personal videos accelerate sales and improve customerexperience. Learn more in order today at Bombombcom Book. That's bomb bombcom book. Thanks for listening to the customer experience podcast. Remember, the single mostimportant thing you can do today is to create and deliver a better experience foryour customers. Continue Learning the latest strategies...

...and tactics by subscribing right now inyour favorite podcast player or visit Bombombcom podcast.

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