More and more organisations are now recognising the value of including the Customer Effort Score (CES) as a Key Performance Indicator and business metric. Measuring customer exertions during service interactions (particularly a complaint), identifying customer pain points and providing opportunities to make the customer service interaction more effortless are all valuable information provided by such measurement. However, most companies fail to also measure Company Effort, i.e. the customer perception of how hard an organisation has worked during a service interaction or to resolve a problem, issue or complaint.
At The Research Locker, we believe using CES as a key metric to measure your service performance is a win-win for organisations:
1) By reducing or removing customer pain points, you make the complaint interaction(s) more effortless, saving your customers time and effort to resolve
2) By reducing or removing pain points, companies reduce repeat (unnecessary) interactions – thus making the service operation more efficient and, more importantly, driving cost overheads down.
In 2015, Ipsos conducted 10,000+ interviews with US consumer and found that Customer Effort did influence on Customer Satisfaction with complaint handling and future Customer Loyalty. However, the research also found that measuring Customer Effort in isolation was not enough and that by measuring both Customer and Company Effort, you would have a better predictor of future Customer Loyalty than if you just measured Customer Effort alone.
Termed the Customer:Company Effort Ratio (C:CER), which takes both perceived customer and company effort into account, the research found that the ratio was 3 times more predictive of a customer’s probability to remain / reuse following a complaint than the Customer Effort Score alone was!
Measuring both Customer Effort and Company Effort is 3x more predictive of future customer loyalty than measuring Customer Effort in isolation
At The Research Locker, we believe these research findings suggest that organisations should also consider including both the measurement and tracking of customer perceptions in relation to the effort they believe companies put in to resolve their problems, issues and / or complaints – because this perception, combined with customers’ own efforts, can be used as a greater predictor of future Customer Loyalty and Advocacy, providing organisations with a more rounded view of their service performance. Organisations also benefit from having 2 times as much the information on how well they perform and what opportunities for improvement might exist!
Put yourself in your customer’s shoes, you would expect the companies we choose to do business with to put more effort into resolving our issues than we need to. But, as the US research established, the perception is often that we have to put more effort in than (a) anticipated, and (b) than the company has. How often have you heard yourself tell friends and family how you had to do “all the running” to get things resolved?
What this means for your business …
From a commercial standpoint, those with service responsibilities can benefit from incorporating both Customer & Company Effort metrics in existing performance measures or creating an appropriate performance measurement tool to track such exertions. By doing so, your organisation will be able to better understand when a customer perceives they have had to exert more effort to resolve their situation than your organisation has. Having had to exert more effort than anticipated, and perceived to exerted more than the provider organisation itself, then customer loyalty can suffer significantly:
• 4x more likely to start using the company less or stop using altogether
• 3x more likely to share their negative experience on social media
• 2.5x more likely to tell friends and family about it
• circa 2x more likely to complain to the company (if interaction concerned problem or issue resolution)
In the US research, 3/5ths of all consumers interviewed believed they had exerted more effort than their companies did to sort out their problems, issues or complaints. This suggests that the balance within the Customer:Company Effort Ratio is not correct, i.e. 40:60. If such an in-balance exists within your own organisation, then the commercial implications are obvious:
• harder challenge to retain customers
• harder challenge to acquire new customers
• loss of cross-sell and up-sell opportunities
• loss of Customer Lifetime Value
Let The Research Locker help you understand whether you have the right Customer: Company Effort balance and how you look to improve customer perceptions.