Measuring Customer Effort? Be sure to measure Company Effort too!
My recent blogs have concerned the Customer Effort Score (CES) and how it can be used to measure customer exertions during service interactions (particularly a complaint), identify customer pain points and offer opportunities to make the customer service interaction more effortless. I’ve also discussed how CES can be used to predict future customer loyalty too!
At The Research Locker, we believe using CES as a key metric to measure your service performance is a win-win for organisations:
- By reducing or removing customer pain points, you make the complaint interaction(s) more effortless, saving your customers time and effort to resolve
- 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.
Measuring Customer Effort alone might not be enough …
In 2015, a leading US research agency collected over 10,000 US consumer interviews. In their research, the agency investigated the influence of Customer Effort on customer satisfaction with complaint handling and its influence on future customer loyalty. I’ve personally conducted something similar – though specifically for a client rather than pan-sector like the US research. But one of the key findings of the US research was that measuring Customer Effort in isolation is not enough …
Measuring Customer Effort in isolation is not enough!
The US agency found 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
Implications for those with Customer Service responsibilities …
Basically, it suggests that organisations should consider identifying, measuring and tracking customer perceptions of the effort that companies put in to resolve their problems, issues and / or complaints – because this perception will have a significant impact on future customer loyalty (and advocacy). Incorporating Company Effort alongside Customer Effort means you have a more rounded view of your service performance – and 2 times the information on how well you perform and what opportunities for improvement exist!
How well do your customers rate your effort when it comes to resolving their problems, issues and / or complaints?
Of course, as consumers, we would expect the companies we choose to do business with to put more effort into resolving our issues than we need to. But 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 would do well to consider either incorporating Customer & Company Effort metrics in their existing performance trackers or implement a performance measurement tracker ASAP. Why? Well, again, our friends in the US suggest that when a customer perceives they have had to exert more effort to resolve their situation than the organisation itself has, then customer loyalty can suffer:
- 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)
According to 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. With such a high proportion on the wrong side of the Effort equation, and with what we already know about Effort’s influence on Customer Loyalty, the commercial implications for companies are evident:
- harder challenge to retain customers
- harder challenge to acquire new customers
- loss of cross-sell and up-sell opportunities
- loss of Customer Lifetime Value
If you would like to know more about the research or how The Research Locker helps clients measure Customer & Company Effort to identify opportunities for service improvement, please email me at email@example.com