There’s a new white paper from customer engagement company 7 entitled Why Delighting Customers is a Waste of Time and Money. It seeks to refute what it says is a widely held belief: that exceeding customer expectations is unquestionably a good thing; that it leads to delighted customers, and that delighted customers are more loyal.
The notion is not its own, the report acknowledges as the source of this idea a 2014 study by CEB, a company that claims to “unlock the potential of organisations and leaders by advancing the science and practice of management.”
Summarising the research in a blog post, CEB research director, Erin Dumbacher, said CEB research “shows that operations’ efforts to delight customers have diminishing returns. Of course, when service does not meet expectations, customer effort and attrition rise, but when service exceeds expectations customer effort and attrition scores hardly change at all, while the cost to implement such service is high.”
She adds: “Although this finding may surprise some, it should offer senior leaders some relief because organisations only succeed in delighting customers 16 percent of the time. Additionally, 80 percent of service leaders report that their efforts to exceed customer expectations require significantly more resources than their efforts to just meet those expectations.”
The /7 white paper argues that resources are better directed to ensuring that customer interactions are as smooth and easy as possible for the customer “because increased efforts (i.e., points of frustration within the customer service journey) are a staggering four times more likely to drive disloyalty [than exceeding customer expectations].”
Most of the white paper is devoted to discussing ways of smoothing that customer journey, but it leaves unanswered the question of just how much effort should be devoted to ‘delighting’ customers.
Dumbacher offers a number of suggestions, supported by real-world case studies, including one from Australia “See how Suncorp-Metway provided the best service at the lowest cost by balancing customer service metrics” (available only to CEB members, unfortunately).
None of the recommendations looks simple to implement. For example, “To prioritise customers’ expectations, managers should use surveys and value maps to determine areas of relative operational strength [and] develop and market service guarantees to shift customer expectations.”
The bottom line is that organisations need to really understand the customer response to everything they do so as to assess how best to direct resources into customer interactions. That’s an enormous task, but thankfully it’s being made easier today thanks to the ‘digital trail’ that digital customer interactions leave, and the power of data analytics.
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