Are you ready to address ‘Customer Effort’ – and is it worth the effort?
Understanding the propensity of your audience to engage with your organisation – and remain engaged with it – has occupied marketing teams and business leaders for decades, but there’s a new kid on the block, and it’s causing a bit of a stir.
Customer satisfaction (CSat) surveys have been used as a benchmark since time immemorial, and more latterly, net promoter scores (NPS) have been ‘de rigeur’. But now, ‘Customer Effort’ is being added to the armoury of early adopting business leaders.
‘Customer Effort’ (CE) is a customer’s perception of the amount of time and energy that he/she has to spend in an encounter with a brand or an organisation. It measures the non-monetary cost of consumption of the product or service, such as the time expended, the emotional effort or stress experienced, the mental effort of acquisition or installation process and the physical effort.
Simply put, CE evaluates how easy it is to do business with your organisation. The lower the score, the easier it is, and this appears to translate directly into a reliable predictor of intent – and action. And whilst it hasn’t yet replaced CSat or NPS, a number of enlightened organisations are adding it to their metrics, on the basis that it offers less prescriptive – but more actionable – insights into likely levels of customer engagement and loyalty.
CE is proving particularly adept at identifying specific points at which the prospect or customer encounters a game-changing problem, causing them to reconsider their choice, whether it be their experience of the website, or the menu of options that greets them on their first telephone call, or the instructions that guide them through the joyous challenge of piecing together their flat-pack wardrobe. But once identified, positive action can be taken to rectify the issue.
For example, BT started by understanding how customer journeys differ and how their respective effort scores also change relative to each other. This required the ability to cut and analyse the results by the types of experience being measured.
They conducted an analysis of the routes a customer took through the IVR (Interactive Voice Response) system. By using natural language analysis, 200 distinct routes relating to what customers were trying to do were identified along with how easy it was to do it. The verbatim comments were then cross-referenced with each instance of a journey to produce trend insights.
To quote BT, who have pioneered a customer ‘net easy score’ in their organisation:
‘The rate of customer loss for the ‘easy’ scores was found to be significantly less than for the others and showed a 40% reduction in their propensity to churn.’
And other companies have seen similar findings, prompting them to radically alter their strategic focus. For example, the data collected by several organisations suggest that the negative consequences of high effort experiences are greater than the positive, and delighting customers may not add a huge amount to loyalty.
‘It makes more sense to invest in the lower end of recommendation scores, minimising the ‘no’ and “unlikely” responses, rather than moving customers from ‘probably’ to “definitely”.’
In other words, rather than trying to delight customers in every area of their experience, it may be far more productive to focus attention on those that are important to them. And customers who find it less easy to deal with a particular organisation are much more inclined to look elsewhere.
CE may not be able to provide the whole answer, but early testing suggests that it is proving to be a valuable addition to the arsenal of measuring tools, and whilst the criteria will vary from sector to sector, there are strong indications that the same process can also be applied to employees.
Co-author of the research report, Professor Moira Clark of the Henley Centre for Customer Management views CE as an essential tool for any ambitious organisation:
‘CE should be an integral element in any Board’s customer management strategy, and there are very strong signs that when properly implemented, it can deliver a significant competitive advantage.’
And particularly in the context of her teaching role on The Henley Advanced Management Programme, Professor Clark is acutely aware of the need to provide any competitive advantage to the next generation of business champions. ‘Customers in all sectors want to be heard, and want a quick response. They crave information and explanation, and individualised attention. CE is becoming an important technique for organisational leaders to measure and influence how they achieve this, so it’s important that we remain at the forefront of these innovations.’Download Article (PDF)