By: Matthew Dixon

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You've heard them before - the heroic customer service stories that set the bar almost impossibly high for the rest of us.

Like that one time a Zappos customer service representative stayed on the phone for 9 hours and 37 minutes with customer. Sometimes, the people at Zappos say, people just need to talk.

Or that other time a Nordstrom's customer lost the diamond from her engagement ring at the store. Multiple employees dropped what they were doing, and after a long and tiring search, they finally found the diamond inside the bag of a vacuum cleaner that had recently been used to clean the area.

The traditional thinking is that service like this goes a long way to creating customer loyalty, and thus profits.

But what if that thinking was wrong?

What if, instead, customer service was more about defence? More about preventing frustration and delay?

Those are the questions that the folks at the Corporate Executive Board have been researching for the past few years, and they have learned some interesting things.

Over the next 10 or so minutes, we'll explore their 4 main findings, and the 4 main principles of what they are calling "low-effort service."

Finding #1: A strategy of delight doesn't pay

After analyzing the responses of 97,000 customers, the CEB found that there was virtually no difference at all between the loyalty of those customers whose customer-service expectations are exceeded and those whose expectations were merely met.

There are two big takeaways here.

First, companies tend to vastly underestimate the benefit of merely meeting customer expectations. We live in a world where most customer experience interactions are horrible. So people are very happy to just get what they were promised. In practical terms, if there's a problem, just fix it quickly and easily. No fuss, no muss.

Second, companies tend to vastly overestimate the returns they'll get from exceeding customer expectations. If your goal is to increase loyalty and profits, the extra resources you'll put in to the customer service experience beyond meeting customer expectations brings you almost no financial return.

So, figure out what your customer expectations are, meet them, and then invest the rest of your money elsewhere.

Finding #2: Satisfaction is not a predictor of loyalty

This one is surprising. In their global survey, the CEB found no correlation between how a customer rates a company on a customer service satisfaction survey and their future customer loyalty.

To make things worse, 20% of the people who suggested that they were satisfied with the customer experience also stated that they were intending to leave the company and buy from a competing company.

On the flip side, 28% of people who suggested they were dissatisfied with the customer service experience also stated that they fully intended to stay loyal to the company.

Finding #3: Customer service interactions tend to drive disloyalty, not loyalty

The CEB research showed that customers service interactions are 4 times more likely to drive disloyalty than loyalty.

It's important here to make a distinction between a product experience and a service experience. Although they are both part of the customer experience, they have completely different impacts on loyalty.

For instance, 71 percent of people who have positive product experiences engage in word of mouth, but only 32 percent of customers with a negative product experience will tell other people.

Contrast that with the customer experience numbers. 65 percent of customers who have poor service experiences will engage in word of mouth, but only 25 percent of customers who have a positive service experience will tell other people.

There's an adage in management theory that says that people join companies, but they leave their managers. Similarly, in customer-company relationships, people pick companies because of products, but leave them because of their service failures.

The key, then, is not to try and delight people, but to put your time, money and energy into mitigating customer disloyalty.

Finding #4: The key to mitigating disloyalty is reducing customer effort

There are 5 drivers of disloyalty. Get ready to recall traumatic experiences from your past as we go through them one by one.

Having to contact the company more than once is the biggest problem of all, responsible for more than half of the disloyalty impact. Simply solving this issue for customers is a huge deal.

The next biggest driver is "generic service" - which is when a customer feels like the customer service rep is treating them like a number, and making no attempt to personalize the service.

Next on the list is having to repeat information, which is a cousin of repeat contacts. If you've ever called your bank, entered your card number into the automated system, and then had to repeat it again when a live person got on the line, you know what I'm talking about. Or you had to repeat your story to a supervisor because your original contact couldn't solve your problem.

The fourth driver of disloyalty is the "perceived additional effort to resolve," which means what it says - how much a customer believes they have to do in order to resolve an issue, even if the reality turns out to be much easier.

Finally, it's the concept of being bounced around between people or channels. For instance, trying to solve a problem online but then forced to call into the service line because it didn't work. Or getting transferred between departments to get somebody on the line who can solve your problem.

Now that the trauma is over, you'll realize that out of the 5 drivers of customer disloyalty caused by customer service, 4 of them are related to the additional effort the customer must put forward to solve their problem.

For the rest of the summary we'll focus on how to create an Effortless Experience, just like the title suggests.

Principle #1: Create "sticky" self-service channels

The research done by the CEB concluded that most people are more than happy to use self service channels, in spite of the belief of service leaders that customers prefer to talk to a human being. This is true across almost all customer types and demographics.

The key here is not to get people to try self-service, it's to get the people who start there to stay there. 58% of all inbound calls are from customers who were just on the company's website.

Looking deeper into the data, there are three main categories of people who end up calling after a website visit.

First, there are customers who couldn't find the information they were looking for. The solution to this problem is to simplify the self-service experience. As the authors point out, most service websites fail not because they lack functionality and content, but because they have too much of it.

Second, there are people who found the information they were looking for, but it was unclear. The travel company Travelocity created rules to solve this problem which you might find helpful:

1. Simplify language. Use language that score an 8 or 9 on the Gunning Fog Index.
2. Eliminate null search results. This can usually be solved by using the language your customers use when searching for information.
3. Chunk related information. This involves condensing related information and spacing it apart from other text, allowing easier scanning.
4. Avoid jargon. Your customers don't use your jargon.
5. Use active voice. This is much better for reading online.

The last category are those who were simply looking for your phone number to begin with. While you don't want to make it hard for your customers to call you, you do want them to use the self-service option if possible. One idea here is to feature prominent links to the most common questions customers ask.

Principle #2: Practice next-issue avoidance

When customers are forced to call your company, you want them to be able to solve their entire issue - and maybe even the next logical one they might run into - on the same call.

The CEB research showed that almost half of all repeat contacts go unnoticed by the companies. Customers who have their initial issue resolved frequently call back for reasons that are indirectly related to the original issue.

These issues often include things like adjacent issues (downstream implications linked to the original issue) and experience issues (the customer didn't feel like they were treated appropriately by the rep or didn't like the answer they got).

There are three rules that low-effort companies follow in order to get this right.

Rule #1: Down one, not two. Most companies can predict two or three calls into the future, but trying to solve those issues for customers on one call tends to overwhelm them. So, only forward-resolve the immediate adjacent issues.

Rule #2: Pick winners. Only forward-resolve the highest-probability adjacent issues - not all of the possible adjacent issues. A good rule of thumb is that an adjacent issue has to occur at least 20% of the time in order to bring up.

Rule #3: Don't forward-resolve complex issues on the phone. If issues are complex, it's better to follow up in writing.

Principle #3: Low-effort companies equip their reps to succeed on the "emotional" side of the service interaction

When looking at the concept of effort, it's one third "do" and two-thirds "feel." Put another way, it's the customers' perception of effort that matters most.

Managing a customer's perception isn't about being nice - it's about engineering an experience that's rooted in behavioural economics to generate a positive response to an outcome.

Positioning Alternatives with Customer Benefits

The first thing you can do to engineer a positive outcome is to position alternatives with customer benefits. The idea is that you "don't tell customers what you can't do, tell them what you can do."

There are a few things to keep in mind.

1. Don't be so fast with a "no." Avoid sharing what isn't available immediately - take a little extra time.

2. Don't encourage reps to explain their way out of a high-effort solution.

3. Don't take the customer's request so literally. In many cases, what the customer is requesting and what they actually want/need is different. Ask questions to get to the root of what they are really looking for.

Personality-Based Issue Resolution

The second tool that low-effort companies use to generate positive outcomes is to divide the customer world into four basic categories. We have:

• The Feeler, who leads with their emotional needs.
• The Entertainer, who loves to talk and show off their personality.
• The Thinker, who needs to analyze and understand; and
• The Controller, who just wants what they want, when they want it.

The key is to tailor the delivery of the service experience to the personality of the person. When you do, your customer will feel like you "get" them, leading to a much lower-effort experience.

Principle #4: Use incentives to value the quality of the experience over speed and efficiency

In low-effort companies, the service reps themselves determine how to best handle unique issues being experienced by unique people.

In their research, CEB was able to identify the skills required of reps in order to pull this off successfully.

They found 4 categories of skills that lead to increases in performance.

Being better than average:

• In critical thinking (or IQ) increases rep performance by 3.6 percent.
• In the basic skills of customer service (product knowledge, clear communication, etc) increases rep performance by 5.1%.
• In EQ (empathy, advocates for the customer, etc) increases rep performance by 5.4%
• In what the authors call CQ (Control Quotient) increases rep performance by 11.2%.

This last category deserves a deeper look. It includes the following skills and behaviors:

• Resilience
• Able to handle high-pressure situations without becoming burned out
• Takes responsibility for own actions
• Responds well to constructive criticism by managers
• Able to concentrate on tasks over extended periods of time

There are three things that you can do to create a High-CQ environment in your company.

First, you need to display trust in your service reps' judgement. At high-CQ companies, frontline reps feel free to do whatever is right to serve that one customer they are dealing with right now. So, ask yourself whether or not your employees feel trusted.

Second, you need to create a culture where the rep understands and has alignment with company goals.

Third, you need to have a strong rep peer support group. This is hard to get right, but the effort is worth it. Giving reps the time and space to share best practices with one another is critical to creating a culture that embraces CQ.