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Everything You Thought About Customer Service & Loyalty is Wrong // Toolbox Series

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What we think about in customer service could be wrong, from what customers want to who’s the best personality for teams.
Technology research firm Gartner Inc. (previously CEB) recently presented findings from a number of studies carried out within the realm of customer service across the world.

The research spanned many different industries and consisted of over 125,000 customers, over 5000 service representatives, over 100 companies and revealed three major findings.

We explore these findings and offer actionable steps and useful resources to begin customer service transformations within any company.

Published in: Business
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Everything You Thought About Customer Service & Loyalty is Wrong // Toolbox Series

  1. 1. UNDERSTAND TODAY. SHAPE TOMORROW. CUSTOMER SERVICE & LOYALTY LHBS // CUSTOMER SERVICE & LOYALTY RESEARCH. 1 EVERYTHING YOU THOUGHT ABOUT IS WRONG. the latest instalment of our: Toolbox Series
  2. 2. ABOUT. LHBS is a marketing & innovation firm with offices in Berlin & Copenhagen. We work with legacy organisations to adapt their customer value proposition to meet emerging customer expectations. http://www.lhbs.com UNDERSTAND TODAY. SHAPE TOMORROW. Discover Define Develop Deliver ABOUT UNDERSTAND TODAY. SHAPE TOMORROW. 2 At LHBS, we are always looking ahead to reputable, new research shedding light on the customer experience across touch-points, industries and countries. What we discover, we like to share in a way that is actionable for business leaders to implement within their own company or teams, with tried and tested models and canvases to get started. That’s why we’ve created the Toolbox Series. This issue is challenging our assumptions and revealing that Everything You Thought About Customer Service & Loyalty Is Wrong. We hope you enjoy this deck and are inspired to explore further to really understand today’s consumer and how to best serve them. CUSTOMER SERVICE & LOYALTY RESEARCH // INTRODUCTION.
  3. 3. UNDERSTAND TODAY. SHAPE TOMORROW. INTRO- DUCTION. Technology research firm Gartner Inc. (previously CEB) recently presented findings from a number of studies carried out within the realm of customer service across the world. Gartner’s global research spanned many different industries and consisted of over 125,000 customers, over 5000 service representatives, over 100 companies and revealed three major findings. These insights challenge long standing assumptions we have about expected and delivered customer service. We explore these findings and offer actionable steps and useful resources to kickstart customer service transformations within any company. CUSTOMER SERVICE & LOYALTY RESEARCH // INTRODUCTION. WHAT CONSUMERS WANT FROM COMPANY INTERACTIONS ISN’T WHAT WE THOUGHT Customer preferences have changed with the entrance of on- demand services, enabling tech and experience-focused brands, and yet customer service departments have remained largely unchanged. Kathleen McCaffrey Marketing Strategist at LHBS lhbs.com | kmc@lhbs.com INTRODUCTION 3
  4. 4. UNDERSTAND TODAY. SHAPE TOMORROW. WHY IS THIS RESEARCH NEEDED. Customer service is lagging when it comes to innovating for customer experience improvement. The likes of Amazon are proving to us the huge effect a customer-centric approach can have. Then why do the majority of businesses still see a consistent reduction in customer satisfaction after service interactions? The rise of self service resources has dramatically decreased the number of low-complexity issues coming into call centres. It’s now becoming evident that frontline service representatives are not trained to standard and are ill-equipped to handle these increasingly complex problems. With the hiring, on boarding, development and management of service representatives remaining largely unchanged, live service interactions are in need of a major shake-up if they want to begin seeing positive changes in customer loyalty, ROI’s and in their brand image. Gartner’s research reveals crucial insights into what the customer expects from a service, why they initiate an interaction and who they benefit most from connecting with when they do reach out. INTRODUCTION 4 CUSTOMER SERVICE & LOYALTY RESEARCH // INTRODUCTION.
  5. 5. REPORT TITLE // INTRODUCTION. Delight Doesn’t Pay Research Question: What do people really want from customer service? They Don’t Always Want to Talk to You Research Question: How have service preferences changed in recent years? Make it Effortless Research Question: What kind of service representative do we want to solve our problems? Drive Loyalty From the Front Line How should businesses take onboard these key insights to enhance their customer experiences within their service departments? UNDERSTAND TODAY. SHAPE TOMORROW. KEY REPORT FINDINGS. DEEP DIVE 5 CUSTOMER SERVICE & LOYALTY RESEARCH // DEEP DIVE.
  6. 6. UNDERSTAND TODAY. SHAPE TOMORROW. FINDING ONE: CUSTOMER EXPECTATIONS Delight doesn’t pay. Companies are underestimating the amount of goodwill they generate by simply meeting expectations, and overestimating how much loyalty benefit they get from exceeding customer expectations. DELIGHT DOESN’T PAY 6 CUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  7. 7. UNDERSTAND TODAY. SHAPE TOMORROW. little relationship is found between satisfaction and loyalty 7 DELIGHT DOESN’T PAYCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  8. 8. UNDERSTAND TODAY. SHAPE TOMORROW. 8 Company’s Perception Exceeding expectations delivers an increasing rate of return on investment. Loyalty only increases - and increases dramatically - when they exceed customer expectations of service. The Reality Exceeding expectations delivers a decreasing rate of return on investment. Customer loyalty peaks when their expectations are simply met, and levels off even when their expectations are exceeded. Less Loyal More Loyal Below Customer Expectations Meets Customer Expectations Exceeds Customer Expectations Company's Perception The Reality DELIGHT DOESN’T PAYCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  9. 9. UNDERSTAND TODAY. SHAPE TOMORROW.Source: 75% 25% 60% 11% 89% CEB The Effortless Experience™ 89 out of 100 customer service managers said their main strategy was to exceed expectations 9 89% DELIGHT DOESN’T PAYCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  10. 10. UNDERSTAND TODAY. SHAPE TOMORROW.Source: 75% 25% 60% 84% 16% Gartner: The Effortless Experience™ Only sixteen percent of customers said they had been wowed by a recent customer service interaction 10 16% DELIGHT DOESN’T PAYCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  11. 11. UNDERSTAND TODAY. SHAPE TOMORROW. “Companies overlook the massive good that they do when they simply do what the customer wants… when they simply do what the customer expects which is - fix the problem in an efficient way.” MATTHEW DIXON GROUP LEADER, CEB 11 DELIGHT DOESN’T PAYCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  12. 12. UNDERSTAND TODAY. SHAPE TOMORROW. FINDING TWO: CUSTOMER PREFERENCES They don’t always want to talk to you. Consumer preferences have shifted towards a desire for self service when it comes to problem solving. Reaching out to customer service teams is a last resort. 12 THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  13. 13. UNDERSTAND TODAY. SHAPE TOMORROW. The truest test of loyalty is when something goes wrong, and the problem is fixed 13 THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  14. 14. UNDERSTAND TODAY. SHAPE TOMORROW. The majority of company executives believe customers want to speak to their CX team. 14 THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  15. 15. UNDERSTAND TODAY. SHAPE TOMORROW. 15 of customers prefer live service of customers prefer self service of these customers are going to non-company channels to self serve e.g. peer solutions, same experience stories. 20% 80% 54% These customers are primarily deterred from using the company’s site to self serve due to; • technical jargon • legal writing • over-produced and corporate videos Live service vs. self service THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  16. 16. UNDERSTAND TODAY. SHAPE TOMORROW. Customers do everything they can to avoid calling companies. Most likely when they do call, it’s because they had no other choice. 16 THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  17. 17. UNDERSTAND TODAY. SHAPE TOMORROW. 17 Customers are often overwhelmed by choices of how to connect to a company. Calling is the equivalent of making no choice, but it is still an action they dread over desire. THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  18. 18. UNDERSTAND TODAY. SHAPE TOMORROW.Source: 75% 25% 60% Gartner: The Effortless Experience™ When a service interaction occurs, it is four times more likely to result in a dissatisfied customer than a satisfied one, causing them to become disloyal to the company. 18 More loyal More disloyal 1x 4x THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  19. 19. UNDERSTAND TODAY. SHAPE TOMORROW. “While the self-service experience has improved dramatically in recent years, the live service interaction has barely changed in decades, creating a gap between customers’ expectations and actual experience… customer satisfaction has been in steady decline across industries for years.” MATTHEW DIXON, LARA PONOMAREFF, SCOTT TURNER & RICK DELISI LEADERS OF CEB RESEARCH 19 THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  20. 20. UNDERSTAND TODAY. SHAPE TOMORROW. FINDING THREE: CUSTOMER REPRESENTATIVES Make it effortless. Customers who engage in a service interaction have more than likely exhausted all other avenues of self service, and so expect an immediate and effortless solution provided by a company representative with the best personality to deliver this. 20 MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  21. 21. UNDERSTAND TODAY. SHAPE TOMORROW. Consumers do not want an apology, they want an effortless solution 21 MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  22. 22. UNDERSTAND TODAY. SHAPE TOMORROW. This interaction with a company that customers already dread is therefor critical to handle correctly. This can be done by avoiding these impactful mistakes; 22 Requesting that customers call back Transferring calls multiple times (one transfer is actually beneficial) Asking customers to repeat stories Asking to repeat personal information Treating the customer in a robotic way Which personalities are best to deliver this crucial service? MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  23. 23. UNDERSTAND TODAY. SHAPE TOMORROW. 23 Interviews of 1440 frontline service representatives revealed seven distinct personality types; Controllers focus less on asking customers what they’d like to do and more on telling them what they should do— the aim always being to get to the fastest and easiest resolution. “I like to take control of the situation and guide people.” Many managers feel Controllers “wouldn’t be a good cultural fit” and lack the requisite empathy to succeed, they are therefor bottom of the list when asked which personality type they would like to hire. Assumptions Reality Empathizers spend more time apologizing and taking time to understand the customer’s position. As a result, they are less productive than Controllers, and their interactions result in more customers feeling dissatisfied and having a high-effort experience. Managers know many customers coming to them are already frustrated, and feel a more expressively empathetic representative should await them,. Therefor they currently make up the majority of call centre teams. Assumptions Reality MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  24. 24. UNDERSTAND TODAY. SHAPE TOMORROW. 24 Interviews of 1440 frontline service representatives revealed seven distinct personality types; CURRENTLY HIRED PREFERRED BY HIRING TEAMS BEST FOR DELIVERING LOW-EFFORT SERVICE The Empathizer The Empathizer The Empathizer The Hard Worker The Hard Worker The Hard Worker The Controller The Controller The Controller The Rock The Rock The Rock The Accommodator The Accommodator The Accommodator The Innovator The Innovator The Innovator The Competitor The Competitor The Competitor 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 6 6 6 7 7 7 MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  25. 25. UNDERSTAND TODAY. SHAPE TOMORROW. 25 The two personality types to focus on are; the one currently most present in companies and the one most effective in creating the ideal service interaction according to this research. The Empathizer Enjoys solving others’ problems; seeks to understand behaviors and motives; listens sympathetically The Controller Outspoken and opinionated; likes demonstrating expertise and directing the customer interaction MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  26. 26. UNDERSTAND TODAY. SHAPE TOMORROW.Source: 75% 25% 60% 16% 84% Gartner: The Effortless Experience™ of customers would rather a straightforward solution over a wide variety 26 84% MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  27. 27. UNDERSTAND TODAY. SHAPE TOMORROW.Source: 75% 25% 60% 15% 85% Gartner: The Effortless Experience™ is how much more likely consumers are to purchase from Brands who scored highly in CEB’s “decision simplicity index” 27 85% MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  28. 28. UNDERSTAND TODAY. SHAPE TOMORROW. 28 ‘The Empathizer’ profile type makes up 32% of existing service representatives globally. After reviewing all profile types, 42% of surveyed leaders said they will hire ‘The Empathizer’ type in their next opening in their call centre. Managers described the ideal representative as being “service- oriented,” “a good listener and communicator” and who “likes helping others.” The Empathizer MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  29. 29. UNDERSTAND TODAY. SHAPE TOMORROW. 29 “More often than not what customers really want is a guided and simple experience… And what they really want is to stop interacting with you and get back to what they were doing before” They only make up 15% of existing service representatives, and only 2% of managers wanted to hire this profile above the other six They outperform all other profiles on quality indicators, customer satisfaction levels and productivity measures - and most notably, reducing effort on behalf of the customer The Controller MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  30. 30. 12% 88% increased likelihood of spending more or wallet share 88% 6% 94% increased likelihood of repurchasing from the brand 94% UNDERSTAND TODAY. SHAPE TOMORROW. 30 A low-effort experience from the customer’s perspective results in; MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  31. 31. 19% 81% increased likelihood of negative word of mouth 81% 4% 96% increase in overall disloyalty towards a brand 96% UNDERSTAND TODAY. SHAPE TOMORROW. 31 A high-effort experience can result in; MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  32. 32. UNDERSTAND TODAY. SHAPE TOMORROW. 32 Company's costs for resolving service requests decrease by 37% when a relatively high- effort experience is reduced to a low-effort one 37% MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS. Gartner: The Effortless Experience™
  33. 33. UNDERSTAND TODAY. SHAPE TOMORROW. This desire for an effortless experience is true for live service, but needs to be replicated online 33 MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  34. 34. UNDERSTAND TODAY. SHAPE TOMORROW. “our interviews reveal that Controllers are, in fact, quite empathetic. They do understand customers’ needs and frustrations. But they respond in a distinctive way. They recognize that after toiling away online trying to self-serve, customers don’t want an apology—they want a solution.” MATTHEW DIXON, LARA PONOMAREFF, SCOTT TURNER & RICK DELISI LEADERS OF CEB RESEARCH 34 MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.
  35. 35. UNDERSTAND TODAY. SHAPE TOMORROW. APPLICATION FOR BUSINESSES Drive loyalty from the front line. Your customers want effortless solutions, so they opt for self service options first. Only when they cannot solve the problem themselves do they reach out to your team. The team should be ready with a problem solving attitude and ‘take charge’ mindset to deliver that solution. Here are some valuable resources to begin implementing this effortless customer experience within your own customer service department. 35 DRIVE LOYALTY FROM THE FRONT LINECUSTOMER SERVICE & LOYALTY RESEARCH // APPLICATIONS.
  36. 36. UNDERSTAND TODAY. SHAPE TOMORROW. 36 It’s often the norm that leaders tell service representatives to exceed customers’ expectations. This simply results in confusion and costly giveaways, not to mention wasted time and effort on a solution where the customer simply wanted a fast, low-effort resolution. Telling frontline representatives to “make it easy” gives them a solid foundation for action. This simply translates to ‘remove obstacles’ to make the interaction quick, easy and low-effort for the customer. Empower your frontline staff by giving them a clear goal that makes a difference to customers; DRIVE LOYALTY FROM THE FRONT LINECUSTOMER SERVICE & LOYALTY RESEARCH // APPLICATIONS.
  37. 37. UNDERSTAND TODAY. SHAPE TOMORROW. 37 Redefine success within your customer service teams by more accurate measuring of service quality; NET PROMOTER SCORE CUSTOMER EFFORT SCORE SATISFACTION Why: Gives a ‘big picture’ of loyalty and captures the customer’s sentiment towards the company Example: How likely are you to recommend the company to friend, family member, colleague? Why: Good for distinguishing those who experienced high effort service, which are the customers much more likely to exhibit ‘disloyalty’ Example: How easy did the company make it to solve your problem? Why: Enables the company to ensure that friendliness and compassion are not being compromised in a bid to solve problems as fast as possible. Example: How satisfied were you with the answer that you got? HIGH- EFFORT LOW- EFFORT 1 2 3 4 5 DRIVE LOYALTY FROM THE FRONT LINECUSTOMER SERVICE & LOYALTY RESEARCH // APPLICATIONS.
  38. 38. UNDERSTAND TODAY. SHAPE TOMORROW. 38 Here is a useful canvas to use as a worksheet and plan your customer’s experience with your company; DRIVE LOYALTY FROM THE FRONT LINECUSTOMER SERVICE & LOYALTY RESEARCH // APPLICATIONS.
  39. 39. UNDERSTAND TODAY. SHAPE TOMORROW. 39 The canvas can be broken down into three key steps; 1 2 3 Fix the basics. It’s not the extras, but the basic service that drives loyalty. When a problem is solved quickly, with little to no effort on behalf of the customer, a positive ROI is made much more likely. If customer expectations are not met, they will not see beyond this. Validate delighting moments. Creating wow moments can be rewarding, but they must first be validated in terms of scalability and ROI to ensure they are actually having an impact on loyalty and not wasting time and resources of your team. Individualize to scale. Individualization doesn’t need to be overly complex and with first name basis interactions. Reducing effort by adapting your service to various lifestyles and personality types can often be achieved with existing or easily obtainable customer data. DRIVE LOYALTY FROM THE FRONT LINECUSTOMER SERVICE & LOYALTY RESEARCH // APPLICATIONS.
  40. 40. UNDERSTAND TODAY. SHAPE TOMORROW.
  41. 41. LHBS Put the Title of the Report here INSPIRATION -HUB UNDERSTAND TODAY. SHAPE TOMORROW. This report is powered by the LHBS Inspiration-Hub. The LHBS Inspiration-Hub is a digital platform that brings customized insights and inspiration to the heart of your organization. It is a digital platform that tracks changes in people, markets and technology. https://inspiration-hub.com/ CUSTOMER SERVICE & LOYALTY RESEARCH // APPLICATIONS. LHBS CONSULTING 41 WORK WITH US. Can you see the implementation of this research benefiting your business, if you had the right support? Here at LHBS, we’re working with legacy companies each day, providing them with the right tools, models, workshops and insights to best ideate, reposition and transform their business for today’s customer-centric and digital age. We’d love to hear more about your business and discuss your potential as a leader in customer-centricity. Access our free intelligence Kathleen McCaffrey Marketing Strategist kmc@lhbs.com lhbs.com/resources Insights, reports & case studies
  42. 42. Die in dieser Präsentation dokumentierten Gedanken und Vorschläge sind geistiges Eigentum der 
 LHBS Consulting Berlin GmbH und unterliegen den geltenden Urhebergesetzen. Die unauthorisierte Nutzung, 
 die ganze oder teilweise Vervielfältigung sowie jede Weitergabe an Dritte ist nicht gestattet. LHBS Consulting Berlin GmbH Köpenicker Straße 154  10997 Berlin Germany   IMPRINT UNDERSTAND TODAY. SHAPE TOMORROW. www.lhbs.com THANK YOU CUSTOMER SERVICE & LOYALTY RESEARCH // THANK YOU. 42

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