Aiming for Exceptional Customer Service Is Costing Your Business

In a world of increasing commoditization, seeking differentiation by delivering exceptional customer experience to drive loyalty seems like a no-brainer. Going above and beyond what is expected to provide exceptional customer service is routinely stressed as one of the most important and effective factors in driving continued satisfaction.

There’s just one problem: it’s not true. Sure it may not be true for the rest of us in the sense that we can’t all be Ritz-Carlton, Walt Disney, or Zappos—companies that build, and empower through financial support, their employees to make customer experience a hallmark of their identity. For the most part we accept that these are unicorns—exceptions that are not easily replicated. But what’s more interesting is that it’s not true even in the sense that exceptional customer service is something we’d even want to replicate, at least when looking at compelling data of what is most effective at driving customer loyalty. For that, we need to look elsewhere, and in doing so be willing to ask hard questions about how we shape and deliver our service management solutions. We may find that our supposed justification for delivering exceptionally delightful service is actually a delusion.

But before we get to why that may be, let’s start off with a story. This one in particular begins with a CS manager I knew years ago. In conversation at an off-site once, he regaled me with a story of a really great service experience he had at a bank on the way home from work. This particular branch wasn’t his normal one; it was a little more out of the way than the one closer to his office, but he happened to be in the area and, as luck would have it, he received exceptional service. The teller was delightful and helpful and went above and beyond the normal call of duty, all things we consistently stress with our own employees. Now the kicker: how many more times do you think he visited that branch than the one that merely met expectations, but required less effort (drive, waiting in traffic, etc.)? The answer? None. I’m sure if you think about it yourselves, you’ll find that—a few unique cases aside—the vast majority of your experiences would align with this as well. This my friends, in microcosm, is a perfect example of why what so many of us aim for in service management—exceptional customer service—is actually hurting our business.

To help effectively maneuver us into unconventional thinking land, let me throw some findings out at you. These come primarily from the work of Matthew Dixon, a sales and service management thought leader who has contributed a number of articles and webinars on the matter, and is a contributing author of the book The Effortless Experience:

• 81% of customers will first attempt to self-serve (automated options; web searches, etc.) before contacting customer service departments. This will eventually mean more complex issues and/or prepared (or confused) customers coming into the call center
• 4 of the 5 biggest drivers of customer disloyalty all have to do with the amount of effort the customer must put forth (the largest by far is having a customer have more than one contact to resolve)
• Strategies aimed at “delighting” customers increase costs 10–20%, only work about 16% of the time (meaning the customer felt “wowed,” however ambiguous that is customer to customer), and even when they do work only account for a 12% increase in customer loyalty
• There is a disparity of more than 30% between first call issue resolution when reported by the company (i.e., measuring FCR, averaging 76.7%) vs. what the customer reports (40%)
• Measuring customer effort is more effective than both NPS and customer satisfaction (CSAT) scores for determining customer loyalty
• 73% of service organizations focus on effort reduction initiatives designed to decrease customer exertion (what they “do”), but from a customer perspective this accounts for only one third of what the customer considers effort—65% of that perceived effort comes from customer interpretation (i.e., how the representative resolves the request and their interaction throughout the process)

Take a moment to digest the data. Nowhere in there is there a “wow” factor jumping out at you to save the day. Nowhere in there is escalating to a higher tiered support for backup (in fact, if anything it puts more emphasis on having competent first call support). What works is eliminating barriers, heading off future calls, and getting the customer back to normal as quickly as possible with as little effort as possible.

Now, I know what some of you may be thinking. So far, we’ve been talking mainly about loyalty, not satisfaction. They’re two different things. Besides, we’re the service center, who else are they gonna call? To the second point, you know who: anyone, or no one at all. That the concept of “shadow IT” exists invalidates this rebuttal. But the first one is interesting, so let’s take a moment to focus on that.

Remember that the stats above show very little relationship between satisfaction and loyalty. Further, think of why your service centers are being contacted to begin with; your customers are not looking to be delighted like they would with disposable incomes and trips to Disney. They want something fixed, and fast. In this sense, customer satisfaction shouldn’t even be first on your list even if any of the above wasn’t true (which it is). Sure, it’s better to have good customer service, but it’s certainly not sufficient. Getting users fixed as quickly and cost-effectively as possible should be the number one goal.

Your customers are not looking to be delighted. They want something fixed, and fast.

OK, so now armed with this knowledge, what changes should you actually look to implement, and how could you measure them to make sure they’re effective? For one, start slow. From a process standpoint, you want to empower your frontline to take control of calls and coach them to do so (remember: coaching is different than training). Being empathetic is good, but not as good as someone who can effectively engineer the conversation to a desired outcome.

Another thing you need to come to grips with is that, in order to make way for changes, you’re probably going to have remove some of the waste. If you just tack on another “ask” without clearing the room to make way for it, adoption will be stymied.

From a measurement standpoint, instead of using first call resolution as the holy grail, for each customer track the number of tickets within a closed timeframe (say 1–2 weeks from the last ticket opened). This will let you in on how many times customers need to continually call about repeat or newly created issues (from say, a previous fix). Sure your numbers will look bad to begin with. But you’ll be able to see if A) Your reps are future-proofing their solutions and B) if their first call resolutions actually are true resolutions. Also think about changing your survey questions from “How did you feel” type questions to “How much effort did you have to exert” type questions. Remember, low effort equals high loyalty and satisfaction from a customer perspective.

Coming to the realization that a large portion of what you may have been taught is relatively ineffective is always a shocker. I know. I spent more than a decade in IT caring only about volume, FCR, survey data, etc. But when you think about it, it all makes sense. Do you go to a bank teller or an ATM? Effort. Do you still physically mail every bill or pay things online? Effort.

These insights directly relate to service management as well. If you can begin to conceive of your service centers not as a place of renowned customer experience, but rather as a place of efficient customer engineering, it will pay dividends for both your teams and the business. Of course, soft skills are still important; bad experiences are bad experiences. But providing what is nearly unattainable yet ultimately ineffective is always a bad bet. Instead of thinking how to be nice, think of how to require less effort of your customers, and then watch the rewards roll in.

Adam Rauh has been working in IT since 2005. Currently in the business intelligence and analytics space at Tableau, he spent over a decade working in IT operations focusing on ITSM, leadership, and infrastructure support. He is passionate about data analytics, security, and process frameworks and methodologies. He has spoken at, contributed to, or authored articles for a number of conferences, seminars, and user-groups across the US on a variety of subjects related to IT, data analytics, and public policy. He currently lives in Georgia. Connect with Adam on LinkedIn.