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Industry Research : Avaya Study Reveals the Cost of Inconvenience
Avaya announces the results of a Customer Effort Impact survey that highlights how the amount of work a customer exerts to obtain service affects business priorities of revenue and market growth, brand loyalty and operational margins. The results reinforce the value of a customer experience characterized by a holistic, low-effort, personalized approach to fulfill customers' needs.
Customer needs and company objectives often appear to be at odds when it comes to the customer experience. Consumers seek excellent service across all divisions of the company; companies look for revenue and market growth while controlling costs and increasing efficiency. To manage this dichotomy, companies need to define efficiency from the customer's point of view, simplify the effort required and optimize each interaction for an engaged, long-term relationship that multiplies customer lifetime value.
The Cost of Inconvenience
Inconvenience has its price. Ask the customer to jump too many hurdles to get the service they desire and a company is more likely to send them running in another direction. More importantly, high effort experiences have a bigger impact on whether a customer will turn away from a company than moderate or low effort experiences do to mitigate this. In addition, poor customer service experiences often lead to additional costs and labor -- such as channel escalation for resolution and multiple employees' involvement -- to resolve the issue.
66% of respondents indicate they are likely to stop spending money with a company as a result of a high effort experience, with 37% extremely likely to do so.
High Effort vs Low Effort Experience
Customers appreciate an experience that is low effort and efficient. The survey identified factors that contribute to the perception of a low-effort, positive experience as well as the "pet peeves" that leave a more sour taste. The good news is that companies can take control of this by providing a personalized, knowledgeable and engaging experience.
- 87% of respondents rate the customer service agents' knowledge of a product or service as important to their ongoing experience with companies with 68% saying it is very important.
- 83% rate friendly, engaging customer service reps as important to their ongoing interactions and experience with companies with 33% saying it is very important.
Conversely, companies can't risk a customer having a bad experience at any point in the customer lifecycle, whether it is during the point of sale or during a service appointment. The survey emphasized high effort activities that can significantly worsen the perceived customer experience.
- 64% of respondents cite the need to repeatedly contact a company to resolve an issue requires high effort.
- 62% indicate that inability to reach a human to get an answer to complete a transaction creates a high effort.
- Nearly six out of ten (59%) cite interacting with company representative who lack knowledge of product/service as contributing to a high effort.
- 56% cite lack of follow up by company representatives to provide an answer or complete a transaction as high effort.
- Over half (52%) cite being transferred between staff or departments to get an answer or complete a transaction as requiring a high effort.
What's at Stake: Customer Lifetime Value
Several studies have focused on the upside of good customer service, which are reinforced by the findings of the Customer Effort Impact study. The service experience plays a crucial role in shaping consumers' buying decisions, long-term loyalty and whether they recommend - or do not recommend - companies, products and services. While putting an exact figure on customer lifetime value is dependent on each company, a good experience will contribute to the long-term revenue and market growth that are consistently among the top company priorities.
- Over three fourths of respondents state they are likely to continue spending money as a result of an exceptional customer experience with 63% indicating they would be extremely likely to continue.
- On the other hand, 82% of respondents are likely to stop spending money with companies as a result of a bad customer experience, with almost half saying that it would extremely likely to stop.
- Over half of the respondents would pay more to companies that provide consistently customer service. 21% of respondents even said they would pay 10% more to a company they felt provided good customer service.
- 82% say an existing relationship with a company is important or very important when making a purchase demonstrating the likelihood of repeat business that grows brand and revenue.
More than 2100 US-based adults (18+) participated in the survey conducted by Harris Interactive earlier this year.
"Direct experience is one of the leading contributors to a customer's impression of a brand and the likelihood that they'll be a fan or a detractor. Companies need to test the service experience at every point in the customer journey to see how much effort it requires and whether it supports their brand objectives and business priorities."
--Mark Wilson, Chief Marketing Officer, Avaya
Posted by Veronica Silva Cusi, news correspondent
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Published: Monday, May 13, 2013