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Industry Research : Putting a Cost on Customer Inconvenience
"Customer Experience" is the new mantra driving businesses, especially consumer-focussed businesses whose principle interaction with customers is through their contact centres. However, the costs of delivering optimal customer experience must be weighed against the overarching goal of running a profitable and growing business, and that’s not an easy balancing act.
It goes without saying that inconvenience has its price: asking the customer to jump too many hurdles to get the service they desire increases the chances that instead of jumping hurdles they will jump ship and find another provider. The question is just how much should be invested in lowering those hurdles before the cost of doing so outweighs the customer retention gains.
In an attempt to weigh these two conflicting priorities one contact centre technology company carried out a customer effort impact survey to demonstrate "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 survey found that 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. And of course poor customer service experiences often lead to additional costs when problems have to be resolved.
Eighty two percent of respondents to the survey said they would likely stop spending money with a company as a result of a high effort experience, and almost 50 percent said they were extremely likely to do so.
Countering this, over 75 percent of respondents said they would likely continue spending money as a result of an exceptional customer experience and 63 percent said they would be extremely likely to continue.
The results, the report said, reinforce the value of providing a means for customers to meet their needs through a holistic, low-effort, personalised interaction. "Companies need to define efficiency from the customer’s point of view, simplify the effort required and optimise each interaction for an engaged, long-term relationship that multiplies customer lifetime value."
The survey also sought respondents’ views on what constitutes good and bad customer experiences. High effort interactions were a big no-no. Sixty four percent of respondents rated the need to repeatedly contact a company to resolve an issue as high effort. Sixty two percent said that that inability to reach a human to get an answer to complete a transaction created a high effort and 59 and 56 percent respectively rated as high effort interacting with company representatives who lacked knowledge of product/service and lack of follow-up by company representatives to provide an answer or complete a transaction.
The lifetime value of a customer will vary greatly between different businesses, but a good experience will contribute significantly to the long-term revenue and market growth that are consistently among the top company priorities, the survey concluded.
Posted by Veronica Silva Cusi, news correspondent
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Published: Monday, May 6, 2013