“Companies told us that they try to delight customers because they believe there are significant economic gains to be made by exceeding the service expectations of their customers,” says Nick Toman, Group Vice President, Gartner and co-author with Matthew Dixon and Rick Delisi, Principle Executive Advisor, Gartner of The Effortless Experience, Conquering the New Battleground for Customer Loyalty (Portfolio/Penguin, 2013).
How can customer service improve loyalty, while also reducing operating costs?.What can customer service do to drive customer loyalty?.To what extent does customer service matter in driving customer loyalty?.In 2013, research leaders with Gartner set out to answer three critical questions for customer service leaders: In reality, exceeding expectations, or delighting customers, may create “feel good” moments, but doing so has low impact on loyalty or repeat business. They conducted a quantitative research study with hundreds of customer service organizations and 97,000 customers to investigate their service interactions. The data uncovered four major, and unexpected, findings. 1: The delight strategy doesn’t payĪfter analyzing the responses of 97,000 customers, it became clear that there was virtually no difference between the loyalty of customers whose expectations were exceeded and those whose expectations were simply met. “ Just because your customers are satisfied, doesn’t mean they will keep buying from you” In fact, loyalty actually plateaus once customer expectations are met. “Delight, it turns out, is expensive,” Toman says. Roughly 80% of senior leaders surveyed said the strategy of exceeding customer expectations cost 10% to 20% more in operational costs. “If we look at the customer data, their clear preference is for organizations to simply solve the problem,” he explains. 2: Satisfaction doesn’t predict loyalty very well “There’s no customer need for delight.” Finding No. Many companies still consider customer satisfaction (CSAT) rates as the barometer for customer service success. Unfortunately, data from the survey shows that a strong CSAT score is not a reliable predictor for whether customers will be loyal. “When we reviewed the data, we learned that 20% of customers who reported they were satisfied with their service interaction also expressed at the same time that they were actually intending to leave the company and buy from somebody else,” Toman says. In other words, just because your customers are satisfied, doesn’t mean they will keep buying from you. 3: Customer service interactions drive more disloyalty than loyalty “You can liken it to a customer of a local steakhouse who loves his steak dinner but will be sure to try a new steak restaurant when it opens,” Toman adds. Think of customer service like lifeguards they’re usually called upon when something goes wrong. Yet the research shows that a customer who requires a service interaction is four times more likely to drive disloyalty than to drive loyalty.
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