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Most executives believe that providing an excellent customer experience will increase customer loyalty. Many companies are known for it and stand out as examples of how to win business and loyalty – Nordstrom, Zappos and Apple come to mind. While providing an excellent customer experience is certainly more likely to increase a loyal customer base than providing a poor one, just how this is done may well be the key.
A very insightful article in the Harvard Business Review analyzed the results of a study by the Customer Contact Council of over 75,000 people. It examined the links between customer loyalty and customer service. The results were quite surprising. According to the article:
“Two critical findings emerged that should affect every company’s customer service strategy. First, delighting customers doesn’t build loyalty; reducing their effort – the work they must do to get their problem solved – does. Second, acting deliberately on this insight can help improve customer service, reduce customer service costs, and decrease customer churn.”
So, if going above and beyond isn’t really a solution, what is?
According to the study, to really have an impact on customer loyalty companies should stop focusing on going above and beyond, and start focusing on simply accomplishing their core services efficiently. The overall concept is that a consistent customer experience that solves a customer’s needs trumps an exceptional one in terms of impact on loyalty. “When it comes to service, companies create loyal customers primarily by helping them solve their problems quickly and easily,” the Harvard Business review article states. And, according to the article, that is accomplished by removing obstacles.
In the automotive world, customers come to your dealership to get certain problems solved. They may be coming because they need a new vehicle. Perhaps they need their vehicle serviced. Or perhaps they simply need their phone paired to their vehicle’s Bluetooth system. They want their problem solved quickly. Solving those problems efficiently in a consistent manner has the greatest impact on building loyalty simply because you have met the customer’s needs. They don’t necessarily need flashing lights, confetti, red carpets or fanfare. In fact, the article says that doing this can actually be a waste of time and effort and that: “Corporate leaders must focus their service organizations on mitigating disloyalty by reducing customer effort.”
Some businesses have an over-the-top perception of what providing an excellent customer service experience means. Because of this misperception, they dismiss it as something that is too difficult or too costly to implement. In essence, providing an excellent customer experience boils down to one simple thing: Solving your customer’s problems properly and efficiently. While the customer may not leave with confetti in their hair, they are more likely to return for this simple reason -- they got what they wanted: their problem was solved.