How to Increase Customer Loyalty by Reducing Customer Effort
With Gabriel Méndez Botello, Auditor & Senior Consultant in Customer Experience Processes & Technology Applications
Show Notes
Gabriel Mendez is an auditor and senior consultant in customer experience processes and technology applications.
Based in Mexico City, Gabriel has decades of experience in contact centre data and voice technology, and has been a judge for industry awards in Mexico and Colombia.
Today, he shares how to increase customer loyalty by reducing customer effort.
You'll Learn:
The 3 key metrics you need in place to measure and track customer experience (04:00).
How customer effort is the biggest determinant of customer loyalty, repurchasing and spending you can measure (04:59).
The common reasons why customer effort is higher than it should be (07:17).
Why many IVRs don’t create as much value as they could for customers (10:26).
Technologies which can reduce customer effort, and the common pitfalls when deploying them (13:02).
Why Customer Effort Score should replace NPS as your primary customer experience measure (15:52).
Transcript
Blair Stevenson (00:00)
Welcome to the Secrets to Contact Center Success podcast, connecting you with the latest and greatest tips from the best and the brightest minds in the industry.
I am Blair Stevenson. I'm the founder of BravaTrak. Our Sales Leadership System enables contact centres to increase revenue and achieve their sales growth targets.
Today I'm joined by Gabriel Mendez, who's a senior consultant in customer experience processes and technology applications. Gabriel is based in Mexico City.
So, Gabriel, welcome along. Great to have you.
Gabriel Mendez (00:30)
Hi, Blair. Nice to be here. I'm glad to be here with you and have this opportunity.
Blair Stevenson (00:38)
Awesome. Just as a starting point for our listeners, tell us a little bit about yourself and your experience.
Gabriel Mendez (00:46)
Sure. Well my former studies were in telecommunications. At the beginning, I worked in different projects for big companies in data and voice networks. And at that time, those networks were separated, because we had circuit-switched networks, packet-switched networks, things like that. And with the evolving of technology, actually the voice and data became integrated. Maybe there are people that are not even not aware of those changes in the technology.
So I then worked with integration of applications. One of those applications was for contact centres, and with the contact centres, then I entered into this field of customer experience, giving better services for customers, clients, and citizens, even, because the government has a big role also in customer experience and providing better services.
Blair Stevenson (02:05)
Yeah. Cool. So let's get into that customer experience stuff. What's your approach to helping your clients improve customer experience?
Gabriel Mendez (02:16)
As a consultant, normally I try to to be the equivalent of a medical doctor. So when you go to a doctor, you can say, "I need some pills for this problem." The doctor says, "No. Please let me first check your vital signs."
So normally my approach is to check on my client customers the vital signs, because they can be aware or worried about a problem, but maybe the vital signs show we need to do something with it.
So in that sense, normally I try to focus on the core services that that company needs to provide to customers. And then we can think about a better experience to costumers, etc. So my first approach is that. To concentrate on the big core issues and then try to improve in all these areas.
Blair Stevenson (03:38)
Makes sense. There's a minimum level of service that you really need to be providing before you start to escalate from there.
Gabriel Mendez (03:45)
Exactly.
Blair Stevenson (03:45)
Thinking about that from a kind of a metrics perspective, what are the key metrics that your clients are using to measure and track customer experience?
Gabriel Mendez (04:00)
The first one that's existed forever is Customer Satisfaction. Normally companies try to do surveys of what customers think about their services. So Customer Satisfaction, but it's done by internally with the leaders of the company.
Additional to customer satisfaction, I think that there are two other indicators that are important that are the NPS - Net Promoter Score - and the Customer Effort Score (CES).
I think that NPS has been more used because maybe there is more investment for that type of measure as a whole for the company, the services, would you recommend my services or not.
But I think that Customer Effort Score is a better one that we should have maybe some priority on analyzing, because the effort means how easy is it to do business or resolve a problem with my company. So I think that that is more related with the effectiveness of the company.
Blair Stevenson (05:26)
Yeah. As you say, CSat and NPS are widely known, but in this part of the world too, I also find that companies aren't that aware of Customer Effort Score. But it appears actually to be a stronger predictor of customer loyalty, of repurchasing, of increased spending than does, interestingly, NPS.
Why do you think Customer Effort is a valuable metric for CX?
Gabriel Mendez (06:04)
Well, I consider that it is very valuable, as I related with the previous comment that I made about those vital signs. So that means Customer Effort focuses more on those real aspects. I am not interested in having a nice voice on the phone or a nice web page if my problem is not resolved.
So I want my problem to be solved, and I would like to have a nice web page, a nice voice, etc. But the priority is my main issue. So Customer Effort, I think is more related with these priorities that users want to be solved.
Blair Stevenson (07:11)
What impact does a high effort interaction have on loyalty?
Gabriel Mendez (07:17)
I would say it depends also on the country, because if you have services that don't work properly, we will go to the basics of having high availability, reliability, performance in the tools and channels we use.
Maybe that seems very basic, of course, that my services should be available, should be reliable, should have good performance. But some are things that we need to address as the vital signs. So to check the company has really good services that are reliable, that are available, always do not fail, etc.
And in the case that happens, it's already planned, what's the way that I am going to support my customers. For example, if I have self-service, but it doesn't have a good availability or reliability. So what is the option? What is the alternative way to service my customers? That should be very well explained and set in place, for example.
The other one is to have the context of the customer. If the customer has to repeat everything, that's really a big effort. If they change a channel to another channel and need to do it again, that's a big effort. And that creates in the customer dissatisfaction.
Blair Stevenson (09:10)
I imagine then that that high Customer Effort is going to lead to lower loyalty and more likelihood, potentially, to switch companies.
Gabriel Mendez (09:25)
Yes, I agree with you. For example, there are companies that I have seen where there are some types of transactions that are mandatory that needs to be done via self-service, either in an IVR or in a web page. And the service doesn't work well, so customers are very angry. There is no alternative way to do it. And so disloyalty and churn happens.
Blair Stevenson (09:58)
Yup. So practically speaking, what does it mean to make things easy for customers? One of the things you talked about was having to repeat information. So finding ways to ensure that people don't have to repeat information, that it's captured in one place and everyone can access it.
What other things can companies do to make things easy for their customers?
Gabriel Mendez (10:26)
Well, to have information, have data. Because, for example, let me try to explain some scenario that is maybe exaggerated. But in the IVR, what's the purpose of the IVR? To say "one for this, two for this", that is not an IVR. The IVR allows you to personalise, and you need data for that.
So if I want to create value for my customer, I need to understand who is my customer. So an IVR normally should ask, "Please enter your account number", or any other ID. That way, I can go to a database and to have the profile of that customer.
And in a customer experience design, then plan the next step for this type of customer. So the next step is segmentation. I need to have data from my customers. Ideally I would segment those customers and then try to create the vital signs and the customer experience for that segment. That would be better than a customer experience in general. So I need data.
Some projects that I have had the experience with customers, they don't have good databases, a good CRM. So if you don't have data, it's going to be more difficult to add value in the effort or in the experience as a whole. So I would say data and then segmentation, trying to do some personalisation, and having the same context in different channels. That would be ideal, I would say.
Blair Stevenson (12:43)
Yeah, absolutely. So that implies quite strongly that technology is not all the solution, but it's definitely part of the solution. What are some of the technologies that can be used to assist to reduce Customer Effort?
Gabriel Mendez (13:02)
One of those technologies would be artificial intelligence. AI applications are coming in an aggressive, interesting way. But I think that we need to be very careful in the way that we configure technology. Technology is great, but maybe for some specific functions. Not for all that.
And AI, I think, applies some concepts that I normally take into account since the ancient times with the IVR. Because once a company invests in an IVR, maybe the CEO says, "Okay, I invested some money into this. I think that it's expensive."
Maybe it's not expensive, what he thinks is expensive. "And so I want you to explode that technology as much as you can. So I want eight options in the IVR." Even in the IVR, you are trying to provide value just for one type of transaction, but I put in eight options.
And then with those eight options, my Customer Effort suffers because I am creating a problem with my customers. And that happens now with the chat bot, another type of application that we want to introduce artificial intelligence into. And maybe Customer Effort Score is going to suffer because maybe it's not for all the transactions.
So I think that we need to choose those technologies, omnichannel, AI. Those would be the two I think that I would focus on, but in a very specific way to add value.
Blair Stevenson (15:08)
Yeah. So I guess the question always is, "Is this making things more difficult for the customer? Is it increasing the amount of effort they have to make in order to get what they want, or is it making it easier for them?" And, make it easier for them, they're going to be more loyal.
So we've talked about Customer Effort, let's circle back to the two other metrics, CSat and NPS. All the data I've seen says that Customer Effort is a better predictor of loyalty than either of those two, but should they still remain, do you think?
Gabriel Mendez (15:52)
Yes, because NPS is widely adopted, and maybe for benchmark purposes it's important to have it. And it complements CSat, and can be also used for specific points that the company wants to address in CSat. Customer Effort, maybe for the core aspects, and NPS as a benchmark.
The good news I would say is that if you have good Customer Effort, then your NPS is going to improve also. And maybe the opposite is not so clear for me that if you have a good NPS, it may not decrease your Customer Effort. But I think that improving Customer Effort is going to increase your NPS.
And that's good news if you want to benchmark in your industry, against your competitors. So I would say that the three of them have an application.
Blair Stevenson (17:01)
Makes sense. And particularly in terms of NPS, in terms of benchmarking. Gabriel, you're a highly experienced customer experience professional. If anyone in North or South America wants to get hold of you and talk to you about improving customer experience, how do they get hold of you?
Gabriel Mendez (17:22)
Well the easiest way I would say is my profile on LinkedIn. Of course, by phone by email, but I think LinkedIn would be the easiest way, I think.
Blair Stevenson (17:39)
Thank you so much for your time today. I really appreciate it.
Gabriel Mendez (17:43)
Oh, my pleasure.
Blair Stevenson (17:47)
For listeners, you'll find the link to the show notes in the episode description below.
And if you'd like to connect with Gabriel on LinkedIn (https://www.linkedin.com/in/gabriel-mendez-botello-172b72/ ), you’ll find a link to his LinkedIn profile in the description too.
And if you'd like to follow me on LinkedIn as well (https://www.linkedin.com/in/stevensonblair/), you’ll find a link to my profile there too. Well, that's it from us today. Have a productive week.