Time to stop delighting your customers?

The Harvard Business Review argues in its July/August magazine that we should stop trying to delight our customers and concentrate on delivering basic promises. Institute knowledge and research officer Alan Tanner analyses the impact of 'delightful' service on areas such as customer loyalty.

Stop trying to delight your customers is the call from a new piece of research by Matthew Dixon, Karen Freeman and Nicolas Toman. In the Harvard Business Review (July–August 2010) the authors contend that, to win customers’ loyalty, “forget the bells and whistles and just solve their problems”.

The key is to adopt processes to “make it easy” for the customer to get the service they require, then measure the results with a new metric, the Customer Effort Score. Citing Fred Reichheld and others by way of support, the authors find “little relationship between satisfaction and loyalty”, but add that “although customer service can do little to increase loyalty, it can (and typically does) do a great deal to undermine it”.

Food for thought, certainly. But, have customer satisfaction scores really sent managers barking up the wrong tree, as the authors suggest? Perhaps not. Work in this area has long acknowledged that there is a group of customers who register a reasonable level of satisfaction but aren’t particularly loyal: Heskett, et al (1994) place them in the zone of indifference, Reichheld (2003) describes them as the Passively Satisfied. Very high scorers (9 or 10 on a 10-point scale) will tend to be in Heskett’s zone of affection, acting as Reichheld’s Promoters: Heskett, et al, cite the example of Xerox, whose large dataset revealed that where these high levels of satisfaction exist the likelihood to re-purchase was 6 times the level of the merely satisfied. So striving for world-class service standards should still pay off.

The authors do, however, have a point about gold–plated service not always being necessary: A supermarket that has well-stocked shelves and relevant product information probably doesn’t need personal shoppers! At a broader level there may even be diminishing top–end returns to raising customer service: Experience from our own UK Customer Satisfaction Index suggests that organisations with the very best customer satisfaction levels generally struggle to move much beyond overall scores in the high 80’s.

What it really boils down to is that organisations need to see themselves through “the lens of the customer”, and a good customer satisfaction index will be founded on this very principle. Nonetheless, the authors provide us with novel reminders that organisational processes can, and should, be designed to anticipate customers needs and reduce the amount of effort required for them to get the service they want.

References

• Heskett, J L, Jones TO, Loveman GW, Earl Sasser, Jr, W, Schlesinger L A (1994) Putting the Service-Profit Chain to Work, Harvard Business Review, March-April 1994
• Reichheld, F (2003) The One Number You Need to Grow’, Harvard Business Review, December 2003