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Just last week, a consumer forum lawyer argued with me on Twitter about the column on customer satisfaction and its importance, saying that all companies are just fudging this idea of satisfaction. I figured it probably was because of the number of service deficiency cases he must have been handling in India.
Providing exceptional customer experience is vital for any business seeking to retain customers and drive growth. One metric that has gained prominence in assessing customer experience is the Customer Effort Score (CES).
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CES is designed to measure the ease or difficulty that customers experience when interacting with a company or its support systems. It focuses on minimising customer effort and reducing friction throughout the customer journey. By identifying areas of high customer effort, pain points can be addressed proactively and the overall customer experience enhanced.
CES is typically measured by asking customers to rate statements such as, "The company made it easy for me to resolve my issue" or "The company made it easy for me to complete my purchase." Customers are then asked to rate their agreement on a scale, often ranging from "strongly disagree" to "strongly agree." The scores are aggregated to calculate the CES.
Analysing the score helps to identify areas that need improvement, prioritise efforts, and track progress. Amazon is an example of how companies have successfully implemented CES. The global e-commerce giant prioritises the minimisation of customer effort as a key driver of customer satisfaction. Through their one-click ordering feature, they streamline the purchasing process, reduce friction and make it effortless for customers to complete transactions. This commitment to reducing customer effort has contributed to Amazon's success and customer loyalty.
Another example is Zappos, an online retailer renowned for its exceptional customer service. It focuses on delivering effortless experiences. Its customer support team is empowered to go above and beyond to resolve issues and provide seamless service.
Many studies have highlighted the impact of CES on customer loyalty, repurchase intentions, and word-of-mouth recommendations. According to a Harvard Business Review study, customers who had low effort experiences were 94 percent more likely to repurchase from a company than those who faced high effort experiences.
Research by CEB (now Gartner) found that customers with low effort experiences are more likely to remain loyal to a brand, with 94 percent expressing an intention to repurchase. A Temkin Group study revealed that customers with low effort experiences are more likely to recommend a company to others, with 81 percent willing to recommend compared with only 1 percent of customers with high effort experiences.
These statistics underscore the importance of reducing customer effort in driving customer loyalty, repeat business, and positive brand image. Here are more reasons for small and medium enterprises (SMEs) to use CES to drive growth:
Resource optimisation: SMEs typically have limited resources compared with larger organisations. By focusing on reducing customer effort, resources can be deployed more effectively. Identifying areas of high effort and allocating resources strategically to improve those specific touch points is better than implementing broad changes that may be more resource intensive.
Differentiation and competitive advantage: In a competitive market, every business needs to differentiate from its competitors. By prioritising a low customer effort experience, you can stand out and offer streamlined processes, responsive customer service, and hassle-free interactions. This differentiation can help attract and retain customers even in the face of stiff competition.
Word-of-mouth and referrals: Positive word-of-mouth and referrals play a crucial role in the growth of SMEs. Customers who have low effort experiences are more likely to recommend a business to others. By focusing on delivering effortless experiences, businesses can create a positive reputation and generate valuable referrals, which can lead to new customers and business opportunities.
Agility and adaptability: SMEs are known for their ability to be agile and responsive to customer needs. Monitoring and improving the CES allows them to quickly identify and address issues that impact the customer experience. This agility helps to maintain a competitive edge and respond to evolving customer expectations more effectively.
Customer-centric culture: SMEs often have the advantage of fostering a strong customer-centric culture due to their smaller size and closer customer relationships. By emphasising the importance of reducing customer effort, you can instill a culture that values customer satisfaction and actively seeks to improve the customer experience. This customer-centric approach can become a core competitive advantage soon.
Clearly, CES is highly important for SMEs seeking growth because it directly impacts customer retention, loyalty, differentiation, and the overall success of the business. By prioritising low customer effort experiences, business leaders can optimise resources, stand out in the market, and build a positive reputation, leading to sustained growth and success in a competitive business landscape.
Muneer is a global expert columnist and managing director of CustomerLab Solutions, an innovative consulting firm delivering measurable results to clients. Twitter @MuneerMuh