Sometimes delivering an exceptional customer experience (CX) is about preventing customers from becoming disloyal. It may seem strange to approach customer retention this way, but this is what happens when users expect effortless customer service that meets their expectations.
What Is Customer Retention and Why Is It Important?
Customer retention is a metric used to find out how many users continue to do business with a brand over a given period of time. Retained customers make repeat purchases, so retention rates are an indicator of how companies capture their value, influence them to purchase more products, and build loyalty.
This metric is important for several reasons. For one thing, retaining an existing customer is often less expensive than getting a new one. Also, loyal users make more purchases and refer friends and family to a brand. All this has a positive impact. For example, Bain & Company found that in the financial services industry, a 5% increase in customer retention produces a more than 25% increase in profits.
Additionally, according to a Harvard Business Review article, leading loyalty brands grow revenue approximately 2.5 times faster than their competitors. Thus, high customer retention rates are a competitive advantage.
What Is It and How Does Customer Effort Impact Retention?
The customer effort is the perception of the amount of time and energy that has to spend in a contact with the brand or company. Therefore, the more time and energy spent, the greater the client’s effort, and vice versa.
According to Gartner, 96% of customers with a high-effort interaction are more disloyal compared to just 9% who have a low-effort experience. Therefore, making customers invest too much time and effort to obtain a resolution to their query negatively affects a contact center in customer retention.
High-effort customer service experiences also elicit a lot of complaints. For example, Gartner reports that 81% of consumers who experience high-effort support will tell their friends and family about it, compared to 1% who have no-effort experiences. Usually, it is the bad experiences that are remembered and explained.
Customer effort has such an impact on customer retention that it is one of the main predictors of loyalty. In fact, Gartner reports that it is 40% more effective than customer satisfaction in predicting user loyalty.
What Makes Customer Service a “Great Effort”?
There are many factors that can increase customer effort. Today, customer journeys are more complex because they have multiple points of contact and transfers in call centers.
1) Use of Multiple Channels Within the Same Interaction
When a customer uses multiple channels, they will need to work harder if the business does not have omnichannel capabilities.
2) Not Being Routed Correctly the First Time
Call routing, if ineffective, generally results in continual call transfers and makes customers work harder. In fact, every time a user is required to repeat the same information, it creates a higher effort experience.
3) Other factors that create more work for clients include:
- Not solving your problem during the first contact.
- Agents with poor listening comprehension skills.
- Inflexible policies and processes.
- Ineffective (or non-existent) self-service tools.
- Poorly designed IVR menus.
How Contact Centers Can Reduce Effort and Strengthen Customer Retention
There are many tools available to help call centers reduce effort and strengthen customer retention (or at least not hurt it). The following solutions should bring companies closer to these goals.
While not all solutions are technology-based, having the right software capabilities can make things much easier for customers to receive support.
2) Omnichannel Capabilities
Omnichannel solutions, like Enreach’s Omnichannel Contact Center, allow customers to seamlessly move between multiple call center channels. When user data is available to agents and self-service tools, customers don’t have to repeat themselves, creating a low-effort experience.
In fact, Gartner research revealed that 96% of consumers expect companies to make it easy to switch channels without repeating information. However, 68% of users say that organizations are doing a poor job with omnichannel. That means many companies are putting customer retention at risk by failing to meet their expectations.
3) Smart Self-Service
Smart self-service is a good way for people to resolve their queries. However, poorly designed self-service solutions or used for the wrong types of interactions can increase customer effort and disappoint users. To ensure their self-service tools are as user-friendly as possible, call centers need to take advantage of Artificial Intelligence (AI), include a seamless path to an agent, and be realistic about their capabilities and limitations.
4) AI-based Routing
Directing customers to the right place the first time is a critical component of delivering low-effort customer service. Having AI-based routing utilizes user data, thus increasing the chances that customers will be matched with the right agents on first contact. Additionally, this routing matches customers with agents based on factors such as sentiment and their preferences, leading to a more personalized interaction with the contact center.
5) Trained Agents with Good Active Listening Skills
A competent agent with strong active listening skills can make an interaction easier, as they quickly understand the customer’s inquiry and go straight to the resolution. For this reason, companies must invest in training so that agents have the listening skills necessary for low-effort resolutions.
6) Include First Contact Resolution (FCR) and Customer Effort Score (CES) in Your Top KPIs
Companies that focus on customer retention need to ensure that their key metrics are aligned to improve customer retention.
One way to do this is to ensure call centers manage effort-related metrics. For example, first contact resolution (FCR) rate can have a significant impact on customer effort.
In addition, contact centers need to measure customer effort by surveying customers immediately after support interactions. By asking customers a question such as: “To what extent do you agree or disagree with the following statement: The company provided me with the solution to my query?” and have users rate the claim on a seven-point scale. Thus, organizations can calculate a Customer Effort Score (CES) that can be used to track progress and identify opportunities. Likewise, by reducing the customer’s effort, the agent’s is also reduced.