What is Customer Effort Score?
The Customer Effort Score first entered the corporate sphere in 2010 with the Harvard Business Review paper ‘Stop Trying to Delight your Customers’. The belief that customer loyalty came from trying to wow or impress them with every interaction had become “entrenched” in the managerial subconscious – with 89% of interviewed managers citing “exceeding customers’ expectations” as a key strategy. Conversely, 84% of interviewed customers felt their recent interactions with these companies “did not exceed their expectations.”
Instead, the research discovered that loyalty came from reducing the amount of effort that customers must expend to resolve their problems.
The extensive, large scope research found that the primary concern for customers was that their problems with the company are solved quickly and easily – if companies could deliver on their basic, “bread & butter” promises, then customers will remain loyal.
The Customer Effort Question was developed:A low Customer Effort Score was found to be a good predictor of repurchasing intentions and increased share of wallet. A strong correlation was also found between a high Customer Effort Score and intentions to spread negative Word-of-Mouth about the company.
Why is it so good?
Customer Effort Score (CES) was embraced by managers. It brought liberating news, both in the form of cost-cutting – (no more offering of freebies, going the extra mile for customers or free refunds!)– as well as employee engagement; (“make it easy” is a lot simpler for employees to understand and accomplish than “exceed expectations”).
More importantly, CES outperformed popular metrics of Net Promoter Score (NPS) and Customer Satisfaction (CSat) as a reliable predictor of customer loyalty. Net Promoter Score focuses on customer advocacy, but CES goes beyond intentions and examines actual actions, provides insights and identifies what can be done make a customer experience easier. CSat provides a general measure of satisfaction, but CES captures customer impressions (both positive and negative) at a transactional level.
By its very nature, Customer Effort Score ensures all channels and touchpoints are made more customer-centric – it acts as a catalyst for reshaping company processes and developing a focused company culture.
How is it used?
Customer Effort Score is a very useful metric to measure customer loyalty, especially in a customer service situation, however it is less helpful for larger, more established companies. For example, for a company such as Apple – low customer effort is already built into the business model and their customer loyalty and value IS built by providing exceptional, unique and special brand experiences.
Additionally, as with the Net Promoter Score, the concept of customer loyalty has been seriously oversimplified – Customer Effort Score cannot measure all aspects of loyalty, as it tends to apply best to service interactions, and not to the entire customer experience.
Customer Effort Score 2.0
The Customer Effort Score 2.0 was developed for several reasons. Firstly, the wording of the question was changed from “effort” to “easy” as this was more intuitive and spanned international culture differences.
Secondly, the original scale was inverted to be more intuitive, with a high value score representing a positive response (e.g. a score of 7 was the aim – as opposed to of a score of 1 from the original scale).
In practice, a score of 5 is a good point to aim for, as after reaching this, loyalty plateaus. Research surrounding the revised scale found that “moving a customer from a 1 to a 5 boosts loyalty by 22%” but a further push to move the customer from a “5 to a 7 only boosts loyalty by 2%”.
Customer Effort Score has strong boardroom appeal – it is a simple question, easy to understand and the concept of removing obstacles to an effortless transaction rather than trying to delight customers speaks to both senior company members on a commercial level and employees on an operational level.
However, it does have its drawbacks, and shouldn’t be used in a vacuum – NPS, CES and CSat all complement each other, and to gain a genuine company-wide understanding, these 3 metrics should be used in an integrated, holistic approach.
For more information on customer satisfaction metrics and how your company can increase customer loyalty, call Customer Satisfaction UK today on +44 (0) 1298 73051, drop us an email or visit our website.