Customer Effort Score™: A Loyalty Predictor for Customer Service Interactions
Posted by Jeffrey Henning on Fri, May 08, 2009
Though it was little noted at the time, in December the Corporate Executive Board introduced a new loyalty metric, the Customer Effort ScoreTM:
Exceeding customer expectations has long been the measure of success in customer service interactions-89% of customer service executives believe that "delighting the customer" will lead to increased loyalty. New research by the Corporate Executive Board's Customer Contact Council, however, reveals the alarming truth: exceeding customer expectations results in virtually no loyalty gains. In fact, service and support centers have little stake in building customer loyalty at all.
"The probability that a service interaction will drive disloyalty is approximately four times greater than the chance it will create any positive loyalty impression. In other words, as a function, customer service typically plays on the ‘negative side' of the loyalty field," said Matthew Dixon, Ph.D., Managing Director of the Customer Contact Council. "Most service executives are using traditional customer satisfaction (CSAT) or the more recently popularized Net Promoter® Score (NPS) to gauge loyalty in service interactions, but we found these metrics fail to capture the most powerful driver of disloyalty-the amount of personal effort a customer has to put into the service experience." In light of this new understanding, the Customer Contact Council has developed an original metric that is far more predictive of loyalty than either CSAT or NPS. This new metric, the Customer Effort ScoreTM (CESTM), is based on a single question that determines the degree of required customer effort during a service request.
Unfortunately, the actual wording of the single question is only available to Corporate Executive Board subscribers. The Customer Contact Council has published a presentation, "Shifting the Loyalty Curve: Mitigating Disloyalty by Reducing Customer Effort", which provides an introduction to the research. In a blog post, the author of the study provides additional detail about customer effort by service category and industry. The blog Every Experience Counts reports on the metric in a little more detail.
The selection of the CES metric was derived from a survey using a convenience sample of almost 18,000 customers of CEB clients. CES suffers from similar problems to NPS: it's proprietary and the data used for deriving it is not publicly available, making it difficult for third parties to verify the claims about the methodology. That said, I would encourage any contact center managers who are already CEB customers to check out the full report. It requires little effort (ahem) to integrate the Customer Effort Score into existing transactional surveys, which certainly makes it worth piloting.
Most surprising to me was the finding that 89% of customer-service executives look to customer satisfaction as the primary driver of customer loyalty. After all, it was over 13 years ago, Jones and Sasser published their landmark paper "Why Satisfied Customers Defect", introducing the Apostle Model and demonstrating that customer satisfaction and loyalty were orthogonal. Clearly the word is not yet out that satisfaction is but one component that drives loyalty.