MyCustomer examines the Customer Effort Score as a measure of customer experience - and looks at how it shapes up next to Net Promoter Score and customer satisfaction.
Using recommendation or satisfaction-based techniques to measure customer loyalty is a well-established practice in the marketing world, and not without its controversies. Fred Reichheld’s Net Promoter Score (NPS), the first of such measurements, determines customer loyalty based on the question ‘Would you recommend the company to others?’ and hailed by Reichheld as the “single most reliable indicator” of company growth. It enjoyed a stint of popularity in the 1990s before becoming heavily criticised and moving over for another measurement.
Customer satisfaction measurement (CSAT) determines how an organisation meets the expectations of its customers based on satisfaction. Customers are asked a question based on how satisfied they are with the company following a transaction which is then rated from one (very dissatisfied) to five (very satisfied), although has also fallen under criticism, mostly for its lack of detail.
Customer Effort Score
But now there’s a new measurement on the block that once again has marketers divided - the Customer Effort Score (CES). Behind the measurement is US research and advisory firm Corporate Executive Board (CEB), which began its research back in 2008. Lara Ponomareff, research director at the CEB’s Customer Contact Council (CCC), who undertook the five-year study alongside Anastasia Milgramm and Matthew Dixon, explains that as products became more commoditised, customer service emerged as the differentiator.
Therefore to examine the link between customer service and loyalty, Ponomareff and her team conducted a large scale study of contact centre and self-service interactions. Respondents were asked if their expectations were not met, met or exceeded to determine future loyalty. “We found that in the difference between meeting and exceeding expectations there was no discernible increase in loyalty behavior. The biggest increase came from going below to meet,” she explains.
The research concluded that what customers really want is simply a satisfactory solution to the service issue rather than to be “delighted” by over-the-top customer service experiences, as previous measurements assumed. The study surveyed more than 100 customer service heads - 89 of which said that their main strategy was to exceed expectations – and found that a staggering 84% of customers who had experienced over-the-top interactions claimed their expectations had not been exceeded.
Additionally, the report revealed that such excessive levels of customer service levels (such as offering free products or services) will only make customers slightly more loyal to the brand. In a move away from CSAT, which bases customer loyalty on satisfaction, Ponomareff explains that the research revealed the smallest link between satisfaction and loyalty. The study showed that 20% of the ‘satisfied’ customers intended to leave the company in question whilst 28% of the ‘dissatisfied’ customers intended to stay.
So to achieve customer loyalty, rather than exceeding expectations organisations must reduce the effort that customers exert to get their problem solved. Simply, companies must remove obstacles.
The research identified several common customer complaints relating to effort including having to switch from the web to the phone, calling back a second time to resolve an issue and being transferred. To combat these obstacles, there are a number of tactics that every company should consider when using CES, said Ponomareff. Companies must arm call centre agents to address the emotional side of customer interactions, minimise channel switching by increasing self-service channel ‘stickiness’, use feedback from disgruntles customers to reduce effort and empower the front line to deliver a low-effort experience.
In comparison to NPS and CSAT, Ponomareff argues that although NPS is a great relationship level metric and a great compliment to CES (in terms of how the customer feels overall and their willingness to recommend), and the same with CSAT and customer satisfaction, neither are as strong a prediction of loyalty over time as CES.
Despite this, Ponomareff is not advocating that CES as a measurement tool is used in isolation but that it should be integrated with existing company strategies and continued to measure over time. “A low effort company insisting on a low effort approach doesn’t mean dumping your current approach,” she says. “What it does mean is effort needs to be at the centre of everything you do and you need to refocus your current initiative around low effort – you want to think ‘What’s the impact on customer effort here?’”
The magic number?
So how does CES compare to NPS and CSAT and can it be used as a standalone measurement tool?
Bruce Temkin, chair of Customer Experience Professionals Association, believes the concept of CES is broadly a good one but doesn’t necessarily replace others or not any more of a panacea than NPS.
“NPS is a relationship type of question which is asking inherently based on what do you think of me as a company, will you recommend me? So it incorporates a bunch of things that go into deciding whether a customer's going to recommend you. The question itself is different than CES because the effort is closer to a satisfaction question. Satisfaction is really trying to point out how you feel about a specific company or how you feel about a specific interaction as opposed to how you feel about the whole company. So the CES could be structured as a satisfaction question - how satisfied are you with the effort it took to deal with the company?
“The actual implementation of any of these is how do you calculate the scores? NPS has their promoters, detractors and passives, there's 0-10 scales. CSAT has a whole bunch of different implementations around it, some do similar netting like NPS whilst some do average scores. And so the actual implementation of those makes them quite different and quite unique.”
He adds: “There is no ultimate question, none. And that's because one, every business is different and they need to get feedback that's appropriate for their business, and two, the value is not in asking the question, the value is in taking action based on the insights that you find.”
When asked to compare CES to NPS, Morris Pentel, chairman of the Customer Experience Foundation, argues that this is impossible as they measure two very different human drivers. Like Temkin, Pentel agrees that there is no single measurement or question that can give you the answer you need, only a combination.
He says: “There are a number of different factors in terms of understanding your relationship with your customer. There are voice of the customer (VoC) pieces, the use of tools like surveys that aren’t questions like NPS and CES, there are also a range of other things from focus groups through to mystery shopping. There's a whole range of things that the modern organisation has at its disposal and needs to be using in order to effectively understand their customer relationships.
Although they both agree that one question cannot measure satisfaction or loyalty, Temkin adds that there are a set of common actions companies face providing they are in the same sector – for example, a retail call centre sourcing customer feedback. However, moving past that neither NPS, CSAT, CES nor any other single question can by itself help address the problems that are specific to your business and its environment, he concludes.