Customer Service’s New Role: Value Enhancement
Not all forms of customer loyalty are created equal. Long-standing Gartner research indicates a clear difference between decreasing the probability of customer defection on the one hand, versus increasing the likelihood of customer preference on the other. And the single biggest opportunity for customer service to impact loyalty has always been to mitigate downside risk. Until now.
That Was Then
Ten years ago, Gartner research unlocked a powerful insight for customer service teams: statistically speaking, the single biggest opportunity for customer service to impact loyalty was by providing customers a way to resolve issues with as little effort as possible. Dubbed the “low effort experience,” the research proved foundational not just for what it found, but also for what it did not find.
On the one hand, service organizations seeking to reduce customer defection should minimize the time, steps, and frustration of issue resolution to maximize customers’ service experience. And as a result, many have instituted some kind of “effort score” to identify and address service interactions failing to meet that standard.
At the same time, Gartner researchers also found that customers’ satisfaction with the service interaction doesn’t necessarily translate to higher satisfaction with the actual supplier. Bottom line, better service can decrease downside risk (e.g., customer frustration, dissatisfaction, and defection), but can’t increase upside potential (e.g., higher satisfaction, increased preference, future growth).
The New Opportunity
Recent Gartner research, however, has now identified a reliable way for customer service to impact the other half of the loyalty equation—to increase customer loyalty, not just decrease disloyalty.
We call this approach “Value Enhancement”—boosting the value customers perceive in the actual product or service they’ve purchased. In driving that kind of outcome, Value Enhancement ultimately expands customers’ preference for the product, their desire to do/buy more, and most intriguingly, their own self-confidence for having chosen to do business with that company in the first place.
In fact, Gartner research indicates that 82 percent of customers scoring service interactions high on Value Enhancement stayed with that company, 85 percent chose to buy even more, and an incredible 97 percent recommended that supplier to others.
5 Ways to Drive Value Enhancement
Demonstrating value to customers during service interactions can be done in many ways, but research shows five tactics to be particularly effective:
1. Validate customer purchase decisions. Reassure customers that their purchase was a smart one.
2. Anticipate customer needs. Predict and suggest what additional features customers may find valuable in the future based on their current behavior.
3. Help customers achieve a goal. Outline the product features a customer should use to achieve a specific objective.
4. Educate customers on better uses. Teach customers how to best use a product or service, rather than simply addressing “incorrect” approaches.
5. Advise customers on new uses. Introduce the customer to newly introduced or untapped product features as they become available.
As more and more simple product and service issues migrate to self-service channels, both the need and the opportunity for live service reps to deliver richer, higher-quality interactions aligns directly to a Value Enhancement approach.
Rethinking the Service Scorecard
To get there, service leaders will need to rethink the metrics they commonly use to measure success. Current service scorecards are not only deeply supplier-centric, they’re intensely service-centric as well. Today’s standard metrics typically focus almost solely on the customers’ perception of the service interaction itself, through questions like these:
1. How satisfied are you with the overall quality of service that you received?
2. To what extent did our consumer care agent treat you with care?
3. To what extent has our company made it easy to handle your issue?
Value Enhancement metrics, on the other hand, seek customers’ level of agreement to things like:
1. After the customer service interaction, I am able to achieve more with the product/service.
2. After the customer service interaction, my confidence in the decision to purchase the product service is higher.
Ultimately, these kinds of metrics target the very thing great customer service is truly designed to impact: customers’ perceptions of their actual purchase, irrespective of the service. And even more importantly, customers’ perception of themselves in making that purchase in the first place. After all, customers confident in their ability to make good purchase decisions are far more likely to do the very thing companies ultimately want them do: make that same decision again. And again.
Brent Adamson is a Distinguished Vice President, Advisory, at Gartner, serving heads of sales, customer service, and marketing. He facilitates a wide range of executive-level discussions around the world, including global sales meetings, keynote presentations, board-level presentations, and hands-on best practice workshops.