Busting Customer Service Myths
During our research for this guide, we uncovered many studies, reports, and articles from 2014 (Nick Toman guest post and Forbes), 2013 (Salesforce), and 2012 (Harvard Business Review: Stop Trying to Delight Your Customers!) that challenge conventional thinking about customer satisfaction, loyalty, and whether customer service should be a cost center.
The main source of data and insights for these posts is a Customer Contact Council (CCC) 2008 study (which is ongoing) of more than 75,000 global customer service interactions. Despite the checking and backing of McKinsey, Harvard Business Review, and more, the data still causes a fuss today.
In their study, the CCC set out to answer three questions:
How important is customer service to loyalty?
Which customer service activities increase loyalty and which don’t?
How can you improve loyalty while still reducing operating costs?
To keep things practical, CCC also looked at the costs (at last!) involved in designing and delivering those customer service experiences. They measured the service costs against:
Customers spending more
Customers generating word of mouth.
We think that’s a great approach. We grabbed that report, did some more research of our own, and matched it all up with the usual myths about customer service.
Myth #1: The more satisfied a customer is, the more loyal they are The study showed virtually zero relationship between satisfaction and loyalty. In other words, just because a customer is “satisfied” with you solving a problem doesn’t mean they will stick around. In fact:
“Between 60% and 80% of customers think of themselves as “satisfied” or “very satisfied” right before switching!”
To customers, sorting out a problem just means you are competent, nothing more. That’s no reason for a customer to become more loyal to your brand. They’d just rather not have a problem in the first place, thank you very much!
Myth #2: Delighting customers creates loyalty The study found that exceeding customer service expectations does not encourage people to buy again, buy more, or generate positive word of mouth.
Sure, any extras are nice to have for a customer, but the report shows you will get exactly the same loyalty benefits if you just focus only on meeting their expectations.
Myth#3: Customer service should focus mainly on building loyalty The study showed that customer service is 4x more likely to prevent a customer leaving than it is to create loyalty. So the most cost-effective use of your customer service is to actually prevent people from jumping ship.
When a customer contacts you, they just want their problem solved as quickly as possible, that’s all. If you can do that, and stop them leaving, you are already winning.
Myth#4: Your customer service operation needs to be a cost-center The CCC study showed that it is possible to turn a service operation into a profit-center — if you focus your service efforts where they are most effective. That means two things…
First, increase customer satisfaction by stepping up the soft skills of your team. Second, improve loyalty by reducing the amount of effort it takes for a customer to get their problem solved.
Myths busted! Controversial? Maybe. It may take a while to get your head around it all, but, after all is said and done, we think these insights make a lot of sense.