Customer Metrics that Matter in Distribution

Having satisfied customers is your goal, right?  But is satisfaction enough? What about loyalty and advocacy? You want to create advocates that will tell your story, recommend you to friends and colleagues.  You may be using Net Promoter Score (NPS) to gauge overall customer satisfaction and loyalty, but you also need detailed feedback that is actionable, that allows you to pinpoint problems across your customer's journey. Also, according to research by Corporate Executive Board(CEB), customer satisfaction alone can be a poor indicator of customer loyalty. They found that 1 in 5 (20%) of self-described ‘satisfied’ customers said they intended to leave the company in question, and more than 1 in 4 (28%) of the “dissatisfied” customers intended to stay.

So, what does create loyalty?  Reducing customer effort makes a difference. 

From the CEB research: “First, delighting customers doesn’t build loyalty; reducing their effort—the work they must do to get their problem solved—does. Second, acting deliberately on this insight can help improve customer service, reduce customer service costs, and decrease customer churn.”

Using NPS is still essential, as it can help you pinpoint problems and track progress by having a consistent metric that tracks the degree to which customers are satisfied by understanding their willingness to recommend your product or service.  This provides a good baseline, but you need to uncover what’s driving your NPS scores.  Adding Customer Effort Score (CES) to your arsenal to compliment your NPS metrics will give you the causal relationships you’re looking for related to how customer effort impacts satisfaction and loyalty.

Advantages of Using Customer Effort Score

In the manufacturing and distribution sectors, CEB’s Lara Ponomareff notes that there are several advantages to using CES for these types of firms, these include:

  1. Practical in Nature - Distributors can make tangible changes to their customer service programs by identifying customer pain points.  By gauging effort at various touch points, from initial support call to final issue resolution, managers can isolate process inefficiencies, ineffective policies, or employees that need coaching or counseling.
  2. Subjective -  Pomoroff notes that the notion of customer effort is subjective, and in CEB’s research they found that, “effort is actually two-thirds of what we call ‘feel,’ or how I felt about the interaction as a customer, and only one-third is what we call ‘do,’ or the actions and steps I actually had to take.” Closely monitoring and measuring customer service outcomes can help understand and influence perceptions of effort. For example, redirecting customers to a self-service site that has ready answers and sophisticated search may seem like a low effort alternative for a customer to get a question answered.  But after just a few minutes of scanning FAQs and prior posts, and only getting partial answers, the perceived level effort can quickly build, leading to frustrated customers.
  3. Actionable – The level of effort can vary throughout the stages of the customer journey. These variances can help you pinpoint problem areas.  Your online product discovery, selection and check out may be a breeze, but when a problem occurs that requires escalation to a contact center, the customer’s perceived effort may start to escalate.  Interminable wait times, multiple hand-offs, poorly trained or ill-informed reps can make issue resolution seem rather laborious.  Measuring CES at each point of interaction can help isolate issues and fix problems.  
  4. Reduces cost – Callbacks, escalation, and backlogged customer complaints can be costly as they required staff to resolve current issues and be on call to address the next wave of problems.  By isolating issues using CES, customer service operations can start to use practices that help preempt or anticipate future issues.  For example, by tracking issues or questions related to the initial use of a specific product after purchase, companies could send a link to a how-to video that addresses the most common questions related to the product and pre-empts call to the contact center in the future.   

Conclusion

On the adequacy of customer satisfaction as a loyalty metric, perhaps customer experience consultant Joesph Michelli put it best: “At the end of the day, the customer satisfaction score is very little more than a measure of your competence – your perceived competence – in the mind of a customer.” Reinforcing the competitive imperative facing companies today, he emphasizes that, “If you can’t satisfy 90 percent of your customers 90 percent of the time, you should be in another career field.” 

A cautionary warning indeed for those just relying on satisfaction to gauge loyalty.  Adding metrics like CES could yield additional insights that will reduce churn and service expenditures, ultimately making your customers happier and you more competitive.