Matt Dixon: Before encouraging customer loyalty, discourage disloyalty
We’ve all heard about companies wowing customers with extraordinary acts. However, according to bestselling author, Matt Dixon, that’s not where we should be focusing our efforts. Matt argues that what’s important is mitigating customer disloyalty. Here’s how...
Bestselling author of the Effortless Experience, Matt Dixon, spent 10 years studying more than 100,000 customers around the world to find what really creates customer loyalty. The conclusion was unexpected — what’s actually more effective is mitigating disloyalty as opposed to encouraging loyalty.
Why is it more effective to discourage disloyalty?
In the course of their research, Matt and his team found that although it’s great to be able to surprise and delight your audience, it doesn’t necessarily add up to greater loyalty. “These kinds of stories make for great PR,” says Matt. “They make for great campaigns and they make us feel good about who we are and what we do and the value we provide to our customers.
“But when we test it with data, we find that strategy is a flawed one. It actually doesn't really pay off.”
They found that a service interaction with a customer was 4 times as likely to create disloyalty rather than loyalty. Why? You may be thinking it’s because they’re already annoyed when they get in touch, but Matt says that’s not the case: “It’s in the way we handle resolving that issue and helping the customer — we actually tend to make it worse, not better.”
So what on earth are we doing to make it so much worse? It’s all about “disloyalty drivers.”
What are disloyalty drivers?
These are essentially any time a customer has a bad experience, such as:
- Pointless policies and procedures. Those ones that seem to customers to exist purely to create a barrier between them and a resolution to their problem.
- Channel switching. Where they’ve tried the website to self-serve and haven’t been able to complete an action, so they’ve had to pick up the phone.
- Transfers. Feeling like the buck is being passed between departments.
- Repeating information. Having to tell their story to several different people before they can get it resolved.
- Robotic service. Being treated like a number, not an individual.
- Repeat contact. The customer has to chase a resolution to their problem.
- Hassle factor. The feeling the customer has when they call your customer service line and their shoulders tense up in anticipation of the stress in getting their problem sorted.
The answer, according to Matt, is to make customer service easier than we're making it right now by eliminating these sources of customer effort.
He adds: “When we look at negative word of mouth, we find it’s only 1% of customers who have low effort, easy service interactions with a company that say anything bad about the company, to friends or family on Twitter or Facebook, etc. But 81% of customers who have high-effort interactions will go out and actively badmouth your company to friends, family, coworkers, and online.
So what can you do to mitigate these poor experiences?
Matt suggests 4 ways to encourage low-effort service:
1. Recommend the contact channel depending on the problem
Not every channel is equally suited to solve your customer’s problem. Rather than giving customers 100 ways to contact you, give them the best way to contact you for that specific problem.
Tell them if they can easily find the answer to your question via a FAQ if that’s the best way. Or maybe it’s via Twitter. Or it might be the case that calling you will be the quickest and easiest way.
2. Be one step ahead of problems
We don’t want our customers to have to call us back. It costs us money and frustrates the customer. When customers do call back, it’s usually because we’ve either failed to resolve the original issue (explicit issue failures), or we’ve failed to resolve issues that surround the original issue that the customer was calling us about (implicit issue failures).
Most companies are focused on trying to resolve explicit issue failures, but they forget about implicit issue failures. Matt gives the example of a time he had to call Dyson because he’d broken part of his vacuum.
Instead of just selling him the part and that being the end of it, the customer call rep said they’d like to send him two identical spare parts. Why? Because the part they were sending him could be easily broken when fitting it in himself, and they’d rather he had a spare just in case. When he said he’d rather not pay for two parts the rep explained that the extra part would be free. Again he asked why — after all, wouldn’t this cost them money to do that?
Surprisingly not. The rep explained that it was actually cheaper to send him a free duplicate part than him having to call back. And plus, it means that it stops his Dyson from being out of action for another two weeks while he waits for the replacement’s replacement part to be delivered.
3. Experience engineering
During Matt’s research, the team found that customers perceive effort differently to how we thought. Only about one third of how customers defined effort had to do with what they actually had to do — for example, repeatedly call or visit our website to resolve their issue. The majority of customers (two thirds) perceived effort by how they felt when resolving their issues.
This is controlled by the language customer service reps use when interacting with customers. And it’s not about being nice and helpful — it’s about using language that’s designed to make the customer perceive that effort was lower. This includes things like:
- Advocacy language: using language that makes the customer feel as if they’re on your side
- Positive language: g. instead of saying “we close at 9pm”, say “we’re open until 9pm”
- Anchoring: giving customers a less attractive option before giving them the option you’d actually like them to choose. An example of this is timeslots — customers are more likely to accept a 7am-7pm time slot to get their internet fixed, if the alternative is that they’d have to wait 3 days for a one-hour slot. So offering them the latter option first can help to mitigate the annoyance they may feel having to wait in all day.
All these massively reduce the effort the customer perceives to have gone to in order to resolve a problem.
4. Frontline control
One thing we’re aware of is that customer service reps’ jobs are getting harder. Because customers can get answers to their most basic questions online, the questions that customers are coming to them about tend to be a lot more complicated.
In reaction to this, some companies are becoming far more prescriptive with what reps are allowed to say — forcing them to use more structured scripts or AI prompts. However, Matt says this is a mistake.
In a more complex landscape, you need to give more freedom to your reps. And you need to hire differently, too. As Matt points out, most customer service reps are what we’d call “empathizers.” And when we asked hiring managers who they’d prefer to hire, 42% said they needed more empathizers.
But again, for Matt this is a common mistake. Hiring managers should be looking to hire more “controllers” — they’ve been shown to get significantly better results. Controllers are the “know-it-alls” of the office; they relish in their own subject matter expertise and know customer problems back to front. This means that when a customer gets to them — usually after spending time on your website trying to solve the problem themselves — they don’t want someone to empathize with them, they want someone to take control and just fix their problem. And controllers can usually do just that.
Want to find out more about these ways to create effortless CX?
Discover more about CX through our series of Qualtrics Master Sessions. Each session features unique insights and practical tips from experts who have cracked the CX code – including CX pioneer Joe Pine, and bestselling authors Jay Baer and Matt Dixon, as well as our own XM Qualtrics masters.
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