Service leaders have long asked what role Service and Support plays in customer loyalty returns, and Gartner has studied this critically important question for more than a decade. Our first customer loyalty study revealed that customer service has nearly 4x more potential to degrade loyalty than to boost it. As a result, the best strategy to win the customer loyalty game is for service to focus on mitigating disloyalty by reducing customer effort. In other words, make it as easy as possible for customers to solve their service issues.
In my last post, I shared a brand new Gartner study that uncovered how service organizations can now drive loyalty behavior by creating Value Enhancement in service interactions.
The study revealed a new strategy, called Resolution plus Value Enhancement, which shows that service organizations should first deliver Low Effort resolution of the customer’s original issue, and then deliver Value Enhancement, in appropriate situations. Value Enhancement activities can improve customer loyalty outcomes, and result in an 82% probability that customers (when faced with a go/no-go decision, will choose to stay with your company if they agree or strongly agree on the two statements below:
After the customer service interaction, I am able to achieve more with the product/service.
After the customer service interaction, my confidence in my decision to purchase the product/service is higher.
This is very exciting news for Service Leaders, but in order to effectively implement a VE strategy, it’s crucial to understand the facets VE can take in a service interaction, as it is not a one size fits all approach. What are those “certain scenarios” when Value Enhancement should be delivered and what do those activities look like in action?
We uncovered five activities that drive value enhancement during service interactions:
Educating customers on better uses — Rather than focusing on how customers have been using the product incorrectly, teach them how best to use it.
Advising customers on new uses — Introduce the customer to newly introduced or untapped product features.
Validating customer purchase decisions — Reassure the customer that their purchase decision was a smart one.
Anticipating customer needs — Predict what features your customer may find valuable in the future based on their current needs.
Helping customers achieve a goal — Outline the product features a customer should use based on their goal for partnering with you.
How do I understand which of these activities make sense for us to use in our organization?
The first step is to understand where Value Enhancement (VE) might be occurring already. Based on client conversations that I’m having on VE implementation, many organizations already conduct some form of VE activities organically. Given that VE opportunities occur in 35-50% of all service interactions, organizations have the best opportunity to conduct VE in Inquiry-type contacts (e.g. troubleshooting, general questions about product, asking for product/service information). For service leaders to expand on the interactions that happen today where VE is a natural fit, leaders should also determine the customer personas that are most likely to be open to VE delivery.
In my next post, I’ll share more detail to help you identify VE opportunities in your organization.
For information on our new research, Driving Customer Loyalty and Retention Through Service, schedule an interaction with a Gartner representative today.