Maximizing the effectiveness of customer service

There is an expanding gap between citizens’ expectations for their experience with government services and agencies’ ability to meet them. Improving digital services has been made a priority in President Barack Obama’s management agenda, highlighted in the Digital Services Playbook and cited in several cross-agency priority goals. At issue is how agencies can maximize their efficiency to provide the highest-quality citizen experiences in the most cost-effective manner.

Conventional wisdom suggests that organizations satisfy their customers when they far exceed expectations. Fueled by media coverage of companies such as Zappos and JetBlue, 89 percent of organizations surveyed by CEB believe that “delighting” customers will increase loyalty. That perception assumes a direct correlation between extreme customer service delivery and customer satisfaction, defined in this case as loyalty to the organization.

Our research, however, has found that premium customer service programs are not likely to produce that outcome. In fact, it shows that customers whose expectations were exceeded were no more loyal to the organization than those whose expectations were simply met. If the return on investment for exceeding service expectations is negligible — or even draining — for the organization, then adopting that type of strategy could prove debilitating to an already cash-strapped agency.

A key driver of customer satisfaction is the level of effort the customer must exert during a transaction.

Nevertheless, failing to meet customer expectations can have crippling effects on loyalty. A customer is 400 percent more likely to be disloyal after a subpar service experience. That statistic has dramatic implications for agencies because it demonstrates how a failure to meet customer expectations could profoundly undermine the agency’s support of the federal mission.

A key driver of customer satisfaction is the level of effort the customer must exert during a transaction. CEB research indicates that 96 percent of customers who put “high effort” into service interactions are disloyal, compared to a 9 percent disloyalty rate among those with “low-effort” interactions. Drivers of effort include repeat interactions, generic service, redundant information, transfers and the customer’s perception of how difficult it was to arrive at a solution (i.e., the hassle factor).

For federal agencies, creating a low-effort experience can go beyond increasing customer loyalty to generate operational cost savings by reducing customer escalations and unnecessary callbacks.

A presidential executive order asks agencies to apply private-sector best practices to their customer service. Here are five key ways to deliver a low-effort experience:

• Track customer effort, not satisfaction. Agencies should identify and prioritize improvements that result in the largest loyalty wins. Some organizations have adopted a “customer effort score” as a key performance indicator.
• Engineer experiences to reduce customers’ perceived effort. Agencies can make complex interactions feel easier, in part by using activities designed around the principles of behavioral economics.
• Solve the customer’s next problem, not just his or her current issue. To avoid repeat contacts that frustrate customers and increase costs, agencies must capture latent issues through questions designed to identify the root cause of potential future service interactions.
• Provide a guided resolution experience. Customers should be steered toward the lowest-effort service channel. For example, it might be difficult to transmit confidential information via an online chat, the organization should direct the customer to a service channel that is better equipped to handle such communications.
• Create a climate that enables and empowers staff. Frontline employees must exercise the judgment necessary to deliver tailored, low-effort service interactions with customers. Therefore, organizations must thoughtfully select job candidates, focus on frontline supervisors’ coaching abilities, build a performance management process that rewards the use of good judgment and carefully analyze employee attrition.