Posted: 22nd August 2019

Thanks to Professor Moira Clark, Director of the Henley Centre for Customer Management for providing her great insight and customer management experience to this article.

Gaining, holding onto and increasing the lifetime value of customers is key to the success of any growing business, but there’s certainly no ‘one-size-fits-all’ solution for achieving this.

That’s not to say, however, that there aren’t steps that your firm can take to make continued growth a reality. A good customer experience, and the valuable loyalty that generates, is something that can be built up with sustained effort and gleaned from even the most difficult of circumstances.

Meeting customers’ needs in regulated markets

Regulated businesses, whether they be large banks, utilities providers or insurers, face unique challenges when it comes to ensuring customer satisfaction.

As most of these businesses will be providing essential services to broad, semi-captive portions of the population, it is all too easy for them to deprioritise existing customers’ perception of their firm in favour of chasing other operational metrics, such as the rather crude measure of “new customer volumes”. 

But, with the rise of comparison websites, increased competition and easy switching (you can even change telecoms suppliers with a text, nowadays) firms are finding that they need to differentiate themselves with unique bonuses, discounts and similar lures to attract today’s footloose switchers.

The fact remains, however, that one current account is much like another, and you will still get electricity to your house no matter the supplier you choose to pay your bills to.

In marketplaces where all the products on offer are largely the same (save any of the ‘bells and whistles’ that may come attached), there is one key way that regulated businesses can differentiate themselves and grasp the market share that they are after.

And it’s all about making things easy for your customers.

Making it easy for customers to interact with you

The vast majority of firms are still overly focused on driving up scores in measures such as “customer satisfaction” (CSAT) and “Net Promoter Score” (NPS). While these measurements, made through customer surveys and the like, do provide firms with a basic idea of how they are perceived within the marketplace, they don’t really offer any answers to how their product offering is really encouraging further business.

A new measure that we at the Henley Centre for Customer Management have been proposing for the past few years is something we’ve dubbed the “Ease Score” (ES). You should think of this as a measure of "how easy it is to do business with any given organisation".

Measuring the ES could not be simpler. It all begins with a binary question asked to your customers at large – “Are we easy to do business with?” Is that a “yes” or “no”? If the answer is “no” then you need to follow up with “I’m sorry to hear that,” and ask a second question: “Would you mind telling us what is stopping us from being easy to do business with?”

Every interaction a customer has with your business, whether this be reading through a service page or choosing a product through a comparison site, comes at a cost to them. This may not be a financial cost. In fact, more often than not, it is intangible.

Consciously or not, a customer will always weigh up the perceived costs of interacting or transacting whenever they go to make a decision. This will be considered in terms of emotional energy (a fear that things may go wrong, for example), mental energy (being faced by too much choice) and time spent (being forced to queue or being called to a branch).

In our busy, modern lives, these costs can often prove too expensive for the potential return. Think of how often you might turn down the opportunity to complain, or let an issue run on simply because you can’t make it into a physical branch the next town over.

As Nobel laureate Daniel Kahneman says in his book Thinking Fast and Slow: “Thinking is to humans as swimming is to cats. We can do it if we have to, but we’ll do anything to avoid it.” In regulated markets, those businesses that thrive and capture market share will be those that give customers the chance to lower the intangible costs of interacting and transacting. Those that don’t will find customers refusing to make the effort at all – such companies are just not easy to do business with.

The keys to Ease

Here’s an example situation for you, and a timely one at that. There’s barely days left before new complaints for PPI are time-barred for good and yet, according to some reporting, there are still millions of pounds worth of redress yet to be paid to customers.

One explanation for why so many customers are still to come forward with their complaints, even at this very late stage, is that they are unaware they were even mis-sold PPI in the first place. Another could be that those remaining actually got material use from their PPI. But the most obvious and simple answer to this is that the process for making a complaint just doesn’t seem worth it to some customers.

Making a PPI complaint is a relatively simple process (and has been made easier, if not less financially rewarding, by claims management companies), but the process potentially costs too much in terms of mental energy and time. While the potential for monetary reward has encouraged hundreds of thousands to claim, the effort of finding all those documents needed to prove you were mis-sold PPI, of reaching out to your firm and chasing them for answers, and of worrying things might not actually turn out your way has led too many to procrastinate till the bitter end.

Businesses that answer “yes” to the big ES question are those that handle customer expectations well and guide them through the customer journey with clear signposting around what they are required to do and when. Consider, for example, offering in-line webchat for online sections of the journey, and personalising experiences by pre-populating fields based on the data you hold on the customer in question.

Such firms will also deliver consistently in engagement, meaning that no matter where and through which channels customers dip in and out of the customer journey they will find the staff member dealing with them having access to all the information they had previously provided. They will take into account customer preferences as well and grow to understand the areas in which they might need more support through repeat engagements.

To summarise, businesses with high "Ease Scores" will be dedicated to reducing the time and energy cost of interactions and making every point of contact a pleasurable experience. They will also deliver on any and all of the promises they make – in fact, they will proactively over-deliver, if at all possible.

All of this will go towards making the customer feel a valued part of the work you are undertaking, essentially welcoming them into the decision-making process. A business with a high ES will necessarily be a customer-centric one at the same time.

Being proactive, joined-up internally and open to contact will ensure your customer feels like they are in control, surely turning them into advocates for your business along the way. People are more willing to make an effort if they feel they have a stake in the firm they are promoting ... and if that effort doesn't feel like effort. 

Moira clark

Moira Clark

Director of the Henley Centre for Customer Management