Contact centers have traditionally focused on solving problems and handling questions. Efficiency has been the watchword.
But new research suggests that spending a little more time on the phone or chat may provide big payoffs in terms of revenue, word of mouth (WOM) marketing, and margins.
Customer Care Measurement & Consulting (CCMC), sponsored by VIPdesk Connect, a leading business process outsourcer (BPO) for premium and luxury brands, surveyed 2,519 affluent consumers on their delight experiences over the last six months. Here are several surprising findings.
1. Honesty and transparency are powerful delighters. Customers want to know the limitations of products and services they buy. Therefore, honesty and transparency, highlighted in yellow in Figure 1, are two of the top delighters.
FIGURE 1: Prevalence of 15 Delight Experiences and Rank Ordering of Most Important Delight Experience
This is especially important in industries with complex or confusing products and contracts. For instance, in the auto industry, honesty and transparency are as important in producing delight as getting a great price.
The right column in Figure 1 shows the rank ordering of the most important type of delight experienced by consumers.
2. Cross-selling is a significant delighter. As noted by the green highlights in Figure 1, 16% of consumers mentioned being delighted by being cross-sold other products.
Moreover, our research also showed that 66% of customers delighted by a cross-sell indicated they would pay more for the same products from that company.
This is a two-fer. Not only do you create delight, but you generate more revenue!
The critical requirement is that the cross-selling is appropriate and tailored to the customer. Which means that the customer service representative (CSR), whether a contact center agent or in-person rep, must know what the customer already has, and their needs, based on their persona or history.
While customers do not usually like sales pitches, if they feel you are trying to accessorize or help resolve a current gap in the overall experience, they will welcome the suggestions and walk away feeling delighted.
For example, Harley Davidson found that most riders want to personalize their motorcycles and are enthusiastic to spend a great deal (often as much as the basic price of the bike) on chrome and other accessories.
3. Delight can be delivered cheaply via CSR actions, behaviors, and words. The 15 approaches to delight noted in Figure 1 range from inexpensive transparency to patient/detailed explanations, tailored experiences delivered by empowered employees, enthusiasm and quirky humor, and to more costly actions, such as surprise freebies, discounts, and very low prices.
In the 15 approaches listed on the left-hand column of Figure 1, at least eight are produced solely by CSR communication/interaction with the customer and have no tangible cost: beyond the application of creativity by the reps and their talk or typing time expenditures.
Our survey data also shows the percentage of customers experiencing a particular delighter who indicated they would pay more for the same product from the same company based on being delighted.
Surprisingly, the CSR behaviors produced almost exactly as many customers willing to pay more as the more costly “great deal” and “freebies” (42%-54% versus 48%-51%).
Finally, the experience that leads to the most consumers willing to pay more (66%) is being cross-sold other products that were useful, which produces more revenue.
But customer delight can also be achieved by personal interaction as easily as monetary means. For many delighters, the only expenditure required is the time to listen and then respond with emotion and information. The eight CSR interactions that have been highlighted with green arrows are all low effort, but they are very effective delight actions.
What action creates delight can also vary by customer and can often be literally opposite experiences tailored to the customer.
For example, at the Club Floor of a five-star hotel in Tokyo, at 7am John Goodman looked for the usual coffee urn to grab a quick cup of coffee. There was not one in sight. He was approached by a staff person who said a self-service urn “would not be personal service and we want to serve each cup personally, even if it takes more time.”
But personal service could include providing coffee both ways, so that two different segments can be simultaneously delighted.
4. WOM and intention to repurchase from delighted customers is more impactful than WOM from satisfied customers. In past studies we found that satisfied customers will tell several friends and acquaintances about their satisfactory experiences.
When we take the next step of asking, “to your knowledge, how many of those you had told about your satisfactory experience actually acted on the recommendation?” we found that about 20% are reported to have taken action.
In this study of delight experience and resulting market actions, results for the same question show that, across all industries, an average of 50% of those who were told about a delight experience were reported by the respondent to have taken action on the recommendations. The range was 36% for auto to 69% for beauty and fragrance.
This means that if six people are told (a median across all industries), at least two people acted on the delight recommendation: twice the reported impact of WOM from customers reporting good or satisfying service.
Figure 2 shows the possible quantification of the impact of a delight experience for the eCommerce industry based on the subsamples from that industry.
FIGURE 2: Calculating the Impact of Word of Mouth from Delight on Winning eCommerce Customers
The data shows that 69% of customers spread WOM and told a median of 4.7 people about their delight experience. Those giving WOM referrals estimated that 60% of those they told took action. Meaning that for each customer delighted, 1.9 new customers may be generated.
We recognize that the self-reported information on how many of those told acted on the referrals is a weak metric.
Across dozens of studies the data is consistent, and we agree that better metrics are needed. This is an area for additional experimentation, especially within online social communities where closer measurement and tracking of future purchases is possible.
Further, Figure 2 shows that 45% of customers would pay more for the product when delighted versus only 6% when satisfied.
Additionally, more than twice as many men posted on social media about their delight than women. This was consistent across all industries. While perplexing, we believe that it may be that men are seldom delighted during shopping and are more vocal when encountering delight.
In our survey we asked about customers’ definitely will repurchase intention (for 10 product/industry categories, including eCommerce) and found that it was 5%-9% higher for delighted customers than for customers who were not delighted but still declared their experience the best in the last six months.
This finding refutes the contention by the January 2012 Harvard Business Review article, “Stop Trying To Delight Your Customers,” that delighting customers produces no consistent payoff.
5. Delight can be delivered digitally with video chat being a major channel for every type. One of the greatest surprises came from the question about the primary channel used for communication with the company.
On average, 48% of delighted customers buying products and services across all industries reported said that they used digital channels: email, chat, or social media. Meanwhile 22% experienced delight events via telephone and 30% in-person.
Every type of delight could be delivered by any of the channels. We did not expect that emotional messages, such as enthusiasm and empathy, could be delivered easily via digital channels.
In fact, delight is almost as easily created by email and chat as in-person or over the phone interactions. In addition, we found that live video chat calls were one of the most mentioned channels as a source of delight.
But not surprisingly there were variations based on the products and services. For example, as noted in Figure 2 for eCommerce, email and chat surpassed the telephone in customer delight.
Proof of Concept: VIPdesk with Beautycounter
The basic conclusion of the study was that only small investments in training on delight were needed to achieve significant bottom-line improvements.
VIPdesk and its client, Beautycounter—a leading provider of clean skin care, makeup, and personal care products—decided to test this premise via a quasi-controlled experiment.
VIPdesk’s trainer worked with one team of eight brand ambassadors on identifying approaches to delivering delight via two of the actions: enthusiasm and empathy.
The experimental team applied these tools to contacts where they seemed appropriate for a two-week period. At the same time, an additional team was receiving the same mix of contacts and acted as the control group.
Surveys were sent to every contact asking for a rating on a five-point scale along with a verbatim comment. At the end of the two weeks a total of 787 surveys were received: 447 surveys for the experimental team and 340 surveys for the control group.
The table below shows the overall average rating, 4.70 for the experimental delight team and 4.64 for the control team.
While a 0.06-point difference does not seem large, it is significant at such a high overall satisfaction rating level.
More specifically, five-star, top box ratings were 84% for the control group and 88% for the delight team. Statistical tests of the 447 versus the 340 surveys indicated a genuine difference with a 90% confidence level.
The experiment’s conclusion? Training investment in delight produced a four-point lift in top box rating!
Further, the delight training and the broad freedom provided to the brand advocates on when and how to apply the strategy enhanced staff enthusiasm for the strategy.
The trainer, Heather Morris, reported that the training was logical, and the actions seemed natural to the team.
“The Delight Study turned out to be extremely beneficial to the Beautycounter team,” said Morris. “We used empathy and enthusiasm as our “Delight Tactics” and these two topics really seemed to allow our customer support to shine.
“It was amazing being able to view the difference in our delighter’s reviews compared to the team as a whole. The Delight tactics have not only shown our agents what customer service truly means, but it also turned our customer experience into nothing but a positive experience. Our main goal for Customer Support is for our agents to radiate positivity and show what we CAN do to help, and the Delight Study helped us complete this goal.”
Implications for Action
Here are the key takeaways from this study and test for customer experience (CX) leaders including contact center management.
1. Investment and attention to transparency and honesty in all sales and marketing messages is a best practice. Such transparency not only fosters delight but it also prevents many problems by setting proper customer expectations.
“Small investments in delight training time can produce large increases to top box loyalty,” said Sally Hurley, CEO, VIPdesk Connect.
“We’re now going to leverage this strategy with all our clients by implementing revised customer messaging to include expanded honesty: a practice now proven effective at creating memorable experiences with brands.”
2. Digital is becoming the primary channel of service and can also become a primary source of delight.
Chat and email communications must be examined and modified to convey more personality. Staff must be given more freedom in how they present the written word. In reality the risk of major disaster is small, and the payoff is significant. Digital is not a technology play; it is a CX action.
3. Service should train that cross-selling, intelligently done, is a delighter: which is doing the customer a service, whether it is adding a needed financial product or mascara and face powder to a lipstick purchase.
4. CX and service should focus on investing in additional needed talk time and training and in empowering CSRs to deliver the 10 humanistic experiences that cause delight (see box below): from empathy and enthusiasm to transparency, interest, and concern.
5. Supervisors must be directed to encourage delight and use monitoring and measurement tools to effectively evaluate its delivery across all channels.
6. Complex products requiring onboarding, but such education is a powerful delighter. The brand advocate should identify the customer persona, motivate the customer to get the needed education, and evaluate the onboarding process.
7. Customer Service should work with Customer Insights to more effectively categorize and to measure delight and measure the impacts of WOM across all channels. Service must be portrayed to Marketing as the “WOM Mouth Management Mechanism.”
8. While this study focuses on affluent consumers, remember that WOM is more important in business-to-business (B2B) markets. 70%-90% of new B2B customers are acquired via referrals. Therefore, everything posited here for consumer contact centers applies in spades for B2B centers.
Creating delight should not be an afterthought or viewed as an extra contact center expense. Instead, it should become a primary focus for every manager.