Solvvy Blog

People naturally tend to initiate conversations about experiences that are either exceptionally good or really let them down. Unhappy customers tell between 9 and 15 people on average about their poor customer experience–and 13% of unhappy customers will complain to more than 20 people.

But excellent customer experience is pricey, and trying to reach excellence can be a long road. So, what is the best way forward for your company’s CX strategy?

Your company has two options: either invest in exceptional customer service, or invest in the bare minimum to retain customers. The choice to deliver exceptional customer service is obviously the better path to take, but the reasoning behind each option is worth understanding.

Companies that deliver an excellent customer experience retain customers more effectively. Individual customers also spend more with a company when they feel like they’re satisfied.

Is It Enough To Do The Minimum?

It’s not that companies strive to do the bare minimum, sometimes it may be the best choice financially–or so it may seem.

It’s appropriate to invest the minimum in customer experience when your company doesn’t have enough room in the budget to implement a customer experience improvement program.

If you can’t reach excellence that will inspire your customers to bring new business or spend more money, retaining the customers you already have is the only choice.

This is typically the rationale for maintaining only a minimum standard of quality for customer experience.

What’s the upside to doing more? According to an article in the Harvard Business Review, delivering stellar customer experience ultimately generates 33% more revenues than poor customer experience does.

Loyal customers are extremely profitable–one report estimates that US companies could gain $62 billion dollars per year if they delivered a better customer experience.

Doing the minimum for your customers is a holding pattern at best and can result in poor customer experiences.    

While you don’t want customers to complain to friends about their experience, you certainly don’t want to lose out on the benefits loyal and satisfied customers bring to your business.

Going beyond customer expectations is a surefire way of building loyalty. Once customers realize that you’re working hard to impress them, they’ll reward your company in kind.

That’s why building excellent customer experience in your company is the best option.

Excellence Is Best

Excellent customer service is the route to loyal customers and repeat business.

Even if it means committing money upfront, McKinsey’s research shows that effective customer experience improvement programs pay for themselves rapidly.

The driving force behind the high ROI of customer experience improvement programs is easy to explain by looking at successful companies with great customer experience; 75% of Zappos’ sales come from repeat customers.

Happy customers keep coming back and spend more when they do.

The Road To Excellent CX

The path to excellent customer experience may be long, but it’s well worth it!

Customer experience improvement programs need time to work before you see revenue increase and business impact.

In fact, according to a Forrester report, customer experience improvement programs improve revenue in three different modalities depending on the industry.

The three modalities are:

1. Linear: Improvements in CX lead directly to increased revenues immediately
2. Logistic: Improvements in CX lead to increased revenues until a certain amount of revenue
3. Exponential: Improvements in CX lead to very small increases in revenue until a certain point at which revenue skyrockets

For example, if your company is in the retail banking business, improvements in customer experience need to accumulate for a long time before you’ll see increased revenue. But when it does, the impact is significant. Customers of retail banks require a long period of trust building before they’re willing to fully commit.

In short, your company needs to view customer experience as a long-term strategy.

Improving customer experience can be simple to start.

To get started with delivering excellent customer experience, your company can:

• Personalize service for each customer by instructing your support team to use the customer’s name and be sensitive to their needs and let them know they are being listened to
• Under promise and over-deliver so that exceeding expectations is the norm
• Train your support team to be consistent with each other so customers don’t get conflicting information
• Rectify serious customer issues immediately and follow-up to repair the damaged customer relationship

Once your customer experience has incorporated the basics, your company can move on to more complex solutions like customer rewards programs and building a dialogue with customers even if they don’t need customer service. Building a dialogue with customers forges strong and long-term relationships.

If you’re not sure how to start improving your customer experience, there are a number of customer service metrics you may want to look into.

Invest in customer experience excellence today, so your business can reap the benefits for the long term!

We are very excited to announce our spring release. This release includes a lot of new features and functionality and brings us closer to our long standing mission of applying the promise of artificial intelligence and machine learning to provide the best customer experience for consumers and end users around the world. We’ve been hard at work building new features and are especially excited to share our completely redesigned experience and dashboard with you.

Here are the big improvements in our spring release:

New Customer Facing UI

Our new and improved consumer/end-user facing UI was redesigned to allow and encourage a conversational exchange to understand the issue of the user and, in response, to provide an immediate resolution effortlessly.

You can see the new simple and clean UI that allows the customer ask their question and then displays potential solutions. If the solutions don’t help the user, Solvvy can route the user to the appropriate support channel to provide a frictionless experience.

Solvvy as your first line of defense: Solvvy’s new UI can be launched wherever and whenever your customers need help. The Solvvy interface can be called from your home page, help center, mobile pages or from the support form. You get to decide how to design the best workflow for your customers and empower them with intelligent self-service. With Solvvy, your users can ask quick questions and receive immediate responses without agent interaction.

Multiple personas: Our customers can provide persona choices to end users before Solvvy tries resolving their issue. This helps provide more accurate answers for end user questions.

Custom fields and dropdowns: Solvvy now supports customers who have custom fields and nested dropdowns in their support form. 

New Dashboard

Our Dashboard was redesigned to allow our customers (leaders of customer experience and customer service teams) gain strategic business insights while continuously monitoring their team’s vital KPIs.

New Dashboard UI showing KPIs/metrics

In 2017, we heard from our customers the impact Solvvy has had on decreasing contact volume, resolution time, and cost and we wanted to ensure our dashboard shows the comprehensive data to make it easy for our customers to measure and report on these results. If self-service is a 2018 priority, here are a few highlights from our dashboard and how we report on your KPIs:

• Self-Service Rate: Measure the impact of your self-service strategy on Day 1 with Solvvy. Our customers see self-service rates between 15-30% that continue to grow over time.

• Cost Savings: See our impact on your bottom line with our cost savings graph. Customers find this helpful to compare seasonality and peak times as well as an overall view of self-service and its impact to the business.

• Average Resolution Time: Report on Solvvy’s significant time savings–your customers can find instant resolutions and your support team can focus on answering more complex questions faster. 

• Data Download: Export and build custom reports that make sense for your team.

• Ticket Training: Use our interactive training tool to deliver expert feedback, identify knowledge gaps, and improve Solvvy’s accuracy over time.

User Management

With new user management features available, the whole customer support/customer experience team can benefit from insights in the the Solvvy dashboard. Admins can add and remove users and easily reset passwords.

We wanted to share highlights from the best sessions in case you missed this event! We’ll be following this summary with a series of posts on the key trends and topics.

Just Have Fun With It! Surprising and Engaging Customers With Your Brand’s Unique Voice (Panel)

Our CEO, Mahesh Ram, spoke on this panel along with customer experience leaders from  Marriott, MeUndies, Tuft & Needle, and Authentic CX. What all of these companies had in common was the belief  that customer experience and effective brand storytelling are key differentiators in building customer loyalty. In this session, they addressed the question of how to  build emotional connections and how to maintain genuine relationships with your customers at scale.

The panelists touched on shifting demands of customers and the rising customer expectations that go beyond  the products or services. Customers want to know and understand the brand’s unique voice and what the brand stands for. In a digital-first world where costs of switching are low, experience is where companies have the ability to build brand advocacy, passion, and loyalty. For example, REI is known for its focus on outdoor adventure and conservation efforts. On Black Friday, REI shuts down its stores to encourage people to #optoutside and spend the day outdoors. REI also donates millions of dollars to support conservation efforts globally. REI customers are passionate about REI’s mission and strong advocates of the company.

Focusing on customers is not just good for customers, but good for business and creates lasting revenue impact with repeat customers who become brand ambassadors.  

Can You Hear Me Now? Strengthening Your VoC Program (Panel)

Creating a direct line of communication with customers informs the team how you’re doing today and where you need to get to tomorrow to keep customers satisfied. This panel covered how changes to your customer experience are only as good as the insights you receive and the importance of listening to all types of feedback.

CX leaders from companies such as Johns Hopkins Hospital, AARP, Cars.com, and Goodyear discussed the importance of having an omnichannel view of customer feedback–are you asking customers how you did at all touchpoints and interactions? Do you have comprehensive business reporting to consolidate all this data and effectively draw insights? One challenge raised from the audience was how to manage the volume of feedback for teams with limited resources. Panelists suggested investing in 3rd party tools that help build category models instead of trying to do it manually.

To get a realistic VoC, Goodyear’s Marketing Innovation Group seeks to understand “what’s beyond the tire?”. They gather data from end users, trend surveys, ethnographic research, and keeping up to date on hot topics in the automotive space (i.e. electric & autonomous vehicles)–creating a holistic view of customer feedback on their business and the industry.

We have no shortage of data, but what’s important is harnessing it in to give us an accurate view of the customer experience to influence our strategies.

Next Gen Customer Service – Implementing AI for Customer Facing Interactions (Roundtable Discussion)

Our CEO, Mahesh Ram, led a roundtable discussion on implementing AI for customer facing interactions and how businesses of any size should consider in their approach to machine learning for customer experience.

A Gartner report states that 59% of organizations are still in the knowledge gathering stage of implementing machine learning. Part of this stage is understanding if you should buy or build. When thinking about implementing machine learning and automation to your customer service flow, there’s surrounding infrastructure that needs to support Data Collection, Feature Extraction, Analysis Tools, Serving Infrastructure that are complex to build and maintain.

Keep in mind that you should build when it helps maintain a competitive advantage. For example, if you’re Quicken Loans and your mortgage bot is proprietary and a differentiator, building makes business sense. Build when no vendors can meet your requirements and you have a team in place for ongoing maintenance. Ask yourself, will this team be up to date on latest breakthroughs in machine learning and be able to maintain our system?

Buy when you have limited resources and the project is not absolutely central to your business mission, so your team can focus on your core business. When evaluating solutions, remember to ask for references so that you aren’t a vendor’s ‘guinea pig.’

We’ll be sharing an in-depth “How-To Guide” based on this session soon!

Let’s Get on the Same Page- How to Match CX Initiatives With Company Wide Goals (Speaker Session)

As a customer experience leader, how do you align your initiatives to company goals and advocate for C-Suite approval for these initiatives? Ernie Garcia, CEO of Carvana, shared his perspective on the importance of customer centricity to his business. Carvana is an online platform that enables users to trade, finance, buy, and sell used cars.

Ernie covered the difficult trade-offs companies make between customer experience and monetization as a company scales and the increased need to be purposeful with CX as the company grows. Start-up companies are out-resourced, and it’s necessary to be focused on customer experience–many start-up ideas begin from a founder’s poor experience with a product or industry . At Carvana, they sought to address why friction exists in car sales and if it’s the product or the experience that can be re-imagined. Carvana was built on the belief that the car purchasing experience can be dramatically improved and has led them to be a successful public company.  

He also emphasized the importance of diversity and the value of different perspectives. Hiring is the key first step and you don’t want to build for people just like you. Diversity is critical to your understanding of your customers and their different  points of view. To acquire more customers, companies need to acquire diverse perspectives internally to truly understand their customers.

Expect Resistance! Successful Product Designers Need to Be Great Influencers (Speaker Session)

Jonathan Mann, Senior Director of User Experience Design at Target, discussed the product designer’s role — not just in the craft of design, but in influencing a variety of stakeholders to get beautifully designed products to customers.

He began with a Zen story about resistance that we’ll share as part of our NGCX series. In all roles, we face resistance and have a choice to 1) go head-to-head with resistance which can be exhausting for all parties, 2) avoid resistance and go around the source of resistance which doesn’t address the underlying issue, or 3) learn to build relationships to overcome resistance as a collective team.

Jonathan also highlighted the role of Logos, Ethos, and Pathos in creating convincing and effective arguments. Logos (data & reasoning) and Ethos (credibility & authenticity) often come more natural in discussions and presentations, but it’s equally, if not more, important to focus on Pathos–the emotional connection and ability to bring out empathy among your stakeholders.

From the Trenches: How to Run a Successful, Pain-Free CX program That Actually Moves The Needle (Speaker Session)

There’s a lot of buzz around customer experience, but how do you design surveys to concretely see what is working and measure your impact on the bottom line?

Christine Rimer, VP of Product Marketing and Voice of Customer at Survey Monkey, shared that people-powered data is what demonstrates your impact. Big Data tells you what, but talking to customers tells you why.

NPS is a leading indicator of retention and loyalty, and Christine stressed the importance of comparing your score over time, comparing to peers, and comparing to competitors. In a Bain report, the NPS leader of a category outgrows their competitor by 2x. Promoters have 3-8x the lifetime value than detractors.

Her tips on designing great NPS Surveys:

1. Be thoughtful about how you collect information – What’s specific to your business that you need to understand or segment by?
2. Ask questions that will elect actionable insights – What are the follow-up questions that matter to your business that you need to ask?
3. Robust analytics takes you from insights to action, faster – Do you have a system in place to make sense of your data quickly?
4. Amplify – Are you leveraging customer feedback to create authentic customer stories to share?

We’ll be discussing more on the value of NPS surveys and best practices for your business.

Achieving Omnichannel Success (Speaker Session)

Customers are the foundation of your business, and customer experience is becoming as important as your product or service. WIth this shift to customer experience, the role of support is changing. Increasing ticket volume and changes in the technology landscape are putting more pressure on support organizations and customers expect more and value speed and convenience.

Astha Malik, VP of Platform & Product Marketing at Zendesk, discussed customer expecting always-on support where convenient for them. Companies that focus on delivering great experiences are raising the bar since customers want a seamless customer experience across all products. Part of creating a seamless customer experience is, proactive engagement. Proactive engagement ensures that you’re setting your customers up for success before they raise their hand. In the long term, this will translate to increased customer satisfaction, loyalty, and dollar impact on the business.

Why is having an omnichannel support experience important? In Zendesk’s study, 87% of customers think brands need to put more effort into providing a seamless customer experience and 81% of consumers are likely to defect to another brand as a result of poor customer service.  Having a great customer service is no longer a nice-to-have; it’s table stakes to stay competitive and continue to grow.

In Summary:

We consistently heard about the importance of customer service automation, value of customer feedback, understanding the customer journey, measuring the success of CX initiatives, and addressing rising customer expectations. We’ll be diving deeper into these topics in our NGCX Series.

The first interaction that your company has with a customer is a chance to make a great and lasting impression.

24% of customers who have a good first impression are likely to remain loyal for up to two years, and 87% of customers will tell others about good experiences that they had.

In contrast, 95% of customers will talk about a bad experience.

If things don’t go well, it’s a lot of work to correct a bad first impression, but it’s still possible.

Making a great first impression means accounting for many factors. Appearances alone are enough to cement a rosy first impression within the first five seconds of your interaction.

This means that it’s critical to plan ahead for these first five seconds in every possible dimension.

If executed successfully, a good first impression leads to a strong customer relationship. The basics of making good first impressions are widely known:

• Speak slowly and clearly
• Be courteous
• Avoid interruptions
• Use active listening

These tips go a long way towards reliably winning customers over. But there’s a lot of other groundwork that you can do in addition to following these tips to make stronger and lasting first impression.

A company’s first impression with a customer might be when the customer visits the company’s website or uses one of its products. For services like healthcare, 77% of consumers perform a search before settling on a provider.

Your customer might already have exposure to the competition. This means that you need to give the same attention to detail to every facet of your company that faces customers as you would with a customer in person.   

Below, we’ll share a few psychological behaviors that explains why taking this approach is necessary.

The Halo Effect

In a nutshell, people love to make generalizations based off of their first impression.

Establishing a good first impression is a fundamental step in making the halo effect work in your favor.

In short, the halo effect is a cognitive trope in which people see one good trait in another person then make additional positive judgments about the person as a result.

The halo effect’s existence means that making a good first impression can help you maintain your relationship from that point onward. Customers will generalize other positive traits in your company as a result of that first interaction.

The negative companion to the halo effect is the fundamental attribution error.

The Fundamental Attribution Error

Closely related to the halo effect is another cognitive trope called the fundamental attribution error.

The fundamental attribution error describes the phenomenon wherein people attribute intent to the actions of another and use that attribution to make generalizations about the other person’s personality.

If a customer visits on a day when customer service happens to be very busy and they have to wait for a while, this impression can mistakenly cause them to believe that they are not a priority for your business.

They can easily extend their fundamental attribution error to your entire company using the evidence of having long wait times to support the idea that your company doesn’t care about its customers.

The Dale Carnegie Playbook For Making A Great First Impression

Dale Carnegie was a legendary people-skills guru and the author of the internationally acclaimed book, How To Win Friends And Influence People.

The power of a good first impression was obvious to Carnegie, and so he spent a lot of time experimenting with the best way to reliably make a good one. Carnegie had many ideas about how to make a first impression in a business context, but he held six rules above all others.

His six rules for making a great first impression are:

1. Become genuinely interested in other people
2. Smile
3. Remember that a person’s name is to them the sweetest and most important sound in any language
4. Be a good listener and encourage other people to talk about themselves
5. Talk in terms of the other person’s interests
6. Make the other person feel important, and do it sincerely

Each rule is very simple to implement, but difficult to master. To help bridge the gap between theory and practice, Carnegie recommended that his readers practice abiding by the six rules in private rehearsals before trying to use them in high stakes conversations such as with new customers.

Using these rules to make a good first impression in the modern business context requires a bit of refining, however.

Especially if you’re trying to improve the first impressions that your customer service representatives make on your customers, exercising discretion with respect to rule four is advisable. Rather than encouraging customers to talk about themselves, it’s recommended to offer narrow questions which prompt them to discuss their needs in greater detail.

The phrase “within the context of the specific business issue that the customer has” should be added to the end of each of the rules for making the most out of them in a business context.  

If All Else Fails

Sometimes we make a mistake with customers despite our best efforts. Rather than expecting perfection, it’s best to have a plan in place for when things don’t go exactly how you imagined when it comes to making a good impression.

Luckily, it’s eminently possible to repair first impressions with time and attention.

A good Plan B following a lackluster first impression needs to make up for the difference between the subpar initial impression and the impression that the customer expects.

The common-sense consensus as published in the Harvard Business Review and Forbes is to correct a bad first impression by taking a consistent series of actions that meet or exceed the expectations of the customer.

A bad first impression made the customer expect that you will underdeliver, so over-deliver. Turn the charm up to 11 every time that you interact with them.

Keep it up, and eventually you’ll make an impressed and loyal customer.

Tay, the AI-powered chatbot from Microsoft, had to be turned off within 24 hours of its debut when it turned sexist, racist and offensive. Developed to conduct research on conversational understanding, Tay was supposed to learn from the messages she received and gradually improve her ability to conduct engaging conversations. Unfortunately, the training data that she received from the Twitter community sent her off track. Whether it was proclaiming its affinity towards Hitler or tweeting out hateful comments against Jews and feminists, Tay was out of control.

IBM’s Watson started swearing after learning the Urban Dictionary, Nikon S360 camera missed the mark on racial sensitivity and computer assessment at a federal prison put a black woman at a higher probability of committing a future crime compared to hardened criminals. Tomorrow, when self-driving cars become mainstream, will the technology powering it put the passengers at risk to save the pedestrian who emerges from nowhere?

Clearly, releasing AI into the real world where the unpredictability of the environment may reveal a software error can have pretty disastrous consequences. Nick Bostrom, the director of the Future of Humanity Institute at Oxford University, notes in his book Superintelligence that it may not always be easy to turn off an intelligent machine. So the questions is: Are you training your machine learning algorithms on biased data? Stop. Think. Hit Refresh.

Rumman Chowdhury, Senior Principal and Global Lead for Responsible AI at Accenture outlined the “Five Principles of Human Centric AI” in designing ethical AI solutions at an AI Summit in San Francisco, earlier this year. They are:

Enable Enhanced Judgement

AI should help people identify and address biases, not invisibly alter their behavior to reflect the desired outcome.

Collaborate, Not Challenge

Real-time interactivity with AI mimics how humans grow and learn. We should design to co-create instead of correcting.

Human + AI

Humans and AI have complimentary skills. Human-centric AI capitalizes on critical thinking skills that humans excel at and combines that with massive computational skills of AI.

Create Diverse and Inclusive Teams

Diversity and inclusion takes many forms – racial, gender, academic, geographic, to name a few. True human centric AI takes into account the vast differences of humans who will be impacted by the AI by inviting these perspectives into the design and development process.

Align Machine Intelligence with Human Values

AI is better at making decisions and that doesn’t necessarily imply that it makes better decisions. What are the values that should be encompassed in your product? How might these values vary across different demographics?

These questions need to be taken into consideration while designing AI solutions. Responsible AI should be developed to incorporate core human values and sensitivities.

McGill’s Prestige Scholar and AI Ethics Researcher, Abhishek Gupta, advocates for AI products to be “ethical-by-design” just like cyber security teams at leading companies across the world ensure that their products are “secure-by-design”.

Most experts call for collecting data from diverse set of users to make sure that there is adequate representation in the backend dataset. Diversity in speech, culture, race, gender… and even user interfaces should all be taken into consideration while developing a product that will employ AI at its core. 

Jane Nemcova, VP & GM of Global Services for Machine Intelligence at Lionbridge, believes that the government should get involved and that there’s a pressing need for a fundamental shift in how companies approach the subject of ethics in AI. It should be built into the daily life of a company by educating everyone and making it a habit.

As mathematical models take over our daily lives and determine even the food that we eat through restaurant recommendations, and as machine learning algorithms become all pervasive and form the building blocks of the products of the present and the future, we need to pause for a moment and ask ourselves: How biased is my training data? What checks do I have in place? Am I building ethics into my AI strategy?

Would you take a 3% annual growth rate advantage over your competitors?

What about a 2% lower expense ratio?

Or perhaps you’re tempted by 80% higher customer loyalty than your competitors?

According to a July 2017 analysis by McKinsey, all of these benefits and more are ripe for the taking if companies can provide a winning customer experience compared to their competition.

It’s obvious why this is the case. To customers, the expectation of good customer service can outweigh price as a decision factor.

In fact, customers are willing to pay more for good customer experience. Companies have taken note and are working on creating a best in class customer experience. A Gartner report estimates that 81% of companies will compete on the basis of customer experience by 2019.

In this marketer’s guide to customer experience, we’ll cover what you’ll need to understand why and how customer experience is so powerful.

You’ll also learn how your marketing practices can contribute to creating a great customer experience for your customers.

Stand In The Customer’s Shoes

86% of marketers are convinced that it’s essential to create a streamlined customer experience.

But what is “streamlined customer experience”?

In a nutshell, streamlined customer experiences are easy and seamless customer experiences.

Easy customer experiences lower the barrier to buying from a brand or from engaging with a brand’s customer support. Creating an easy customer experience is essential to generating customer satisfaction.

Empathy For The Customer Generates Good CX

Knowing how to create a highly intuitive customer experience is a matter of identifying with the customer and understand what they are trying to solve for.

This means that the best trait for marketers is empathy.

Empathy gives marketers the ability to  fine tune customer experience by helping visualize every step of the customer’s interaction with the brand. Once a marketer has mastered customer empathy, building a great customer experience is all but assured.

To get started with using empathy to improve customer experience, ask yourself the following questions as though you were the customer:

• How long should I expect to wait when requesting customer service?
• What’s my favorite aspect of this brand?
• Do I feel that my experience with this brand is made specifically for me?
• If I have an issue, will it be easy to fix?
• What’s the hardest part of my interaction with this brand?

These questions will help you to flesh out customers’ expectations. Other questions are fair game too, but these foundational questions should stay in your wheelhouse whenever it’s time to optimize customer experience.

Setting Expectations

Customers’ expectations need to be clarified and attended to because they’re something that your company can control. Part of the job of marketers is to set customers’ expectations such that the company regularly exceeds them.

Doing this is much easier than it may sound; just do your best to make the customer’s interactions as easy as possible while promising slightly less than your company can consistently deliver.

To fulfill the customer’s expectations for an easy experience, points of friction need to be recognized and smoothed. Likewise, every claim that reaches the customer should be accurate and easy to understand.

This means that everything from pre-sales outreach materials to customer service routines should be examined carefully.

Ambiguities in language should be replaced, time-intensive interactions should be shortened to the duration the customer desires, and interactions with multiple steps should be simplified.

Personalization

After ironing out difficulties in the customer experience, the next step to achieve good CX is building personalization.

Customers love it when products or services are personalized.

A McKinsey report on customer experience states that 61% of consumers are more likely to buy from companies that deliver custom content.

Personalization has a few components:

• Catering to the customer’s market segment
• Catering to the customer’s prior interactions with the brand
• Using the customer’s name and other personal details
• Making the customer feel uniquely valued
• Giving the customer a range of options for brand interactions

Each of these points is deeply important and has the potential to make customers feel good about their interactions with your brand.

Make sure that every interaction that the customer has with your brand mentions them by name, refers to their prior activity, and thanks them for their loyalty.

Arrange your product’s features and website such that the things your customer wants to interact with most frequently are the easiest to access.

Let The Customer Engage However They Want

Easy access applies to your customer service and sales just as much as it does to your product.

Part of providing a great customer experience is making your company available to customers across multiple channels for customer service and sales.

These channels should include:

• Live chat
• Phone
• Knowledge bases
• Social media
• Email
• In-person

Most customers find live chat and knowledge bases to be the easiest channels for support.

There are other advantages of providing multiple support channels. The more channels your company regularly uses to engage with your customers, the more channels that you can use as opportunities for cross-selling and other promotions.

It’s normal for companies to be stronger in some channels than in others, but strive to always provide a quick response to your customers whenever they reach out for support, even if it’s just a confirmation that you have received their request.

Providing a quick response is a huge competitive advantage; an HBR study reported that only 37% of companies responded to requests for support within the hour, and 23% of companies never responded.

If you know that you can’t provide a quick response, reach out to the customer and let them know that you’re sorry for their inconvenience.

Be sure to let the customer know that they haven’t fallen through the cracks.

Following Up

The last critical aspect of customer experience is using every opportunity to follow up with the customer to further the relationship.

If the customer has recently asked for support, made a purchase, commented on your product on social media, or answered a customer survey, treat it as a chance to check in and let your customer know that you appreciate them.

Be sure to reference the action that the customer just took and use personalization to further improve customer experience during the follow up.

Building a dialogue with your customer by following up makes the customer feel valued and adds a sense of familiarity with your company that helps to build trust.

By following these tips, your company can continue to grow customer loyalty, increase revenue, and reduce overall costs.

Customer support has become an area of fierce competition among companies, and there’s evidence that the competition is only heating up.

A Dimension Data study shows that 74% of customer support centers expect the number of tickets handled to increase in the near future. With a larger volume of tickets, the overall cost of providing customer service is increasing with it.

At the same time, 50% of customers may be experiencing issues that they need resolved, but only 5% actually reach out to ask for help. This means that up to 95% of customers won’t reach out to let companies know that they have a problem.

So even as the number of service requests continues to go up, companies need to reach out to customers proactively to make sure things are going well.

Today, companies are facing a fickle customer base that can easily hop to a competitor if they have an unresolved issue that they may or may not choose to tell you about.

While this predicament leads to lower customer retention and lower revenue, but there are ways to combat this!

Imagine if you could ease the load on your customer service team, increase revenue, let customers who don’t even report having an issue resolve their issue, and create satisfied customers all at the same time?

Enter the world of customer self-service.

Why Self-service?

Self-service resources allow your customers to solve their own issues in a way that’s fast and easy, meaning that your customer service team doesn’t need to handle as many requests for support.

Companies that implement self-service resources for their customers have a sizeable opportunity to reduce customer service costs.

This lucrative opportunity is already being chased by companies everywhere. A study by Gartner predicts that by 2020, 85% of customer relationships will be managed without the customer ever interacting with a human. Self-service and automation of processes will play significant roles in this transformation.

Human-free service is a win-win–cheaper for the business and easier and preferable for customers.

It’s clear that companies that help customers help themselves will excel relative to their competitors who don’t. The digital channel service center of the future is ascending rapidly.

But why are digital support channels eating the customer service world? The answer is simple: customers prefer self-service.

Customers Prefer Self-service

Customers’ preferences are straightforward. 91% of consumers would use a self-service channel if it met their needs, and 84% of consumers have used a self-service channel in the last 12 months, according to Forrester’s customer service trends report in 2016.

Customers are on board with helping themselves, and millennials are leading the charge in utilizing self-service channels with 73% expecting companies to give them the resources to resolve issues on their own. Generating the most revenue out of this demographic will only become more important as time passes.

The reasons for customers’ preferences are very simple:

• Self-service channels are faster and more convenient on mobile devices
• Self-service lets customers access support whenever they need it
• Preemptive service lets customers head off problems before they arise
• Self-service resources are easy to refer to a friend experiencing the same issue

What’s more, customers like to have multiple self-service channels available. According to a study performed by Deakin University, customers think of each self-service channel differently, and they often switch between self-service channels when new channels are offered.

Customers who make the jump between self-service channels expect to do so seamlessly, and are pleased when they are able to resolve their issue as a result of switching channels. Pleased customers tell an average of nine friends about their good experience with a company.

Revenue Is Higher With Self-service

There are multiple reasons why it is very profitable to give customers the service they want.

A Forrester report unearthed a clear reason as to why companies are enthusiastic about implementing self-service channels.

In the companies Forrester surveyed, each online chat interaction cost $.40, whereas each voice interaction cost a minimum of $1.40. Voice interactions become more and more expensive the more complex the issue.

But the cost of a ticket answered entirely by an online knowledge base or FAQ page is close to zero no matter what the issue is.

The better the knowledge base, the more tickets will be resolved and the better your customer service team can focus on higher priority and more complex questions. Trivial inquiries won’t clog your voice support channels or live chat queues any longer. 

Knowledge bases require upkeep by customer service teams and product experts, but they can be as easy to create by allowing internal information to be accessible by customers with issues.

With self-service resources, your customer service groups will:

• Handle fewer Tier 1 tickets
• Have many potential tickets resolved before reaching an agent
• Experience an increased one-touch resolution rate
• Find that customers who contact support likely have knowledge about their issue

Setting up a self-service portal means that your company will see the number of new tickets drop in relation to company growth and the job satisfaction of your customer service team rise.

Self-service During Sales

Aside from customers dealing with their issues by using self-service, sales is also an area where self-service can make money for your business.

Customers that have access to self-service resources during the buyer’s journey have a higher average order value than customers who don’t.

But be wary. A Forrester’s report indicates that 53% of adults in the US are likely to abandon their purchase if they can’t find the exact piece of information that they’re looking for.

Offer more than an FAQ page and a few links to product manuals. Satisfying your customers who are hungry for self-service requires making a knowledge base that reflects all of the knowledge that your company has about its products.

Creating A Killer Self-service Platform

Getting started with your company’s self-service platform is easy. Most of the costs are up front.

Follow these basic steps:

• Build a searchable online knowledge base
• Create a prominent FAQ page
• Cross-link to knowledge base articles at every relevant opportunity to make it easier for customers to find the self-service resource that they’re looking for
• Provide a forum for customers to discuss their issues with other customers and task a CSR with addressing the most common issues
• Direct customers to your self-service resources on social media

It goes without saying that you will need to inform your customers about the resources that you have created for their self-service needs. Likewise, the guiding principle behind all of your self-service resources needs to be ease of use.

If you’re not sure what a knowledge base should contain, check out this guide that shares numerous great examples of effective knowledge bases.

Understanding why a customer purchased a particular product or service often gives businesses valuable insights into what is working and how they can continue to grow in their industry.

In an attempt to better understand their customer’s path to purchase, businesses often try to map out the various touchpoints that occur and the different stages of awareness.

We call this the customer journey.

It’s characterized as a discrete set of touchpoints or steps that take a customer from the very first stages of buyer research through to the final stages of making a final purchasing decision.

When visually designing the customer journey map, most businesses usually come up with something similar to the example image you see below.

Source, CoversionXL

From this image, you can better grasp where a customer stands at each of the stages listed and how one stage can naturally lead to the next. You also get an idea of where some of these valuable touchpoints happen and how the company can be tuned in to customers at these different stages.

These visual journeys are important pieces to understanding customers and the overall customer experience.

However, it’s important to address that mapping out the journey as depicted above and viewing it as a straight line from awareness to purchase is a gross simplification of what is actually taking place.

In reality, the “journey” is rarely linear. There is no single path.

In A Digital Age, It’s All About the Customer Experience

Thanks to the modern world we live in, technology has opened the way for many channels of awareness (social media, online communities, content marketing, outbound marketing, etc), which allows customers to find their way to your business in more ways.

But it also means that the customer journey is difficult to predict or understand.

The touchpoints that lead one customer to your doorstep may not be the same ones another person goes through to reach the same result.

In other words, the customer journey is not linear.

Take a step back and think about how your customer could take one of any number of different paths to purchase. Rather than being something simple and linear, the buying decision is about the culmination of the entire customer experience and the various touchpoints your customer interacts with.

While we do what we can to track and pool all the data from marketing efforts to find our best acquisition channels, making sense of the marketing funnel, and how to understand the full customer experience is difficult through traditional models and methods.

So, rather than trying to map a customer journey to a linear path or going overboard by trying to keep up with the torrent of data available to you, there is a better way to gain and retain customers while keeping a competitive edge in your industry. 

A Holistic Approach To Customer Experience

With so many moving parts involved in modern day marketing, it can be easy to make the mistake of looking at things as individual parts that impact business rather than looking at things holistically.

In order to comprehend and control the customer experience, there must be a shift in thinking. Rather than a focus on specific paths to purchase, there must be an emphasis on holistic understanding.

Similar to how an engine is made up of many functional parts that are needed to make it run, a business also has many parts (marketing, sales, customer experience, so on) that power it forward.

Unlike traditional journey mapping exercises, thinking about the customer experience in a holistic way gives you multidimensional insight that’s hard to gain from old methods. It requires companies to take a step back and look at their entire customer experience throughout a range of touchpoints.

The benefits for doing things this way — by focusing on the entire customer experience — are numerous, but here are a few:

• Allows you to strategically improve communication across a range of different touchpoints.
• Gives individual team members a strong understanding about their individual actions and how these actions impact the overall customer experience.
• Develops a clear framework for how to measure, assess, and improve the overall process.ramework for how to measure, assess, and improve the overall process.
• Simplifies the process of identifying areas for improvement within your customer experience so that you can fix friction within channels and touchpoints.

So how can you get started and bring things up to speed with this fast-paced digital world?

Let’s take a closer look.

Preparing Your Brand For A Holistic Customer Journey

The customer journey is one of the main cogs that powers the entire customer experience.

Knowing the experience you want customers to have and then delivering that experience throughout the various touchpoints in their journey is a critical strategic initiative.

Companies that have taken a holistic approach to managing their customer experience tend to exhibit four main characteristics:

1. They are customer obsessed.

Customer feedback and desires are heard, which leads to industry-leading customer satisfaction and retention rates.

They usually have a community they’ve built to get a better grasp on who their customers really are and to allow them to communicate more easily and with more transparency than their competitors. And since they are focused on providing a great customer experience, they are constantly looking to better understand customers.

2. They are authentic and always on-brand.

While giving customers what they want is viewed as vital and unquestionably valuable, companies with excellent customer experiences stay focused on building an authentic and consistent brand.

If customer demands push the lines of staying on-brand, successful businesses choose authenticity rather than satisfying every ask.

You can look to a brand like REI as an example of this.

They’ve remained steadfast in delivering a consistent brand experience, which is at the heart of their customer relationships–and drives fierce loyalty among their customers.

3. They have strong in-house collaboration.

Cross-functional teams are a staple of most successful businesses. However, modern teams that successfully deliver an exceptional customer experience have managed to break the mold and make collaboration across all teams an organizational focus.

This involves getting the entire company to understand the customer experience vision, how individuals will impact that experience, aligning the incentives and processes to work holistically (there’s that word again!) within a company, and making it clear that communication and cooperation are not just urged but expected.

4. They are brutally pragmatic.

Brands and businesses with a competitive advantage usually excel at knowing which objectives are most important and how to prioritize initiatives accordingly.

These companies are both rigorous in their testing and brutally pragmatic about analyzing what works and changing what doesn’t work.

Test, listen, learn, tweak, repeat. Test ideas that comes from feedback and concrete data. Listen to more feedback about the implemented changes. Learn about what is working. Tweak what isn’t working. Repeat the process again.

All of these traits and actions can become a core part of your company to help you build a better customer experience.

While it’s true that there is a lot more dimension to the journey today than a couple decades ago, it’s clear that companies that put a focus on customers and give them an above and beyond experience are the ones that will lead in their markets.

If you’re looking for a way to design a better customer experience, we suggest you take a closer look at our article about the Customer Experience Maturity Model, which is an in-depth and actionable framework you can use to assess and prioritize your customer experience management process.

Join Kate Leggett, VP and Principal Analyst at Forrester Research and Mahesh Ram in an exclusive webinar, “Investing in the Future of CX” on Wed, Mar 14 at 11:00am PST. We will discuss how CX will become faster, smarter—and yet, more human with AI.

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Jeff Bezos once famously noted: “The best customer service is if the customer doesn’t need to call you, doesn’t need to talk to you. It just works.” 

Bezos was foreshadowing what today’s consumers now expect from business—speed, accuracy and consistency—across every interaction channel and especially for support. Omni-channel contact capabilities and the rise of conversational interfaces have raised the bar further for businesses to compete for consumer attention in the digital on-demand economy. Failing to meet this bar results in lost opportunity.

But racing to meet these rising expectations can incur massive costs for business without thoughtful planning and strategy. For example, if organizations try to meet these users’ rising expectations merely through increased staffing, it would be incredibly inefficient and expensive—and worse, the quality of service would greatly vary. It’s simply not scalable to throw labor at the problem. Yet if the fundamental goal of any business is to get closer to customers, what can companies do to deliver a superior customer experience that is both elegant and profitable?

Fortunately the answer is emerging before our very eyes. A recent study by Aspect found that nearly 3 out of 4 consumers prefer to solve their customer service issues on their own if presented with the right tools to do so. Personalized and intelligent automation, with artificial intelligence at its core, can be combined with time-honored principles of human-centered  service. Intelligent self-service solutions, powered by machine learning, can liberate companies to focus more on optimizing customer journeys and delighting consumers.

Moving from Defense to Offense

AI is becoming the new competitive battleground for delivering a superior customer service experience (CX). It is helping companies work smarter and transition from defense to offense, from heavy dependence on labor to intelligent automation. The leading brands are increasing their investment on customer-facing knowledge and education knowing that this knowledge “has wings” to “fly” to all consumer touchpoints and be instantly available to end-users on the device, browser and channel of their choice.

Today’s connected consumers demand much higher levels of choice and control: they want to choose the customer service experience that best suits their needs at that moment. They are trained to express themselves conversationally on any channel. They want their questions understood and resolved within the context of previous interactions. They want to seamlessly switch between different contact channels as it suits their busy lifestyles.

Companies are turning to AI for delivering this consistency and speed across all support channels.

AI helps businesses move from defense to offense

Improved self-service creates a slew of secondary benefits for companies and their employees.  As intelligent automation enables self-service for many (if not most) Tier 1 and Tier 2 tickets, agents become more empowered as well. They can handle more complex interactions that require more attention and greater personalization. Their engagement level goes up and their attrition rates go down. They go from being ‘agents’ to becoming ‘guides’ or ‘concierges’, which in turn ensure high CSAT ratings.

Intent to Resolution: An AI Journey

AI allows organizations to take in consumer issues via completely natural language, make sense of their actual intent (i.e., categorize them properly), and determine the user intent in real time. But understanding the intent of the ticket is only one part of the complex puzzle.  Self-service resolution requires deep AI and machine learning science that identifies the most relevant resolution from the vast repository of knowledge and serves it up in real time. If the question is not self-serviceable, AI must automatically detect this and redirect the question to a human agent minimizing user friction.

The AI algorithms are able to deliver intelligent automation at speed and scale. Understanding the question involves using natural language understanding that can handle complex utterances and go beyond mere keyword dependencies. This is a hard problem but once solved, it creates a miraculous experience. Once issues are aptly understood in context, supervised and unsupervised learning methodologies allow classification of the incoming user questions into relevant tags or categories. This is a multi-step process that involves sorting, optimizing and creating tags.

For instance, an ecommerce company might get frequent questions around pricing, discounts, shipping, refunds, returns and exchanges which might fall under more than one category.

A question may fall under multiple categories, as depicted in the graph above

The ability to automatically categorize tickets as they come in greatly improves the accuracy, quality and speed of providing resolutions that match the issue intent. Categorization also creates the ability for companies to have a deeper understanding of product issue trends, key defects, or gaps in knowledge.

AI and machine learning applications for customer experience are hard to build and design. When done well however, the use of AI empowers organizations to create delightful end-to-end customer journeys by providing instant resolutions in minutes as opposed to hours, or even days!

Moving from Tactical to Strategic

Artificial intelligence also employs sophisticated machine learning capabilities that leverage existing algorithms to learn from data, in order to build generalizable models that give accurate predictions, find unknown patterns and offer deep insights.

Companies are able to take the learnings from their customer interactions, build on them and then intelligently apply them to improve customer journeys across the board by taking into account the variable operating conditions. User journeys often vary depending on where they are is in the lifecycle of a product or a process, nature of their support issue, whether they are a first-time user or not, their demographic profile and other factors.

As systems continue to evolve and become more sophisticated over time, AI enables companies to be more strategic and targeted about who they serve, what channels they employ, and where they allocate their resources. As a result, they are able to achieve the magic equation where the key support metrics go up on the one hand and costs come down on the other.

Machine learning capabilities lend a competitive advantage to businesses. 

With technology on their side, organizations are in a position to make informed business decisions to achieve a sustainable ROI while creating a frictionless customer experience.

Conclusion

With customer service becoming a brand differentiator, organizations are using AI technology as an enabler to transition from individual silos and disjointed experiences to integrated and consistent experiences. Organizations are moving from defense to offense, and from tactical to strategic. Most importantly, end-users or consumers are happier and spend more money with these leading companies. As CX leaders, there has never been a better opportunity to build a leadership position for our brands that deliver an intelligent and effortless customer experience!

Join Kate Leggett, VP and Principal Analyst at Forrester Research and me in an exclusive webinar, “Investing in the Future of CX” on Wed, Mar 14 at 11:00am PST. We will discuss how CX will become faster, smarter—and yet, more human with AI.

Companies seeking to safeguard and grow their revenue should focus on increasing the loyalty of existing customers rather than focusing primarily on customer acquisition.

With the right mindset and organizational commitment, increasing customer loyalty is an attainable goal and one that should be a company priority.

The best businesses find a way to make customer loyalty programs work and the reason is simple: Loyal customers outspend other customers.

An Accenture report from 2017 describes that 66% of consumers spend more on brands that they’re loyal to. This finding shows a clear incentive for businesses to take the plunge into building a meaningful customer loyalty improvement program.

Creating an effective customer loyalty improvement program requires understanding the impact of customer loyalty, seeing loyalty programs from the customer’s point of view, and using practical objective methods for assessing where and how loyalty programs are the most effective.

Customer Loyalty Is Powerful

Customer loyalty over time guarantees the future of a business’ profitability.

Loyal customers are increasingly valuable the longer that they’re loyal.

A Bain & Company study reports that the longer customers have had a relationship with online retailers, the more they spend, amounting to a 67% increase in money spent after 31 months when compared to the first purchases in the relationship.

This relationship duration spending bonus holds up in other industries too. Customers spent 23% more on buying groceries after 31 months than they did in the first month buying from the same grocery store chain.

However, customer loyalty is even more powerful than these figures suggest.

Loyal Customers Provide Free Benefits For Companies

Loyal customers are overwhelmingly more profitable than other customers because loyal customers do more for a business than purely generating revenue during purchases.

As stated in Accenture’s report, 55% of consumers tell their friends about the brands that they’re loyal to, with 12% being loyal enough to applaud brands and defend them against detractors on social media.

Brand evangelists and brand defenders are often customers who have the deepest level of experience with a brand and they provide accurate information to their friends and social media followers and behave like another marketing channel.

Customers trust what their friends say about companies and this heavily influences their purchasing decisions. Customer loyalty can thus increase the rate of new customer acquisition as well.

It’s difficult to quantify the exact value of defenders on social media, but the social proof that loyal customers create for free is a powerful indicator and driver of future revenue.

The Impact Of Customer Loyalty Is Variable

Some industries benefit from customer loyalty more than others. McKinsey’s report on marketing led growth indicates that loyalty’s impact on a customer’s decision to buy varies across types of purchases.

According to the report, purchasing decisions for some products, such as auto insurance, are 76% driven by loyalty, whereas purchases of other products, like cosmetics, are only 4% driven by loyalty.

This means that companies seeking to improve customer loyalty should first think about whether they are selling products that are sold primarily via customer loyalty or whether their products are sold primarily via their features in comparison to other similar products.

Some Customers Are Routinely Loyal

The McKinsey report claims that 13% of consumers were completely loyal to their preferred brand and would never consider alternatives. The remaining 87% of consumers were willing to be disloyal if they found a product they preferred.

The twist is that 29% of consumers shopped around for a product before ultimately returning to the brand that they were initially loyal to. These consumers are first on the list for customer retention efforts because while they are open to other brands, they still feel a stronger tie to the initial brand they felt loyal to.

The best strategy for increasing customer loyalty is to target the 29% of customers who are vulnerable to disloyalty but are still loyal. Prevent losses first, then work on expanding loyalty to new customer segments.

Some Customers Will Not React Well To Loyalty Improvement Programs

Aside from the customers that are vulnerable to disloyalty, Accenture’s report finds that 23% of customers react negatively to loyalty improvement efforts. These customers are predominantly in younger demographics, who will be the potential customers of the future.

Be wary of over-handling this customer segment. While no loyalty program is perfect, putting additional thought into the approach for younger demographics would be beneficial.

Practical Steps For Increasing Customer Loyalty

Given the challenges of customer retention, coming up with an actionable strategy for improving loyalty for the right segment of customers requires getting creative.

The smoothest way forward is to think about a customer loyalty program from the perspective of the customer interacting with a business.

Give Customers The Channel They Want To Use

Customers’ reasons for staying loyal may be unrelated to a customer loyalty program, but that’s a good thing! Customers who are loyal before a loyalty program are customers who genuinely prefer your company and your product. Loyal customers also tend to have positive feelings towards the customer service these companies are providing.

A report discussing the results of the American Express’ 2017 Customer Service Barometer study states that more than 60% of consumers prefer to use digital self-service tools for simple inquiries. These tools include company websites, mobile applications, online chat, and voice response systems.

For more complicated inquiries, 40% of consumers reach for the phone with the hopes of talking to a human, and 23% of consumers try to find a way to talk to customer service face to face.

In a nutshell, customers prefer to use the easiest channels for the easiest inquiries, but are willing to invest more effort in getting service if they think their inquiry is more complicated.

If a company offers easy to use service channels, customers will find themselves exerting less effort to have their inquiries answered, improving both customer effort scores and loyalty.

Make things easy for your customers by giving them the self-service channels that they want to use and as an added bonus your company can save money on customer service costs.

Calibrate Pricing

Ease of interaction, while important, is not the only factor that can impact customer loyalty.

The International Council of Shopping Centers (ICSC) conducted a survey in 2017 found that 92% of the consumers surveyed claimed that price and value were the biggest reasons to be loyal to a brand. The survey also found that price and value were 13% more likely to be ranked as the biggest loyalty factors in comparison to product quality.

For B2C companies this may be particularly helpful to know as this indicates that dropping prices may be a better way of ensuring loyalty than spending money to improve your product. Discounts for loyal customers are an effective way of making sure that loyal customers stay loyal and that other customers have an incentive to become loyal and continue to engage with your product offerings.

Use The Two Pie Model

Sometimes improving customer loyalty is simpler than adjusting pricing or introducing an easy to use support channel. Rather than focusing on making changes to increase loyalty directly, it can pay off to reduce the number of reasons that customers might have for being disloyal in the first place.

However, today most companies are trying to increase loyalty. As noted by a Harvard Business Review (HBR) article, 89% of customer service managers stated that their strategy to increase customer loyalty was to exceed their customers’ expectations.

While logical that exceeding customers’ expectations would increase loyalty, thinking about it the other way around and focusing on reducing the reasons to be disloyal can make more sense for the business.

Exceeding expectations often requires extra work and can get expensive as your business continues to scale and is a tough bar to meet. In fact, in the same HBR study, 84% of customers reported that their expectations hadn’t been exceeded in their most recent customer service interaction.

The time, money, and effort put into exceeding their expectations may not always be the best way to move the needle.

To explain why this disconnect exists, HBR proposes using what they call the two pie model. Using this model can help businesses creatively think about improving customer loyalty.

One pie is the “loyalty” pie, which has many different small or medium sized slices that are drivers of customer loyalty.

Good customer service, a great product, and customer loyalty programs each have slices of the pie which are heftier in comparison to the other slices, but no single slice accounts for the majority of the pie. Customer loyalty has many factors and each factor contributes a little bit towards driving individual customers to remain customers.

The other pie is the “disloyalty” pie, which contains drivers of customer disloyalty. This pie contains a few large slices, with the largest slice– perhaps larger than half the pie– being poor customer service.

Poor customer service is overwhelmingly the most common reason for breaking customer relationships. Among millenials, 74% of those surveyed reported that a bad customer service experience would cause them to switch retailers. Importantly, Accenture found that in 2017, 77% of consumers were more likely to retract their loyalty than in prior years.

The takeaway is that reducing dissatisfaction can often encourage more customer loyalty than increasing satisfaction and can be easier to identify and take action on improving.

Create a Unique Loyalty Program That Differentiates Your Company

Be sure to reinvest in loyal customers relative to the revenue that they bring to the business.

Sometimes, the best way to do this is by providing them with loyalty benefits that address problems they might have with a competitor’s rewards program.

For example, Southwest Airlines links its Rapid Rewards loyalty point system to the amount that customers spend on their tickets rather than the distance that the ticket may take them like other airlines do.

As an airline, Southwest offers flights along common routes which cover great distances and are highly booked across all of the airlines who run those routes.

In order to compete with other airlines offering the same route, Southwest must be creative on how they differentiate their value to customers. Flying these routes thus generates a lot of reward miles for each Southwest customer. For the airlines who use the miles system, this system isn’t associated with higher revenue, customer loyalty, or even customer spending.

Because there are many other options for the same product — flights along a popular route– customers can easily go elsewhere. If Southwest rewarded customers for the distance that they flew, they’d often be rewarding the segment of customers most likely to be disloyal because of the nature of their business.

Instead, Southwest rewards customers who spend more. This means that customers who fly on more expensive (but shorter) routes will feel like they’re getting a better reward for staying loyal than they could with other airlines. These routes are also more likely to be underserved by other airlines, putting Southwest in a much stronger position to capture the market.   

This program differentiates Southwest from other airlines while costing the same amount as other airlines spend on loyalty programs; the difference is that the loyalty rewards given to Southwest customers scale perfectly with the amount that they spend.

Southwest retains the loyalty of profitable customers as a result. Likewise, customers that are easy to keep loyal because of their limited number of choices are more likely to stay loyal when they get a reward that’s structured in a way that benefits them.

Start A/B Testing

According to an A/B test case study by Marketing Experiments, optimizing the first seven seconds of a customer’s visit to a company’s website can result in a 14.65% increase in the rate of visitors to conversions. This means that if a company has a recurring customer base, there are probably ways to get more revenue from those customers.

Getting more revenue from existing customers is much easier than getting revenue from new customers.

In a marketing tell-all by Duolingo’s chief growth expert, one of the biggest insights gleaned from A/B testing was encouraging customers to engage with the app by sending push notifications telling the user that there was something new to see.

By simply adding a home screen notification counter to their iOS app’s icon, Duolingo saw a 6% increase in daily active users.

More importantly, by performing the test, Duolingo was able to learn what time of day individual users were the most likely to engage with the app after receiving a notification. They then used this information to build a habit for their users by notifying them slightly before they were most likely to engage with the app.

The lesson is clear: start running tests on customer segments so that you can guide them through engagement with your product.

Strong Loyalties Await

Combining these methods for increasing customer loyalty will bolster a company’s subset of loyal customers without breaking the budget.

The single biggest takeaway is that customers are often pleased with a frictionless experience whether that’s an interaction with the product itself or with customer service.

Use these methods to find unique areas of customer friction and create a plan to address them and make it easier to start your trek towards building a more loyal customer base.