Everything You Thought About Customer Service & Loyalty is Wrong // Toolbox Series

UNDERSTAND TODAY. SHAPE TOMORROW.
CUSTOMER
SERVICE &
LOYALTY
LHBS // CUSTOMER SERVICE & LOYALTY RESEARCH.
1
EVERYTHING YOU
THOUGHT ABOUT
IS WRONG.
the latest instalment of our: Toolbox Series

ABOUT.
LHBS is a marketing & innovation firm with offices in Berlin &
Copenhagen. We work with legacy organisations to adapt their
customer value proposition to meet emerging customer
expectations.
http://www.lhbs.com
Discover Define Develop Deliver
ABOUT
UNDERSTAND TODAY. SHAPE TOMORROW. 2
At LHBS, we are always looking ahead to reputable, new
research shedding light on the customer experience across
touch-points, industries and countries. What we discover, we
like to share in a way that is actionable for business leaders to
implement within their own company or teams, with tried and
tested models and canvases to get started. That’s why we’ve
created the Toolbox Series.
This issue is challenging our assumptions and revealing that
Everything You Thought About Customer Service & Loyalty Is
Wrong.
We hope you enjoy this deck and are inspired to explore
further to really understand today’s consumer and how to best
serve them.
CUSTOMER SERVICE & LOYALTY RESEARCH // INTRODUCTION.

INTRO-
DUCTION.
Technology research firm Gartner Inc. (previously CEB) recently
presented findings from a number of studies carried out within
the realm of customer service across the world.
Gartner’s global research spanned many different industries and
consisted of over 125,000 customers, over 5000 service
representatives, over 100 companies and revealed three major
findings. These insights challenge long standing assumptions we
have about expected and delivered customer service.
We explore these findings and offer actionable steps and useful
resources to kickstart customer service transformations within
any company.
WHAT CONSUMERS WANT FROM COMPANY INTERACTIONS
ISN’T WHAT WE THOUGHT
Customer preferences have changed with the entrance of on-
demand services, enabling tech and experience-focused brands, and
yet customer service departments have remained largely
unchanged.
Kathleen McCaffrey
Marketing Strategist at LHBS
lhbs.com | kmc@lhbs.com
INTRODUCTION
3

WHY IS
THIS
RESEARCH
NEEDED.
Customer service is lagging when it comes to innovating for customer
experience improvement. The likes of Amazon are proving to us the huge
effect a customer-centric approach can have.
Then why do the majority of businesses still see a consistent reduction in
customer satisfaction after service interactions?
The rise of self service resources has dramatically decreased the number of
low-complexity issues coming into call centres. It’s now becoming evident
that frontline service representatives are not trained to standard and are
ill-equipped to handle these increasingly complex problems.
With the hiring, on boarding, development and management of service
representatives remaining largely unchanged, live service interactions are
in need of a major shake-up if they want to begin seeing positive changes in
customer loyalty, ROI’s and in their brand image.
Gartner’s research reveals crucial insights into what the customer expects
from a service, why they initiate an interaction and who they beneﬁt most
from connecting with when they do reach out.
INTRODUCTION
4

REPORT TITLE // INTRODUCTION.
Delight Doesn’t Pay
Research Question: What do people really want from customer
service?
They Don’t Always Want to Talk to You
Research Question: How have service preferences changed in
recent years?
Make it Effortless
Research Question: What kind of service representative do we
want to solve our problems?
Drive Loyalty From the Front Line
How should businesses take onboard these key insights to
enhance their customer experiences within their service
departments?
KEY
REPORT
FINDINGS.
DEEP DIVE
5
CUSTOMER SERVICE & LOYALTY RESEARCH // DEEP DIVE.

FINDING ONE: CUSTOMER EXPECTATIONS
Delight doesn’t pay.
Companies are underestimating the amount of goodwill they generate by simply meeting
expectations, and overestimating how much loyalty beneﬁt they get from exceeding
customer expectations.
DELIGHT DOESN’T PAY
6
CUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.

little relationship is found between
satisfaction and loyalty
7
DELIGHT DOESN’T PAYCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.

Company’s Perception
Exceeding expectations delivers an increasing
rate of return on investment.
Loyalty only increases - and increases dramatically -
when they exceed customer expectations of service.
The Reality
Exceeding expectations delivers a decreasing rate
of return on investment.
Customer loyalty peaks when their expectations are
simply met, and levels off even when their
expectations are exceeded.
Less Loyal
More Loyal
Below Customer
Expectations
Meets Customer
Expectations
Exceeds Customer
Expectations
Company's Perception
The Reality

UNDERSTAND TODAY. SHAPE TOMORROW.Source:
75%
25%
60%
11%
89%
CEB The Effortless Experience™
89 out of 100 customer
service managers said
their main strategy was to
exceed expectations
9
89%

75%
25%
60%
84%
16%
Gartner: The Effortless Experience™
Only sixteen percent of
customers said they had
been wowed by a recent
customer service
interaction
10
16%

“Companies overlook the massive good that they do
when they simply do what the customer wants…
when they simply do what the customer expects
which is - ﬁx the problem in an efﬁcient way.”
MATTHEW DIXON
GROUP LEADER, CEB
11

FINDING TWO: CUSTOMER PREFERENCES
They don’t always want to
talk to you.
Consumer preferences have shifted towards a desire for self service when it comes to
problem solving. Reaching out to customer service teams is a last resort.
12
THEY DON’T ALWAYS WANT TO TALK TO YOUCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.

The truest test of loyalty is when
something goes wrong, and the
problem is ﬁxed
13

The majority of company
executives believe customers
want to speak to their CX team.
14

of customers prefer
live service
of customers prefer
self service
of these customers are
going to non-company
channels to self serve
e.g. peer solutions,
same experience
stories.
20%
80%
54% These customers are primarily
deterred from using the company’s site
to self serve due to;
• technical jargon
• legal writing
• over-produced and corporate videos
Live service vs.
self service

Customers do everything they can
to avoid calling companies. Most
likely when they do call, it’s
because they had no other choice.
16

Customers are often overwhelmed by
choices of how to connect to a
company.
Calling is the equivalent of
making no choice, but it is still
an action they dread over
desire.

75%
25%
60%
When a service
interaction occurs, it is
four times more likely to
result in a dissatisﬁed
customer than a satisﬁed
one, causing them to
become disloyal to the
company.
18
More loyal
More disloyal
1x
4x

“While the self-service experience has improved
dramatically in recent years, the live service
interaction has barely changed in decades, creating
a gap between customers’ expectations and actual
experience… customer satisfaction has been in
steady decline across industries for years.”
MATTHEW DIXON, LARA PONOMAREFF,
SCOTT TURNER & RICK DELISI
LEADERS OF CEB RESEARCH
19

FINDING THREE: CUSTOMER REPRESENTATIVES
Make it effortless.
Customers who engage in a service interaction have more than likely exhausted all other
avenues of self service, and so expect an immediate and effortless solution provided by a
company representative with the best personality to deliver this.
20
MAKE IT EFFORTLESSCUSTOMER SERVICE & LOYALTY RESEARCH // FINDINGS.

Consumers do not want an apology,
they want an effortless solution
21

This interaction with a company that customers already dread is
therefor critical to handle correctly. This can be done by avoiding these
impactful mistakes;
22
Requesting that
customers call back
Transferring calls
multiple times (one
transfer is actually
beneﬁcial)
Asking customers to
repeat stories
Asking to repeat
personal information
Treating the customer in
a robotic way
Which personalities are best to deliver this crucial service?

Interviews of 1440 frontline service representatives revealed seven distinct personality types;
Controllers focus less on
asking customers what they’d
like to do and more on telling
them what they should do—
the aim always being to get to
the fastest and easiest
resolution.
“I like to take control of the
situation and guide people.”
Many managers feel
Controllers “wouldn’t be a
good cultural ﬁt” and lack the
requisite empathy to succeed,
they are therefor bottom of
the list when asked which
personality type they would
like to hire.
Assumptions
Reality
Empathizers spend more time
apologizing and taking time to
understand the customer’s
position. As a result, they are less
productive than Controllers, and
their interactions result in more
customers feeling dissatisﬁed
and having a high-effort
experience.
Managers know many customers
coming to them are already
frustrated, and feel a more
expressively empathetic
representative should await them,.
Therefor they currently make up
the majority of call centre teams.
Assumptions
Reality

Interviews of 1440 frontline service representatives revealed seven
distinct personality types;
CURRENTLY HIRED
PREFERRED BY
HIRING TEAMS
BEST FOR DELIVERING
LOW-EFFORT SERVICE
The Empathizer The Empathizer
The Empathizer
The Hard Worker
The Hard Worker
The Hard Worker
The Controller
The Controller
The Controller
The Rock
The Rock
The Rock
The Accommodator The Accommodator
The Accommodator
The Innovator
The Innovator
The Innovator
The Competitor
The Competitor
The Competitor
1 1 1
2 2 2
3 3 3
4 4 4
5 5 5
6 6 6
7 7 7

The two personality types to focus on are; the one currently most present
in companies and the one most effective in creating the ideal service
interaction according to this research.
The Empathizer
Enjoys solving others’ problems;
seeks to understand behaviors
and motives; listens
sympathetically
The Controller
Outspoken and opinionated;
likes demonstrating expertise
and directing the customer
interaction

75%
25%
60%
16%
84%
of customers would
rather a straightforward
solution over a wide
variety
26
84%

75%
25%
60%
15%
85%
is how much more likely
consumers are to purchase
from Brands who scored
highly in CEB’s “decision
simplicity index”
27
85%

‘The Empathizer’ proﬁle type makes up
32% of existing service representatives
globally.
After reviewing all proﬁle types, 42% of
surveyed leaders said they will hire ‘The
Empathizer’ type in their next opening
in their call centre.
Managers described the ideal
representative as being “service-
oriented,” “a good listener and
communicator” and who “likes
helping others.”
The Empathizer

“More often than not what customers
really want is a guided and simple
experience… And what they really want
is to stop interacting with you and get
back to what they were doing before”
They only make up 15% of existing
service representatives, and only 2% of
managers wanted to hire this proﬁle
above the other six
They outperform all other proﬁles on
quality indicators, customer satisfaction
levels and productivity measures - and
most notably, reducing effort on behalf
of the customer
The Controller

12%
88%
increased likelihood of
spending more or wallet
share
88%
6%
94%
repurchasing from the
brand
94%
A low-effort experience from the customer’s perspective results in;

19%
81%
negative word of mouth
81%
4%
96%
increase in overall
disloyalty towards a brand
96%
A high-effort experience can result in;

Company's costs for resolving
service requests decrease by
37% when a relatively high-
effort experience is reduced
to a low-effort one
37%

This desire for an effortless
experience is true for live service,
but needs to be replicated online
33

“our interviews reveal that Controllers are, in fact,
quite empathetic. They do understand customers’
needs and frustrations. But they respond in a
distinctive way. They recognize that after toiling
away online trying to self-serve, customers don’t
want an apology—they want a solution.”
MATTHEW DIXON, LARA PONOMAREFF,
SCOTT TURNER & RICK DELISI
LEADERS OF CEB RESEARCH
34

APPLICATION FOR BUSINESSES
Drive loyalty from the
front line.
Your customers want effortless solutions, so they opt for self service options ﬁrst. Only when
they cannot solve the problem themselves do they reach out to your team. The team should be
ready with a problem solving attitude and ‘take charge’ mindset to deliver that solution.
Here are some valuable resources to begin implementing this effortless customer
experience within your own customer service department.
35
DRIVE LOYALTY FROM THE FRONT LINECUSTOMER SERVICE & LOYALTY RESEARCH // APPLICATIONS.

It’s often the norm that leaders tell service
representatives to exceed customers’
expectations.
This simply results in confusion and costly
giveaways, not to mention wasted time and
effort on a solution where the customer simply
wanted a fast, low-effort resolution.
Telling frontline representatives to “make it
easy” gives them a solid foundation for
action.
This simply translates to ‘remove obstacles’
to make the interaction quick, easy and
low-effort for the customer.
Empower your frontline staff by giving them a clear goal that makes a
difference to customers;

Redeﬁne success within your customer service teams by more accurate
measuring of service quality;
NET PROMOTER SCORE CUSTOMER EFFORT SCORE SATISFACTION
Why: Gives a ‘big picture’ of
loyalty and captures the
customer’s sentiment towards
the company
Example: How likely are you
to recommend the company to
friend, family member,
colleague?
Why: Good for distinguishing
those who experienced high effort
service, which are the customers
much more likely to exhibit
‘disloyalty’
Example: How easy did the
company make it to solve your
problem?
Why: Enables the company to
ensure that friendliness and
compassion are not being
compromised in a bid to solve
problems as fast as possible.
Example: How satisﬁed were
you with the answer that you
got?
HIGH-
EFFORT
LOW-
EFFORT
1 2 3 4 5

Here is a useful canvas to use as a worksheet and plan your customer’s
experience with your company;

The canvas can be broken down into three key steps;
1
2
3
Fix the basics.
It’s not the extras, but the basic service that drives loyalty. When a problem is solved quickly, with
little to no effort on behalf of the customer, a positive ROI is made much more likely. If customer
expectations are not met, they will not see beyond this.
Validate delighting moments.
Creating wow moments can be rewarding, but they must ﬁrst be validated in terms of scalability
and ROI to ensure they are actually having an impact on loyalty and not wasting time and
resources of your team.
Individualize to scale.
Individualization doesn’t need to be overly complex and with ﬁrst name basis interactions. Reducing
effort by adapting your service to various lifestyles and personality types can often be achieved
with existing or easily obtainable customer data.

LHBS Put the Title of the Report here
INSPIRATION
-HUB
This report is powered by the LHBS Inspiration-Hub.
The LHBS Inspiration-Hub is a digital platform that brings
customized insights and inspiration to the heart of your
organization. It is a digital platform that tracks changes in people,
markets and technology.
https://inspiration-hub.com/
CUSTOMER SERVICE & LOYALTY RESEARCH // APPLICATIONS. LHBS CONSULTING
41
WORK
WITH US.
Can you see the implementation of this research beneﬁting your
business, if you had the right support?
Here at LHBS, we’re working with legacy companies each day,
providing them with the right tools, models, workshops and
insights to best ideate, reposition and transform their business for
today’s customer-centric and digital age.
We’d love to hear more about your business and discuss your
potential as a leader in customer-centricity.
Access our
free intelligence
Kathleen McCaffrey
Marketing Strategist
kmc@lhbs.com
lhbs.com/resources
Insights, reports & case studies

Die in dieser Präsentation dokumentierten Gedanken und Vorschläge sind geistiges Eigentum der  
LHBS Consulting Berlin GmbH und unterliegen den geltenden Urhebergesetzen. Die unauthorisierte Nutzung,  
die ganze oder teilweise Vervielfältigung sowie jede Weitergabe an Dritte ist nicht gestattet.
LHBS Consulting Berlin GmbH
Köpenicker Straße 154
10997 Berlin Germany
IMPRINT
www.lhbs.com
THANK YOU
CUSTOMER SERVICE & LOYALTY RESEARCH // THANK YOU.
42

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