Measuring Friction for the Customer

Insights without surveys


It’s amazing how many types of interactions customers have with companies that are inherently expressions of dissatisfaction such as “where’s my order?”, “I don’t understand my balance”, “My bill is wrong/too high, or “I’m missing my X,Y or Z…” and so the list goes on. In some cases, these indicators of issues or “friction” form as much as 80% of the contacts. Wow! What an opportunity. What great feedback on what isn’t working well!


If anything, the proportion of these types of problems is rising in other human assisted channels like chat. The reason is that greater use of self-service is changing the contact mix. As customers make more use of self service for routine transactions, the customer facing channels get a higher proportion of complaints and problems. For example, these days customers don’t chat to ask their balance, but they do chat to question why the balance is not what they expected or to get details about a transaction they don’t recognise.


What this means is that the interactions in human assisted channels are an amazing data source about the effort customers have to go to and the frictions that exist for the customer. This data shows the issues and problems customers are encountering with products, services or channels. It’s fantastic feedback if we can understand it and yet organizations continue to invest in surveys and mechanisms that typically ask “how did we go?” and “what do you think of us?” or sometimes “How much effort was that?”.


"Why did they have to do that?" is the most fundamental question of all and can be answered if we take the time to understand why customers are making contact. That’s the reason we wrote our new book “The Frictionless Organization” because we think getting rid of this bad contact and the associated friction is such a huge opportunity. We also see understanding contact as the most importan form of "voice of customer".


In the book we observe that some of the most successful businesses have tried to create operations where we never have to make contact for the wrong reasons. Uber, Airbnb, Amazon and Netflix are organizations that are hugely valuable but they are also some of the easiest to deal with. This isn’t by accident. The book explores what every organization can do to remove these frictions and become like these innovative businesses. This paper explores the first step in the process which is about understanding the frictions that exist so that the cost, priorities and solutions become clearer. This can be great data to galvanise a business around customer issues and help reduce these frictions.


Of course it’s easy to say “let’s reduce the rate of contact” and much harder to do it (which is why the book may help). This paper covers three mechanisms to “Understand” and shows how to tap these sources of great untapped customer insights. We’ll explore how to understand:


A) The quantum of friction (both the C and the X of what we call CPX).


B) The nature of frictions that exist


C) The true cost of friction


1. Understanding the quantum of friction: The C and the X of CPX

The first level of “understanding” is to assess and track the rate of problem contact relative to key parameters of the business. This is a great measure of the level of friction in a business. The focus first is the C of what we call CPX, namely the total level of human assisted contacts across all channels: calls, emails, chats, messages, letters and so on. It’s valuable just to start to add up the volume of contacts across channels. We realise some channels may be cheaper than others but it's still useful to be able to look at the total of all these channels of customer effort because only that gives the complete picture. So, if a company has 2 million calls (per annum) and 1 million chats and 500,000 messages the C (contact) would be 3.5 million. We don’t normally count automated contacts in this analysis because they are different – those are transactions and enquiries that the customer is choosing to make. In the example shown, calls, chat and email are all rising at an absolute level.



The absolute number of contacts is interesting e.g. 3.5 million contacts a year but without the business context it tells only half the story. It’s great to understand the total contact picture and the trends overall and by channel but they make even more sense if we start to understand these trends relative to business growth. In this instance we made the X of CPX, policy numbers, and the contacts per policy chart told a picture of almost no change. The rate of contact (see chart) was steady despite the investment in new channels and new self-service.


The X puts it into context (as we talked about in our last paper Factfulness for business). The X could be flights for an airline, orders for online shopping or accounts for a bank. The X needs to be the measure of business size and growth. This can lead to some great insights. In the case of a major subscription service, they did some analysis of “contacts per device type”. This showed that eight of the ten devices they offered had contact levels more than double the best two devices. The organisation stopped selling the high effort devices and profitability improved. That kind of analysis is repeatable in many organisations. For example, it might show that certain types of mortgages or insurance policies have disproportionate contact rates. So, the first level of understanding is to know the rate of contact and its trend against key business drivers. It’s a very powerful indicator of the ease of doing business.


2. Understanding the nature of friction: contact at the right level of detail

It’s one thing to understand the “quantum” of contact via a CPX type measure. It’s even harder to get the right level of understanding of what makes up this contact. Organizations have tried for years to get this right and it is hard but it is worth it. Here are some lessons we have learnt the hard way:

  • If you have 80 or more reasons for contact, that’s too many and nothing will seem like it’s worth actioning. If there are more than that (one place had 2500 possible combinations), many won’t be used and no one will trust them

  • Twenty or fewer reasons you’ll find things like they don’t change much and it isn’t clear who owns what

  • If it isn’t clear which areas of the business are accountable, then it may be the wrong level of detail

  • The contact reasons aren’t there to prevent “root cause analysis”. They are there to tell you why customers think they need to make contact.

  • Your front-line staff can help you get these right as they handle these contacts day in day out. We find that one workshop will typically get you the top contact drivers and the language customers use.

  • If the proportions never change week by week, then they may not be at the right level of detail

  • If the reasons blend very different issues, then the level of detail is probably wrong. So, a “my bill is late” is different from “my bill is wrong”.

There are now some great tools (through speech and data analytics) to help you track contact against reasons continuously. However, we’ve also learnt that you have to teach these tools what to look for. An analytics tool doesn’t know that “my bill is late” and “where’s my bill” are the same thing, for example. The tools need to be shown what to search for so don’t use them too early in the process. One trick we have learnt is to use the customer’s language. So rather than “invalid password attempt”, the customer will probably say “I can’t log on” or “my password doesn’t work”. Thinking in this way can help because the analytics has to search for this customer terminology.


What has got harder, is that there are now more channels in which contact is occurring and

frictions are being identified. Chats and messages can be as much a source of dissatisfaction and friction as a call or email. The good news is that it should be possible to use similar categorisation across a business. For example, if a customer has an issue logging on, they may call or chat about it but the reason can be the same. It’s important to understand these contact reasons across channels and bring the data together so that the total contact picture and the full extent of friction is understood. The tools can help do this as well because chats and messaging are in text form that can be analysed more easily than speech (which often needs converting to text first). The problem is now more complex but as a result it’s important to understand what is going on across as well as within each channel.


3. Understanding the true cost of friction


One reason that many problems don’t get actioned is that the true costs aren’t well understood because related costs are often isolated in different parts of the business. For example, the cost of refunds may be with a product owner or finance area but the costs of contact sit in customer care. Often problems logged to customer service get actioned by others and these “downstream” costs are far greater because, for example, they might involve a truck and a repair crew, a replacement product or writing off revenue in some form. In The Frictionless Organization we describe how bringing these costs into the equation makes the impact of these frictions far clearer and builds the case to take action.


The third step in “Understand” is to associate these costs with the contact reasons. That sounds easy, but it’s often hard to do as sometimes it’s not a one-to-one relationship. Perhaps 50% of contacts of type “A” result in sending a repair crew. But sending a repair crew varies in cost and complexity. There may be other types of associated costs such as hand-offs forced by business rules. At one company we found that over sixty percent of contacts resulted in a work item for another area. The costs in customer service were just the tip of the iceberg of the real work involved. Worse still, these hand offs were often delayed and resulted in repeat contacts and further complaints, so the costs were even higher than they first appeared.


As organizations have centralised and pooled more data, it can now be easier to understand and associate these other costs of friction. However, it does take analysis to work out what to associate and where to source the data. One possible technique is what we call’’ “staple yourself to an X” or “follow the X”. This is a process analysis technique that tracks an issue through the business and along the way gathers information on costs, frequency and timing. Once that is understood the associated costs can be allocated and reported with the reasons for friction.


Summary

These three levels of understanding we have covered here are among five different mechanisms we discuss in The Frictionless Organization. The book describes some other “Understand” mechanisms such as, understanding the rate of repeat contact as a key point of friction and understanding the customer impacts and reactions to different types of friction. Each of those would need a separate paper in their own right. We realise that “understanding friction” is hard but we think its invaluable to drive customer focused improvements that cut costs. We are happy to discuss how to use these techniques to make a real difference in a business. For more information email us at info@limebridge.com.au or call 03 9499 3550 or 0438 652 396.


“The Frictionless Organisation” by Bill Price and David Jaffe to be published in June 2022. Pre-orders available now on Amazon

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