Ease of Doing Business: Are you Ignoring Customers?
For the past year, Jeb Dasteel, former chief customer officer of Oracle, and I have been interviewing and surveying top executives, asking them how much they have reduced effort, or improved Ease of Doing Business for their customers. And we’ve asked executives at companies who consume products and services how much easier to do business with their top suppliers have become.
A comparison of the results is shocking.
52% of sellers admitted they had reduced hardly any or no effort at all in the past year. Which is certainly alarming, given the massive investments in CX improvements and digital transformation.
The remaining 48% of sellers said they’ve eliminated a moderate amount of effort. Sounds a lot more promising, right?
Buyers strongly disagree. 90% say their top 3 suppliers have eliminated hardly any or no effort at all in the past year.
It gets worse.
First, a little context. In our previous article, we wrote that improving Ease of Doing Business is the single most important thing that organizations need to work on to create value not only for their customers but also for their own business.
The most critical component of Ease of Doing Business is reducing customer effort, or the burden placed on your customer that creates no intrinsic value for them but is an inescapable aspect of how they’re forced to interact with you.
Gartner states that reducing customer effort can reduce costs by 37% and induce customers to spend 88% more. In fact, 96% of customers with high-effort experiences are disloyal, compared to only 9% with a low-effort experience.
Effort is a gating factor preventing loyalty gains. High effort experiences have to be remediated before customers can become loyal.
Clearly, focusing on reducing customer effort in order to improve Ease of Doing Business yields huge dividends in terms of loyalty, profits, and revenue.
In our many discussions with executives and in our 2019 CCO Council meeting, it is clear that CX is often nebulous. How many employees know exactly what constitutes a great experience? Effort, however, is intuitive. Employees often know exactly how to make it easy for customers to do business with us.
Ease of Doing Business is more concrete and resonates more strongly with the CEOs, COOs, and other c-suite executives we’ve talked with, as compared to CX.
To gather this data we targeted top-level executives, typically of B2B companies offering a product or service (sellers), and executives who purchase products/services from B2B sellers (buyers). We interviewed many CMOs, chief customer officers, and other customer strategy executives. We invited our customers, contacts, and LinkedIn colleagues to participate in the survey. (Note: The survey is ongoing. We would love to have you take three minutes to contribute to it. If you do contribute, please don’t let these conclusions sway your answers!)
We asked sellers, “How much customer effort has been eliminated today versus a year ago? In other words, how much easier have you made it to do business with you today versus a year ago?”
We asked buyers, “How much customer effort has been eliminated on average by your top 3 most strategic providers today versus a year ago? In other words, how much easier have they made it for you to do business with them today versus a year ago?”
We also asked both sellers and buyers to rank order a list of 10 of the most common drivers of Ease of Doing Business from most to least importance.
How Much Easier are you to do Business With?
A handful of sellers were rather honest: they acknowledged they had eliminated no effort at all during the past year. Based on our experiences, we wouldn’t have been surprised if respondents had said it had actually gotten worse. We’ve seen so many initiatives launched that have poor consequences for customers because companies sought operational efficiency without considering the net impact on their customers.
Forty percent of respondents said they have eliminated hardly any effort.
Forty-eight percent of sellers said they had eliminated a moderate amount of effort and have become easier to do business with. This one is important: hold this thought.
Interestingly (and sadly), nobody said they had eliminated a great deal of effort.
When we asked buyers the same questions, we were surprised. Buyers told a very different story than the sellers. In sharp contrast, 90% of buyers said their top 3 most strategic providers have eliminated hardly any or no effort at all.
Thankfully nobody said effort has actually increased.
What does this tell us about the massive investments in CX improvements, digital transformation, omni-channel integration, and more? Were they wasted? Or overwhelmed by high-effort experiences? It is certainly possible that the innovations of a handful of companies such as Uber, Amazon, and others are increasing the expectations of all customers everywhere, making it impossible to “finish” Ease of Doing Business improvements. But that doesn’t explain these results.
Net, there is a significant disconnect between buyer and seller perspectives on how easy they are to do business with. Sellers aren’t listening to customers, or they aren’t asking the right questions. And they certainly aren’t keeping up with a rapidly changing set of industry expectations.
What are the Biggest Drivers of Ease of Doing Business?
We asked sellers to rank-order 10 of the most common drivers of customer effort that they believe have the greatest impact on their customers (1 being most impactful and 10 the least impactful).
If you examine the top 5, do they make sense to you? If you’re like most, you’d probably tend to agree that these should be the highest priority.
It makes sense that customer on-boarding should be #1, especially for a SaaS or other product/service company with a complex process for adoption and value realization. Streamlining interactions so customers aren’t calling repeatedly or multiple people aren’t unnecessarily involved makes absolute sense. And of course, we want to resolve customer issues, ideally without escalation.
We asked buyers essentially the same question and were quite surprised to find that there is absolutely no overlap in the top three most critical priorities between sellers and buyers. Customer on-boarding, the highest priority for sellers, is fifth for buyers. The highest buyer priority, “Better ways to collaborate”, is the seventh priority for sellers.
Would you have ever guessed at this disparity?
The disparity in the drivers of Ease of Doing Business results in a significant waste of resources. An executive for an agency operating a government-funded passenger railway said, “We’re undergoing a modernization effort. Engineers want to add WiFi in the rail cars and improved online ticketing. But we can’t even effectively communicate with passengers that the train is delayed! We have to fix the core system before we start examining engineering marvels!”
How you do YOU know that you’re solving the problems that customers actually care about? If you were to ask your top customers these same questions, would they be in perfect alignment?
The survey results match Jeb’s 20-year experience at Oracle, and Curtis’ experience in working with hundreds of customer strategy executives.
As customer strategy executives, we need to figure out how to become easier to do business with. And we need to ensure we’re anchored in and guided by our customers’ priorities.
We need to understand the customer’s drivers. We need to have a formal Ease of Doing Business metric we can baseline and benchmark against every year. We need to ensure the whole company is engaged in making it easier for customers to do business with us—not just in the call center, but throughout the entire customer lifecycle.
We’ve created an Ease of Doing Business Accelerator, a 1.5-day workshop designed for senior executives from marketing, customer care, services, other critical customer-facing roles, AND their cross-functional teams. It enables you to work on real customer strategy challenges & opportunities for you plus 3-4 members of your cross-functional team. You’ll walk away with a clear definition of Ease of Doing Business/effort drivers, an explicit linkage of drivers to operational and financial metrics important to your CEO, and a detailed plan to resolve the highest priority Ease of Doing Business obstacles.
If you’d like to learn more or join us at the accelerator, please select a convenient time to talk further on a brief call.
Curtis Bingham, Founder & CEO, Chief Customer Officer Council
Jeb Dasteel, former chief customer officer, Oracle