How Reducing Friction Will Improve Your Bottom Line
BBCS Business Advisors
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Understanding friction is hard, but it is very invaluable to drive customer-focused improvements.
Reducing or eliminating friction from your business can have drastic effects including:
So, What is Friction?
It’s amazing how many types of interactions customers have with companies that are inherently expressions of dissatisfaction such as:
In most cases, these moment of truth, indicators of issues or “friction” represent as much as 80% of the contact volumes and costs to fix the problems. Friction points can be described as the straw that broke the camel’s back—one straw added during the customer onboarding process, another during your internal meetings, and yet another while providing customer support. Each straw by itself isn’t such a big deal, but if you have many different sources of friction, or repeat offenders, you might end up with a big problem.?
From the consumer side, a small point of friction in the sales process might cost you 10% of your potential sales. Add in another point of friction in the payment process and you might lose another 5%. After that, customers experience an issue with customer support and 5% give up and leave.?
These three “minor” points of friction just cost you 20% of your customers.
The good news is that for every bit of frustration your customers experience there is an opportunity for you to fix it and improve your processes.
We've identified 3 major areas where some business are getting it wrong...
The impact of Friction in your Buying Process
According to?Zero Risk Future, barriers along the consumer journey are costing businesses in Asia-Pacific $325 billion a year in revenue loss. When purchase friction points are not dealt with, consumers lose trust, prospective clients divert attention and billions of dollars in potential revenue are lost.
What if, instead of turning away potential customers because of friction, businesses could improve their brand performance by removing friction?
Your company's revenue would increase as frustrated prospects became happy customers. And what if this same philosophy could be applied to the other touchpoints in your business? Would you enjoy even greater success?
For example, what if your sales team could get more leads just by making their prospecting efforts easier? What about increasing conversion rates of website visitors into buyers through frictionless processes?
By removing mental friction at every stage of the customer journey you will achieve better brand performance. And yet only a minority of businesses are currently doing this, which leaves a huge opportunity for companies to improve their brand performance and gain a competitive advantage.
So, how do we remove friction? In 3 simple steps..
1. Understanding Your Customer
Understanding your customer is crucial to target them effectively; knowing the psychological needs and desires of your customers will allow you to target them with specific messages and processes.
You can also use this understanding to better empathise with their situation and make changes in order to improve their experience.
Understanding the mind of your customer won't just help increase sales, but also increase brand loyalty, as customers who feel valued will stick around longer than those who don't. They're also more likely to recommend your brand to a friend, thus increasing brand advocacy.
2. Identifying the Root Causes of Friction and Opportunities for Improvements
Once you have an understanding of your customer's psychological needs and desires, it is crucial to identify what potential mental barriers exist between them and fulfilling those needs/desires through your brand.
You might want to consider asking current customers for honest feedback about your brand.
Research has shown that customers are more than willing to share their heartfelt experiences with brands, especially if they are incentivised.
By identifying these points early on, you open yourself up to opportunities where changes can be made to provide solutions that should eliminate or minimise the friction that exists within your organisation. The result will be increased productivity, efficiency and profitability for any organisation that has taken this approach.
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3. Implement a strategy to remove friction
The final step to removing friction is to?have a strategy in place?and actually follow it!
All too often we see brands conduct a little research, claim to have found a solution but fail on its implementation because the organisation isn't aligned or there are no clear goals. To successfully remove friction, a company needs a plan of action with a clear, concise delivery performance indicators to show how success will be measured.
Having a target in place is key because it forces your organisation to focus on the things that matter most and removes distraction from non-core activities that only add more friction.
Here 3 areas where you can start your process of reducing friction.
1. Business Development and Customer Onboarding
Well, ironing out your onboarding process is the quickest way to increase revenue and all the business benefits that come along with that.?With the amount of choices consumers and businesses have today, sales teams have the difficult task of breaking down defences, explaining unique selling propositions, and overcoming objections to the sale. And while there are many ways to optimise the sales process, one immediate way to reduce friction is by automating (high frequency) administrative bits within the sales process.?
With the technology available today, there’s absolutely no reason that there should be any hiccups during the?onboarding process.?
A “yes” from a new customer should automatically trigger (at minimum!) the following actions:
2. Consumer-facing Marketing
We’re all bombarded with marketing messages every day, and we’re all making judgments on the companies that issue the material. Are you being whacked over the head daily with sales messages on Facebook from a company whose website you glanced at once? Not exactly the optimal experience for a prospect.
Instead of pushing sales messages the majority of the time, modern marketing aims to provide marketing “so useful, you’d pay for it.”
Shortening the path to conversion or increasing the quality of leads that convert is the goal.?
Areas of friction in digital marketing, which generally comes down to “conversion rate optimization” include:
Each one of these variables can be tested and optimized. Improve your customer's path to purchase by testing your messaging, making sure every landing page has a clear (and relevant!) CTA, and using testimonials or reviews to build trust.?
3. Customer Service and Account Maintenance
Customer support calls are a part of life, but turning that into a dreaded experience by adding friction is an easy way to send your customers looking for solutions elsewhere. Some friction is inherent in customer support, mainly because things aren’t working properly, hence the call! But that doesn’t mean you can’t improve the experience by reducing the friction associated with those interactions.?
For instance, what’s the average number of touches before a customer support issue is resolved? If it’s more than one, you have room to improve. There are plenty of options: well-organized FAQ pages, software that auto-fills known information, and chatbots can all improve the support process—just to name a few.
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 about 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 recognize.
There is a reason why some of the most successful businesses have tried to create operations where we never have to make contact for the wrong reasons. Airbnb, Amazon, Netflix, Uber, and Xero are organizations with high market caps but they are also some of the easiest to deal with. This isn’t by accident.
Do you want to learn how to identify those "moment of truth" and reduce friction? Get in touch at [email protected]
References:
https://customerthink.com/how-to-galvanize-a-business-around-customer-issues-to-reduce-friction-and-contact-volume/
https://www.adcocksolutions.com/post/3-steps-to-increasing-brand-performance-by-removing-friction