How CES and VES Work Together to Boost

Customer Loyalty
Published 22 December 2020 - ID G00739324 - 5 min read
Customer Service and Support Research Team
Initiatives: Service and Support Customer Experience (CX) and VOC

This research helps customer service and support leaders

understand how two key metrics — customer effort score and
value enhancement score — should be viewed in unison to help
improve customer loyalty.

Overview
While customer service and support leaders have traditionally focused on measuring
customer effort score (CES) to mitigate customer disloyalty, value enhancement score
(VES) provides service organizations with an opportunity to predict positive customer
loyalty outcomes. Our analysis shows CES and VES are complementary and critical
metrics for service organizations to measure and manage. Value enhancement can only
occur if the customer has had a low-effort interaction with the customer service
organization. Thus, service organizations need to monitor both CES and VES together to
ensure customers remain loyal to their organizations.

Key Findings
■ CES and VES metrics work in tandem to mitigate disloyalty and boost customer
loyalty toward an organization.

■ CES moderates the achievable levels of VES, that is, a low-effort customer
interaction is an important prerequisite for achieving high VES scores.

CES Helps Evaluate Customer Disloyalty

CES is a customer service experience metric that measures customers’ perception of how
easy it is to handle interactions and achieve issue resolution during service and support
requests. For more than a decade, our research has consistently shown that high-effort
interactions decrease customers’ likelihood to continue doing business with an
organization. 1 In other words, customers are unlikely to remain loyal if the organization
made it hard for them to resolve their issue or meet their needs.

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Measuring effort through CES positions service organizations to more confidently take
action for improving the customer service experience, which in turn helps improve
organizational goals. Our research shows that measuring and reducing customer effort
has a strong effect on customer loyalty and cost savings. 2 Thus, delivering a low-effort
customer experience helps mitigate customer disloyalty and leads to cost savings (see
Figure 1).

Figure 1. Loyalty Playbook

While CES is a critical metric for service leaders, it does have its limitations. CES can only
tell leaders whether a customer is likely to be disloyal following an interaction —- not
whether they will be more loyal. While a high-effort experience will lead to disloyalty, a low-
effort experience does not necessarily lead to increased loyalty. Rather, low-effort
interactions simply return a customer back to neutrality. To measure and manage the
service organization’s positive impact on customer loyalty, service and support leaders
should implement value enhancement and measure success with VES.

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VES Helps Evaluate Customers’ Probability to Stay
Unlike CES, VES helps service organizations understand their positive impact on customer
loyalty. It is also significantly more accurate at predicting all dimensions of customer
loyalty — customer retention, increased wallet share and positive word of mouth — than
metrics such as CSAT and NPS. 3 Hence, customers reporting high VES are much more
likely to stay with an organization following a service interaction.

Contrary to CES, VES does not assess a customer’s perception of the service interaction
itself. Rather, it assesses how the service interaction impacted a customer’s views of the
product or service offering. VES measures the customer’s perceptions of the project or
service offering and whether the service interaction made those perceptions more
favorable. Specifically, VES is an index of two post-transaction questions:

■ After the customer service interaction, I am able to achieve more with the product or
service … (7-point scale, from “Strongly Disagree” to “Strongly Agree”).

■ After the customer service interaction, my confidence in my decision to purchase this

product or service is … (7-point scale, from “A Lot Lower” to “A Lot Higher”).

These questions provide insight into different elements that comprise customers’ sense of
product or service value, functionality and confidence. Customers who respond positively
are much more likely to continue to do business with the organization.

Hence, customer service can have an enormous impact on loyalty by enhancing

customers’ perceptions of the product or service. When a service interaction includes a
healthy dose of value enhancement, loyalty increases and customers are more likely to
continue doing business with the organization (see Figure 2).

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Figure 2. Probability of Customers Choosing to Stay Within an Organization

VES and CES Together Complete the Loyalty Story

Using CES and VES together can aid an organization in gaining knowledge on both
mitigating disloyalty and boosting loyalty. While CES helps organizations manage and
mitigate downside risk, VES is helpful in making customers more loyal to organizations. In
addition to improving retention, tracking both CES and VES helps companies increase
wallet share and positive word of mouth. However, it is extremely unlikely that a customer
receives enhanced value in a service interaction unless the interaction is also low effort.
Thus, mitigating disloyalty through low-effort resolution becomes a prerequisite for
boosting loyalty through value enhancement, as customers who experience a high-effort
service interaction are less likely to remain loyal to an organization (see Figure 3).

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Figure 3. Completing the Loyalty story

Figure 4 shows the influence CES has on the value of VES. Average CES scores of 4 or
below lead to low VES scores and results in reduced possibility of customers remaining
loyal.

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Figure 4. Correlation Between VES and CES

Only when the average CES value reaches the value of 5 does the average VES score rise
to 4.5. To build customer loyalty through VES, organizations need to maintain the CES
scores of 5 and above. Service organizations could consider the average CES scores of 5
as a benchmark of an average customer whose perceptions of the product or service is
enhanceable through value enhancement.

Hence, CES moderates the achievable levels of value enhancement; in other words, low-
effort interaction opens the door for a higher VES. To achieve a high score on VES, the
customer service experience first and foremost must remain low-effort.

Conclusion
A service strategy aimed at customer loyalty should focus on two important aspects:
mitigating customers’ disloyalty and enhancing their perception about the product or
service. While tracking an individual customer’s VES can be easily used to predict the
probability of loyalty in the future, service organizations should continue measuring CES
to ensure customer interactions are low effort.

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Recommended by the Authors
Driving Customer Retention and Loyalty Through Service

The Metric of the Future: Value Enhancement Score

About This Research

This research is drawn from extensive qualitative interviews with customer service and
support leaders from more than 70 companies globally to understand their challenges
and identify unique practices and solutions that can be scaled to other organizations. We
also drew on quantitative survey data from 6,000 customers and over 100 service leaders.

Endnotes
1
Shifting the Loyalty Curve: Mitigating Disloyalty by Reducing Customer Effort

2
Engineering the Low-Effort Customer Service Experience

3
2020 Gartner Loyalty Through Customer Service and Support Survey

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