Your home warranty brand is doing everything perfectly. Your communications with homeowners are clear and positive. Your reps answer calls and emails quickly and are extra-efficient when it comes to sending jobs to a vetted service provider.
Sadly, it all falls apart during the “last mile”—the time between when you hand the customer off to your third-party service provider and when the technician finishes the job. For example, the technician doesn’t let the customer know he’s running late…he doesn’t have the right tools for the job…or he hands the homeowner a messy paper invoice and asks for a check.
Your third-party service providers are a reflection on your home warranty brand, so read on to discover how digitizing the last-mile customer experience—also known as last-mile CX—impacts your customer retention, profits, expenses, and more.
Every Stage of The Customer Journey Is the Most Important Stage
It’s a mistake to frontload all your amazing customer experience capabilities and then let it drop off at the end of the process. This excerpt from a white paper on customer experience by Jolt Consulting Group does a good job of explaining why:
CX is a cumulative result of each and every touchpoint; therefore, the impact of service on customers’ perceptions and experiences with a company must be evaluated through the complete service delivery chain—from service initiation to call centers to online portals all the way through to on-premise delivery of service. To achieve service excellence and improved CX, service organizations must develop best-in-class business processes, create new and unique ways to interact with their customers and invest in service technology to optimize these touchpoints.
Digitizing your last-mile CX helps optimize every touchpoint. For example:
- Omnichannel communication lets the homeowner interact with the service provider in the way they’re most comfortable with.
- On-my-way customer notifications give the homeowner the confidence of knowing when they need to be ready for the service visit. (No one likes wondering if they have time to duck out for a carton of milk before the technician arrives!)
- Automatic appointment reminders mean the homeowner doesn’t have to worry that they’ll forget about the service visit.
- Mobile payments let the homeowner pay quickly and easily using the method they prefer.
- Mobile feedback forms end the experience on a positive note by showing that the service provider cares about the homeowner’s experience.
From the beginning of the customer journey to the end, digitized last-mile CX offers homeowners a great experience that reflects well on your brand.
Customers Always Remember the Last-Mile CX
Let’s say your home warranty company delivers good CX all the way through the entire customer journey, but there’s a minor glitch in the last mile. What will customers remember most? 95% of the time you and your service provider delivered a positive experience or the 5% of the time that it was just “meh”?
Surprise: The “meh” last-mile CX is what will stick in their minds, giving customers an overall view of your service as “just OK” even though you scored well during the rest of the process.
Here’s why: The Peak-End Theory, developed by Nobel Prize-winning psychologist Daniel Kahneman, says that people don’t average out the highs and lows of an experience—they judge an experience by how they felt at its most intense moment, and how they felt at its end.
So unless you created an intensely positive or negative moment somewhere along the line, that last-mile customer experience is what your customers will remember most.
A Better CX = More Profits
Now we know that customers judge their experience based on the last mile. But how much is that worth to your home warranty company?
We admit: it’s hard to measure ROI on customer experience—so we’re lucky that the smart folks at Harvard Business Review did it for us.
In businesses with transactional revenue models (which are based on the sale of goods), customers who had the best past experiences spend 140% more compared to customers who had the worst past experience.
Even more relevant for a home warranty business are the data from subscription services: members who have the worst experience have only a 43% chance of being a member a year later, while those who have the best experience have a 74% chance of remaining a member for at least another year.
That increase in subscriber retention makes focusing on the last mile CX well worth the effort.
Focusing on Last-Mile CX Saves Money
Sure, digitizing the last mile to create a better customer experience boosts customer retention—but since you have more control over the first portion of the customer journey, why not spend your efforts on attracting new customers instead?
Developing loyal relationships actually costs less than building new ones. This is from a research report by Bain & Company:
Consider the cost of serving a long-standing customer versus the cost of courting one. Across a wide range of businesses, customers generate increasing profits each year they stay with a company. Why? Return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline. What’s more, return customers refer others to your company. And they’ll often pay a premium to continue to do business with you rather than switch to a competitor with whom they’re neither familiar nor comfortable.
Digitize the last-mile CX and you’ll see expenses drop even as profits roll in.
Ready to Improve Your Last-Mile CX?
Businesses that offer digital customer experiences with Dispatch’s Last-Mile CX see a 35% increase in their Net Promoter Score. Reach out for a demo to see how Dispatch lets home warranty companies offer service reminders, on-my-way tracking, instant customer reviews, digital invoices, simple payments from the field, and other features that improve the last-mile CX.