The idea that companies must “delight” their customers has become so entrenched that managers rarely examine it. But ask yourself this: How often does someone patronize a company specifically because of its over-the-top service? You can probably think of a few examples, such as the traveler who makes a point of returning to a hotel that has a particularly attentive staff. But you probably can’t come up with many.

Now ask yourself: How often do consumers cut companies loose because of terrible service? All the time. They exact revenge on airlines that lose their bags, cable providers whose technicians keep them waiting, cellular companies whose reps put them on permanent hold, and dry cleaners who don’t understand what “rush order” means.

Consumers’ impulse to punish bad service—at least more readily than to reward delightful service—plays out dramatically in both phone-based and self-service interactions, which are most companies’ largest customer service channels. In those settings, our research shows, loyalty has a lot more to do with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the service experience might be. Yet most companies have failed to realize this and pay dearly in terms of wasted investments and lost customers.

To examine the links between customer service and loyalty, the Customer Contact Council, a division of the Corporate Executive Board, conducted a study of more than 75,000 people who had interacted over the phone with contact-center representatives or through self-service channels such as the web, voice prompts, chat, and e-mail. We also held hundreds of structured interviews with customer service leaders and their functional counterparts in large companies throughout the world. (For more detail, see the sidebar “About the Research.”) Our research addressed three questions:

• How important is customer service to loyalty?

• Which customer service activities increase loyalty, and which don’t?

• Can companies increase loyalty without raising their customer service operating costs?

Two critical findings emerged that should affect every company’s customer service strategy. First, delighting customers doesn’t build loyalty; reducing their effort—the work they must do to get their problem solved—does. Second, acting deliberately on this insight can help improve customer service, reduce customer service costs, and decrease customer churn.