INTERVIEW: Lynda Kate Smith
CRM: As businesses face increasing competition and
rapid commoditization, how is the role of service
evolving?
Lynda Kate Smith: As companies look for new ways to “stand out” in their markets, they are recognizing the significant role that the customer experience can play in gaining a competitive advantage. More and more, value is ascribed to a company based on customers’ experiences interacting with that organization through the various channels available to them. That’s why businesses are now investing in new ways to deliver exceptional service as a means to secure customer loyalty and achieve differentiation in increasingly crowded markets.
Successfully leveraging service as a competitive differentiator requires a dramatic shift in how companies approach customer care. As noted in a recent BusinessWeek Online special report on customer service, “… providing great customer service is much more than just a job for the front lines or the call centers. It takes coordination from the top, bringing together people, management, technology and processes to put customers’ needs first. That’s true today more than ever. Technology is leveling the barriers between alpha companies and also-rans, making great customer service one of the few ways companies can distinguish themselves. Retail, online and phone shopping channels are expanding, increasingly prompting customers to demand a seamless – and painless – experience.”[1]
Effective customer experience management must be approached from the outside in, designing and managing interactions – whether self-service or person to person – from the customer’s point of view. This typically requires that companies make changes to organizational structures, systems and processes – all from the customer’s perspective – to ensure consistently exceptional customer experiences. At the same time, effective customer experience management requires that companies collect and act on specific customer interaction data to improve the experience across all touch points. Finally, it requires that companies make technology investments that allow customers to conduct interactions conveniently and reliably using their preferred service or communication channel – whether by phone, email, chat or Web self-service.
According to Yankee Group, “Customer service is one of the few differentiators that a company possesses. As a result, well-executed self-service is now a crucial and strategic component of the overall customer-centric business strategy. To derive maximum value from self-service, companies must optimize the value of their customer interactions and not focus solely on selfservice as a cost-saving mechanism.”[2]
CRM: Does customer care impact company brand perception and loyalty as much as product quality and performance?
LKS: Absolutely. Customer service quality has a huge impact on the customer’s perception of a company. When participants in a recent Harris Research study[3] were asked how the quality of customer service influences their perception of the company, 80 percent reported the quality as “Very Influential” (40 percent) or “Extremely Influential” (40 percent). In fact, almost three-quarters (72 percent) of the participants reported that they have stopped doing business with a company because of poor customer service.
This Harris Research study also shed light on the far-reaching implications of poor customer service. When asked how they would react to a negative customer experience, 70 percent of the participants indicated that they would tell family and friends; 59 percent would choose not to do business with the company; 59 percent would call back and talk to a manager; and 56 percent would switch to another provider.
Today as technology advances facilitate fast, easy sharing of information, poor customer service puts companies at greater risk than ever before. In recent years, traditional media has given increasing coverage to consumer-focused stories that expose customer service issues. Web-based access to information has led to increased consumer reliance on rating systems like JD Powers, Consumer Reports, Amazon.com and even eBay for researching companies’ track records for service satisfaction. What’s more, the emergence of social networking vehicles, like blogs and YouTube, has made it possible for people to rapidly spread information – positive or negative – about their customer service experiences to a virtually unlimited audience of consumers. As BusinessWeek Online stated, “Whether via blog, Web site or news report, consumers have a means to get back at companies for dishing out poor service.”
There is mounting evidence that consumers are no longer willing to shrug off poor service as a necessary evil. Consider the “gethuman” project, a consumer initiative started by Bostonbased consumer advocate and entrepreneur Paul English, aimed at improving the quality of phone support in the U.S. The popular movement’s free website is run by volunteers and is powered by over 1 million consumers who demand highquality phone support from the companies they use. Intense media coverage, including “Today Show” interviews with [Mr.] English, is fueling consumer impatience with poor service standards.
Another example is JetBlue’s customer service debacle [Feb. 14, 2007], when an ice storm left passengers stranded on runways in New York for 10 hours and forced the airline to cancel flights for several days to deal with the backlog. In response to the resulting media frenzy and passenger backlash, the company is trying to redeem its once-stellar customer service record by offering full refunds, free flights, a passenger bill of rights and promises of operational changes that will prevent similar situations in the future. Time will tell whether JetBlue can regain its top customer service standing, which was publicly stripped from them by BusinessWeek immediately after the incident.
CRM: In general, do self-service applications enhance or detract from the customer experience?
LKS: If well-designed and -executed, self-service applications can provide a highly effective means for delivering superior service at a lower cost, they enhance it. The key is to balance automation with usability. To ensure a consistently exceptional customer experience, companies must continually monitor interactions across self-service channels and use collected data to improve usability, convenience and automation success rates.
In Q4 2005, Forrester Research surveyed their Customer Experience Peer Panel about their spending plans for 2006 and discovered a clear trend. Panelists wanted to shift more customers to self-service channels and believed that improving usability is the most effective way to accomplish this goal. To that end, panelists’ firms planned to either maintain or increase their investments in customer experience improvements in 2006, with the biggest increases planned for tools and trades that helped companies better understand their customers’ behavior.[4]
CRM: How are self-service channels evolving?
LKS: With rapid advancements in technology and increasingly mobile lifestyles, it’s no surprise that consumers, business partners and even employees are becoming more demanding in the requirements for exceptional care. These demands include the ability to interact with companies via an expanding range of access points. As a result, the past decade has seen a proliferation of self-service channels starting with call center agents and expanding to include interactive voice response (IVR) with touchtone, Web, IVR with speech, and most recently, multimodal interactions. Yankee Group defines multimodality as a new concept that allows telephony subscribers (mobile phone users) to move seamlessly between different modes of interaction, from visual to voice to touch, according to changes in context or user preference.[2]
Multimodality opens up new opportunities for service differentiation and many companies are recognizing the power of speech applications for unlocking the potential of the mobile channel. To compete effectively based on service, companies must be willing to invest in multimodal selfservice solutions – including speech-based applications – that enhance both convenience and efficiency for mobile users.
While investing in multimodal, self-service solutions is an important first step, it’s often not enough to realize a significant return and keep pace with customer demands. Strong ROI and ongoing competitive advantage can only be achieved by understanding behaviors and experiences across the customer life cycle and by putting that understanding to work for improved automation and seamless, integrated interaction across self-service channels.
CRM: Does achieving competitive differentiation through service involve more than providing an exceptional experience for customers?
LKS: It can and it should. That’s why at Nuance, we find the term “customer care” far too limiting. Through hundreds of client engagements, we’ve found that most organizations need to care not only for customers, but for other constituencies, including business partners (resellers, vendors, suppliers, etc.) and employees as well.
In a typical enterprise, there are any number of functions and daily processes that fall under the category of “care.” Certainly customers contact companies on any given business day with a multitude of care-related issues – product service and maintenance issues, shipping and delivery inquiries, billing questions and more. However, in most companies, care is not limited to customers alone.
Who else requires care? The list is virtually endless. Resellers contact distribution regarding order status to meet customer commitments. Suppliers contact the warehouse to gauge supply levels for replenishing stock. Sales representatives contact management regarding product features and availability. Employees contact the IT helpdesk with password reset requests. Other employees contact HR to change beneficiaries. Based on job function or personal preference, these constituents may use different communication channels – phone, email, Web, SMS and more – for their interactions. By optimizing the usability of multimodal selfservice channels, companies will not only be able to provide a consistently exceptional customer experience, but they will also be able to improve care to partners and employees by enhancing operational efficiency.
Endnotes
- http://www.businessweek.com/innovate/di_special/
- Yankee Group, October 2006, “Implementing Effective Self-Service to Improve the Customer Experience and Drive Profitability”
- Harris Interactive Research Survey, February 2007
- “Customer Experience Spending Booms in 2006: Survey of Customer Experience Panelists Reveals Plans for This Year,” by Nate L. Root, Forrester Research, February 3, 2006
