Transforming Customer Contact: Make Every Contact Count
How can companies simultaneously achieve high levels of customer satisfaction while holding down costs? Its been an elusive goal, but a critical one. Accentures ongoing research into high-performance businesses has shown that delivering a differentiated, branded customer experience plays a major role in improving customer satisfaction, which drives customer loyalty, which drives high performance through better margins, revenue growth and shareholder value.
Unfortunately, the numbers show that in most industries, the traditional approach to managing customer contacts in a way that balances cost and satisfaction is not working. In the communications industry, for example, losing one-fourth of your customers each year is fairly typical. In the auto industry, the best performers only enjoy repeat customers about half the time. Airlines lose about 40 percent of their customers, insurance companies 30 percent.
Whats wrong? Companies are implementing self-service capabilities that cut costs, but which also alienate customers. They do not effectively identify the high-value customers who must be tended with special care. They implement agent desktop tools but fail to build the skills in the agents who actually deliver the experience to customers. These problems are exacerbated when one end of the building isnt talking to the other end: marketing is going one direction, operations another.
What companies need is an overall customer experience blueprint, one that plans for the optimal customer experience along the entire spectrum of customer segments and value. Whether for a low-value customer or a platinum account, the blueprint designs the right customer experience for each customer segment, makes the design truly actionable and provides an underlying financial model to track operational improvements and bottom-line impact. The blueprint makes sure companies achieve the best possible balance between customer satisfaction and customer cost-to-serve.
Leveraging the Value Points
Optimizing satisfaction and cost depends on leveraging specific value points in the overall design of the customer experience. Consider the analogy to the methods a mining company uses to sift through Transforming Customer Contact: Make Every Contact Count Through eliminating unnecessary customer interactions, utilizing intelligent customer self-service, increasing the efficiency of contact center agents and leveraging flexible sourcing models, companies can deliver sustained cost savings and increase customer satisfaction. excavated rock in search of more valuable materials: you first use heavy machinery to remove the biggest rocks, and then subsequent processes allow you to find the pieces that need to be handled individually. The customer experience blueprint enables companies to sift through and deal most effectively with different segments of customers in ways most appropriate to their value, handling each in a way that maximizes customer satisfaction and loyalty as well as cost efficiency (see Figure 1). Like mining, actualizing the ideal customer experience proceeds through integrated stages:
1. Reduce Unnecessary Customer Interactions
The first step in the mining process is to eliminate the big rocks the customer interactions that are unnecessary because they are caused by poorly designed processes or misleading customer communications.
Advanced business intelligence and analytics capabilities support the kinds of root cause analysis that can identify certain problematic customers. These intelligence tools can gather large volumes of data from multiple sources from all customer touch points and enterprise data sources and integrate them into a meaningful framework for analysis. Companies can then look for statistical correlations and deviations to identify causes, and then also develop careful, cost-based plans for taking corrective action.
For example, when Bank of America was considering a marketing campaign to expand its customer base, executives were concerned that already high call center volumes would be pushed beyond capacity. Using a root-cause analysis tool, the bank found that customers who had established bank accounts online were calling the contact centers seven times more than other customers. This insight helped the company realize that it needed to refine the Web channel as well as better prepare Web customers on Web channel usage. In a matter of days, Bank of America was able to produce insights that might have previously taken the company six months.
2. Take an Intelligent Approach to Customer Self-Service
The second stage of the customer value mining process is to focus on customer interactions that are better handled through a self-service channel better, that is, not just for the company but also for the customer. Not every customer, nor every kind of interaction or inquiry, should be directed to a self-service channel.
Successful companies are able to distinguish between the customers who generate the most profits and those customers who actually cost the company money. These industry leaders then focus their resources on further cultivating relationships with the profit generators, while redirecting other customers to less costly interaction options.
The key is to take a customer-centric approach tailoring the selfservice option to customer need and customer segment, and speeding customers through the process with user-friendly interfaces or interactive voice response capabilities that do not turn people away in frustration.
One impediment to delivering a branded customer experience has been unsuccessful use of integrated voice response (IVR) systems. Most everyone has experienced the limitations of these systems (press 9 to tell us how frustrated you are right now). In addition to damaging the customer experience, the improper use of IVR can actually add cost: up to 80 percent of customers using IVR end up talking to a live agent anyway.
For example, when Liberty Wireless examined the performance of its IVR-enabled customer self-service, it decided to take action: it added speech recognition capabilities that help automate customer care while also projecting its desired image as a high-tech company. A customer activates these capabilities when using the phone on the Liberty Wireless network for the first time. The application provides a speechbased tutorial that informs the user about service features.
Though the new customer still finishes the call with a live agent, the first call application saves time by automatically providing essential information to the customer. As a result of these initiatives, the company decreased the number of calls going to live agents by 40 percent, reduced operating costs 30 percent and decreased calls per subscriber by more than 60 percent. Customer satisfaction scores have increased accordingly.
Web-based self-service capabilities have become increasingly sophisticated, as well, and companies are discovering that many of their customers generally those who are younger and more comfortable in the online world actually prefer self-service functions for basic information requests and purchasing. Bank of Americas award-winning online banking site has improved customer satisfaction at the bank measured by customers who give the bank an assessment of nine or 10 on a 10-point scale from 41 percent to more than 50 percent.
3. Make Contact Center Agents More Effective
At the contact center itself, leading companies are discovering that investments in desktop tools will only pay off in increased customer loyalty and lower costs if they are accompanied by better training and performance support for the service agents. A focus both on workforce performance and on enabling technology can have a dramatic effect on the effectiveness, quality and efficiency of the contact center.
Learning programs based on simulation techniques (where agents practice interactions with customers in a risk-free environment) and more focused training (where agents can review a short multimedia segment, for example, about a new product or service) are two areas being explored by companies in search of high performance today. Companies like British Telecom have achieved stunning results using simulation-based training for their customer service agents. In one instance, British Telecom was able to increase the rate of sales conversions on a new offering by 102 percent and increase customer satisfaction 16 percentage points.
New desktop applications and workflow management tools are also having a dramatic effect on the productivity of agents, automating the workflow among the workers themselves, and integrating multiple channels, desktop applications, business intelligence and customer data sources. Agents at some leading organizations are much more effective at serving customers because their tools give them access, through natural language query, to multiple knowledge sources to find the information they need.
When New York City, for example, implemented its 311 Citizen Service Center, content management tools allowed the city to transform its center into a one-stop resource center where the citys 8 million residents can have 24-hour access to nonemergency municipal services and information in 170 different languages.
The retail bank ING Direct, the U.S. subsidiary of the Dutch financial services company, wanted to build rich customer relationships without building expensive brick-and-mortar branches. To do this the company needed to combine customer intelligence with real-time analytics to maximize interactions across channels and product lines. By infusing the agent desktop environment with customer insight, the company improved its ability to deliver the most relevant products and messages to individual customers when appropriate during inbound interactions.
The company has had call center offer response rates as high as 42 percent, and its average offer-to-acceptance rate rose to 9.2 percent, far higher than the channel average of 7.4 percent. As a result of these and other benefits, the company began to recover the cost of its investment in three months and saw a 400 percent ROI in the first year of use.
4. Leverage a Flexible Sourcing Model With Global Reach and the Advantages of Competition
Through 15 years of trial and error, the conventional approach to outsourcing customer contact has definitely produced results. Specifically, many customers dissatisfied with their service experience, and many companies unhappy that they never realized the promised cost savings.
To a large degree, these outcomes resulted from companies ceding control of too many elements innovation, flexibility and scalability in the process of lowering labor costs. Now, they have the opportunity to re-exert control and reintroduce these factors into their sourcing model.
The next generation of customer contact outsourcing will leverage the best mix of options available globally, both insourced and outsourced. For example, to continuously enhance service levels, Professional Education Institute, an education and training institute focused on real estate investing and financial management, uses multiple outsourcers. According to chief marketing officer Roger Sinnes, this approach helps the company create an environment of healthy competition between multiple outsourcers where each vendor has an equal opportunity to earn the lions share of your call volume. It not only increases overall performance, but also gives you that backup if a vendor runs into an issue where they cant handle your calls.
When companies are not locked into a sole-provider arrangement, or bound by the constraints of one providers infrastructure, they retain the ability to respond quickly to new opportunities and competitive threats.
In addition to offering more flexibility, this approach will also introduce more competition into the outsourcing model. With multiple providers vying to set the best benchmark of both cost and satisfaction, companies will have far more options for delivering the best customer experience at the best possible cost.
With growth back on the strategic agenda, companies are increasingly focusing on attracting and keeping customers, while fending off competitors who seek to take those customers away. Responding to market threats while holding down costs means companies need to move away from piecemeal CRM investments. Instead they need to turn to more holistic and transformational programs that touch all customer channels and treat the customer experience as the paramount measure of success. A combination of new strategies for handling customers, more flexible investment options and creative operating models makes it possible today to achieve high performance by aligning customer treatment with customer profitability.
