Understanding Customer Intentions: Delivering a Satisfying Customer Experience
As far as business headlines go, one in particular has been pretty hard to ignore: Companies are once again focused on growth. To be precise, they are focused on the opportunities and challenges of increasing share and revenue by attracting, acquiring and retaining profitable customers – no easy task in the face of changing consumer demographics, heightened competition and the steady erosion of traditional sources of advantage.
While not an easy task, enabling the corporate growth agenda is nevertheless essential – and one which Accenture research into the characteristics of high performance can help address. Every year, Accenture asks the leaders of the world’s largest companies and public sector entities to tell us about their chief business concerns. In our most recent survey, issues related to growth, revenue and profitability represented most of the top five concerns shared by this group of 400 executives (see Figure 1).
These responses demonstrate a clear trend that confirms what we’ve seen so often in the headlines during the last 12 to 18 months. Without question, companies are working to grow their customer base, their share of wallet and their profits. What may be questionable is how well they’re working.
The marketplace has always posed natural barriers to growth, which a company will seek to overcome through pricing, innovation and efficient operations. What’s new, however – and increasingly common – are the barriers posed by a company’s own operating model.
Despite a steep rise in marketing investment, the return on acquisition and retention campaigns continues to be disappointing, due in large part to outmoded business practices. Many industries are currently evolving from a single-purchase transaction model to the more complex model of bundled products and services – often, products and services which in themselves are more specialized and complex. This increased complexity and specialization, which is potentially appealing to customers, is having an unexpected impact on service operations, such as making it more difficult for service representatives to handle customer support requests quickly, or to provide correct product information. Introducing more complexity into customer-facing operations has in turn led to higher operating costs and loss of margin.
Their offerings may have more bells and whistles, but few companies have introduced a similar level of innovation into their customer service environments. In fact, many have inadvertently created functional silos that fragment the customer experience across the various business units and channels supporting the new offering bundles. Poorly judged attempts to lower the cost of service and support have exacerbated the situation, alienating key customers and eroding loyalty.
A Crisis in Customer Service
In fact, we are witnessing a crisis in customer service, just when organizations are trying to fuel growth. The ramifications are significant. According to Accenture research, a poor customer experience drives half of U.S. and U.K. consumers to take their business elsewhere each year. Virtually every industry loses business because service expectations are not met. Unable to deliver the experience that customers expect and demand, companies can only be frustrated in their desires to enter new markets or strengthen customer ties.
Accenture recently surveyed consumers in the United States and United Kingdom about their customer service experience. Respondents reported a higher level of satisfaction in having to speak to only one or two service agents. Yet few customer inquiries are handled by only one agent; as many as half of our respondents reported often needing to speak to three or more.
The most frustrating aspect of customer service, respondents said, is being kept on hold for long periods, followed by having to repeat the same information to multiple customer service representatives. Predictably, our respondents reported often waiting on hold for five or more minutes before reaching a live agent. In fact, more than half of the respondents described the typical customer service experience as similar to driving in city traffic – it’s slow and often they must take alternate routes to reach their destination.
The fact is, while most businesses know what kinds of customer calls they receive, very few know – or have the ability to find out – what these callers experience or what causes a bad experience. A senior vice president at one Accenture client recently stated, “Repeat contacts are the largest unnecessary drain on our contact center resources today. … I’d like to know what percentage of our calls are the second repeat call or higher. … I have a staff that runs reports, but they wouldn’t know where to begin to isolate this information.”
Another manager reported, “My switch data tells me that we’re transferring 30 percent of our calls, but it can’t tell me why we’re transferring so many calls.”
The executives who expressed these frustrations are not in the minority. Ninety percent of the executives surveyed at the largest U.S. companies believe that they need stronger business intelligence capabilities to gain better insight into their operations. The greatest roadblock to this insight, ironically, is often the organization itself – specifically its structure, processes and technologies (see Figure 2).
Understanding Customer Intentions
To identify key problems in the customer experience, companies must truly understand what customers intend when they contact the company and what obstacles prevent them from accomplishing these intentions. In our client work, we break this collection of insight into three main components:
- Customer Intention Categories: The real reasons why customers call, which help determine the best opportunities to improve the customer experience while eliminating wasted effort, time or resources.
- Root Cause Analysis: Identification of the problem areas that are the chief causes for a poor customer experience, such as a high transfer rate.
- Product/Market Intelligence: Insight gained by listening – literally – to the voice of the customer concerning products and services, which helps shape better business decisions about products and services in the future.
To acquire these insights, Accenture helps companies complete what we term a “customer intention analysis,” which is designed with several goals in mind:
- Creating a comprehensive “customer intentions inventory” based on real interactions, i.e., not an analysis based on an agent’s interpretation of calls they handle.
- Understanding the drivers of poor customer experience and then acting on that intelligence.
- Evaluating both organization and agentspecific performance at the intention level (e.g., call volume, average handling time, fix rates, transfer rates, customer experience and satisfaction, etc.)
- Determining the cost per resolution for each intention, leading to a better model for overall cost to serve.
Few organizations take such a comprehensive, disciplined approach. Most, in fact, continue to rely on traditional analytical means that lost their effectiveness some time ago, like agent-entered data, which is often inaccurate, inconsistent, incomplete or simply biased, if not patently false. They may also infer causes from transaction data, relying on little more than intuition.
How bad can this situation get? Pretty bad in our experience: One organization we worked with recently insisted that its system for capturing and coding customer contact transactions yielded more than enough information for managing the quality of customer support. Our evaluation of this system data showed the company used more than 8,000 different codes to record the reasons – that is, intentions – for customer calls. Three of these codes accounted for nearly three-quarters of its recorded customer contacts.
After conducting a customer intention analysis, the Accenture team found that one code selected less than 1 percent of the time actually accounted for more than 9 percent of calls. Further analysis revealed that this intention accounted for more than 10 percent of the repeat calls received.
Even the telephony infrastructure is often not equipped to perform root cause analysis. At another organization we worked with, our customer intention analysis revealed that a key intention – “I need to exchange a product” – was performed by two different functional groups. A care representative handled the “return” transaction and then cold-transferred the customer to the sales organization. A sale rep would then ask the customer to repeat his or her information and explain the customer’s situation a second time, before processing the sale of the new product.
According to the way each organization measured its own transactions, their agents were hitting their target performance metrics without necessarily satisfying the customer’s intention. The care agent achieved “first call resolution” for processing a return (although not, technically, an exchange). The sales agent added a positive hit to his or her close rate and received a commission for a new sale. However, the customer’s experience would be considerably less satisfying: coldtransfer, hold time, as well as repeated requests to provide the same information.
After completing our analysis, it became apparent that if the care agent processed the entire exchange, it would help the company avoid more than $4 million in operating costs by improving the average handle time and avoiding redundant commissions. In addition, it would deliver an experience much better aligned to the customer’s intention, thereby helping to boost the company’s customer satisfaction score.
Analysis at Scale and at Speed
Accenture has been conducting customer intention analyses since 2002. Early on, our project teams spent significant time listening in on a large number of live customer calls, to create a sample for analysis that was truly representative of the entire network and statistically significant. While necessary – and very valuable – this work clearly needed to occur faster, with less time between the analysis and benefit delivery, to satisfy the accelerating pace of business. One customer intention analysis we conducted identified opportunities valued at $20 million to improve the customer experience and operating efficiency. This project, however, also required several hundred hours over a nine-month period to complete.
Fortunately, new speech analytics technology has emerged that allows us to mine thousands of hours of recorded audio for invaluable insight into the customer experience. Recorded voice is a definitive representation of customer intent, and it tells the real story from the voice of the customer. Key words, such as “transfer,” or phases such as “I’m having problems with my modem not connecting,” can be quickly mined to find the occurrences and then dig deeper into the identified audio files to gain a more robust understanding.
In August of 2005, Accenture established a formal relationship with Nexidia, a leader in speech analytics that uses a proprietary technology that reduces any audio track from any recorder in any language into its most basic form – phonemes – a process that makes the audio information completely searchable.
Phonemes are the smallest discrete elements of human speech. Approximately 400 phonemes exist in all; most languages contain about 40. Nexidia can index and search for phonetic patterns. Using Nexidia technology, analysis that once required hundreds of work hours and many elapsed months to complete can now be completed in a matter of weeks.
For example, Accenture recently completed a customer intention analysis that examined 40,000 recorded calls from a four-month period. Using Nexidia technology, we were able to mine this audio data efficiently and study the customer intentions expressed during these calls.
At this client, the contact center organization had informed the company’s product development team that it was receiving quite a few calls regarding a new product. Development had dismissed these reports, pointing to system-generated reports that indicated that less than 1 percent of all customer calls were related to this product.
We discovered that the product in question had been mentioned in 9 percent of the sample calls. We then correlated these calls to the number of repeat calls in the sample, and we were astonished to learn that calls about this product represented more than 16 percent of the repeats calls – more than $7 million in wasted operating resources and a poor experience for a large number of customers.
After further analysis of an isolated sample, we were able to identify four root causes for the original calls and the repeat calls. Presented with definitive, quantifiable, statistically relevant evidence, the product development group could not dismiss this analysis as it had dismissed the earlier anecdotal reports. After seeing – and hearing – the considerable evidence amassed by the team, the client was able to take corrective actions and prevent further erosion of customer satisfaction for the product.
Projects such as this one have identified opportunities to deflect customer calls and avoid millions of dollars in operating costs, in addition to providing a better customer experience. One organization, for example, was able to identify $3 million in savings by streamlining the closing script used by contact center agents and eliminating an ineffective cross-selling script that resulted in almost no additional revenue, but which did frustrate customers. Another client improved inbound sales processes by determining that its sales agents were not qualifying prospects before responding to sales requests. Customers who did not receive an acceptable credit score were often upset to have spent the time going through the process, only to find they were not eligible. Identifying these customers sooner enabled the sales agents to make more informed decisions about what the customer could afford, thus delivering more sales revenue and improving the customer experience.
Summary
Every company serves a finite set of customer intentions. Knowing how a company performs and designing the organization model and processes to align with the desired customer experience for each intention yields greater performance for a client organization and a better experience for the customer.
As products and services continue to become more complex, organizations will be challenged to deliver more positive customer experiences. Using innovative methods and technology from sources such as Nexidia will provide valuable insights that identify and eliminate the root causes of poor customer experience. As one client executive put it, “By the time I hear about an unhappy customer, our chances of retaining that customer are next to impossible.” In today’s world, business intelligence and the capability to act on that intelligence is not a “nice to have” capability – it is essential.
