Recently, I received a “special offer” from Southwest Airlines, and, as it coincided with travel plans, I ended up booking a Southwest flight to Los Angeles, reserved a car and started making a hotel reservation. Halfway through, I canceled the hotel transaction, so my husband and I could consider whether we wanted a hotel near Disneyland.
Immediately I was tossed out of the sheltered cocoon within which I had been happily making air, car and hotel reservations, all the way to Southwest’s home page. Brushing off my chagrin, I tried to confirm the rest of the itinerary. Because I hadn’t finished, I had not written down the car rental or flight confirmation numbers.
Normally, at this point, I would have sent an email request, but Southwest doesn’t accept customer email. I ended up calling the toll-free number a couple days later, when I had time to follow up. But Southwest was not able to confirm the rental car booking. I had to re-book at a higher price.
This is a case where sales and service could have been in close harmony but were not, because Southwest Airlines—which generally wins high praise for its customer service—resists multi-channel.
The reason? According to the explanation on the Southwest web site, it’s because Southwest answers every letter it receives, and it “takes time to research, investigate and compose a real business letter.” Southwest streamlines “to keep our costs low, our People productive, our operating efficiency high, and our responses warm and personal.”
At first glance, this seems reasonable. But I did not need or want a real business letter. I needed to confirm my bookings, and Southwest needed a way for me to alert its personnel to a glitch in its web operations.
To respond to my problem, Southwest incurred several direct costs:
- The cost of the toll-free (to me) call
- The cost of the agent speaking with me when I had already booked an “Internet special” fare
- The cost of the agent telling me that the company didn’t handle confirmation of bookings made on the Southwest site for cars or hotels.
And it had the following effect on me: decreased customer satisfaction, which left me hesitant about booking car and hotel reservations through Southwest in future
That should be troubling for Southwest, which has what Nielsen/NetRatings clocked as the top airline web site, with just more than 8 million unique visitors in the month of April 2005, resulting in an astounding 14 percent conversion to sales.
(The runners-up lagged behind. American Airlines had just under 6 million unique visitors, with 9 percent conversion to sales and Delta, about 5 million visitors and 10 percent conversion.) Other airlines and online travel agents like Expedia and Travelocity are fiercely competing for an opportunity to access that lucrative Southwest Airlines 14 percent conversion-to-sales rate.
It’s understandable that companies are wrestling with the question of the return on investment of a multi-channel contact center: the equipment, the total cost of ownership, the personnel, the training, the supervision, the policies, the processes and the integration of different customer information.
But someone somewhere in your company needs to be thinking about the question of multi-channel contact centers in a proactive way:
- What technology is available to make it more convenient and pleasant for customers to interact with our business?
- What technology is available to our competition, eagerly waiting to grab our hard-earned market share?
- What policies are we clinging to (e.g. all written communications should have the professionalism of a formal business letter) that might be holding us back in lowering costs or improving quality of service? If you, like Southwest, are rejecting multi-channel contact because of what appears to be a low return on investment, take into account that there could be a cost in doing nothing. How so?
- Will your customers, on the lookout for deals, continue to purchase from your business at the same rate, using the same media as before? Today, customer loyalty isn’t a given, and frequent-flier miles are no longer golden handcuffs. Customers will leave for something as small as a $10 difference in air ticket price, or added convenience
- Will your competition stay put or work hard to tempt your customers away not just with lower pricing and convenience but also enhanced style, prestige, better timing, improved locations, blah blah blah? To win market share, competitors are innovating and paying attention especially to your blind spots. Joe Louis was beaten in his first prize fighting bout with Max Schmeling because Schmeling’s team discovered that Louis lowered his hand after delivering a left blow. The next time they met, Louis had eliminated the weakness and won the 1936 Olympic heavyweight championship. Louis didn’t have the luxury of time to calculate the ROI.
- Will the demographics of your customer base remain the same? Gen X and Y, the people who grew up with computers and the Internet, will have even higher expectations of your web site and electronic communications. And even if you keep the same customers, they will age and their habits will change.
- Are sales and service working together to increase profits? To deliver increasing value to your customers? A multi-channel center can significantly improve the hand-off between sales and service and result in increased profitability. But insightful process design that learns through data collection and practical experience is a key component.
A good example is the insurance company John Hancock, the U.S. subsidiary of Manulife Financial. It uses Verint Systems Inc.’s performance reporting to run real-time reports as frequently as hourly to analyze the customer service email and call logs. Using the logs, the company proactively calls back or re-contacts customers both to win back lost sales and provide information about complementary products. And it devises improved scripts for agents that provide increased value to customers by offering the most appropriate products and services at the right time and to the right customers during inbound customer service calls.
Are you still questioning the ROI of investing in a multi-channel contact center? Then it’s high time you flip the question around:
- Which customers will buy from me in one year, two years or three years?
- What value proposition must I offer to keep them from the competition?
- How do they want to buy?
- When will I be able to coast along and stop improving on the value I deliver today? (This answer is easy but difficult to digest: NEVER.)
If you don’t have good answers to these questions, you will never really know how many channels your contact center should support. That’s an answer your ROI spreadsheet can’t tell you.