Now here’s the kind of problem a lot of companies would like to have, especially in this sour economy. Infusionsoft executives had set a goal to drive the fast-growing e-marketing vendor to one million subscribers, but then realized their plan didn’t compute. Because handling all those new subscribers using the current customer support processes would mean hiring another 2,500 people.
Fortunately, the company could tap the expertise of community manager Joseph Manna, who had joined the company after cutting his social media teeth running message boards and forums at AOL. Infusionsoft decided they needed a social media solution that would enable users to help each other and also work collaboratively with their assisted support processes.
In other words, it was time for “CrowdService”—my term for harnessing the “wisdom of crowds” in customer service and support (CSS). As I’ll discuss a bit later, this is one form of what some call “social CRM.”
CrowdService: Harnessing the wisdom of crowds in customer service and support.
Infusionsoft considered integrating a modern community solution with their existing support systems, much like iRobot has connected a Lithium-powered user community to RightNow’s customer service system (see Building the Social Customer Service Experience). But Manna says they found Lithium was designed and priced for larger enterprises. Salesforce.com, on the other hand, didn’t have all the CSS bells and whistles they wanted, while other community solutions were not focused on customer service.
Thanks to a mutual investor, Infusionsoft was introduced to Helpstream, a new SaaS-based “collaborative customer support solution” launched in January 2008. The idea behind the company, according to CEO Anthony Nemelka, was to bring together into one tightly integrated system both conventional customer support (case management and knowledgebase) and community collaboration (Q&A forums).
Helpstream’s solution has helped Infusionsoft solve its subscriber growth problem by using social media to increase “case deflection.” Manna reports that agents now handle an average of 177 customers each, more than a three-fold increase. Customer satisfaction improved from 77 percent to 89 percent, because customers get their questions answered quickly in an easy-to-use system, with the personal touch from agents when they need it.
Agents are also happy because they can easily monitor community activity and use their time more productively.
The Rise of the Social Economy
CrowdService is just one example of social media’s growing impact on business strategy and operations, which is why I believe we are now entering the “Social Economy.”
In the Social Economy, consumers want to be part of the performance—to “co-create” value in their goods or services through interactions with producers.
Nearly 20 years ago, Joe Pine and James Gilmore argued in The Experience Economy: Work Is Theater & Every Business a Stage that businesses must orchestrate memorable events to add value to their customers and create differentiation. As indicated by the book’s subtitle, their concept is that businesses should “put on a show” for their customers.
But the game is changing. In the Social Economy, consumers want to be part of the performance—to “co-create” value in their goods or services through interactions with producers.
People have always been social, but companies have traditionally operated in a more command-and-control manner. CRM (as commonly practiced by most companies) is an internally focused approach to automate processes and extract value from customers. While CEM is more concerned with delivering value to customers, it still assumes the company is in charge of “orchestrating” experiences.
CRM and CEM aren’t going away anytime soon, but there’s a new business opportunity—and threat—due to the explosion of social media and online networking options.
According to a March 2009 Nielsen report, two-thirds of the world’s Internet population visit social networking or blogging sites, accounting for almost 10 percent of all Internet time. Facebook is the new king of the social mountain (supplanting MySpace), Twitter usage has been growing at astronomical rates, LinkedIn now reaches 16 million people in the U.S. and Ning has helped launch one million social networks.
But what are people actually doing with social media? In CustomerThink’s June 2009 survey, we found that nearly 70 percent of U.S. consumers frequently exchange messages with friends or colleagues and more than half frequently view social content. About one in three say they contribute new content at least weekly through new posts, comments and links.
Happy consumers can create a groundswell of support (think free marketing), which has helped lift online retailer Zappos to $1 billion in annual sales in just a few years. Or, a few mistreated consumers can cause tremendous damage to brands (think “Dell hell”) by blogging or posting a video on YouTube.
Whether you’re ready for it or not, consumers have made this the Social Economy.
Fortunately, as we learned in CustomerThink’s recent global survey of business managers, one in four say their organizations are already using both external social media and company-run communities. Another 20-25 percent plan to implement within the next year. While that’s encouraging, we also found that a full 40 percent indicate that they have no social media plans whatsoever!
Still, roughly half of businesses are participating in the Social Economy now, or will soon. Not surprisingly, marketing is one key area of interest. Based on our survey, around 70 percent of managers believe that external social media can provide better marketing or customer insight, or help them influence prospective buyers.
But consumers are looking for more help, not pitches. About two-thirds of U.S. consumers believe that companies should ramp up social media usage to “identify service/support issues and contact consumer to resolve.” As you can see from the chart below, there is also strong support for companies hosting an online community and participating in consumer-run communities. Monitoring conversations and forming groups on external social media sites got more of a mixed reaction.
CrowdService delivers ROI by using social media to let customers help each other, creating and using a kind of communal knowledgebase where the good answers bubble to the top. Françoise Tourniaire, founder of FT Works and an expert in complex technical support, says she has “no doubt that a well-run community will save (deflect) cases.” Some users will post a question instead of using an assisted support channel and others will search and get answers from existing community content
But Tourniaire also believes that companies are investing in community-based support partly out of frustration. Executives are still searching for ways to cut costs in assisted support, without harming quality of service. Knowledge Management has not lived up to its promise, because it requires organizing the wisdom of those hard-to-find internal experts. Nagging ease-of-use issues have also thwarted end user KM usage, leading to more “I’ll just Google it” behavior.
While your mileage may vary, let’s review a simple ROI example. Say your current customer service operation handles one-third of cases through self-service and the rest through agent-assisted service. If an online community can handle (deflect) another 20-30 percent of cases—which Tourniaire and other industry experts tell me is feasible—that translates nicely into “no brainer business case” based on cost savings, especially for companies with a large base of customers to support.
Aside from agent productivity, companies can also use CrowdService to gain insight on product/service issues, increase loyalty, and even drive sales. However, building a business case on these less tangible benefits is more challenging.
Of course, in any ROI discussion there’s also the “I” (investment) to consider. Companies need to hire and train people with the right skills, acquire and implement appropriate technology, and provide on-going funding. But these investments are typically modest compared to the potential return. Using conservative assumptions, Forrester analyst Natalie Petouhoff says a payback in one year or less can be achieved.
Tips to Succeed with CrowdService
These ROI calculations, based primarily on cost savings (or avoidance) can make it easy to build the business case. But real success rests on a critical assumption: that the total customer experience is not compromised.
Remember the off-shoring trend in call centers? By and large, our research and other studies have found the savings were achieved at the expense of the customer experience, which can increase customer attrition. Can you afford to lose customers in this economy?
Achieving both short- and long-term benefits with CrowdService means bringing together the best of the social and CRM worlds to work collaboratively. But as this chart indicates, there are fundamental differences to consider. Social users are volunteering their time to connect with other people and enjoy the experience. CRM users, on the other hand, generally follow processes designed to optimize resources.
Here are few tips for success, based on my research and personal experience running this community for the past 10 years.
- Invest in skilled moderators. You need people who can stimulate discussion, help resolve problems and deal with inappropriate behavior.
- Seed initial content and contributors. Much like starting up a knowledgebase, you’ll need to proactively post starter content and invite contributors.
- Recognize and reward your stars. Create programs to encourage the small percentage of community members that will post most of your content.
- Develop community success metrics. Don’t depend just on page views; a healthy community will get regular new posts and replies/comments.
- Integrate social and CRM workflows. Avoid creating a social silo by using automated case creation, giving agent alerts to hot problems, etc.
Of course, you also need appropriate technology. Although I’ve discussed Helpstream as a kind of “new breed” of integrated CrowdService vendor, it currently lacks some of the robust functionality found in dedicated CSS and social business vendors.
This list includes selected vendors researched by the author that can be used or integrated into a CrowdService solution. No endorsement is implied.
For larger or more complex requirements, CrowdService solutions can be created through integration. For example, RightNow and Lithium are SaaS-based vendors that both focus on customer service in large enterprises. Kana and Jive can be integrated for companies that prefer an installed solution.
For small to mid-sized businesses, Fuze Digital Solutions provides social capabilities to motivate users to improve the knowledgebase, and Parature offers a forum option as part of its integrated CSS suite.
I expect to see lots of vendor activity in this area. Salesforce.com has a social slant in the Service Cloud introduced earlier this year, and nGenera has indicated it will offer tighter integration between its interaction and collaborative tools. Oracle, although currently using the term “social CRM” for internal sales collaboration, certainly has the ability to expand into customer service operations directly or through partnerships.
These are just a few prominent examples. Feel free to add your comments below on your favorite CrowdService solutions!
The Next Step is Yours
Thus far, consumers have been leading the way in the Social Economy. I believe that CrowdService is a great opportunity for business leaders to provide great service while making the best use of scarce internal resources.
Consumers have extended their hand to welcome you. Are you ready to join the conversation?