High-Tech Customer Service in the Spotlight

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“It will not suffice to have customers that are merely satisfied. An unhappy customer will switch. Unfortunately, a satisfied customer may also switch, on the theory that he could not lose much, and might gain.”

This is a statement made close to thirty years ago by W. Edwards Deming, in his book Out of the Crisis. Though an expert in total quality processes, he well understood that it was customer experience, formed by interactions with employees, augmented by systems and processes, and supported by a company’s messaging and other communication, that creates success. He concluded: “Profit in business comes from repeat customers, customers that boast about your product or service, and that bring friends with them…profit in a transaction with a customer that comes back voluntarily may be 10 times the profit realized from a customer that responds to advertising and other persuasion…”

Placing the customer first, or complete focus on customers, two of the clarion calls of customer experience optimization, have a hollow ring if strategies aren’t drilled down and reduced to a point where CSRs’ daily efforts can have a positive impact on customer loyalty.

Customer experience is supposed to be about creating, and optimizing, relationships with customers; however, experience and support initiatives, frequently through service operations are, typically, are almost all about the technology: software systems, sales contact management, data warehousing, and so on. Apart from that, in this era of steadily shrinking resources, the emphasis has also been on tight budget controls, doing the most with the least. People, especially customer-facing staff, have also largely been an afterthought in experience and strategies.

Customer service representatives (CSRs) across the United States handle an average of 2,000 customer interactions each week. If CSRs are not aligned with the overall experience strategy, indeed are not directly involved with creating and executing the strategy, this can represent 2,000 opportunities to put customers at risk or lose them.

Placing the customer first, or complete focus on customers, two of the clarion calls of customer experience optimization, have a hollow ring if strategies aren’t drilled down and reduced to a point where CSRs’ daily efforts can have a positive impact on customer loyalty. These centers of customer contact now represent the principal touch point with customers; and, beyond technology, they have the capability to generate and manage a continuous flow of customer information, and to increase customer loyalty.

Nowhere is this more true and evident than in high-technology industries, i.e. computers, software, printers, telecom products and services, and complex entertainment products and services. Recently, major consulting organizations—companies such as Accenture, McKinsey, Allegiance, Forrester, and others—have examined what drives success, defined as leveraging customer loyalty behavior, in high-technology customer service on a global basis. In addition, RightNow Technologies, a customer support technology solutions company with over 1,900 customers worldwide, recently conducted the latest in a series of annual customer experience studies in the U.S. (through Harris Interactive) addressing many of the same service impact subjects. In this review, we will present results from these studies, and how they contribute to understanding the importance of service and how the insights they offer can make service more effective.

Key Findings

Accenture’s research consisted of two simultaneously administered online global surveys—one for providers and the other for customers. It explored the state of business customer service in the communications services, communications equipment, electronics and high-tech industries, querying more than 650 senior executives from 11 countries.

The research revealed that 70 percent of business customers said that it’s possible for a provider to create an experience that “locks in” their future business. At the same time, 70 percent of providers said that improving the overall customer experience and customer satisfaction ranks as their main business priority for 2009. Over 80 percent of customers agree that superior customer support increases their likelihood of making subsequent purchases from the same supplier.

Respondents were asked to explain, in their own words, what they consider to be the main characteristics of a superior, differentiated customer experience. Their responses fell into several categories, the top three of which were: knowledgeable staff and accessible support (32 percent); efficient and timely problem resolution (26 percent); and proactive, personalized solutions (21 percent).

The research also found that, compared with customers in Europe or Asia, those in North America are more loyal to their providers and less likely to have switched providers or considered doing so. And if North American communications and high-tech companies deliver a distinguished and superior customer experience, they have a 20 percent better chance than European and Asian companies of generating more customer service revenues from the same customers.

McKinsey’s research focused on what Harris would call “thresholding,” or finding the correct level of support in multiple areas. The “yardstick” McKinsey uses for making this determination is estimated customer lifetime value. They have determined that companies either overspend on service levels, hoping to reach a level of customer delight, or underspend, hoping that customer satisfaction won’t be impacted.

In their studies, McKinsey has found that, while most executives think compromising service levels is a mistake, they still struggle with identifying necessary investment levels while addressing pressure on revenue and costs. The best companies at this have rigorously applied customer experience analytics, matching survey responses to intended or actual behavior, and then evaluating, to the extent possible, correlation and causation. Principally, the most sophisticated companies, they found, figure out what matters most to customers, eliminate investments that don’t matter, and finance the ones that will help them survive and thrive.

Interestingly, 58 percent of customers in the RightNow study said they would always or often pay more for a better customer service experience, even in a down economy. Further, reflecting the revenue implications of service, almost 60 percent said they were at least somewhat likely to make a purchase during a service engagement; and 24 percent had already made a purchase based on an agent’s recommendation during service.

Impact of Negative Experiences

Accenture’s research uncovered a critical outcome of poor service. Nearly 30 percent of business customers surveyed are considering switching to another provider because they are dissatisfied with the quality of customer service they receive. With their current providers each of these customers spends, on average, US$15 million on products and customer service per year. When asked why they are challenged in delivering superior service, the three reasons providers cited most often were their lack of supporting technology (selected by 30 percent of respondents), a dearth of trained resources (29 percent), and non-existent definitions of support processes (22 percent).

According to providers and customers, the quality and competence of service agents, along with their ability to address customer concerns on the first phone call or e-mail, rank as the two most important factors in delivering a superior, differentiated service experience.

In related research conducted in the UK, Accenture learned that 60 percent of all high-tech customers would be willing to switch providers for more reliable or better service, while 31 percent indicated that a company’s unwillingness to take sufficient actions to meet their needs had a strong impact on their decision to stop patronizing that company. Over 42 percent, for example, have encountered service representatives who were unable or unqualified to solve their problems, contributing to future negative behavior.

Even more serious, RightNow learned that 84 percent of customers who experienced poor service would communicate that result to others (up from 74 percent in 2007 and 57 percent in 2006); and 87 percent said they stopped doing business with a company because of a negative service experience.

Driving Customer Trust and Advocacy Through Superior Service

Accenture service studies that trust and credibility are critical to continued purchase and recommendation; and 45 percent of customers in their UK and US high-tech customer service research said that they would be positive because they have grown to trust the company’s products or services. But, Accenture notes that trust can be easily broken—such as when a company solicits feedback from customer on how to improve products or services, but fails to act on the input given.

Customers today are looking to benchmark their experiences against the greater sophistication of Web 2.0 technologies, and they are coming to expect multi-channel support and an integrated experience.

In fact, 30 percent of respondents said such a lack of credibility has played a strong role in their decision to stop using a provider. Service as brand differentiator is evidenced in customer likelihood to recommend the company to others, and also to escalate their own share of wallet. RightNow’s 2008 study, for instance, showed that 58 percent of customers identified receipt of outstanding customer service as the number one reason they would recommend a company to someone else, higher than either pricing or quality of products and services. This was an increase from the 51 percent of customers giving this same response in 2007.

Capgemini, reporting on the Genesys (contact center software, and enterprise efficiency and collaboration) Global Consumer Survey results, concluded that most high-tech customers are regularly frustrated by service-related issues, such as long hold times, IVR systems with too many, or incorrect, options, and having to repeat information already provided. This undermines the relationship.

Successful companies are, as Capgemini sees it, transitioning to make the service operation a “customer experience center.” Customers today are looking to benchmark their experiences against the greater sophistication of Web 2.0 technologies, and they are coming to expect multi-channel support and an integrated experience. Companies have failed to keep pace with these expectations due to poor customer segmentation, underinvestment in, or poor design of, technology solutions, silo-based organizational structures, and poorly designed processes and agent training. What customers actually want, and what companies need to deliver, is trust, i.e. a perception that service processes and technologies are designed to optimize their relationship with the company.

High-Tech Customer Service Conclusions and Implications

To build the kind of service and support capabilities that can help companies achieve high performance during and after the current economic crisis, Accenture recommends six actions that communications and high-tech companies should take:

  1. Enhance the content on the service and support portal;
  2. Invest more in training and developing customer service agents;
  3. Enhance the knowledge of each provider’s installed base;
  4. Improve first-call or email resolution;
  5. Improve the overall customer experience of self-service, not just reduce costs;
  6. Implement analytical and diagnostic tools.

Forrester has looked at the broader landscape of what companies can do, through service and support, to help optimize the customer experience. They have identified six operating laws.”

  1. Every interaction creates a personal reaction—Experiences need to be designed for individuals, customer segments must be prioritized for tiered service, customer feedback (in the form of debriefing and research) needs to be central to
    designing superior experiences, and employees need to be empowered so they have latitude to accommodate the needs of key customers.
  2. People are instinctively self-centered—Customers care about their own needs, and not how companies are organized; so companies must make certain that processes and procedures are streamlined, easy to understand, and helpful to customers.
  3. Customer familiarity breeds alignment—Companies need to have a clear view of what customers need, want, and dislike, so they can align decisions and actions. It’s vital that employees at all levels have access into customer feedback, and how that insight drives response to customer requirements.
  4. Uncommitted employees don’t create committed customers—From Disney to The Service-Profit Chain, it’s well understood that employees are core to optimizing customer experience. If employee morale is low, for example, it is challenging to provide superior service. So, training must be a priority. In addition, companies should communicate inclusively, provide enabling technology, and coach approaches that help customers. Finally, measure employee commitment.
  5. Employees do what is measured, incented, and celebrated—Metrics that are tracked, activities that are rewarded, and actions that are celebrated are what drive employee actions. Customer experience needs to be the primary focus of metric-tracking and this must be communicated in a non-ambiguous manner, otherwise employee behaviors may be counter to desired outcomes
  6. You can’t fake it—Employees, as well as customers, can sense if experience optimization isn’t a top priority. So, irrespective of the amount of money spent on advertising and brand-building, companies have to be strategically committed to this course in everything they do. For example, advertising should reinforce, not create positioning. Otherwise, it may be better not to start at all.

Bob Thompson, CEO of CustomerThink Corp., used the collaborative resources of CustomerThink.com to prepare a broader guide (sponsored by RightNow) to achieve customer focus and centricity, Accelerate Your Customer-Centric Journey. Much of what he discovered, particularly in the area of customer relationships through service, to improve both strategy and execution could be reduced to four precepts: 1) Staff front lines with friendly and competent people, 2) understand and experience what customers experience (in CustomerThink’s 2008 survey, only 8 percent of executives thought their organizations fully mapped customer experiences and identified interactions likely to impact customer loyalty behavior), 3) see your customers from all sides, i.e. make certain that everyone, irrespective of function, shares the same customer profile and research data, and 4) build genuine relationships through collaboration, such as using social media to share ideas, solve problems, and co-design new products and services.

Harris Interactive’s Summary POV on “Best in Class” High-Tech Customer ServiceRecently, Harris Interactive senior consulting, methodology, account management, and technical staff conducted a thorough review of the current state, and direction, of high-tech customer service. The following summarizes our findings, some of which have been reviewed with clients.

  • Due to poor service, in one year, 60 percent of customers cancelled accounts with banks, 36 percent changed insurance providers, 40 percent changed telephone companies, 35 percent changed credit card companies, and 37 percent changed Internet providers.
  • Service can either represent strategic, positive differentiation or the opportunity to undermine perception and loyalty among current customers, and
  • Technology providers have been challenged with the convergence of solutions in a single device—causing customers to potentially interact with multiple vendors to find a solution. Service providers have become swamped as they cope with rapid adoption of PCs and mobile technologies penetrating the mainstream consumer market
  • Customer sentiment (dissatisfaction) with service shortfalls goes global—and public—with Internet adoption. Firms struggling to focus on ‘ease of use’ and to identify root cause of technical difficulties
  • Firms attempt to cope with burgeoning support demand via IVR systems—further depressing customer satisfaction as human interaction is eliminated—and websites created to tell customers how to ‘hijack’ the IVR systems.
  • Internet communication and social networking continues to amplify poor service performance, which leads to customer share and market share erosion.
  • Most recently, we have all seen a shift to web-based self help as a component of integrated touchpoint options for support
  • Poor training and implementation of outsourced care simply generates more problems and results in collateral damage to customer relationships
  • Companies now entering a ‘rebuilding’ period as customer care moves to #1 position in buying criteria. Better human interfaces on devices, intuitive controls, and personal assistants or diagnostic programs embedded in new product designs
  • As technology becomes mainstream, service and support offers an opportunity for differentiation, making mishaps very visible when they occur. Companies such as Dell have reacted to the highly public and negative attention to customer support challenges, and have increased number of representatives, set up internal service advocates with special email addresses and now offer a ‘fee for service’ for customers desiring greater support priority (or desiring communication with a rep who is English-speaking).

Current Thinking

Current trends in “best practices” tend to focus on two major areas: technology innovation and a refocusing on the human element as a dominant and impactful component of support. Opportunities to leverage positive phone experiences to a self-help environment, empower employees to make decisions within a predetermined bandwidth, leveraging technology through the customer database which will enable front-line employees to reach ‘first call resolution’ more often

Focus on the human element: Gartner reports that 92 percent of all customer contact is still through the center. And, it’s been reported that 70 percent to 90 percent of what happens with customers is driven by human nature, having nothing to do with technology. State of the art technology is certainly a necessity today, but it is meant to enable human endeavors, not to disable them.

As the contact center takes on a more central role in the business, the volume of interactions it handles grows, and the number of agents and sites expands to match.

Virtualizing contact centers solves the issues that arise from this expansion by a) improving the efficiency of call allocation around multiple centers, when it comes to scaling to meet peak demand, b) making it easier to allocate calls across different agent skill sets, c) handling emergency closures of individual call centers, and d) improving visibility of call and customer data from across multiple centers to make better strategic decisions

Recognition that technology and virtualization has multiple benefits: Business continuity is improved by implementing mirror sites; staff morale is increased with flexible work schedules and locations, and skills-based routing to ensure that the call goes to those best qualified and available to answer the query; scalability is enhanced to handle peak demands by drawing on staff across multiple locations; hours of operation can be extended round-the-clock using centers in different time zones; intelligent routing to the most appropriate staff, wherever they are, cuts transaction times and enhances productivity; dynamic control of call routing strategies allows the contact center to respond to changing circumstances quickly and effectively; management workloads are cut and the entire contact center can be managed from a web browser, anywhere

Many firms are focused on leveraging service personnel to cross-sell within the support environment—blurring the roles between service and sales. This trend is not limited to phone-based service. Web-based and self-service environments designed to enable cross-selling opportunities as well. Service representatives need to seamlessly move from addressing a problem or concern to proactively advising about, even recommending, a new product—further supporting the customer while raising the growth of profitability of the enterprise.

Investing in the team: literature focuses on training and empowering support personnel to maximize value of customer interactions. Investment promises to elevate the value of the customer care group with an enterprise, and align the activities of the service organization with stated business objectives of the organization, and tightens the linkages between sales, marketing, and service

Align customers with overall strategic goals. Some customers may be too demanding, reducing your ability to serve those who are more easily satisfied. Customer segmentation is key here, and they can be categorized by a variety of parameters (lifetime value, technology, sophistication, etc. Approaches can also be used to identify those individuals most likely to be amenable to shift to web-based or self-care solutions.

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.

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