Killing 2 birds with one stone – why cost reduction within customer service doesn’t mean decreased customer satisfaction


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I often meet with clients who want to kill two birds with one stone; reduce customer service costs, whilst also increasing customer satisfaction. Many technology-centric CRM programs of the past did not share these aims. They attempted to design solutions inside-out from the company’s perspective, rather than from the customer’s perspective. In many cases these programs tried to control the customer; for example defining the channels that the organisation made available for customer service requests. In a drive to reduce customer service costs, expensive human interactions were blocked from the customer by customer service numbers hidden away on a little known web page, multi-level IVRs, voice self-service solutions, chat-bots and lists of online FAQs. In the main these solutions were designed to benefit the company, keeping customers away from call centre agents and therefore reducing costs but not necessarily improving customer satisfaction.

The communications revolution of the last few years has meant that companies can no longer control their customers. Customers now control which channel or device they use, which social network they turn to, which sources of information they trust and chose to mash together. The communications & connectivity changes present a threat to many organisations used to an ingrained mindset of command & control, but there is also an opportunity for customer service organisations to leverage the technology changes to drive win / win outcomes, namely reducing customer service costs whilst improving customer satisfaction. Below are four examples of some of the tactics different organisations have deployed to help achieve these dual aims:
1. The best service is no service – Bill Price, former VP Customer Service for Amazon famously described his outlook on customer service in his job interview with Jeff Bezos, saying: “Well, the best service is no service. You hire me, and I’m going to try and help reduce the need for customers to have to contact Amazon for service. Why should they? They order things online. Things should work out fine, right?” (See full Customer Think’s interview with Bill Price here). Amazon designs for no service. This starts by thinking about the jobs customers are trying to do when they interact with Amazon and working out how they can help customers achieve their outcomes online. Clearly achieving this stretches far beyond thinking about the online experience; the processes that enable the desired outcomes of customers stretch far into the organisation and it’s eco-system of suppliers.
2. Pro-actively identify problems, fix them at source and update all channels – building on the Amazon example above, many organisations are now setting up command centres to stay connected to the pulse of the customer, attempting to spot trouble brewing and then proactively take action; firstly to update all channels letting customers know that there is a problem and what they are doing to fix it and secondly to fix the problem at source. Dell, for example have pioneered the use of a Social Media Command Centre to try and spot topics that matter to customers as soon as they bubble up on the social web (described in my post on improving social media monitoring). A leading US cable TV company has a swat team concept where they bring together a cross-functional team to investigate opportunities or threats fast and act appropriately e.g. launching an outbound communications campaign or fixing a network problem at source.
3. Leverage peer to peer as a support channel – I’ve written previously about the GiffGaff case study. Around 90% of GiffGaff’s customer service happens within their community forum. GiffGaff customers fix each other’s problems on the forum, suggest new product ideas, recommend the service to their friends and even build smartphone apps for the community. The average response time within the onion support forum 24×7 is under 3 minutes. Furthermore, Telefonica Group who own GiffGaff estimate that their customer service model costs 4 times less than the traditional contact centre-centric model, yet their NPS score is 75 – way above the industry average (note GiffGaff publish their customer satisfaction scores here).
4. Integrate your community forum across the social web – BT do a great job of integrating their community forum across their various social channels. Their online community brings together their YouTube channel (for customer support videos), their Twitter stream, their ideas page etc. They have also integrated their forum to their Facebook page to maximise the reuse of content and allow customers to choose the channel of choice.
One thing to bear in mind if you are attempting to replicate some of the tactics above is that simply deploying the tactics alone may well not produce your desired outcomes. In other words, simply creating a community forum does will not turn you into a GiffGaff. There are many examples where forums have actually increased customer service costs and created additional calls for the call centre to deal with. Fundamentally, the success of deploying the tactics above relies on the adoption of a service dominant mindset. To understand more about Service Dominant Logic, a topic first described some 7 years ago by Steve Vargo read this great post by Graham Hill or take a look at this presentation by Wim Rampen.

Service dominant logic aims to broaden the traditional goods-dominant logic, placing service provision rather than goods as the basis for economic exchange. With a service dominant mindset the customer is always a co-creator of value therefore we design from the customer’s perspective recognising that value is created through usage not at the point of transaction. With a service dominant mindset the tactics above are far more likely to be able to deliver the dual aims of reduced service costs and increased customer satisfaction.

Republished with author's permission from original post.

Laurence Buchanan
Laurence is CEO of EY Seren and leads EY’s global Customer & Growth practice. He works with clients to help them re-imagine growth through human-centered design, innovation and the transformation of Marketing, Sales & Customer Service functions. He is a recognized authority on digital transformation, customer experience and CRM, he has worked across a wide range of sectors, including telco, media, life sciences, retail and sports. He received an MA in Modern History from the University of Oxford.


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