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Forrester Report Offers Strategies To Cut Service Costs And Increase Sales
January 29, 2009
A new report by Forrester Research offers several strategies that will help companies cut costs and at the same time boost revenues by improving customer service.
The study, ‘The Economic Necessity Of Customer Service’ by Natalie L. Petouhoff, Ph.D., Sharyn Leaver, and Andrew Magarie, also implore organizations not to shrink the quality of contact center-delivered customer care, and not to treat contact centers as cost centers. The net results are that firms will lose more than they gain: in higher operating costs, reduced revenue, brand equity, and market longevity.
“In this economic climate, no one can afford to lose a customer,” says Petouhoff. “Rather than halting spending, smart customer service executives will use this economic downturn as an opportunity to regroup and reprioritize. Because of the direct effect of customer service on both the top and bottom lines, customer service professionals need to innovate. But the reality of the economic recession means that they must be smart about which innovations to tackle and when.”
Here are the strategies:
· Be proactive about chat
While companies spend billions annually for their Internet presence and to attract customers to their site, they are wasting their investment as customers abandon shopping carts mid-order, click away from partially filled forms, or become frustrated when they can’t find answers.
Proactive chat, offered on-premises or on-demand can be configured to automatically initiate a chat session to instantly serve your customers in that ‘moment of truth’ and stop them from leaving. This service reduces online shopping revenue loss as well as shrinks the need to call the contact centers, thereby slicing operational costs.
Customer chat sessions can be customized based on a slew of inputs including customer click through rates or paths, time spent on various parts of the Web site, prior average order size, and demographics. Solutions options include: text chat, phone callback, screen push, escorting, and form collaboration.
· Empower sales agents with co-browse tools
Forrester’s (News - Alert) research shows that 50 percent of Web transactions are completed with the help of a customer service agent i.e. co-browsing. Without co-browsing, Web site guidance is limited and frustrating.
How does co-browsing work? Let’s say a customer is online, filling out an application for a new account or placing an order. In the process, they get stuck. Traditionally they would call the contact center or abandon the interaction.
With co-browsing, the system takes note of the abandoned process and reaches out to the customer. By viewing the same Web site page together in real-time, the agent can discern why a customer is stuck and in the ‘moment of need’ guide the customer to form or order completion.
· Explore unified communications
Unified communications (UC) is the successful blending of all communication channels and communication devices (smartphones) into one interconnected entity. UC provides “presence” via chat and collaboration, meaning that an agent is able to see who in the order department is present and considered the expert. The agent can instant message the order rep and/or pull them into the call. UC combines the resources of the contact center with informal experts to create a better customer experience and improve employee productivity and first-call resolution, which can lead to reduced operational costs.
· Invest in online social networking communities
What is the value of an online community? First, customers can solve each other’s problems with much less or no interaction from a company. How? Customers get answers by reading posts made by other customers that have had solved similar issues. That is opposed to calling customer service, and agents. By using the community-enhanced knowledge management database customers can reduce their call time and provide more satisfying answers.
Second, when bad word of mouth happens, online moderators can alert executives and quickly post a resolution to the community, avoiding brand damage and increased call volume. And with a built-in system to recognize, rank, and reward users, even informants can be turned into advocates by acknowledging their suggestions that helped millions of customers.
Lastly, new ideas coming from communities can save product development millions, not to mention marketing and sales, which would then be promoting a product that was designed with customer input.
· Make self-service work in all channels
The ROI of self-service is highly dependent on customer adoption. Customers only use self-service if they can reliably and consistently get what they need done. Contact center deflection occurs when customers who want specific information can find it quickly and easily online instead of having to make a call.
With all of the various interaction channels, customers expect interactions to be seamless and the information to be consistent. Information inconsistencies or distrust of a self-service channel will invariably prompt a call to a customer service agent, resulting in higher operating costs and loss in the savings expected from self-service.
To make these strategies happen requires the right approaches. Forrester recommends:
Step 1: Reject the old paradigms that a contact center is a cost center
Don’t focus on the downturn, look beyond it. Customer service and contact centers have the most direct contact with customers, thus make the largest impression. Executives must immediately stop under-funding contact centers, because doing that is culpable in the destruction of the customer experience, reducing revenue and increasing costs.
Step 2: Demand ownership of the customer experience
Clearly, with the bottom-line value of customer experiences, someone in the organization needs to own the customer experience i.e. a Chief Customer Officer or CCO. The CEO needs to give that new CCO positional power to spend, hire, and transform. The CEO and the CCO must be fiscally responsible for the outcomes, including shareholders holding them accountable for customer-related metrics to earn their bonuses.
Step 3: Listen to your customers to create your customer strategy
Forrester surveyed nearly 5,000 consumers about their customer experiences and found that while the phone is still the most preferred method of receiving service, more than half of the respondents were unhappy with the experience. It also asked, “When thinking about customer care, how satisfied are you with self-service?” The satisfaction ratings were low, ranging between 30 percent- 40 percent. Companies must deploy voice-of-the-customer programs to understand why customer interactions are lacking.
Step 4: Conduct a customer service gap analysis and implement best practices
Often it’s unclear what, within customer service, must be changed or how to prioritize initiatives.
When Forrester asked companies if they were implementing best practices only 30 percent - 40 percent said yes. Use Forrester’s Customer Service Innovation Framework as a tool to conduct a gap analysis, enrolling all stakeholders into the analysis, including IT, CxOs, sales, and marketing. As a collective, pinpoint the best opportunities for quick wins and build a prioritization plan to close gaps.
Step 5: Evaluate software with customer experience as the top goal for a business case
Use Forrester’s Customer Service Solution Wave spreadsheets with your multidisciplinary team to compare software capabilities and make a shortlist of vendors. Having all stakeholders rate the organization’s customer service capabilities is critical to gaining solid support — both financially and organizationally. Stakeholder alignment saves money by reducing project scope creep, timeline, and budget slips. And with solid buy-in, building a business case, with the help of IT, finance, sales and marketing, customer service executives can show why they’ve got a mission-critical initiative.
Brendan B. Read is TMCnet’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.
Edited by Stefania Viscusi
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