Return on Investment – the actual results

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Primus White Paper:
There’s no doubt about it: providing good customer service is expensive. But Primus software has enabled scores of companies to reduce their CRM costs dramatically while improving their customer satisfaction ratings.

Primus has performed full ROI retrospective analyses with deployed customers. In every case, actual measured results proved returns on the Primus investment in excess of 130% per year.

Learn what the others know
The intrinsic economics of using the software are well proved. Primus invites you to learn what other Global 2000 customers have already discovered – purchasing Primus software yields the best economic return in the industry.

CRM is both a boon and a bane to any company’s bottom line. On the one hand, delivering superior customer service yields incomparable customer retention and repeat business opportunities. On the other, such service is historically costly and cumbersome to provide, as well as difficult to measure.

What they do
Classic CRM systems are, in essence, complex accounting systems that track interactions with a customer – who called, which queue they were routed to, who worked the issue, how long it took, whether the issue was escalated to Level 2 – a multitude of service and support activities. These capabilities are important, and CRM systems provide sound statistics about the activities they track.

What they don’t do
They do not, however, help customer service representatives (CSRs) and help-desk analysts quickly find and deliver answers to customers’ questions.

Primus has developed several unique products that can augment and amplify a company’s existing CRM efforts, including:
• eServer for dynamically creating, capturing, and sharing knowledge to increase the effectiveness of customer service and support representatives
• eSupport for publishing all or part of a company’s knowledge base on the web for direct customer access, around the clock

The software integrates with all major CRM systems to empower those systems with knowledge. Knowledge base content grows through usage, making customer service more effective, leading to greater customer satisfaction and lower costs. Primus software often pays for itself in the first year, providing:
• Knowledge capture in the workflow to deliver current, relevant solutions and eliminate the need for offline knowledge engineering
• Immediate availability of new and revised solutions to virtually eliminate redundant problem solving
• Support for multiple communications channels so that customers can request answers in the way they prefer (web, email, voice)
• Integration with other CRM tools and knowledge systems so companies can leverage their investments in these technologies.

The use of Primus software consistently reduces call times, incident escalations, and employee training hours, boosts CSR efficiency and customer self-service on the web, and raises customer satisfaction ratings.

Finding the ROI in CRM
Unlike many capital expenditures, CRM systems typically are not viewed as candidates for improving profitability. Customer service and support organizations usually foster company growth by either adding people to maintain customer satisfaction (inevitably spending more money) or reducing service levels to save money (potentially driving customers away). A Primus software implementation eliminates the need to make this choice.

People in the know
Customers like 3Com, 3M, Compaq, Lucent, Motorola, Nortel, Novell, RCN, and SBC have reaped savings in the millions of dollars by implementing Primus software, with their actual returns meeting or exceeding predicted returns. At the same time, Primus customers increased their customer satisfaction ratings without compromising the quality or quantity of their service. Primus provides this return on investment by focusing on four key areas of support – areas that, when improved, result in cash savings and happier customers.

Four ways to cut costs
Four years of real-world customer data show that customers consistently lower their CRM costs in four key ways:
• Increasing analyst efficiency
• Deflecting support to the web
• Reducing incident escalations
• Reducing new-hire training time

Building a solid knowledge base
Primus has discovered that the best way to reduce service and support costs is to improve the efficiency and effectiveness by which CSRs find and deliver answers. Coupled with an existing CRM system, or standing alone, Primus tools help companies build a solid knowledge base of answers to customer service and support questions, and provide access to it through multiple channels, including email, chat, phone, and web self-service.
The use of the software consistently reduces call times, incident escalations, and employee training hours, boosts CSR efficiency and customer self-service on the web, and raises customer satisfaction ratings.

How much work does it take to resolve customer inquiries? The answer to that question is found by measuring CSR efficiency. Increasing CSR efficiency, particularly at Level 1, allows companies to increase the number of customers they can serve using the same staff, or reduce staff count if necessary.

Intuitive interaction
Primus software increases efficiency by enabling CSRs to more quickly find answers to customer questions or solutions to support problems. CSRs use an intuitive problem-solving process to capture customer questions and problem descriptions and search for answers while they interact with the customer.

If no solution exists in the knowledge base, the information they add becomes the basis for a new solution, which can be made immediately available to others on the team: there’s no waiting for second-hand solution write-ups from another department.

Moreover, because they’re written while a CSR is interacting with a customer, Primus solutions capture small but pertinent details and the customer’s own terminology, making them more likely to be quickly found by another CSR responding to the same request.

Efficiency
Efficiency gains can be measured as decreases in the total time it takes to resolve an issue and decreases in total talk time per call. Shorter call times mean a larger number of calls can be handled in a day. Related data points include total elapsed time to resolution and the number of open calls after any given period of time.

The method behind the metrics
Published cost savings and operational improvement projections are often suspect, which is why it’s important for buyers to understand the source and nature of the metrics they’re presented.

The metrics in this report are taken from customer support centers and IT help desks at hardware, software, and telecommunications companies that added Primus software to their CRM systems. Primus gathers data from numerous customer sources, including reports run at customer sites, emailed success stories, press releases, custom analyses performed by Primus, confidential customer data Primus receives, third-party polling firms, magazine articles, and other reliable records.

Primus tracks, compiles, and analyzes this information so that companies unfamiliar with the value of the software can readily see the cost savings and improvements that other companies have obtained. Primus believes this compilation of results is the best collection of accurate statistical information in the industry.

Primus has performed full ROI retrospective analyses with deployed customers. In every case, actual measured results proved returns on the Primus investment in excess of 130% per year. That annual percentage rate is the same calculation used by banks and mutual funds to report rates of return. Primus’ return for these companies was 10 times larger than long-term stock market returns.

Case in point: The average problem-handling time at a computer chip manufacturer dropped from 7.9 minutes to 4.8 minutes (39%), and the average talk time at an Internet service provider dropped from 11.1 minutes to 8.4 minutes (24%) per call.

Deflecting 35% of calls to the web
Web deflection is a measure of the percentage of service and support requests resolved through web-based customer self-service (i.e., without employee interaction). With strong web support, customers can help themselves to answers and eliminate the telephone interaction. This simultaneously lightens Level 1 support loads and helps companies manage a growing customer base without a corresponding increase in CSR hiring.

The key to web deflection is publishing all or part of a Primus knowledge base online and giving customers access to the same dependable Primus search features that the CSRs use. Even those who are unfamiliar with Primus software can quickly discover information and solutions for themselves. Many businesses find they can publish their solutions online with little to no additional labor.

Faster access
CSR efficiency increases by an average of 35% because of the faster access that Primus software permits. Several support teams have reported 75% to 100% productivity increases in their first year with Primus software.

‘In just six months, Primus enabled Novell to resolve support incidences 38% faster,’ – Novell, Primus Annual Report, 1999

‘With Primus eSupport, approximately 36% of all customer support cases for 3Com networking are now solved online,’ – Primus/3Com U.S. eService press release, 1999

Case in point: A network equipment manufacturer used Primus eSupport to respond to 17,100 inquiries in four months, saving the company $2,556,000. This company’s cost per call dropped from a $10 minimum expenditure per CSR to $0.50 per web-based, self-service incident.

Reduce incident escalations
An ‘incident escalation’ is the passing of an unresolved customer issue from lower, less expensive levels in the organization to higher, more costly levels in order to resolve it. Reducing incident escalation cuts Level 2 labor costs, often significantly, and frees these experts for deployment to other high-value tasks.

It also shortens the elapsed time of a customer inquiry without sacrificing accuracy, and thereby improves customer satisfaction.

Primus software helps reduce escalations by capturing the collective knowledge of an organization’s CSRs and making that knowledge readily accessible to all. In only a short time, the experience and expertise of Level 2 and Level 1 CSRs are blended into a cohesive solution set accessible by the first CSR who answers the phone. Enabling every CSR to access the group’s knowledge to answer customer questions reduces the need to escalate most questions to the next level. Escalation rates are often measured directly by looking at the frequency with which incidents are referred to higher levels. Escalation improvements are demonstrated when that rate falls after the implementation of Primus software.

Person-to-person support calls
Web deflection with Primus eSupport reduces the number of incidents handled by an average of 35% over two years. Cost savings can be so significant that one company directly attributed a 1.1% increase in annual profits to their improved web-based self-service.

‘Escalation reduction is important because it frees up research and development experts to concentrate on their core work – developing new products. We quickly saw a higher percentage of calls resolved on the first point of contact,’ – Paul Guanzini, New Business Development manager, 3M

Contact center close rates
If a call is resolved at Level 1, it was probably not escalated and didn’t result in a callback. The two measures are related in that a high first-call close rate is a good indicator of a low rate of escalation.

Case in point: A top PC manufacturer found that while its escalation counts dropped from 25% to 10% (60% decrease), its first-call close rate jumped from 74% to 90% (22% increase).

Training new employees
Reducing new-hire training time: on average 45% lower customer service and support organizations hire new employees to keep up with the demand created through the company’s customer growth and employee attrition. The time required to train a new employee to solve customer inquiries has a direct effect on the organization’s bottom line. Getting new employees out of the classroom and on to the phones as soon as possible saves time and money.

Primus software promotes faster training through its natural-language search capabilities. A CSR describes a problem while talking to the customer, and the knowledge base searches for solutions that match the information the CSR has supplied. CSRs are not required to have technical expertise in every area of customer service; instead, the expertise of the whole team is captured within the knowledge base.

CSRs can be trained to use the software in much less time than they could be trained in the technical expertise required to solve the wide array of possible customer problems.

Incident escalations drop, on average, by more than 50% with Primus software, and first-call close rates improve by 20%. Such results are often measurable as soon as three months after implementation, and indications are that these improvements continue to increase through the first year.

‘Since the deployment of [Primus eServer] software, we have reduced support training time by 50%,’ – 3M Help Desk, as reported in Knowledge Management World

Measurable improvements
New-hire employee training improvements are easy to measure: how long does it take to prepare a new employee to solve customer inquiries before putting them into service? Customer studies have shown that most CSRs are up-and-running on the software within a day. Any additional training time is spent on company-specific content.

Case in point: A photocopier and printer manufacturer decreased training time from 45 days to 15 days (66%); a computer chip manufacturing business lowered its training time from nearly four months to only one month (75%).

The softer side of ROI
Satisfied customers, pleased employees, better products. Beyond hard metrics and proven financial numbers, customers repeatedly recount other benefits they’ve gleaned from their improved CRM performance. These are the most sought-after goals, the ones that result in overall customer and employee satisfaction in a dynamic business environment.

Number of days in class
New-hire training time decreases an average of 45% with Primus software, allowing companies to put people into service almost twice as quickly as they could before.

‘The biggest return on the Primus solution comes from improved customer relations,’ – Les Berry, Director of Internet Product Development, RCN

Greater customer satisfaction
Customer satisfaction is crucial to the health of any business. Satisfied customers buy more products and services, and they recommend that others buy too. With Primus software, customers get consistent information and service, up-to-date answers, and opportunities to help themselves through multiple channels.

Case in point: On average, support operations report an 18% increase in their customer satisfaction ratings. At one company, before Primus software was implemented, customers reported their overall expectations were failed by 79% on average. After the Primus implementation, they reported their expectations were exceeded by 28% on average.

Happier employees
The pressures of customer support can lead to rapid turnover. Managers must spend more time recruiting and training new employees, and morale and productivity can suffer for those who remain. With Primus software, CSRs can satisfy customers more quickly and reliably, making the support environment less stressful and more conducive to staff retention.

Case in point: Employee satisfaction increased 43.6% on average with the use of Primus eServer, as reported in employee satisfaction surveys taken before and after the tool was implemented at an enterprise software company.

Valuable feedback
The most successful companies are those that heed customer feedback, and what better source of product improvement ideas than customer support calls? Primus systems can provide invaluable information on the problems customers encounter, what worked and what didn’t, and what they’d like to see next.

Case in point: At the end of each month, the Primus system at 3M tells their laboratory and marketing teams how many customers called, which products were involved, the types of problems they had, and the specific solutions that were offered. They use this information to develop new products and refine existing ones.

Putting Primus in the ring
Having fast access to accurate, reliable answers is vital to the perception of quality customer support. But how fast is fast, and how much expertise does a CSR really have to bring? One Primus customer (a top-tier database software vendor) decided to find out by pitting their own custom CRM solution against Primus eServer.

They started on a Tuesday loading data into the Primus system and trained the CSRs for half a day on Wednesday. Then they tested Primus eServer side by side with their internally-developed system, which the CSRs had been using for years. By Thursday, the CSRs had cut their solution times in half – from an average of 14.2 minutes on the old system to 6.8 minutes with Primus eServer.

Next, the company wanted to see how well the Primus system supported use by non-experts. Their support staff was already divided by area of expertise: specialists in database, applications, and operating systems. The CSRs refused to try their current system outside their area of expertise (knowing from experience how difficult it was), but found surprising results with the Primus system. Even when searching for answers that were outside their expertise, they beat their peers (who were working in their area of expertise on the home system) by finding answers in half the time!

Anyone can do it
It became obvious to this company that Primus software could be used by virtually anyone – including their customers – even if they weren’t fully familiar with the underlying problems, technologies, or resolution methods.

Clear gains with Primus: The elapsed time to find solutions was regularly reduced by 50%, dropping from 7.2 minutes to 3.2 minutes per incident. These results came after only a half-day of training and about one day of practice with Primus software.

Calculate your own ROI potential
Customers around the world find that Primus software regularly delivers reduced costs and improved customer service. To find out more about how your company can benefit, Primus invites you to explore these options: Run your own numbers with the Primus Cost/Benefit Calculator. Visit http://www.primus.com/ Products/demo.asp for a simplified version of the calculations Primus uses for its in-depth ROI assessments. You’ll walk away with an estimate of the savings you could expect, based on your own numbers and general goals.

Request a custom ROI analysis
For select companies, Primus will model all factors that are affected by Primus software (e.g., labor costs, call volumes, escalation patterns, training, telephone, dispatch costs), and compare them to existing systems, budgets, estimates, and work flows. This comprehensive analysis projects ROI, payback schedules, and net present value over three years.

Read all about it
• Novell results as described in the 1999 Primus Annual Report.
• CIO Magazine, ‘What’s Your Problem?’ by John Edwards, September 1, 2000, summarizes the results achieved by 3M through its use of Primus software.
• Primus press release, November 1999, summarizes 3Com’s success using Primus software to serve 500,000 users.
• Integrated Solutions Magazine, ‘Building a Bigger Customer Base,’ by Douglas Weldon Campbell, July 2000. RCN chose Primus software as part of its CRM solution.
• Knowledge Management World ‘3M slashes training time, increases productivity with knowledge base,’ February 999 describes 3M’s implementation and use of Primus software.
• IT Support News‘Novell Loss is Sento’s Gain,’ by Lynn Novak, describes Novell’s web-based customer self-service offering, which is powered by Primus software.

www.primus.com

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