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Companies moving customers off the phones - but failing to cut costs

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22nd Sep 2011
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Companies that look to slash their customer contact costs by forcing customers away from the telephone routinely fail to save money, new research has found.

In contrast those companies that don’t restrict choice to their customers and instead offer a variety of channels are experiencing significant cost savings and enhanced levels of customer satisfaction, research by Ember Services has found.
A qualitative study was conducted among directors of more than 30 leading organisations that have adopted alternative channels. National Rail Enquiries has seen customer enquiries grow by 343% over nine years yet still achieved a fourfold reduction in operating cost by migrating 80 per cent of all contacts to the web.
Another organisation in the study, Surrey County Council, has grown the percentage of enquires handled online from 85% to 94% and reduced its average cost per enquiry by 38% since co-locating its online and contact centre teams.
Ember’s founder and director, Mike Havard, said customers would only embrace alternative channels if they saw benefit for themselves as well as the provider: “None of these companies have abandoned the telephone channel or restricted its availability. Instead they have identified those tasks customers are happy to complete by other means and encouraged them to do so.  Customers are happy to use alternative channels, but expect to do so on their own terms. Companies that restrict customer choice will suffer their disapproval.”
Other examples quoted in the study include HomeDepot, which estimates that it has deflected 15 million potential telephone calls and helped solve 8,500 customer problems via Twitter and Carphone Warehouse, whose YouTube ‘how to’ guides have received more than 6 million hits since their introduction in 2009, averting calls to the contact centre.
The research report warns that customers’ channel preferences are multiple, not singular and will change on a day-to-day basis according to their situation and the task they wish to complete. It urges companies to offer multiple platform choices and make sure they are simultaneously available and linked, so that the customer experience is seamless across all channels.
Instead of forcing customers to use lower-cost channels by restricting their options, companies must analyse the drivers of ‘expensive’ phone-based or in-store interactions and deflect them by offering pro-active information via other channels.  This has the dual benefit of reducing an organisation’s operating costs and boosting its service reputation.
The study also says that customers will often revert to the telephone for complex or emotionally charged enquiries, making it essential for companies to maintain a sustainable body of agents, invest appropriately to develop their skills and provide them with information and insight that will help them serve customers better. 
“The most important lesson to come out of this research is that offering customers true channel choice can provide a reliable route to simultaneous cost reduction and customer value enhancement,” says Mitch Lieberman, market strategy director with Sword Ciboodle. 
The research report ‘Why Multi-Channel Must Mean Multiple Choice’ is available at www.emberservices.com
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