Why should firms add a proactive element to their service strategy - and which brands are doing it well?
Whilst proactive customer service is not a new concept, it surprises me that the majority of companies are still only organised to deliver customer service reactively.
Research suggests that one of the primary reasons is that most businesses are organised, run and measured in a way that works against the sort of collaboration and cross-functional working that a proactive customer service strategy would require.
Reactive customer service is both expensive and un-engaging and firms would do well to look at what that type of approach is actually costing them in terms of extra resources and costs versus a more proactive approach which offers cost saving and customer engagement opportunities.
Here’s a few reasons why firms should consider adding a proactive element to their customer service strategy:
1. There is a clear opportunity to reduce costs. Research by Sabio and the Customer Contact Association found that between 25% and 40% of all calls to UK contact centres are either unnecessary or avoidable. According to the research, the most common causes of these calls included: customers chasing information about deliveries or updates on what was due to happen next in the purchase cycle; customers calling to clarify issues regarding pricing or terms and conditions; and customers having to re-call the contact centre again as the contact centre had failed to address their problem first time around. This research is supported by work conducted by the CEB who found that that 57% of all inbound calls to a contact centre could largely be attributed to a customer not being able to find what they were looking for on a company’s website.
2. Customers want to be contacted proactively. A survey by inContact found that 87% of customers surveyed said they wanted to be contacted proactively by a company, when it came to customer service issues. Also, nearly three quarters (73%) of those who had been contacted proactively and had a positive experience said that it led to a positive change in their perception of the business that contacted them.
3. A proactive customer service strategy delivers cost savings and boosts retention. Further research by Enkata put all of this together and showed that an effective proactive customer service strategy can:
- Reduce inbound customer service call volumes by between 20-30% over a 12 month period;
- Lower call centre operating costs by as much as 25%; and
- Has a positive effect on customer retention, boosting it by 3–5%.
These data points clearly outline the opportunity that is in front of many companies.
In addition, in an interview Matt Lautz, President and CIO of CorvisaCloud, a provider of call centre software, went further and said that he believed that proactive customer service would “pay back in terms of relationship building ten-fold”.
Insight in action
Analysis of leading companies show that they realise that relying just on reactive customer service is no longer sufficient in order to compete, differentiate and drive their businesses forward. Increasingly they are now implementing proactive customer service strategies which is allowing them to lower costs, drive additional revenue, improve satisfaction and NPS scores, increase customer engagement and, also, boost customer loyalty and retention.
Identifying where opportunities to be proactive lie, Kate Leggett of Forrester in a blog post on trends in customer service in 2015 suggested that: “In 2015, we expect organizations to explore proactive engagement ……delivered at the right time in a customer’s pre-purchase journey to help answer customer questions.”
We are starting to see signs of that but I don’t think Kate and Forrester go far enough and there are opportunities to deliver value to the business and the customer not just in the pre-purchase phase of the customer journey but across the whole customer life-cycle (pre-purchase, purchase and post-purchase).
Here are some examples from firms that are leading the way and implementing their own proactive strategies at different stages of the customer lifecycle:
1. Pre-Purchase: Proactive service can begin before a prospect is a customer.
- US truck rental firm, Budget Truck Rental, has added an intelligent virtual agent from Intelliresponse to its web self-service tool to provide instant answers to questions from prospective customers. Following implementation, they have been reduce inbound call centre calls by 28% and achieve $875,000 of cost savings and online revenue gains in the first 7 months of operation.
- Similarly, using the same technology and approach, Copa Airlines has reduced its call and chat volume by 40%, which has freed up their live agents’ time to focus on helping customers that have urgent and more complex enquiries.
2. Purchase: Proactive service improves the customer experience of existing customers.
- AT&T is using SmartVideo technology from SundaySky to minimise ‘bill shock’, for their new and returning customers. ‘Bill shock’ occurs when the customer is shocked when they receive their first bill and they do not understand all the different elements of the bill. This results in a significant number of inbound calls. Now, each new and returning customer receives, along with their bill, a link to a personalised video that explains all of the different elements of their specific bill. Implementing this strategy has allowed AT&T to significantly reduce its inbound calls as a result of ‘bill shock’, drive an increase in valuable services, like paperless billing and increase their NPS scores.
- Debenhams, a UK retailer, is taking a different approach and uses comprehensive buying guides on its website to dramatically reduce the rate of returns and exchanges that they receive which saves them costs, frees up resources and improves overall customer satisfaction.
3. Post-Purchase: Proactive service maintains and improves the ongoing relationship.
- Virgin Media in the UK has around 2,500 engineers providing free-of-charge servicing for their broadband customers. However, through the operation of their business, they know that on average 10% of all their service appointments fail, largely because their customers forget about the appointments. This has huge utilisation and cost implications for Virgin Media. Therefore, in the run-up to appointments they have started to proactively communicate with their customers across various channels, using technology from Contact Engine, to make sure that customers don’t forget about the appointment. This is driving a dramatic reduction in the 10% of failed appointments, saving Virgin Media millions of pounds per year in utilisation and engineer costs and, at the same time, is driving increased customer satisfaction and higher NPS scores.
- Anglian Water, one of the UK’s largest water companies, is also using technology to proactively notify their customers, this time from Aspect, regarding water outages relevant to their location. This has allowed them to save hundreds of thousands of pounds in call centre costs every year and has improved their overall customer experience, which is supported by the positive feedback they receive.
How to use proactive service
So, whilst it is true that proactive customer service is not a new strategy given the clear business case and examples of success that many companies are having it pains me that more companies do not pursue it as a viable strategy given the cost, customer engagement and satisfaction benefits.
However, looking more closely the main barrier to its implementation seems to be that this type of strategy requires cross-functional collaboration and cooperation.
To overcome these barriers and push forward with the development and implementation of this type of strategy, leaders should:
- Investigate: Use data tools to identify the most frequently occurring customer questions and problems across the customer life-cycle as well as the area with the biggest number of problems.
- Design: Work collaboratively, leveraging technology, to develop effective solutions to identified problems. Given that customer problems exist across the different stages of the customer life-cycle this will require a collaborative approach across organisational functions to ensure the design and delivery of a successful strategy.
- Plan and Pilot: Aim for quick wins to generate momentum and organisational support. Most organisations are still reactive when it comes to the delivery of their customer service. Therefore, in introducing a new proactive approach it is essential that any strategy focuses initially on piloting one or two new solutions to commonly occurring and costly customer issues. These pilots allow the business to test hypotheses, learn, quickly deliver benefits and help build support for future initiatives. In the UK banking sector, first direct, is a leading proponent of this approach and uses its ‘Lab’ initiative as a vehicle that allows it to test new service ideas and concepts.
- Measure and Adjust: Pilots will allow the business to learn and adjust for maximum return. Starting the implementation of a proactive customer service strategy with pilot projects will ensure that organisations minimise risk and resource requirements and take a learning and agile approach thus allowing them to learn and adjust new initiatives so that they deliver the maximum returns. The Brazilian telecoms company, Vivo, benefited from taking a pilot-based approach108 when launching a new mobile bill payment service and through its pilot gained valuable insights into obstacles to adoption and scaling their new service.
- Scale: Once proven pilots should be released, adapted and implemented across the organisation. Taking an agile and collaborative approach to the development and implementation of a proactive customer service strategy will allow the organisation to minimise risk and start on the road to achieving the significant benefits associated with proactive customer service.
The aim of these five steps is to build trust and engagement both internally (across functions and departments) and externally (with customers) so that both the organisation and the customer benefits.
I hope that more and more companies take up the challenge and look forward to seeing more and more examples of valuable and innovative proactive customer service.
This article is an abridged extract from Adrian Swinscoe's book How to Wow: 68 Effortless Ways to Make Every Customer Experience Amazing. Full of practical tips, inspiring insights and interviews with a wide range of leaders and entrepreneurs, the book shares 68 strategies that will show you how to stand out from your competitors, whatever your business.