Why customer service demands a multichannel strategyby
When it comes to multichannel service provision, it is commonly assumed that a telephone call answered by a live agent will always be the customer’s preferred means of contact and that a service by any other channel is compromising service quality for cost savings. Not only is this false, says Helen Murray, but by failing to embrace multichannel service provision, companies risk alienating their customers.
By Helen Murray, Verint Consulting
There’s an increasing body of research which suggests that ‘good service’ has a greater impact on customer loyalty than a superior product or a competitive price; that customers are most likely to be influenced – for good or ill – by the direct, personal interactions they have with the organisations that serve them than by the marketing efforts designed to seduce them. For an increasing number of organisations customer service is a vital differentiator on which their commercial success depends; a key element of their business strategy, which they would compromise at their peril.
But the big news is this; there’s further evidence to suggest that today’s customers consider channel choice to be a vital component of a good service strategy. They relish and expect to have choices about how and when they make contact and will make those choices according to a number of criteria, including location, time of day plus the type and urgency of the help they need.
Helen Murray, Verint Consulting
If you’re in your office looking for the time of the next train to Doncaster you’ll likely go to the National Rail Enquiries website to find it. If you’re in the back of a taxi on your way to the station, you’ll probably call
their speech automated TrainTracker service on your mobile phone. If you’re planning a complicated railtour holiday, with several changes and overnight stops, you might prefer to talk through your options with a contact centre agent. All three are valid options, ideal for different times and tasks, and National Rail Enquiries’ customer service offering would be weakened if any of them were absent.
Today’s customers judge the quality of an organisation’s customer service on the basis of availability, choice and the speed at which they can get their issue resolved or transaction completed. According to a recent report by Genesys, they are “comfortable with and impressed by” multichannel access options. They simply want the best route to a solution, on their terms.
First Direct has become one of the most admired service companies in the UK and wins one in three of its new customers through word of mouth recommendation. If the soothsayers are right, and multichannel is an inevitable service compromise, First Direct’s success, appears to be counterintuitive - 75% of all its customer contact and 40% of all its sales are made via electronic channels.
First Direct’s success as a customer service provider is mirrored by its commercial success. Rates of customer acquisition have increased 21% year on year for the last three years.
When to talk
It’s clear that First Direct’s service strategy is making good sense both for its customers and its bottom line business performance. There’s no question that the traditional contact centre agent is an expensive service option to retain. The average cost of handling a telephone enquiry is around £6.50, while an email costs only £3 and a typical cost-per-interaction via an automate self service channel is around £1 or less. By making alternative channels available and encouraging customers to use them First Direct is not only improving customer access, but massively reducing its operating costs.
- Every 2.5 seconds someone phones First Direct
- Every second someone logs on to First Direct internet banking
- Every 5 seconds a First Direct customer recommends them to someone else
The challenge for today’s organisations, then, is complicated but compelling. First, they must understand
their customers’ expectations for service availability and performance. They must also evaluate the cost of each channel deployment in light of the opportunity for business value that can be derived from the interactions it will carry. If this is to be achieved, the data analyst’s arts of customer intelligence and market segmentation must be leveraged beyond the isolated domain of the marketing department and applied to the operation itself.
Given that virtually any transaction is cheaper to complete via an electronic rather than a human channel, it makes obvious sense to encourage as many straightforward, low value transactions onto electronic channels as possible, reserving expensive contact centre agent resource to deal with highly complex interactions or those where the ability for human interjection – to cross sell a new product or service, for example, or to actively combat a possible defection – is highest.
Virgin Money recently reviewed the way it dealt with clients requesting significant cash withdrawals or account closures to understand and prevent the reasons for customer churn and take action to prevent it. In doing so, Virgin Money maintained significant funds under management that they considered to be ‘at risk’. In a six month period the company was able to retain business in 10% of cases where clients had requested withdrawals. This would, clearly, not have been possible if the withdrawal procedure was fully automated and there was no opportunity for the agent to intervene or influence the customer’s decision.
In every organisation there are calls of this type; where the maintenance of human contact is highly desirable and its loss would place business at risk. The trick is to identify them and plan accordingly.
The 24 hour society
In today’s ‘24 hour society’ consumers fully expect to be able to check their bank balance at midnight, buy books and clothes in the small hours and to register a complaint at whatever time of day their rage is greatest. Organisations would be wise to take this non-stop expectation as the starting point for their service strategy. While 24 hour service is likely to be economically unachievable using agents, it is easily achieved using the web or the increasingly sophisticated automated channels – both touch-tone IVR and speech automation – that have now proven their validity in numerous mass market implementations.
- Interaction complexity is significant, e.g. within bespoke banking or medical environments
- Emotional content is high – e.g. life insurance claims
- When the service includes a consultative aspect – e.g. luxury holiday planning
- Where personal service is a key brand differentiator within premium propositions
Automated self-service also wins in the customer satisfaction stakes by negating that most hated call centre phenomenon: the queue. Automated telephone services give direct access to help even during the most dramatic call peaks. Hardly surprising, then, that recent research has revealed that 62% of companies using speech automation have seen an increase in customer satisfaction as a result.
There’s a strikingly powerful example of this in the utilities industry. Northern Ireland Electricity is one of a
small number of power companies using automated speech services to handle the enormous and unpredictable call peaks that occur during power cuts. At a time when normal contact centre resources can expect to be swamped, they’re able to manage every call without delay and provide detailed service restoration information for each caller’s actual location, determined by their telephone number. The
attention of their contact centre agents, meanwhile, is focused on caring for those customers whose special needs – health or otherwise – make them particularly dependent upon electricity supply.
The ingenuity underpinning this service won a nomination in the ‘Best Use of Technology’ category of the 2006 European Call Centre Awards for Northern Ireland Electricity and its providers, Eckoh and Twenty First Century Communications.
Make it consistent
It seems certain, then, that a multichannel strategy is a pre-requisite for customer service success in today’s society. Furthermore, it is evidently possible to encourage customers to use particular channels for particular objectives, according to their needs and those of the business. The remaining challenge is to deploy channels with a degree of interconnectedness that will guarantee a consistent experience for the customer and high levels of business opportunity for the organisation.
Customers will be slow to forgive any provider that’s unable to make connections between the interactions they make on line, via the contact centre, by email or even by old fashioned snail mail. This means, of course, that information from every customer interaction must be centrally captured and made available to every channel. Email confirmation of web-based customer orders or prompt postal fulfilment of an online brochure request are obvious examples of functionally joined up behaviour. However, the
point at which interconnectedness is hardest to achieve – and most painful when absent – is at the contact centre coalface. If and when a customer speaks to an agent, that agent needs to be forearmed with information about recent interactions that customer has had via any channel.
behaviour – the behaviour of the organisation at each point at which the consumer
Susan Baker, co-director of new marketing research, Cranfield University
This calls for a level of synchronicity between technology applications and marketing skill that few companies have yet achieved. The ability to gather information in customer databases is the starting point and depends purely upon the application of the right IT systems. The ability to organise it efficiently and access it intelligently in ways that enable relevant service to be offered and cross sell opportunities grasped calls for significant marketing input and skills. Credit card giant Capital One and Amazon.com score highly in this regard.
Both have discovered an ability to collate customer information and make it universally accessible across their organisations so that the service experience is seamless across channels. But, vitally important from a commercial point of view, they’ve developed the means to interrogate that customer information intelligently and use it to develop individually targeted sales propositions which can be delivered direct to the customer over a range of channels.
When, for example, a customer calls to check their credit balance, or conduct some other routine transaction, Capital One’s systems get to work. First they identify the caller and make the relevant customer information available to the person who’ll take the call. More importantly though, it uses sophisticated data analysis systems to interrogate the exhaustive information held about the whole customer base and uses that to predict the products or services that this particular customer with their particular track record and profile might be likely to buy.
The agent is then prompted to make a cross sell offer with the confidence that the chances of success are high. The same sales opportunity, based on the same analytics, may, of course, be used in direct marketing across any channel, perhaps most powerfully, email or web. In this regard Amazon excels. Its websites use collaborative filtering techniques to guide customers towards items they might enjoy, based on the buying patterns of the entire customer base.
Balancing the brand
But consistency isn’t all about information. It’s about the brand and the way it’s presented in the multichannel environment. We’ve already indicated that high customer experience quality is a valuable source of differentiation which companies – particularly those in commoditised and highly price competitive markets - are keen to exploit. The customer experience is most impactful when it reflects rather than contradicts the organisation’s brand values; a logical conclusion if one accepts that the brand is the point at which an organisations sense of itself and its competitive difference is most clearly defined.
That means not only that ‘look and feel’ must be consistent across visual channels – printed materials, written communication and web – but that the language and stylistic approach used must be the same across all verbal (live agent or automated) and non-verbal channels. If marketers, rather than customer service managers, are custodians of the brand, their involvement in planning and delivery is a prerequisite for success.
Brand values can be translated into conversational behaviours which can be implemented in the contact centre. The same linguistic styles and approaches can also be used in automated speech services and in written communication. As part of its 2003 rebrand, for example, Abbey revised the content and linguistic style of all of its customer letters. The resulting communications were
more concise, clear and tonally upbeat.
Finally, the relative monetary value of each channel is fairly easy to monitor on the basis of cost per transaction; lower, as stated earlier in this feature, in all electronic channels than in the live agent contact centre environment.
The rewards will be greatest if the introduction of cheaper service channels sees calls to the contact centre decrease. When a new channel is introduced, the first and most obvious success measure is adoption – do customers use it and do they come back for more. Calls to TrainTracker, Eckoh’s automated speech service for National Rail Enquiries, cited earlier in this feature, rose to over 225,000 calls per month early in its implementation, with 30% of callers rapidly becoming repeat users.
Measuring long-term success is more challenging but, ultimately, more rewarding. You will judge your channel strategy successful if, in its whole and its component parts, it delivers a long-term increase in customer transactions and a boost in loyalty as service costs decrease. Alternative channels have a contribution to make on both sides of the financial scale; reducing cost to serve and improving revenue performance.
If the real challenge facing customer service strategists today is how to simultaneously maximise customer value and minimise cost to serve, then the judicious use of alternative channels presents the most potent source of potential. As customers demand more options and access it’s a potential they can’t afford to ignore.
Helen Murray, is director of consulting at Verint Consulting.