The corporate world is at full stretch. On the one hand, companies must meet ever-growing expectations with regard to customer experience. While on the other hand, there’s a need for economic efficiency. The ultimate challenge for the customer service of the future consists in offering improved customer service at a lower cost.
In the years to come, every company will question its customer processes. Any sensible company will strive to create the ideal combination between efficiency and the perfect customer experience. Players who are only active online, such as Amazon.com and Booking.com, boast a highly efficient customer process. Even though their customers rarely come into contact with actual people they still provide a very satisfactory customer experience. Traditional companies have a history of a personal service burdened with a heavy cost structure.
To avoid overstretching, traditional companies must invest in digitisation and in forging a personal (emotional) connection with the customer. Technology is opening up new possibilities in this regard but customers also like personal contact. This combination is shaping the future of customer service: a shift to self-service while still keeping things personal. Also, the service package is expanded by involving the customers themselves in the process. The customer-helps-customer philosophy (crowd service) enables companies to be more efficient and improve their service without losing sight of the human aspect. 55% of consumers like the idea of other consumers helping them and 58% are prepared to help others. The customer is ready for crowd service.
I recently wrote a paper based on my own research (in collaboration with SSI and translation partner No Problem!), desk research and discussions with companies, taking a closer look at new trends and evolutions in the field of customer service.
Download the full paper here:
Trends that will influence the future of customer service
Our society is evolving at breakneck speed and the mass consumer market is being flooded with new technologies. This changes consumer behaviour and creates fresh opportunities for companies. At the moment, there are four trends with a major impact on customer service. These four trends emphasise the urgency for companies to place their own customer service under the microscope.
- Mobile: Since Q2 2013, American adults have been spending more time on their mobile phones than watching TV. Since mid-2013, more than 1.5 billion smartphones are in use worldwide. The future is mobile. Consumers can contact companies with their questions anywhere in the world, round the clock. The next few years will see a continued expansion of mobile applications such as Google Glass, Apple iWatch, etc. Consumers will no longer automatically run to their telephones or computers in case of problems or questions. Instead, their initial reflex will be to grab their mobile. Also, they will expect the problem to be solved instantly. The future of customer service is mobile.
- Unrealistic customer expectations: customers find every aspect of customer service important. They want speed, amiability, a solution in a single interaction, the integration of different service channels … For the average company, meeting customer expectations has become an all but impossible proposition. Besides, the traditional approach is too expensive to be able to meet expectations. The only way of doing so is through self-service. Self-service is fast, always available and solves the problem in a single interaction. Seventy percent of customers expect a self-service solution. In the late nineties, customers hated completing bank transfers via the computer; not offering this option today is a competitive disadvantage. The future of customer service is self-service.
- The crowd economy: consumers do business with each other more and more often. According to The Economist, the crowd economy or sharing economy as it is also known, currently represents a $ 26 billion industry. MIT expects significant market growth: in the near future, this economy may be worth as much as 110 billion dollars. A study by Jeremiah Owyang shows that consumers would rather do business with companies from the crowd economy than with the traditional players in the market. For instance, customer satisfaction with AirBnB is much higher than with classic hotel chains like Hilton. This trend is a great customer service opportunity. People like working together and consumers like to help each other. The future of customer service is a future of working with the customer.
- Cut-throat competition: the economic crisis and digitisation have made for much fiercer competition. The average stay in the Fortune 500 has dwindled from 65 years (1920-1950) to just fifteen (2000-2013). In our fast-evolving world, the names of the top players change more rapidly than before. As a matter of fact, many companies find themselves competing with a “free” rival. For instance, every newspaper is damaged by free online content. There are two models for dealing with this situation: in the first model, customer centricity is fully automated, thereby minimising the amount of human contact. In turn, this alleviates the pressure on margins but the chances of building an emotional rapport with the customer are small. The second model promotes the combination of digitisation with a human touch. A pure online player like Coolblue is able to give its company a human face by having employees feature in YouTube videos. Their offline shops also add another human dimension. People enjoy human contact, even in an increasingly digitized society. The second model also increases the likelihood of an emotional bond, which inspires greater customer loyalty. The future of customer service is digitisation but with a human touch.
Customer service shifts its focus
The focus in customer service will evolve in the years to come. For every company out there, it is important to take the lead in this evolution. Its goal: more satisfied customers at a lower cost. A study by McKinsey has revealed a key difference in efficiency between personal service, self-service and crowd service. If the cost of personal service is 100% then the cost of self-service amounts to 12% and crowd service to 9%, so there’s a huge discrepancy there.
Advantages of self-service and crowd service
Apart from efficiency, self-service and crowd service have additional advantages to offer:
Additional advantages of self-service:
- Available 24/7 and year-round: the customer has access to customer service on a permanent basis.
- Self-service solutions for mobile devices are easy to design.
- As self-service is digital, it is easier for companies to keep records of the interactions than with offline contact.
Additional advantages of crowd service:
- Crowd service makes it possible to offer a broader range of services. When consumers ask questions about the product category, it is often too expensive for organizations to answer those questions themselves. When the input on non-core questions comes from other consumers, the cost is very limited.
- Consumers taking part in a crowd service program feel like they are part of the company. They often become brand ambassadors and this creates an indirect marketing effect.
- Crowd service is a type of personal service. Customers communicate with others (other customers). In other words, this is personal interaction, which builds more of an emotional bond.
Future developments in the field of personal, self and crowd service
The relationship between the different service types will undergo some changes in the years to come. Consumers expect more self-service and are receptive to crowd service. Moreover, both approaches are more efficient than personal service. This means that a shift from personal service to self and crowd service will result in better service at a lower cost.
In the first few years, self-service will gain importance before crowd service does. Many companies have already invested in self-service (e.g. the financial world, travel sector…). For now, investments in crowd service are more modest.
In a second phase, though, crowd service will catch up. The crowd economy will keep growing and this will make the transition to crowd service easier than it is right now.
Of course, personal service won’t disappear altogether but its importance will diminish over time. Personal service will continue to act as a kind of safety net. The need for a personalized solution will continue to exist in those cases where self or crowd service fail to provide the answer. Companies like booking.com, a pure online player, are already focusing on self-service (consumer takes care of bookings and modifications) and crowd service (questions about hotels are answered by other consumers). Nevertheless the company still has a large call center to assist customers personally if self and crowd service are not enough.
The table below gives an indication as to how the focus in customer service may shift in the coming years.
Two key words: integration and mobile
Customer expectations are sky high. The challenge lies in offering an improved customer experience in a cost-efficient way. The evolution from personal to self and crowd service is the way to go. Two ingredients are crucial to the success of this evolution:
- Data integration
Even though the focus in customer service is shifting from personal to digital service, the personal channel still exists. Customer service is becoming more of a multichannel affair than before. Data centralization is a priority in the elaboration of the channel strategy. Consumers expect companies to centralize and keep track of all their interactions. Customers don’t like to repeat themselves. Organizing the new service channels in the manner of silos is far from ideal.
- The conversion to mobile
Mobile customer service is essential in a mobile world. By 2016, more than half of all customer service questions will be submitted via a mobile device. Organisations would do well to mold their self-service solutions entirely on mobile.
Three strong self-service cases
More and more companies are investing in self-service. The pure online players have done an excellent job of elaborating and fine-tuning the concept. They came up with the idea out of necessity: when they started out, these companies were simply too small to install a personalised customer service. An efficient self-service channel was their only option to develop a good customer relationship. Banks were also among the early adopters of the idea. Online banking was one of the main activities of the early internet surfers. Banks introduced this application purely from an efficiency point of view. Today, customers expect them to provide this service.
Companies from various sectors experiment with or make a living from self-service. The three examples below couldn’t be further apart: an offline retailer, a pure online player and a financial giant. Still, all three have integrated self-service into their customer service strategy.
Anytime Fitness is the world’s fastest-growing fitness chain. In a saturated market, this company still manages to make a difference. They’re open round the clock. An electronic security system provides 24hr access. The company obviously has personal trainers on staff but there is also a self-service solution. Customers can take video lessons 24 hours a day. The personal trainers have recorded instruction videos of a broad range of training sessions. Apart from the self-service option (in an offline retail channel), Anytime Fitness also has a site with nutritional and training advice for the individual customer. This enables customers to continue their health plans at home thanks to their fitness club. This self-service application is free for members but is also available for non-members in return for a monthly fee.
Booking.com is a daughter of Priceline.com, which has ranked among the world’s fastest-growing companies for a number of years now. The company masters the art of offering an excellent self-service with a personal safety net to fall back on if necessary. The entire purchase process is automated and this also goes for the changing of bookings. In case of unexpected changes, Booking.com staff will sometimes call customers. In many cases these are proactive outbound calls to inform customers of changes made to a booking. Incidentally, the self-service process works perfectly on mobile devices. Mobile bookings went from 1 billion in 2012 to 3 billion in 2013. Data integration is obviously available. The different channels are interconnected so the complete customer history stays available
Rabobank: new mortgage system
Rabobank Nederland invests in self-service. As a financial player Rabobank already has lots of experience in this subject area, but in the coming years they want to take it one step further with their new digital mortgage system. Customers who wish to take out a mortgage can now compile their own customer file. Five years ago, no bank could envision customers ever using online banking for anything other than basic transactions. Today, a large percentage of customers are apparently receptive to this self-service approach. Without going into detail, Rabobank was surprised at how many of its customers prefer this approach. The digital service comes with a personal backup system: they can ask an employee of a local branch for assistance.
Three strong crowd service cases
Crowdsourcing and consumer collaboration are marketing buzzwords but the whole system is still in its infancy. Most co-creation experiments are really PR campaigns rather than examples of actual consumer involvement. At the university of customer collaboration, the corporate world is just a freshman.
Outsourcing (part of) your customer service to customers is obviously a drastic evolution. By taking this step, you’re really implying that customers have at least the same amount of product knowledge as the manufacturer.
The IT world was the first to make tentative strides in crowd service with organically constructed forums where ICT enthusiasts lend each other a helping hand. Today, the technological sector is still the most fertile ground for crowd service.
Giffgaff customer support
Giffgaff is a ‘SIM card only’ telecom player in the UK. The customer service is entirely in the hands of their community members. All members are customers. The more active their support for other customers, the bigger the rewards. There is no safety net and Giffgaff has no call centre. In other words, the entire customer service consists of crowd service. In 2010, no fewer than 130,000 queries were posted on their forum and these questions elicited more than 1 million replies. 95% of all questions were answered within the hour. The average response time is three minutes.
Telecom player Verizon uses a customer-helps-customer forum in support of their other service channels. The ratio on their forum is 1-9-90. One percent of their users are so-called super users. They spend between 20 to 30 hours a week on the forum helping others. These super users are not rewarded financially; instead they are rewarded with a digital status. They earn recognition instead of money. 9%of users frequently answer questions by other users. They don’t spend that much time on the forum but they do answer the questions they have personal experience with. 90% of the community members are readers. They are just trying to find the answer to their queries. Crowd service only works when the super users are actively involved in a community. The presence of that one percent attracts the 90% of readers, which sparks the efficiency surge that companies are counting on.
Barclay Card is a credit card built around a strong user community. On the one hand, Barclay’s online community helps the company brainstorm about the future of the product while on the other it acts as a crowd service platform. Customers discuss various financial topics and help each other with small operational questions about the credit card. The results are astounding. Customer retention is up 25%. The number of questions and complaints via traditional customer service channels dropped by 50%. Barclay Card puts the total return at 10 million dollars.
Steven Van Belleghem is one of Europe's thought leaders in the fields of social media, conversations and digital marketing. Steven is Professor at Vlerick Business School, an author and he runs his own inspiration and coaching company, B-Conversational. He has worked with some of Europe's leading brands [Philips, ABInBev, Landrover] to help them develop a human "face" and evolve into true Conversation Companies, where all communication reflects the DNA of the organisation.