Improving customer service with technology: Imperative or paradox?

6th Apr 2010

Research from the Chartered Institute of Marketing emphasises that while technology is a key way to achieve profitable growth, it is only valuable if it's used in ways that the customer wants. CIM's Mark Stuart explores the use of technology to improve customer service.

It might seem paradoxical to consider technology as a basis for improving customer service. Service is personal; technology is depersonalised. Ask anyone on the street what they dislike most about the service they receive from companies, and the answers are all to do with technology: "I can't get to speak to anyone when I call"; "I get sent through a series of automated options"; "I have to listen to Greensleeves interminably, and even that gets interrupted every few seconds by a robot telling me how important my call is."

Yet the very technologies that cause this customer frustration can be used, with a little more imagination, to vastly improve current levels of customer service. Increasingly, the kind of jobs that used to require human input, can be run electronically. Algorithms can decide whether to grant a mortgage, or how much your car insurance should be. Automated processes mean that you can book every stage of a holiday - the car park, the flights, the hotel, the transfers and your itinerary when you're there - without ever needing to speak to another human being.

Twenty years ago, that would have seemed like science fiction. Companies have saved a lot of staff time by being able to automate so much. So why, when you do need to ring your bank or your airline, do you need to join a queuing system? The answer is that companies see this as the place to make savings. If there's a telephone operator who doesn't have a queue of five customers waiting, there must be too many telephone operators and we can streamline our team.

This, whilst entirely understandable, is a myopic approach. Imagine the differentiation and the positive promotion a brand could experience as a major player in overcrowded, undifferentiated markets if, when you phoned, you got through straight away. You'd get a similar effect if you were through within (say) a minute.

Just because technology enables us to do so much automatically, that shouldn't be seen as a reason to automate everything. Rather, a proportion of the cost savings you make on automation could be re-invested to improve customer service; your staff should be more available, not less.

Differentiator and valuable investment

The theory applies just as well to small companies. The cost of technology platforms continues to come down, meaning that smaller companies can afford them as well as their larger rivals, leading to a considerable levelling of the playing field between small and large. As a result, you can invest in growing the company. Rather than reducing your staff, see customer service as a differentiator and a valuable investment, instead of a cost that can be reduced wherever possible.

Indeed, the latest wave of The Chartered Institute of Marketing's Marketing Trends Survey, conducted by Ipsos MORI, shows that practising marketers view CRM as far and away the best investment in terms of return on investment, with online advertising a close second. This offers two key insights. First is that exploiting technology in the right way is a key way ahead for profitable growth (all advertising bar digital, for example, was seen in the survey to deliver the lowest ROI by far; but digital comes in very high); but second, that technology is only valuable if it's used in ways that the customer wants - ways that appeal to them, encourage buy-in, and turn casual customers into regular ones.

Don't use the technology to make savings that drive customers away. Use it to free your staff up to concentrate on good service. In deciding how best to exploit the technology available, consider it from the point of view of the customer. For example, the technology to modify the look of website landing pages or particular pages to suit the needs and wants of customers, is now possible. Say you're a travel company. What a teenager looks for is going to be very different from a couple with two children, and these are different again from the needs and wants of an older single traveller. Yet whoever you are, when you go to a website you get the same view - the same information, and the same style.

However, when a customer who's used you before comes back, you have data about them from their previous visits - such as their age and some of their interests. This kind of data is beginning to be used for targeted adverts, but imagine how compelling it could be if the landing page you visited highlighted the kinds of thing you're after. It doesn't take long to segment your landing page into six or seven segmented styles, and keep these up-to-date. And a returning customer is much more likely to continue to use you in future rather than a competitor, because you're tailored to their interests.

Companies need to be transparent with their customers about the data they store about them and what they use it for. Behavioural advertising is rightly criticised because people don't realise someone is storing information and using it to target them; they still see the internet as a private space. Communicating clearly to customers what you collect about them and what you use it for, however, transforms a sense of Big Brother into one of desirable personalisation. Use the technology to increase the service, rather than diminish it, and the goal of customer satisfaction becomes that little bit easier to achieve.

Mark Stuart is head of research at The Chartered Institute of Marketing.

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