What Do Customers Do in Response to Poor Service?
1. 40% of those who experience a service problem
a. 20% of the customers do not report them (complain)
i. 10% of the 20% of customers will not repurchase
b. 80% of the customers who do complain
i. 25% of the 80% of customers that may be dissatisfied
1. 40% of the 25% of customers will not repurchase
ii. 35% of the 80% of customers that may be mollified (partially satisfied)
1. 5% of the 35% of customers will not repurchase
iii. 40% of the 80% of customers that may be satisfied
1. 0% of the 40% will not repurchase
Financial Impact of Good Service
1. Excellent CRM performance could improve a company’s return on sales by as much as 64% over merely average performance
2. Ten CRM capabilities accounted for fully half the improvement in return on sales. Of those, five are clearly customer service capabilities:
a. Strategically manage large account customers (#4)
b. Develop effective customer service systems (#6)
c. Proactively identify customer problems and communicate resolution options (#7)
d. Leverage customer information from the service process (#8)
e. Prevent customer problems via customer education (#9)
3. For every billion dollars in sales, accenture estimated the impact on increased profitability as follows:
a. Customer service=$42 million increase
b. Sales and account management=$35 million increase
c. Marketing =$34 million increase.
What do Consumers Want? What do Businesses Do?
1. Consumers want:
a. Timely response to inquiries (45%)
b. Informative content (22%)
c. Communication with a real person (17%)
d. Product displayed clearly and prominently (14%)
e. 24 hour availability (14%)
2. One study of Business response:
a. Only 15% of companies sent any form of acknowledgement of the query
b. 39% of the sample did send a response within 24 hours
c. Only 17% of the companies in the sample responded with a complete and accurate answer
d. 6% of the sample did not even offer e-mail contact
The Evolution of Customer Service Strategy
1. The way customer service is delivered has the potential to improve service without increasing the cost of providing it
a. it involves moving away from total reliance on telephone call centers for live customer service to customer service provided on the internet, either with or without human intervention (reactive)
b. To provide service proactively, before the customer even asks, perhaps before the customer is aware of needing it.
i. Also called “anticipatory” or “preemptive” customer service.
ii. Aim is to prevent problems, not just resolve them
2. Customer Service Channels
a. Telephone—usually represented by formal telephone call centers. Call center workers are generally not well paid, and many would argue that they are often are not well trained. Calls that cannot be handled satisfactorily by the front-line rep are referred to a supervisor who is better trained and consequently more expensive, which is referred to in the industry as escalation.
b. Web-Based Customer Service (available at all times)
i. Live Person assistance
1. Includes e-mail, instant messaging, and chat
ii. Automated—customer self-service
1. Ubiquitous FAQs (first level)
2. Searchable knowledge bases
3. Flash or video demonstration
3. Cost of Customer Service by Channel
a. Telephone with a live person = $9.50
b. E-mail handled by live person=$5.00
c. Live chat, one rep handles several customers at once = $5.00
d. E-mail with automated support = $2.50
e. Interactive voice response (IVR) with no human = $1.10
f. Web inquiry = $0.50
g. Automated e-mail = $0.25
4. Most customers have not yet turned to the web for service
a. 77% of customer interactions still occurred through telephone call
b. IVR only handled 13%
c. Online self service and e-mail handled 4% of total service requests
d. 2% were handled by web chat
Strategic Imperative
· to migrate customers towards lower-cost service channels without decreasing satisfaction
Satisfaction With Self Service
1. Customers prefer self service when
a. Consumers experience a sudden need, such as an ATM machine when need cash
b. When self service performed better than alternatives. Easy to use, save time or money, etc.
c. When it simply did its job (fulfilled their needs)
2. Customers dislike self service when
a. Technology fails
b. When the process itself doesn’t work, such as credit card application online
c. When the self service technology or process is poorly designed
d. When the customer is responsible for the failure, such as the customer cannot figure out technology
Customer Service Themes
· Excellent customer service cannot be delivered by a single department acting in isolation from the rest of the organization
· Providing superior customer service is a long-term commitment
· Build a culture of customer service using quality management principles
· “What gets measured gets managed”
· Technology offers many opportunities to improve customer service
· Technology also makes it possible to offer customers multiple channels
· Customers want the option of human agent
· Improve the overall customer experience
Strategic Customer Care
· Stage I
o Companies focus on customer acquisition and learning about their customer base
· Stages II and III represent customer relationship management strategies of ever-increaing intensity
· Stage II
o Companies place emphasis on segmenting the customer base and learning to serve each segment more effectively
· Stage III
o Companies are able to use technology to offer consistent customer care at all times and all customer touchpoints
1. Customer Care Technologies
a. Telephone-Related
i. Interactive Voice Respone (IVR)—menu of choices when we dial to most large organizations
ii. Intelligent call routing—software that can recognize incoming numbers and route calls to the most appropriate representative based on user-supplied rules. When well executed, they are invisible
iii. Call recording—allows supervisors to review calls with reps at a later time as training activities
iv. Help Desk/problem tracking software—staffed by trained people and are supported by software that can manage incoming requests and queue them, send automatic acknowledgements, maintain a knowledge management database that holds technical information and results of past requests, and provide a variety of management reports.
b. Internet-Related
i. E-mail Response Management system (ERMS)—software that helps organizations manage large numbers of e-mail messages coming into generic addresses . Contains filters that can route mail to reps based on keywords in the content
ii. Embedded service modules—fixes itself, either by code built in to the embed itself or by intervention from a remote operator, such as an elevator summoning a technician
iii. Wireless applications—as wireless devices become more widely available, more customer service applications will migrate to the wireless environment
iv. Push and Polite Push—push is sending content to recipient without them asking for it. Polite push takes advantage of unused network time to load without interfering with the application the user has accessed.
v. Streaming media—as downloads take much too long, streaming video can overcome the slow doownload syndrome, present useful information, and maybe even prevent a service call.
vi. Agent technology—software that automates certain computing functions and then applies preestablished decision rules to give the appearance of exercising judgement on behalf of the user.
vii. Voice activation—expensive, hard to use, and not terribly accurate. Mainly used in disability service applications.
The Dark side of Differentiated Customer Service
· Companies can now know exactly how much business someone generates, what he is likely to buy, and how much it costs to answer the phone, which allows them to deliver a level of service based on each person’s potential to produce profit. Segmented and differentiated customer service can reduce costs, raise revenues by retaining customers, and increase corporate profits.
Building Anticipatory Customer Service
1. Buil Customer Scenarios—using data including call center reports, e-mail logs, chat transcripts, and web site software that reports unusual volumes of activity to prevent problems.
2. Make customer service pervasive—fulfilling common requests before the customer even asks and make service available throughout entire value chain
3. Design process for seamless escalation—guiding customers to the service they need.
a. Sample escalation plan
i. Level 1 – FAQs
ii. Level 2 – Web-based self help
1. E-mail, diagnostic routines, knowledge based
iii. Level 3 – live agent
4. Two more important principles
a. Different levels of customer service (cost of customer service)
b. Based on customer lifetime value