Great Expectations: Self-Service Success Can Happen

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1 Y ANKEE G R O U P Customer-Centric Strategies by Sheryl Kingstone May 2006 Great Expectations: Self-Service Success Can Happen Executive Summary Businesses have grappled with the issue of self-service for many years. Companies have long provided their customers with self-service using ATMs, interactive voice response (IVR) and the web. But times are changing, and customers now demand more options to be self-reliant. Customer service is one of the few differentiators that a company possesses. As a result, well-executed self-service is now a crucial strategic component of the overall customer-centric business strategy. And customers increasingly make it their first choice for primary interaction. To derive maximum value from self-service, companies must optimize the value of their customer interactions and not focus solely on self-service as a cost-saving mechanism. Corporate customers need and want the immediacy that accompanies a self-service framework. This includes the ability to purchase new services, find swift and reliable resolutions to daily operational and long-term strategic issues, and efficiently collaborate with peers. Yet many companies have still not taken full advantage of the power of self-service because they lack the expertise to construct and implement a comprehensive, cohesive self-service model. Certain sectors such as travel have been quick to embrace self-service as a means to offset revenue losses with cost savings. As Exhibit 1 illustrates, self-service is the most effective cost-cutting channel. The potential for cost savings through web self-service is substantial. Yankee Group research indicates that a large proportion of contact centers will reevaluate their current customer service initiatives during To achieve optimal total cost of ownership (TCO) and fast return on investment (ROI), Yankee Group advises businesses to first consider the role of self-service and its impact on the entire customer experience, from concept to deployment. This will help the company avoid critical, time-consuming and costly mistakes and ensure that the self-service model the business adopts will be an integral part of the firm s entire customer care initiatives. Exhibit 1 The Cost vs. Experience of Self-Service Cost (in Dollars) Web Self-Service 0.45 IVR Delayed Text Chat Real-Time Assisted Service 5.50 Phone Average Cost Variability Customer Satisfaction This custom publication has been funded by RightNow. This Yankee Group Consulting Report is published for the sole use of Yankee Group clients. It may not be duplicated, reproduced or transmitted in whole or in part without the express permission of Yankee Group, 31 St. James Avenue, Boston, MA For more information, contact Yankee Group: info@yankeegroup.com; Phone: All rights reserved. All opinions and estimates herein constitute our judgment as of this date and are subject to change without notice.

2 Table of Contents I. Today s Self-Service Focuses on Cost Reduction, Not the Customer Experience Assisted Service Is Predominant, but Self-Service Is Growing II. Creating a Winning Experience Demands a Customer Focus III. Steps to Success for Biggest Business Value Impact Understanding Strategies for Profitable Self-Service IV. Conclusions and Recommendations I. Today s Self-Service Focuses on Cost Reduction, Not the Customer Experience Service initiatives are a critical component to ensure shareholder value and customer retention. It s easy to see why contact centers seek to handle more customer interaction on a self-service basis via the internet, IVR technology or kiosks. The potential for cost savings through web self-service is substantial. Telephone support or even support charges can cost more than $10 per session. By contrast, similar self-service options average less than $1 per session which is an order of magnitude cheaper than traditional support solutions. details, enable visitors to perform basic functions such as search and order entry, and provide answers to frequently asked questions. However, facilitating poorly executed self-service with static knowledge bases, offering no contextual guidance and providing inconsistent customer data and processes will increase costs and degrade the customer experience because unsatisfied customers must contact costlier channels to get the right answers. Poorly executed self-service is worse than no self-service at all. Compare the cost of legacy support with the cost of the same number of self-service interactions. It s obvious the self-service model can have a tangible, positive impact on the company s bottom line and provide an immediate ROI. A properly implemented and managed self-service model can help a company reduce its weekly, monthly and annual costs significantly. The caveat is that organizations must perform due diligence and implement a self-service model that closely aligns with their technology, business and most importantly their customers needs. Ideally, self-service will enhance the customer experience by delivering immediate relevant information thereby resulting in a much quicker, better experience for customers. Yesterday s information will not meet today s customer demands. Many companies mistakenly believe setting up and maintaining web-based self-service functions is a trivial matter. Some think they only need to advertise their web site There are no short cuts or magic formulas. Successful web-based self-service functions require careful planning, quality and assurance (QA) testing, and pilot programs run by experienced professionals. Corporations should also have contingency backup and recovery plans in place in the event of an outage, which will minimize service disruptions to internal employees and external business partners, customers and suppliers. Companies must offer effective self-service as a singular but comprehensive component that provides a wide spectrum of service offerings. A customer-centric selfservice model should also: Be readily accessible Be user friendly Provide contextual information Be well integrated into an assisted channel service for fast, proactive problem escalation and resolution 2

3 Assisted Service Is Predominant, but Self-Service Is Growing The Yankee Group 2005 North American Contact Center VoIP Adoption Survey indicates the current and projected significance of self-service interactions for enterprises (see Exhibit 2). Yankee Group polled 351 decision-makers responsible for updating the agent desktop in contact centers and found that web self-service channels will experience the most growth a projected increase of 86% during the next 2 years. At the same time, live agent calls will decline by an average of 18% during the same period. Enterprises must meet self-service demand while fulfilling business and customer objectives. The goal for many customer service organizations is to migrate and enhance their current customer care operations to become more responsive, interactive and intelligent and consequently more profitable. The desire to create a more intelligent contact center empowers frontline customer service representatives (CSRs) and customers with actionable information through context-driven assisted and self-service applications. CSRs and customers now have the correct information in the right format for each interaction, increasing the efficiency and effectiveness of the experience. Exhibit 2 Customer Communication Channels Source: Yankee Group 2005 North American Contact Center VoIP Adoption Survey Web Self-Service Speech Recognition Web Chat or Instant Messaging IVR (Touchtone) Phone (Live Agent) Today years in the future Average Percent of Customer Contacts 54.7 II. Creating a Winning Experience Demands a Customer Focus For many companies, having an effective self-service strategy is the difference between being profitable and being unprofitable. Successful companies take a fresh approach to self-service. As with any customer-centric initiative, the most successful self-service capabilities are implemented strategically from a customer s perspective as opposed to tactically from product or internal process functions. To gain and retain customer loyalty, businesses must create an ongoing positive experience. Historically, many companies could not provide a consistent experience across assisted service and self-service channels, leading to a less satisfied customer experience. Key examples of poor self-service that will escalate to an assisted service experience are: Out-of-date or inaccurate data Incomplete information Data that lacks context Adding to customers frustration is the assisted service s lack of visibility into their self-service experience. Consistency across all touchpoints is crucial (see Exhibit 3 on next page). To achieve a successful and effective assisted service and customer self-service model, businesses must eliminate islands of automation and create a solid knowledge foundation that is accessible by everyone at all levels of the enterprise. This foundation connects previously disconnected customer channels to create a smooth link among all customer touchpoints. A single, seamless foundation ensures that a company can provide a more relevant (individualized, contextualized) experience at the service touchpoint. This foundation must enable a company to provide real-time, relevant and reliable service experiences that are consistent across channels. It should also link to previous interactions, comprehend the context of the queries and recognize customers value to the company. 3

4 However, there are no panaceas. Sometimes, despite best efforts, a company will have to provide assisted service and speak to an agent. If this occurs, the business must strive to deliver a consistent experience in which the history is retained. Customers should not be required to repeat their problems and specific information each time they call, or search for information. Exhibit 3 A True 360-Degree, Cross-Channel, Real-Time View Is Essential Customer returns to web site to review forums for help Exhibit 4 Increase in Customer Satisfaction with Better Self-Service Initiatives Customer Satisfaction Checks knowledge base and finds relevant article Customer can track order shipment Customer receives notification of fulfilled order Mass Marketing Communications Medium Leading Companies Laggard Companies Customer receives relevant time-based e-marketing offer Customer Web Phone Meet Note: Yankee Group estimation based on one-on-one interviews Browses individualized contextual web site Contacts customer support Agent has relevant information from IVR, web site and customer history Agent is guided into best solution, then is empowered to sweeten the deal and close out offer A seamless foundation provides a unified customer history to ensure visibility into all phone calls, interactions and even self-service searches. It then guides the agent with insight not just data on the business s frontline in real time. Armed with the right information, an agent can quickly and efficiently resolve the situation. Such a transaction is not only pleasant for both the agent and the customer, but will also solidify the customer-vendor relationship. III. Steps to Success for Biggest Business Value Impact The business objectives for the next generation of selfservice will be to improve the customer experience and to provide ROI in 6 months or less. There is ample opportunity to meet these business objectives. This is emphasized by the demand for self-service capabilities, which continues unabated, and the availability of better business and technology solutions. However, companies face some significant challenges. Very few companies have demonstrably effective web self-service models. Therefore, many companies remain skeptical of the technology and ignore the fact that the failures of their peers are directly related to poor selfservice experiences and botched implementations. Companies that provide exemplary self-service see direct results in increased customer satisfaction which leads to cost savings. Yankee Group has conducted numerous in-depth interviews with companies satisfied with their success. When done correctly, web self-service can satisfactorily answer 70% to 80% of customers questions (see Exhibit 4). Self-service can be a win-win situation for the customer and the company by successfully supporting customer demands with the lower cost channel. However, companies must infuse the experience with the proper mix of contextual and relevant information. This will ensure the customer s continued use of the channel and avoid customer dissatisfaction. 4

5 The following critical technologies can make self-service successful: Dynamic knowledge base with self-learning capabilities: It s important to automatically float the most historically useful information to the top of the knowledge base. The knowledge base can also drive all interactions such as IVR, web and agent. Natural language fuzzy search analyzes the clickstream traffic from previous site visits. It also learns from previous site visitors and it gets smarter. In-context touchpoints ensure a seamless cross-channel experience including interactions such as management, live chat, embedded workflow for escalation and case management. Use real-time measurement of customer satisfaction through surveys. Proactive, dynamic navigation based on an analytic foundation: The site must use context based on historical and real-time clickstream data to navigate the user to the desired answer in as few clicks as possible. Exhibit 5 illustrates how critical technologies are instrumental to successful self-service. The knowledge foundation ensures the customer and agent applications are effective and efficient. A knowledge base ensures customers get their questions answered mostly through either web or Exhibit 5 Knowledge Foundation Powers Agent and Customer Experience Customer Inquiries, Problems, Orders and Feedback Unified Interaction Experience Customer Self-Service Applications IVR/speech resolution Dynamic FAQs Natural language search Forums Personalized portals Knowledge Foundation Analytics and Workflow Unified Agent Desktop Assisted Service Applications Case management Co-browse/chat Scripting Next best action Recommended solutions IVR self-service, and only go to a live agent for the final resolution. It also ensures that the agent is armed with details of every interaction that customer has had through self-service to efficiently and effectively solve the customer s issue. Building upon that foundation by deploying the correct tools is another crucial element necessary to the success of the self-service model. The majority of companies will need to make some targeted investments in new technologies. Companies should perform their due diligence and investigate the available solutions, the associated costs and the necessary resources and timetable needed to architect the solution that most closely aligns with their technology needs and budgets. When implemented correctly, web-self service models enable companies to better serve their customers while creating enormous economic efficiencies for both vendor and customer. Understanding Strategies for Profitable Self-Service There are essentially four phases for many companies. Phase 1, which is called One-Way, is best associated with static information on the web site, such as generic FAQs, an link, policies, product information and company information. Phase 1 offers little satisfaction for the customer. Although the customer can gather basic information, it s usually not in context with their specific needs, resulting in the customer abandoning the site. Businesses in Phase 1 view web self-service as a low-end tool for limited problem resolution (e.g., simple FAQs); the telephone-based teams equipped for customer interactions must handle all other service requests. Although more sophisticated, larger enterprises have graduated beyond Phase 1 self-service, many businesses are still stuck there. Phase 2 is called Two-Way. In this phase, companies usually offer more interactive services such as , order entry, registration services and customer update services. Customer satisfaction is improved with some limited selfhelp services. However, the information is not delivered in a 5

6 timely fashion. Basic questions are still manually answered by the CSR, resulting in delayed responses. Customer portals do not provide real-time updates on cases or order status. Most companies offer Phase 2 self-service. The problem associated with staying in Phase 2 is the lack of ROI. The overall customer experience is still reactive. Customers can t find up-to-date information quickly; they are forced to use a higher cost channel such as or phone. Businesses can t shift customer behavior to the low-cost channel because they are not delivering proactive information in context with customer requirements. Phase 3, which is called Proactive, is where more sophisticated companies succeed at generating a solid business return on their investment. Phase 3 starts to deliver on the promise of an effective self-service system. By proactively delivering timely service information through a requested vehicle such as , phones and pagers, businesses can start to deflect routine calls. At this stage, businesses have streamlined the service process inefficiencies that waste the customer s time into an effective personalized customer portal. Most self-service interactions will also aggregate information from different sources, making it easier to ensure the customer gets the correct information quickly. Key technologies used during this stage for improving the customer experience are natural language search or browse, which enables users to get to the right information at the right time. Natural language search combined with intelligent browsing capability (e.g., content personalized and categorized by preference or relevance à la Amazon) are critical to Phase 4 success for proactive delivery of information during this interaction. The customer is often confused or frustrated by searching. A desirable, complementary alternative is to offer a guided question and answer built using artificial intelligence technologies. This enables companies to replicate the benefits of an assisted service experience into self-service. It s also appropriate to offer seamless escalation to a transactional self-service method such as assisted service via chat or . In the self-service transaction, businesses move toward some form of escalation either through web chat or page push. Phase 4, or Dynamic Service, uses artificial intelligence and real-time analytics techniques for contextual guidance. It dynamically detects what information will be useful to the current situation. The self-service web site should also infuse proactive contextual guidance and knowledge throughout the interaction for an improved customer experience. By ensuring the right information is available in context with the current customer interaction, the company can avoid having the customer bounce to a higher cost service channel such as the phone. Dynamic service ensures the streamlined resolution process is infused with real-time personalization and knowledge. From the first search through full incident resolution via either self-service or assisted service, Phase 4 self-service ensures a seamless customer experience. The knowledge foundation captures the information flow to quickly understand a customer s full cross-channel situation, resolve the issue and capture solutions for reuse. By treating customers in context as individuals, the company increases customer loyalty, resulting in a greater wallet share. Exhibit 6 (on next page) illustrates the increased business value impact on the different phases of self-service. As mentioned, many companies are currently in Phases 1 and 2. When companies remain in those phases, the business value does not deliver bottom-line profitability. The biggest business value is in Phases 3 and 4, where companies eliminate islands of automation and provide a proactive and seamless experience. If the self-service experience is effective, it continues to be a win-win situation for organizations and customers. Companies that aggressively strive for a dynamic selfservice experience and encourage their customers to use the web rather than endure long waits for live agents slash costs and improve the customer experience. This has a tangible, immediate and positive effect on daily operations as well as a company s TCO and ROI. 6

7 IV. Conclusions and Recommendations Self-service is one of the primary options for customers to find, explore, organize, compare and decide on interactions. To provide a positive customer experience, companies must do the following: Use the service channel as a differentiator to create memorable experiences. Customers expect a company to understand their interaction history across all channels. It s not acceptable for web sites to contain outof-date information. Companies must ensure a customer s information is not only consistent, but also valuable. Customers should be able to check order status, bill history and other relevant information. Companies also must continually enhance the online experience with relevant content and services to stay ahead of customer expectations. Integrate self-service with assisted service support channels. Customers should not have to start over with the company every time they call, or search for information. A consistent foundation provides a unified customer history to ensure visibility into all phone calls, interactions and even self-service searches. When new issues arise or individualized help is needed, customers should be able to easily escalate the call to assisted support via telephone or . Assisted service should be personalized and fully integrated with the web self-service environment to ensure users resolve their issues as quickly as possible. Exhibit 6 Phases of Self-Service 1. One-Way Informational Flat content such as FAQs, policies, product information Unprofitable Self-Service Business Value Impact 2. Two-Way Reactive interactions Informational and transactional data 3. Proactive Pushed and timely service Cross channel 4. Dynamic Service In-context informational, transactional and proactive self-service Profitable Self-Service Infuse proactive contextual guidance and knowledge throughout the customer interaction for improved effectiveness. Contextual guidance during a self-service experience will also help decrease the likelihood of the customer escalating to a higher cost interaction channel. Companies must ensure the success of lower cost interaction channels by making them the first choice for customers. Segment and proactively anticipate customer needs with preemptive recommendations for both marketing and service interactions. By understanding that one size service does not fit all, companies can segment customers and situations based on knowledge. They can then push service requests to the most appropriate channel and ensure the lower cost interaction channels such as self-service are used appropriately. The alternative is providing a high quality of service for all customers. But economically, this can kill any company s budget. Use analytics to pinpoint user needs and optimize the service experience. By tracking every customer interaction from within both the assisted and the selfservice support environment, the company ensures a superior web experience and drives down support costs by sharing real-time information that can speed problem resolution. Use the most appropriate customer touchpoint as a sales opportunity. Corporations should perform due diligence. Know what to cross-sell and pick an appropriate time to sell it. By having all customer information both historical and real time businesses can appropriately determine what channel (i.e., contact center, web site, ATM, IVR) will produce the best return on the potential sales opportunity. With continued demand for self-service capabilities, companies need to evaluate newer technologies to meet the needs of sophisticated customers. The ultimate goal of selfservice is to enhance the customer experience by delivering immediate relevant information, facilitating a much quicker, better experience for customers. Successful self-service must continually be maintained and must evolve to meet the needs of the customer. The business objectives for the next generation of self-service will be the relentless pursuit of an enhanced customer experience and a faster ROI. 7

8 Yankee Group Decision Services Yankee Group has research and sales staff located in North America, Europe, the Middle East, Africa, Latin America and Asia-Pacific. For more information, please contact one of the sales offices listed below. Yankee Group Decision Service annual memberships offer clients access to research and one-to-one expert guidance. Decision Services represent our best value for clients. The services help our members understand industry, regulatory, competitive and market-demand influences, as well as opportunities and risks to their current strategies. Membership includes an invaluable in-person strategy session with Yankee Group analysts, direct access to a team of analysts, research reports, forecasts, DecisionNotes and regular Online Decision Forums on relevant topics. We offer Decision Services on almost 30 selected topics in Telecommunications; Wireless/Mobile Communications; Consumers, Media & Entertainment; and Information Technology Hardware, Software & Services. Corporate Headquarters 31 St. James Avenue BOSTON, MASSACHUSETTS T F info@yankeegroup.com EMEA 55 Russell Square LONDON WC1B 4HP UNITED KINGDOM T F euroinfo@yankeegroup.com North America Terence Matthews Crescent OTTAWA, ONTARIO K2M 2C7 CANADA T F canadainfo@yankeegroup.com Decision Instruments Yankee Group offers a full portfolio of technology and market forecasts, trackers, surveys, and total cost of ownership (TCO), return on investment (ROI), selection and migration tools. Decision instruments provide our clients the data required to compare, evaluate or justify strategic and tactical decisions a hands-on perspective of yesterday, today and tomorrow shaped and delivered through original research, in-depth market knowledge and the unparalleled insight of a Yankee Group analyst. Trackers Trackers enable accurate, up-to-date tactical comparison and strategic analysis of industry-specific metrics. This detailed and highly segmented tool provides discrete proprietary and performance data, as well as blended metrics interpreted and normalized by Yankee Group analysts. Surveys Surveys take the pulse of current attitudes, preferences and practices across the marketplace, including supply, delivery and demand. These powerful tools enable clients to understand their target customers, technology demand and shifting market dynamics. Forecasts Forecasts provide a basis for sound business planning. These market indicators are a distillation of continuing Yankee Group research, interpreted by our analysts and delivered from the pragmatic stance our clients have trusted for decades. Signature Events Yankee Group s signature events provide a real-time opportunity to connect with the technologies, companies and visionaries that are transforming Telecommunications; Wireless/Mobile Communications; Consumers, Media & Entertainment; and Information Technology Hardware, Software & Services. Our exclusive interactive forums are the ideal setting for Yankee Group analysts and other industry leaders to discuss and define the future of conversable technologies, business models and strategies. Consulting Services Yankee Group s integrated model blends quantitative research, qualitative analysis and consulting. This approach maximizes the value of our solution and the return on our clients consulting investment. Each consulting project defines and follows research objectives, methodology, desired deliverables and project schedule. Many Yankee Group clients combine Decision Service memberships with a custom-consulting project, enabling them to augment our ongoing research with proprietary studies. Thousands of clients across the globe have engaged Yankee Group for consulting services in order to hone their corporate strategies and maximize overall return. Yankee Group believes the statements contained in this publication are based on accurate and reliable information. However, because our information is provided from various sources, including third parties, we cannot warrant that this publication is complete and error-free. Yankee Group disclaims all implied warranties, including, without limitation, warranties of merchantability or fitness for a particular purpose. Yankee Group shall have no liability for any direct, incidental, special, or consequential damages or lost profits. This publication was prepared by Yankee Group for use by our clients.

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