Key Issues for CRM Customer Service Strategies, 2010

Transcription

1 Research Publication Date: 11 March 2010 ID Number: G Key Issues for CRM Customer Service Strategies, 2010 Michael Maoz Through 2013, tying together service interaction channels, integrating social CRM capabilities, and analyzing the customer experience will dominate the customer service strategy. Organizations will underestimate the difficulty in integrating customer participation into customer service delivery. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

2 ANALYSIS As a part of a CRM strategy, customer service supports customers as they interact with the organization across all forms of communication channels: Customer service contact center, where the customer escalates a process from selfservice (including Web and voice response) to assisted service, or turns directly to a customer service representative (CSR) for assistance. Web customer service, where the customer performs the bulk of the service interaction on his or her own from a PC/laptop or smartphone. There will be many examples of handoffs from self-service to an agent in a contact center. Social CRM, where customers participate in solving their own service issues as part of a community. Field service or in-store/in-person activity. Customer service focuses primarily, but not exclusively, after the initial sale, and requires automated and human agents. Key Findings The market for package CRM customer service software will remain highly fragmented during the next four years, with a high degree of custom-built/mashup applications, complicating the procurement process. Gaining the trust and loyalty of customers on the website will become a major focus of IT and business during the next five years, and fostering customer participation in service issues will be a major area of focus. Customer satisfaction is a means to an end: The retention of a customer is the major driver of growth in the lifetime value of a customer to most organizations. Shifting the cost of customer service to lower-cost channels or models (including automated agents, self-service, outsourced/home-sourced) is key to business health, but cannot come at the expense of customer dissatisfaction, or the savings will be lost. Market Implications The customer service software market will experience limited growth in the core contact center, as more money is directed to Web customer self-service, analytics and social CRM projects. Budgets for social CRM in the customer service area will expand dramatically during 2010 and 2011, as business cases are put into place. For software providers and other solution providers (such as managed communities), the emphasis will be on demonstrating the total cost of ownership and ROI. All forms of customer analytics will thrive as organizations seek to leverage customer service to make offers and capture leads, while segmenting service delivery based in part on customer value, and to understand the customer experience better. Publication Date: 11 March 2010/ID Number: G Page 2 of 8

3 The top customer service contact center projects in 2010 and 2011 will be agent training and availability of tools to give service representatives real-time analytical information, while interacting with customers. Recommendations Audience Make the corporate website a more engaging place. Make this a role for the vice president of customer service, working with the chief customer officer or the vice president of customer experience and the CIO. Formalize the roles of IT, business intelligence, marketing and customer service in supporting social CRM and providing a more engaging Web experience for customers. Software and solution providers of social CRM solutions (communities, social software, customer interaction software) need to move away from high-level marketing messages toward more-measurable proof of their offerings' impact on key metrics, such as sales, marketing effectiveness, service costs or loyalty. Customer service directors should work more closely with business intelligence executives to increase the use of analytics as a part of the customer service interaction. Director of customer service Chief customer officer Vice president or head of customer experience CIO CTO Vice president of: Information systems IT strategy Vice president/director of: CRM strategies/programs CRM Key Issue: How will the customer service software market evolve, and which vendors will have the greatest impact on the customer experience? Background and Context The market for customer service applications is very broad, as it encompasses components ranging from communication infrastructure, to analytics, content, data management and search tools. The focus for this Key Issue is on the business applications specific to managing customer interactions. They include: Enterprise feedback management systems Publication Date: 11 March 2010/ID Number: G Page 3 of 8

4 Web customer service tools Customer service agent support tools Field service management solutions Remote monitoring software (intelligent device management [IDM]) Self-service tools Agent/workforce optimization solutions Service analytic solutions Explanation of Impact More than half of the customer service applications are custom built, though the percentage decreases each year. The packaged customer service application market is highly fragmented, as most vendors focus on a single interaction channel. Some have broader offerings, handling multiple interaction channels, while other vendors focus on delivering expertise to specific industries. A new category of vendors is focusing on customer service extensions that allow for customer participation in the creation of solutions to support specific issues. The selection process is extremely complex, and prospective purchasers of software and services should refer to Gartner Magic Quadrants and supplementary research, in addition to pursuing the client inquiry process. Summary of Planned Research We will release updates to our Magic Quadrants for the CRM customer service contact center, workforce optimization, and field service. We will also look at vendor consolidation trends, and the strength of the social CRM capabilities of these firms as a part of customer service. The current Magic Quadrant on e-service will be renamed the Magic Quadrant for Web Customer Services and will emphasize cross-channel consistency. Related Research "Magic Quadrant for CRM Customer Service Contact Centers" "Moving From E-Service to Web Customer Service in 2010" "Key Differentiating Criteria for Enterprise Feedback Management Vendors Through 2013" "Roundup of Recent Contact Center Workforce Optimization Research" Key Issue: How will customer service expand to allow for customer participation through the Web using social networking, communities, and the associated social CRM software and processes? Background and Context We first observed businesses externalizing the process of customer support via the Internet in 2002, but the technologies for collaboration were immature, and applications supporting the collaboration were mostly custom built. In 2010, we are beginning to see the biggest and most sustained effort to embrace the customer in the customer service and support process. Publication Date: 11 March 2010/ID Number: G Page 4 of 8

5 Research surveys from companies such as Edelman and Yankelovich show that consumers do not trust their friends and peers as much as they did even two years ago, but they still trust them more than they trust the enterprise. Gaining the trust and loyalty of customers on the website, as well as fostering customer participation in service issues, will become areas of major focus of IT and business during the next five years. Explanation of Impact Customers often know the answers to typical customer service issues. Allowing them to post these answers on a corporate-managed customer service site not only fosters participation on the site, but also can be an innovative way of prioritizing areas in need of process improvement. Minimally, for an enterprise to gain and maintain credibility on its website, it will need to understand the latest social-networking software and techniques. Communities, communitycreated content, blogs, Really Simple Syndication feeds, posts, ratings, participant profiling, reputation and recommendation engines, and a host of other approaches will be required. Summary of Planned Research This Key Issue will be covered in two research areas: customer service and support, and customer-centric Web strategies. We will discuss how social-networking techniques will be employed to drive down service costs, foster customer participation on the Web, and improve customer satisfaction. We believe these will reinforce an enterprise's brand and build loyalty. Related Research "Predicts 2010: Customer-Centric Web Strategies" "The Top 10 Ways to Make a Website Customer-Centric" "Use Social Knowledge to Enhance Your Self-Service Offering" "Top Business Processes for Customer Service, 2010 to 2012" "Listen to the Customer in the Customer-Centric Web" Key Issue: What role will IT leaders play alongside customer service executives in driving retention? Customer service accounts for the majority of customer interactions over the lifetime of the customer relationship. Properly delivered, customer service plays a critical role in driving retention. The retention of a customer is the major driver of growth in the lifetime value of a customer to most organizations. As product bundles and features continue to be difficult to understand, resolving a customer issue accurately and conveniently is a significant challenge. The rate of customer defection in some industries, such as communications (mobile phone services, for example), is usually below 1% per month but can peak at over 4% per month. In some areas of property and casualty insurance, the defection rate for annual contracts can be more than 50%. Other industries may have lower customer defection rates, but they have difficulty retaining wallet share; thus, they keep the customer, but with fewer products or lower-value products. Background and Context The focus on improving customer satisfaction is predicated on the belief that happier customers are, obviously, more loyal than dissatisfied ones, and that this improves customer retention, is achieved at a lower cost than acquiring "replacement" customers and that the most loyal become Publication Date: 11 March 2010/ID Number: G Page 5 of 8

6 advocates, which lowers the cost of advertising and promotional activities. Therefore, customer retention is the second most important financially driven business goal underpinning much of the activities of the customer service organization. The No. 1 goal is to lower the costs of customer service. However, the customer service organizations rarely rely on the IT organization for help in achieving lower costs. Explanation of Impact The transition to customer service as an extension of sales and marketing is a process problem first and a technology problem second. These activities are difficult to integrate into the service function because: The customer service agent lacks the training, motivation and incentive to perform the marketing and selling tasks. The tools to analyze the customer's history and product portfolio are not available in real time on the desktop. The refinement in agent performance from efficiency metrics (time on task, average handling time, wrap-up time) to effectiveness metrics (reduction in customer defection, higher average sales, higher average number of products owned, customer satisfaction scores) are not in place. We will look at these issues and the technologies behind them. Summary of Planned Research Our planned research will examine how customer service will increasingly play as strategic a role as marketing and sales in reaching out to customers, and encouraging them to stay engaged with the business or enterprise. We'll also examine how the customer service organization will become integrated with the corporate website process to ensure consistency of customer experience. Topics will include: Extending customer service to Web communities The use of contact center agent knowledge for self-service Pitfalls to avoid during Web customer service implementations Related Research "Predicts 2010: Customer-Centric Web Strategies" "Roundup of Recent Contact Center Workforce Optimization Research" "Predicts 2010: The Top Five Concerns in the Analytic Applications Space for the Coming Year" Key Issue: How will customer analytics be used within customer service to drive higher revenue? Background and Context Real-time analysis of customer intentions, behavior, attitudes and receptivity is vital to any attempt at increasing revenue during a service interaction. This is not to say that cost reduction will not remain a critical part of the service delivery equation (see Note 1). Bad information yields bad business. Business intelligence strategies, such as determining customer propensity to churn, or factoring in current satisfaction level or receptivity to an offer, will become increasingly Publication Date: 11 March 2010/ID Number: G Page 6 of 8

7 important. Businesses such as cable providers, telephone services, retail consumer goods, banking and hospitality use the customer service function as an opportunity not only to capture sales information, but also to create leads, make offers and create new sales. We will examine the growing trend toward real-time decision support in all forms in the contact center and on the Web. Explanation of Impact Analytical tools are often locked up in the business intelligence team rather than available during a customer interaction. The transition to customer service as an extension of sales and marketing activities is difficult to integrate because: The customer service agent lacks the training and incentive to perform the marketing and selling tasks. The business intelligence tools to analyze the customer history and product portfolio are not available in real time on the agent's desktop. The refinement in agent performance from efficiency metrics (time on task, average handling time, wrap-up time) to effectiveness metrics (reduction in customer defection, higher average sales, higher average number of products owned, customer satisfaction scores) are not in place. We will examine these issues and the technologies behind them. Summary of Planned Research Our research will focus on: Empowering service agents with real-time decisioning Creating a world-class service organization Identifying the key tools to help organizations drive revenue during customer service interactions Related Research "The Four Styles of Customer Service Contact Center" "Customer-Centric Web Strategies: Responding to All Things Social" Note 1 Lowering Costs Remains Key to Customer Service Budget restraints limit customer service initiatives, and any project will need a strong business case to win approval. There is a risk that chief-corporate-officer-level (C-level) executives will make the wrong budget-cutting decisions (and extensive cuts) around the customer service function, unless IT managers work closely with their peers who are responsible for customer service delivery. Part of the problem is the organizational silos that separate: (1) phone- and chatbased customer service, (2) self-service performed over the Internet, and (3) in-person interactions. Initiatives that allow customers to find answers to their questions on the Web and in communities should drive down the cost of customer service, as it deflects from hiring human service agents. Publication Date: 11 March 2010/ID Number: G Page 7 of 8

8 REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT U.S.A European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo JAPAN Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, andar World Trade Center São Paulo SP BRAZIL Publication Date: 11 March 2010/ID Number: G Page 8 of 8