Winning with Emerging CRM Channels. An Ovum White Paper

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1 Winning with Emerging CRM Channels An Ovum White Paper

2 Introduction If there has been one constant over the past five years, it is the shift in how consumers interact not just with each other, but how they choose to interact with enterprises across vertical markets. No longer are end-users confined to just telephone voice-based interactions, especially with the proliferation of so many new non-voice communications mediums in recent years. To compound this phenomenon, those same consumers are demanding that firms with which they do business provide them with these same channels for questions, comments and support. Enterprises that choose to ignore this trend risk losing both consumer loyalty and long-term revenue, while those that embrace this opportunity are certain to increase their share of wallet through an increase in customer loyalty among their base of end-users. However, ensuring a seamless incorporation of emerging contact channels also means leveraging analytics capabilities and customer experience formulation experience, which means partnering with a partner that can guarantee results and cost effectiveness. Emerging CRM channels are the new normal To be clear, there is still a large appetite among consumers for the traditional CRM mediums of voice and . In fact, in Ovum s most recent CRM Outsourcing Business Trends Survey, these two channels have remained the most consistently offered by enterprises as part of their CRM platform over the past five years. However, Ovum has also tracked a great deal of interest in newer channels that continue to make the leap from strictly personal use toward Business to Consumer application. Webchat The number of enterprises offering webchat as a communications tool for their consumers has risen sharply over the past five years. Whereas Ovum s annual CRM Outsourcing Business Trends Survey in 2011 indicated that not even 20% of business across verticals providing webchat capabilities, in 2015 the penetration rate of this channel has grown to nearly four in ten businesses. Percentage of enterprises offering webchat as a CRM channel, 2011 & 2015 (n = 200) % % Source: Ovum 0% 5% 10% 15% 20% 25% 30% 35% 40%

3 There are compelling reasons for the ongoing growth of webchat, which include (but are not limited to): Lower CRM operating costs as agents can handle multiple interactions simultaneously; Shorter waiting times for an agent means faster resolution of consumers issues, as compared to using the telephone (which is perceived to carry longer wait times); The pervasiveness of webchat technology already crosses work and personal lives meaning consumers are comfortable using this channel in multiple environments. SMS The growth of SMS (more commonly known as text-messaging) has been as rapid as it has been profound. This trend has not been lost on enterprises across industries over the past five years. Specifically, as noted in the graphic below, the jump in businesses offering this channel has been pronounced, increasing by 32% since 2011 according to Ovum s latest CRM Outsourcing Business Trends Survey. Percentage of enterprises offering SMS as a CRM channel, 2011 & 2015 (n = 200) % % Source: Ovum 0% 10% 20% 30% 40% 50% Generally speaking, there are a number of drivers for enterprises providing SMS as a means of interacting with end-users. Among the most commonly mentioned ones include: Ease of outbound notification makes communicating new offers, alerts and specials more straightforward and less costly than telemarketing or traditional white mail mediums; Simplicity of communication is another key component, as when SMS messages are composed properly, they are succinct and easy for consumers to understand; Cellular phone penetration continues to grow in both developed and emerging markets meaning the reach of SMS is even more compelling. Video Video, which what was once seen as a science-fiction communications channel, is quickly becoming one of the most exciting manners through which enterprises can interact with their consumers. Ovum s CRM Outsourcing Business Trends research confirms this trend, showing a jump in the

4 number of enterprises offering video chatting services to their consumers jumping from roughly one in ten in 2011 to a quarter this year. Percentage of enterprises offering video as a CRM channel, 2011 & 2015 (n = 200) % % 0% 5% 10% 15% 20% 25% Source - Ovum There are a number of reasons for the rise of video as a B2C communications tool: Growth in webcam availability has been a major driver for this platform s popularity. Today, nearly all devices (including computers, tablets and smartphones) are sold with integrated video cameras; The number of video chat platforms has risen rapidly in recent years, offered for both personal and business interactions, making individuals at ease with this technology; Product demonstrations are made easier with video chat capabilities, notably in break-fix situations. Anecdotal evidence suggests that both enterprises and consumers benefit from video s ability to identify a problem with a product and being shown how to fix it (which is more efficient and less frustrating than traditional telephone support). However for many enterprises interested in deploying these channels but that aren t already doing so, there are several obstacles that could make this difficult, including: Expertise finding the right people to run new channels and interact with consumers is difficult for enterprises, as not only is the agent demographic different, so too is the pool of expertise to manage such deployments. This results is high recruitment and retention costs, and slower time to market for the solution. Technology acquiring both the hardware and software associated with emerging channels is daunting, both from a cost perspective and deciding which technologies to choose; Channel optimization knowing which emerging channels are the right ones to offer consumers is greatly dependent on end-user demographic, the industry in question and geography. Despite these challenges, an enterprise risks much more by not implementing emerging channels both in regard to customer loyalty and knowing their consumers better.

5 C-EX will be driven by emerging channels Using emerging channel means more customer interactions One of the most important reasons for enterprises deploying emerging contact channels is because it provides both existing and prospective consumers with added opportunities for interaction. With endusers having access to multiple channels it simply makes good commercial sense for businesses to ensure that the opportunity to communicate by as many relevant established or emerging channels is available, in order to answer questions, respond to feedback and to provide product/service support. Leveraging emerging channels for better end-user intelligence Deploying emerging contact channels provides enterprises across verticals with the chance to build a broader profile of their consumers. For example, webchat discussions and video chat can be mined for data points related to existing and future purchases, while SMS is a superb method for communicating feedback tools (such as digital surveys to assess satisfaction levels). If enterprises use emerging channels alongside existing ones, the chance to know their consumer accurately is greatly enhanced. Using emerging channels means greater share of wallet By proactively leveraging emerging contact channels for intelligence purposes, enterprises can better target consumers with appropriate product/service offerings meaning longer term loyalty and revenue. By growing the number of channels by which a consumer can interact with adds to the sense of longterm partnership with the enterprise, thereby guaranteeing loyalty; it also provides the enterprise with opportunity to grow the size and volume of purchases with individual consumers by better targeting products and services through broader and deeper intelligence garnered with emerging channels.

6 The HP Customer Experience and emerging channel services As a vendor of end-to-end customer experience services, HP has proactively developed the HP CX solution that encompasses both mature and emerging non-voice solutions designed to give their enterprise clients an advantage in the current Omni-channel environment. Leading with the HP Digital Halo In order to facilitate more end-user loyalty toward an enterprise (and thereby share of wallet), HP has teamed up with Avaya in order to develop a solution called the Digital Halo, which provides the client with a robust and well-rounded view of their individual consumers. The Digital Halo takes into account the customer s preferences for products and services, as well as their preferred choice of interaction channels, based on ongoing analysis of previous interactions. This is essential in knowing what to push out to the end-user, by what contact channel and knowing when best to do it (known as a key event ) HP CX leverages emerging contact channels With the power of the Digital Halo as a major component of its CX offering, HP is positioned to provide its clients end-users with seamless support, regardless of channel. Having the consumer s profile to hand, HP helps the enterprise push out an offering that are consistent with a customer s purchasing history (such as pay-per-view events, retail specials, travel deals or concert tickets). However, the HP CX Solution goes one step further, by mining the Digital Halo for the individual consumer s preference of channel with which to receive this notification; be it using a traditional voice interaction, via text message or through . However, most interestingly the HP CX solution allows the enterprise to proactively identify any challenges that consumers may be having in taking advantage of a deal, and reaches out to them through their support channel of choice (whether it be voice, web-chat, instant message or video) to help convert the sale. This follow-through enhances the enterprises revenue generating capabilities and continues to feed its database of customer information that can be used for determining future offers. Conclusion It is clear that today s consumer is more channel agnostic than ever before. It is no longer uncommon to see an individual use several different interfaces and channels to complete the purchase of a single product / service. What has also changed is the appetite among firms across verticals to take advantage of this opportunity, from both a delivery perspective as well as that of understanding the individual consumer better, so as to generate loyalty and greater share of wallet. However, given the rapid changes associated with contact center technologies, expertise and channels this is a daunting prospect for many enterprises. So, in order not to be caught out from the ongoing digital transformation in CRM, what are the options for an enterprise? One approach would be to acquire the needed software, hardware and expertise in-house, but with contact center budgets still tight across many sectors, this is simply not feasible for many CRM managers. Rather, by partnering with an organization that understands cross-channel delivery, the importance of analytics

7 and how to proactively convert leads into sales enterprises will enjoy a more robust volume of sales and gain increased levels of insight into their base of customers.

8 Appendix Copyright notice and disclaimer The contents of this product are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa Telecoms and Media Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this product are the trademarks, service marks or trading names of their respective owners, including Informa Telecoms and Media Limited. This product may not be copied, reproduced, distributed or transmitted in any form or by any means without the prior permission of Informa Telecoms and Media Limited. Whilst reasonable efforts have been made to ensure that the information and content of this product was correct as at the date of first publication, neither Informa Telecoms and Media Limited nor any person engaged or employed by Informa Telecoms and Media Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content. Any views and/or opinions expressed in this product by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa Telecoms and Media Limited.

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