Optimizing Customer Service in a Multi-Channel World

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1 Optimizing Customer Service in a Multi-Channel World An Ovum White Paper sponsored by Genesys Publication Date: October 2010 Introduction The way in which customer service is delivered has changed. Customers have never had so many options when choosing how they interact with an enterprise. The number of customer touch points has ballooned and what has been speculated and talked about in the industry for several years multi-channel customer service is now a reality. Most enterprises today support multi-channel communication, and most of it occurs in their contact center operations. While this has resulted in more satisfied customers, many enterprises find it difficult to gauge the success of multi-channel customer engagement due to shortcomings in the area of performance management. Performance management, as defined by Ovum, is the process by which an enterprise ensures it is meeting its goals in an effective and efficient manner. In the context of customer service, performance management focuses on the managerial and frontline performance of customer engagement across the contact center, web and front-office. The challenges that enterprises face typically come from isolated systems and a lack of standardized metrics and processes used across different parts of the organization. Therefore, meeting management s information needs, especially around business outcomes, is a challenge when it comes to multi-channel customer engagement. The increasing volumes of customer interactions, the emergence of new channels (i.e. social media), and the heightened enterprise focus on customer loyalty require enterprises to rethink their current performance management strategy. This white paper examines the importance of using business outcomes to gauge the success of multi-channel customer engagement and helps readers: Identify key trends and consumer preferences shaping multi-channel customer service today; Gain insight into the fundamental challenges enterprises face when tracking performance for multichannel customer service; Understand the business benefits of performance management across different channels; Learn how to develop and implement a successful performance management strategy. Ovum Unauthorised reproduction prohibited Page 1

2 Customer behavior is changing; customer service is becoming more complex Customer service has expanded past the traditional points of contact, like phone, physical store locations and mail. Customers expect that service engagement will include , web self-service, web chat, short message service (SMS) and social media. According to a recent Ovum study of 8,000 consumers from across the globe, the majority of consumers use three or more communication channels when engaging customer service. Results show that 25% of consumers use one or two channels, 52% use three to four, and 22% use five or more, as shown in Figure 1. The overwhelming majority, or 74%, of consumers use at least three channels when interacting with an enterprise for customer service related issues. Figure 1: Customer engagement by number of channels 52% of consumers use 3 or 4 channels 25% of consumers use 1 or 2 channels 22% of consumers use 5 or more channels Source: Ovum 1 channel 2 channels 3 channels 4 channels 5 or more channels N=8,000 Of all the channels today, the phone is still the first choice among consumers when it comes to communicating with customer service. However, while 56% of consumers prefer phone calls with live agents, a little less than half, or 44%, prefer non-voice channels as their first choice for customer service, as shown in Figure 2. The number of non-voice-preferring consumers will increase with the gradual demise of consumer landlines and the growing adoption of smart devices built for easy, new media-channel access. The emergence of these channels, plus the growing use of web self-service and , has created an environment where the volumes of transactions across all channels will increase each year. To provide a frame of reference, 98% of interactions in the contact center in North America came from the voice channel in In 2009, this proportion fell to 67%. However, total call volume still increased, as well as transactions across all other channels. Ovum Unauthorised reproduction prohibited Page 2

3 Figure 2: Preferred channel of communications 60% 50% 40% 30% 20% 10% 0% Phone call with live agent in contact center Web self-service Web chat SMS Paper mail Automated self-service or voice recognition Other (please specify) Fax Percent of respondents First choice Second choice Source: Ovum N=8,000 This change in customer behavior requires a different approach to measuring customer engagement. Yesterday s voice-only performance management was challenging. Today s multi-channel performance management is even more complex. Yet, without it, an enterprise will never achieve its business goals. New challenges facing enterprises The disconnects between operational and business goals causes many blind spots that are overlooked in performance management. Management must peer through a new lens that provides a more business-aligned, endto-end perspective of customer engagement in a multi-channel world. Only then can customer satisfaction and business outcomes be improved across an expanding set of customer touch points. While this concept is implicit in the minds of many, old and new challenges conspire against the success of performance management in a multichannel world. These include: Siloed performance reports for different platforms, channels, & the blended agent Due to mergers and acquisitions and short-sighted technology investments, most enterprises have multiple switches and platforms from a myriad of vendors in their contact centers. Additionally, a multi-channel contact center typically breeds autonomous reports per channel. As a result, reporting is siloed and operationally inconsistent. Include trying to track the performance of a blended agent or agent teams and managementlevel confusion becomes the only assured outcome. Ovum Unauthorised reproduction prohibited Page 3

4 Limited insight gleaned from efficiency metrics The key performance indicators (KPIs) used today by most contact centers focus mainly on efficiency metrics such as average wait time, average call time, post call wrap up times, etc. These metrics help frontline managers reduce costs but are poor indicators of the interaction s outcome or the customer experience. Effectiveness KPIs, such as first contact resolution and task completion rates, provide deeper understanding. But they are typically not tracked by contact centers today since existing systems were not built to capture this type of data. Fragmented information architecture Intelligence provided by customer interactions are stored in various customer databases. Outdated processes, further exacerbated by contact centers becoming multichannel, shred and sort key interaction details across different reporting systems. Consequently, contact centers find it difficult to reassemble the business context of thousands or millions of interactions, and often operate in the dark. For example, a frontline report can show that a customer waited 30 seconds for a sales call and the agent took one minute for post call wrap-up. But, the report may be silent on whether a sale was made or not, which prevents a deeper understanding of sales wins relative to agent training, customer type, or wait times. Most likely, if this data exists, it is locked in a completely different database, making effective and timely analysis difficult. Inconsistent customer experience across customer touch points Customers and enterprise share a desire for a consistent customer experience regardless of customer touch point. However, the requisite agent skill sets are different per channel. For example, agents with poor grammar and syntax are likely not suitable for or chat. At the same time, emerging channels, such as SMS and social media (like Twitter), tend to promote a less formal interaction e.g. punctuating responses like LOL, TTYL, BTW, NP, etc. Using slang can promote a more meaningful dialogue between agent and customer. But going over-board undoes any progress made. Navigating and managing these pitfalls increases with the number of channels going into the contact center. Embracing multi-channel performance management in a multi-channel world Given the challenges facing enterprises today, it is vital that they understand all the fundamental layers and steps needed to effectively manage a multi-channel operation. These are highlighted in the pyramid in Figure 3. Enterprises move upward in the pyramid as the previous level of need is met within the enterprise. The bottom two layers of the pyramid, Multi-channel Engagement and Reporting & Analytics, are the baseline; enterprises simply cannot service customers effectively without a multi-channel routing platform and a corresponding cross-channel solution that provides a consistent, unified understanding of interactions. True differentiation occurs for enterprises when their solution provides Business Outcomes & Business Context and Real-time Decision Making. The same solution that measures frontline efficiency should also measure the business effectiveness of interactions. Not only will this strategically align operations but other contact center operations, such as sales and marketing, will also glean insight from the same standardized contact center reports. At the top of the pyramid is Real-time Decision Making which enables organizations to align operations towards strategic goals in real-time versus drifting while management waits to make decisions that force the frontlines to Ovum Unauthorised reproduction prohibited Page 4

5 pursue short-sighted tactical goals. By progressing upwards in the pyramid, enterprises are able to differentiate themselves in a multi-channel world. Figure 3: Pyramid of multi-channel performance management Source: Ovum Assessing the layers of the pyramid: Key questions enterprises should be asking themselves Multi-channel Engagement: How many channels can your customer use today for customer service? The ability to provide multiple means of communications for customers to engage with customer service is paramount. Shifting demographics along with the proliferation of smart devices has paved the way for more customer interactions across , web self-service, web chat, short message service (SMS) and social media. Reporting & Analytics: How consistent and strategic is your understanding of interactions across these channels? Today, there exist a slew of reporting and analytics tools that track and analyze performance for just one channel (such as voice or ). But when it comes to measuring interactions across multiple channels choices are limited. A multi-channel contact center needs to track the customer through a maze of interactions across multiple channels in a single session. For example, a customer begins a transaction on a website, then engages in web chat with an agent, then calls into the contact center to talk with an agent - who is already aware of all the different channels the customer has interacted with as well as the customer s intent prior to the call. Ovum Unauthorised reproduction prohibited Page 5

6 The reporting and analytics tools that enterprises choose will determine their ability to effectively service customers in a multi-channel world and optimize resources across multiple channels. Business Outcomes and Business Context: How strong is your business understanding of interactions? The ability to track interactions across channels is critical, but in order for enterprises to derive maximum value from customer engagement, they need to capture the business context of each interaction and understand what it means for both the customer and the enterprise. Because typical automated call distribution (ACD) reports are limited, providing only insights into efficiency metrics, it is difficult for frontline managers and executive management to uncover the actual business context of the interaction. Business context adds the dimension needed for enterprises to optimize interactions towards larger business goals. Take, for example, Platinum Customer Billing reports. Typical ACD reports will only give frontline managers a view of average wait times and average call times. Most likely, they cannot provide a more nuanced understanding of which Platinum Customer Billing calls were about billing disputes versus billing address corrections. This distinction has a significant impact on a business, yet ACD reports are typically blind to the required business context. Sales and marketing campaigns are another example of where capturing business context is valuable. For example, enterprises that are aggressively promoting products should identify if the customer learned about the promotion from television, radio, print, the Web or word of mouth. Tweaking agent scripts so agents can capture basic information, such as asking the customer where they learned about the promotion, enables enterprises to understand the business context so they can gauge the success or business outcome of marketing campaigns across different media. A comparable ACD report measuring the same set of interactions would bring only limited value to the sales and marketing decision-makers. Are you managing by desired business results or simply frontline efficiency metrics? Enterprises need to track business outcomes to gauge the success of multi-channel customer engagement. Unlike frontline efficiency metrics, which focus primarily on containing agent costs, business outcomes are the best indicators of business performance. Drawing from the same Platinum Billing example, which compares a billing dispute and a billing address correction, the business outcome becomes even more important. Resolving billing disputes expeditiously is a key factor in avoiding customer churn as well as identifying and segmenting skilled agents. However, most ACD reports are blind to this strategic understanding of frontline interactions. Worse, these types of reports may promote agents who work towards about their efficiency metrics versus spending more time to successfully resolve difficult but higher value customer interactions. Building on the marketing campaign example, a contact center report that captures business outcomes could signal to sales and marketing which advertisement channel is attracting the highest volume of interactions and which channel has the most successful sales closing rates. This information is invaluable for sales and marketing, yet rarely does the contact center play such an obvious role in explaining the success of ad campaigns. Ovum Unauthorised reproduction prohibited Page 6

7 Real-time Decision Making: How long does it take for management to make a decision based on captured data? The ability to make strategic decisions in real-time is the final piece needed for an enterprise to maximize efficiency and revenue. Multiple contact centers, multiple channels, diverse platforms and frontline metrics that lack business context conspire together to blind or delay executive decision-making. Today, many executives typically wait for business analysts to process information using Excel (or through another rudimentary method) which inhibit any real-time decision making capability. Once reporting is standardized across all relevant channels and coupled with business context, then the foundation layers are in place to enable real-time decision making at the executive level. Creating a value realization plan to be implemented in stages Using business outcomes to gauge performance of multi-channel customer engagement is a fairly radical concept relative to the implicit efficiency-focused mindset of frontline contact center managers. But, several steps must be in place to make this reality. Executive and frontline users must fully embrace the concept of multi-channel performance management and fortify this strategy by: 1) Determining together what business context and business metrics should be captured; 2) Educating the workforce on the relevance of business and effeciency metrics; 3) Delivering comprehensive and standardized contact center performance reports to understand all operations systematically; 4) Raising organizational intelligence and expediting decision-making by empowering managers to answer their own questions through ad-hoc analysis capabilities. Ovum Unauthorised reproduction prohibited Page 7

8 Appendix APPENDIX Authors Daniel Hong Lead Analyst, Customer Interaction at Ovum Aphrodite Brinsmead Analyst, Customer Interaction at Ovum Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Ovum (a Datamonitor company). The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Ovum delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Ovum can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. Ovum Unauthorised reproduction prohibited Page 8