Enterprises Adopting Mobile Messaging to Enhance Customer Service and Improve Customer Experience

Transcription

1 WHITE PAPER Enterprises Adopting Mobile Messaging to Enhance Customer Service and Improve Customer Experience Sponsored by: OpenMarket Greg Girard December 2014 IN THIS WHITE PAPER This white paper examines the results of an extensive global survey of 600 organizations. It looks at how enterprises are taking advantage of mobile messaging technology to improve customer experience, in particular by applying SMS, MMS, and push messaging to customer service. The analysis suggests that customer service organizations use these technologies to achieve greater customer insight and better, speedier, and ultimately less expensive resolution of their concerns. SITUATION OVERVIEW Ongoing IDC research across industries shows that customer service continues to be a top priority of companies seeking to distinguish themselves from competitors, and great execution of customer service is a key earmark of top-performing companies. Today, with 3 billion mobile subscribers worldwide and more than 6 billion connected devices, customer service leaders have adopted "mobile first" strategies to satisfy their informed and interconnected customers. These customers are more ready than ever to take immediate action, get quick response, and find resolution. Beyond that, their best mobile experience from any organization sets their minimum expectation for all of their interactions with other product and service providers. Customer service organizations face an ever-rising bar for satisfying their customers. In this context, mobile messaging offers companies a myriad of opportunities to improve customer service. These opportunities fall into two categories: Improving customer-facing communications. This can be by proactive communications (e.g., to better understand an individual's context and take action on that knowledge within an established business process). Alternatively, customer-facing communications are improved by identifying segments of customers and patterns of behaviors that signal opportunities to improve business processes. Improving coordination of workers and processes. Improvements in this area back up and fulfill the expectations set by customer communications (e.g., delivery of orders and services rendered onsite). December 2014, IDC #253044

2 Mobile messaging can encompass a number of technologies including short message service (SMS), multimedia messaging service (MMS), push notifications, and occasionally . Most companies have robust infrastructures in place for the latter and are generally looking at new platforms to manage the other three. Of course, the general intent is to have a robust platform that can integrate all technologies depending on the level of mobile messaging expertise required. Line of Business Led Investment Recent IDC research indicates that lines of business are driving new investment across a range of information technologies. Functional executives are more involved in specifying, selecting, and deploying technology-based services. Customer service commands 4% of external IT spending. Forward-thinking IT executives are complementing their business partners' new roles by focusing more on the delivery of services aligned with business needs than on running technology portfolios themselves. Generally, this plays out in a platform and integration strategy. In particular, this is the case in messaging and, more broadly, across mobility, including telephony. As a service provider, IT wants to bring communication channels together, complemented by a robust workflow engine across "mobile first" customer communications and internal coordination processes. Modest Progress Toward Enterprise Deployment Our survey indicates that customer service processes are not yet widely supported by enterprise wide customer-facing mobile messaging services. In particular, only 22% of customer service executives surveyed are supported by enterprise wide deployment of mobile messaging platforms for alerts, updates, reminders, and notifications. Another 15% of customer service executives are supported by mobile messaging deployed in one or more business units or departments, with another 25% looking to the results of ongoing pilots, proof-of-concept programs, and research efforts of these customerfacing messaging services. Our survey results, shown in Figure 1, indicate that deployment across the enterprise or at an enterprise level of mobile messaging for customer alerts, updates, reminders, and notifications is already fairly widespread, with 39% of the customer service executives saying that their organizations were supported in this manner. These executives reported that mobile messaging for promotions and offers is less widespread. It is likely to remain so given that 32% of customer service executives said they are not yet considering their options in this regard. Surprisingly, only about 8% of the customer service executives surveyed reported that their companies employ mobile messaging to support customer service escalation management. About 3% of companies are piloting these capabilities, and over 60% are not yet considering mobile messaging in support of escalation management IDC #

3 FIGURE 1 State of Deployment of Mobile Messaging Services Q. At what stage is your organization today in the deployment of mobile messaging technology (SMS, MMS, and push notifications) for each of the following business activities? Customer alerts, updates, reminders, and notifications Customer promotions/offers Customer surveys Employee surveys Escalation management (% of respondents) In production enterprise wide In production by unit or department Pilot/proof of concept Researching Considering but not yet pursuing Not considering yet n = 142 Opportunities for Now and in the Near Term Customer alerts, updates, and other communications offer opportunities to improve customer experience. These communications can be proactive (e.g., to remind customers of some action they should take as part of normal operations and procedures). While proactive communications vary from one industry to the next, customers commonly perceive them as value-added services. The good news is that alerts can be offered at very low marginal cost provided back-end content, warranty, delivery, customer behavior monitoring, and such systems are in place. Alerts can mitigate poor customer service, a reactive use of mobile messaging in response to a defect in a process or product related to that customer. There is a tremendous opportunity to improve customer service escalation management with mobile messaging, especially in industries employing mobile workforces and, more broadly, among companies taking a "mobile first" approach to their application strategies. Mobile messaging delivery of promotions and offers should be aligned with the role these communications are designed to serve, and those roles themselves need to be aligned with customer expectations. To improve perceptions of customer service, alerts and updates need to have the right tone of voice consistent with the brand and customers' expectations of its promise, and they need to 2014 IDC #

4 have a cadence tuned to a customer's pace and priorities. Mobile messaging programs need to be coordinated with other communication channels (e.g., outbound and inbound contact center calls and chats via an enterprise marketing management system). Mobile Messaging Customer Service Value Drivers Customer service executives see mobile messaging driving several dimensions of value. Naturally enough, as shown in Figure 2, 39% of customer service executives cited its role in differentiating or improving the customer experience. In addition, an equal number of customer service executives point to mobile messaging's value both in attracting and retaining customers and as a means to gain deeper customer insight (35% each). Customer service executives who take this view of mobile messaging are attuned to their broader role in excellent customer experience management and see mobile messaging as a key part of that effort. The next two mobile messaging value drivers most frequently mentioned by customer service executives relate to mobile messaging's role in internal coordination of the customer-facing operations mentioned previously enhancing multichannel delivery capability, cited by 29% of respondents, and improving employee communications, mentioned by 15% of respondents. FIGURE 2 Greatest Opportunities for Value for Mobile Messaging Q. Of the customer, employee, and operational business priorities listed below, which three do you believe mobile messaging (SMS, MMS, and push notifications) can have the greatest impact on? Differentiating or improving the customer experience 39 Attracting and retaining customers Gaining deeper customer insight Enhancing multichannel delivery capability 29 Improving employee communications (% of respondents) n = 142 Note: Multiple responses were allowed IDC #

5 Mobile Messaging Deployment: Choice or Complexity The number of mobile messaging vendors or aggregators employed by customer service organizations varies widely. As shown in Figure 3A, a slight plurality of these organizations (33%) utilize a single vendor, while 22% utilize two vendors, 25% utilize three vendors, and 15% utilize four or more vendors. (The remaining 5% say they don't employ a vendor.) These findings suggest that customer service organizations' needs vary beyond the capabilities any single vendor can provide (e.g., geographies covered or a splintered approach to mobile messaging vendor management). Based on our experience and the diversity of verticals represented in our survey (e.g., transportation and travel and hospitality), we believe that these results point to a mix of both conditions being the case. This brings up an important vendor management concern. More than 60% of companies are using more than one vendor. Many customer service organizations are not yet running mobile messaging technology enterprise wide. For example, only 22% of customer service organizations run alerts, updates, and reminders on enterprise platforms. There is a significant opportunity to work toward a platform mobile messaging strategy using the fewest feasible number of vendors. Such an approach requires strong governance across IT and all lines of business. A comparison of the results presented in Figure 3A with those presented in Figure 3B the number of mobile messaging initiatives underway or planned in customer service reveals that 18% of customer service organizations have three initiatives underway or planned but 25% have three mobile messaging vendors. A similar pattern emerges when we look at the percentage of organizations that have four or more initiatives underway/planned and four or more vendors, at 13% and 15% of organizations, respectively. This situation suggests two opportunities: better governance of mobile messaging vendors and selection of vendors with a suitable breadth of capabilities in terms of how an organization presents its breadth of requirements IDC #

6 (% of respondents) (% of respondents) FIGURE 3A Current Mobile Messaging Vendors/Aggregators Q. How many mobile messaging (SMS, MMS, push notifications) vendors/aggregators are you working with today? Zero One Two Three Four+ n = 142 FIGURE 3B Mobile Messaging Initiatives Planned or Underway in Department Q. In your respective business function (department), how many mobile messaging initiatives do you have planned or underway? n = One Two Three Four Five IDC #

7 Customer Service Organizations Approach Mobile Messaging Initiative Justification Differently As shown in Figure 4, customer service organizations are required to justify their mobile messaging projects by various means. The survey question allowed a multiple-choice approach. 76% of customer service executives surveyed cited identification and definition of a problem as an approach they take to justify mobile messaging initiatives, while 49% must meet an ROI requirement, 39% justify their initiatives with a payback calculation, and just over a third (35%) focus on cost reduction. Investment "hurdles" are high. Nearly 33% of customer service executives justifying their investments on an ROI basis expect returns of at least 30%, and another 64% expect returns of 11 30%. Almost 80% of customer service executives using payback as their justification expect to see a return in a year or less. These results suggest a tension between an urgency to act ("just spot the problem") and reservations about cost ("show me an ROI"). We believe that as the market matures, and ROI or payback period hurdles become well documented, the urgency to act will emerge as the most important driver for investment in mobile messaging. The compelling momentum toward "mobile first" service design will amplify this trend. FIGURE 4 Basis for Investment Justification Q. In regard to making the business case for new mobile messaging projects or initiatives, what type of justification is required to gain funding? A problem needs to be identified and defined 76 ROI 49 Payback period 39 Cost reduction 35 No formal justification required Total cost of ownership (TCO) Internal rate of return (IRR) (% of respondents) n = 135 Note: Multiple responses were allowed IDC #

8 Vendor Selection Our analysis sheds light on three aspects of how customer service organizations approach selection of their mobile messaging platform vendors: preferences by vendor type, top 3 concerns with incumbent mobile messaging platform vendors, and services worthy of a price premium. As shown in Figure 5, no one type of mobile messaging platform vendor satisfies more than about a third of the customer service executives we surveyed. The general preference leans toward retaining a vendor that covers more communication channels, with 35% of customer service executives preferring to do business with a single vendor that can support all communication channels, but 30% still want to source mobile messaging services from a specialist. Building a mobile messaging platform internally is the least preferred option at 14%, but this overstates the number of customer service organizations in most verticals that want to take a "build it ourselves" approach to mobile messaging platforms because the lion's share of "build it ourselves" sentiment comes from the information technology sector. FIGURE 5 Preference by Provider Type Q. What approach will you take (or have you taken) with regard to adding mobile messaging (SMS, MMS, and push notifications) to your business? Use mobile messaging solutions from an existing communications provider (20.4%) Build your own mobile messaging solutions internally (14.1%) Other (0.7%) Source mobile messaging solutions from an SMS, MMS, and push notifications specialist (29.6%) Choose a multichannel provider that can offer solutions across all communication channels (35.2%) n = IDC #

9 Another finding suggests widespread dissatisfaction with the incumbent mobile messaging platform vendors due to a lack of required capabilities only 20% of customer service executives surveyed expressed a preference for using mobile messaging solutions from an existing communications vendor. Figure 6 reveals why so few customer service executives prefer to go with an incumbent vendor large numbers of the organizations we surveyed have one or more concerns about their current vendors. However, while dissatisfaction runs relatively high, few customer service executives expressed willingness to pay a premium for capabilities that address their concerns. As a group, customer service executives carry a high set of "table stakes" expectations about the extent and quality of services and capabilities vendors provide. There are two slight exceptions to this pattern of low willingness to pay a premium. The first is for the lack of professional or managed services, the largest concern shared by 64% of customer service executives surveyed; 25% of customer service executives expressed a willingness to pay a premium for professional or managed services. Second, with about a third of respondents expressing dissatisfaction with their vendors' customer service, just under a fifth, 18%, say correcting that problem is worth a premium. FIGURE 6 Issues with Existing Vendors and Willingness to Pay a Premium Q. What are your top 3 issues with your current mobile messaging vendor? Q. Of the listed items, which ones would you be willing to pay a premium for? Does not offer professional or managed services Is not flexible enough Doesn't provide APIs Does not support the mobile messaging channels I require Lacks domain expertise in mobile Has poor customer support Cannot scale to support my business needs Mobile messages are not encrypted Does not support global SMS Lacks financial stability Is not able to export data into existing analytics/reporting systems A top 3 issue Worth a premium to correct (% of respondents) n = 142 for question 1, n = 110 for question IDC #

10 ESSENTIAL GUIDANCE Ongoing IDC research across industries shows that customer service is an ever-increasing means to distinguish a company from competitors. In view of that overall trend, we recommend that customer service executives approach their management of mobile messaging platforms within the following framework: Understand and attend to your customers' needs with preemptive service and speedier reactive service when needed. Employ mobile messaging services as an integrated part of well-orchestrated customer service communications supported of course by superior customer service in the first place. Deploy mobile messaging internally as well to hold the line on the cost of providing superior service. Focus on applying mobile messaging on coordinating workers and processes that fulfill expectations set by customer communication. Look for near-term opportunities in mobile customer alerts and updates, delivery of promotions and offers, and customer insight. Begin justifying mobile messaging programs with a sharp delineation of the problem to be solved or the opportunity to be seized and back that up with ROI, payback, and cost reduction calculations. Align mobile messaging deployment with the needs and strategies of the business. Balance any preferences for a mobile messaging specialist with recognition that vendor consolidation gains efficiencies. Temper the trade-off between consolidated vendor management efficiencies and satisfaction of diverse needs of the business. Work with your information technology line-of-business owners to address any pressing concerns about your incumbent mobile messaging vendors. Coordinate your respective concerns and exercise due diligence as you make vendor selection decisions IDC #

11 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA USA idc-insights-community.com Copyright Notice External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2014 IDC. Reproduction without written permission is completely forbidden.