Evidence-Based Service Building Brand Value through Every Customer Touchpoint

Evidence-Based Service Building Brand Value through Every Customer Touchpoint

Table of Contents Executive Summary...3 The Changing Face of Brand...4 The Importance of Aligning Brand and Customer Service...4 Guidelines for Aligning Customer Service to Brand...5 The Problem with Established Practices...5 How to Align Customer Service to Brand...6 The Value of Evidence-Based Practices...7 The Next Wave: Evidence-Based Service...7 Evidence-Based Service Guilding Principles...8 Implementing Evidence-Based Service...9 How KANA's Service Experience Management Solution Supports Evidence-Based Service...10 Conclusion...11 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 2

Executive Summary Traditionally, branding has been the responsibility of the marketing department advertising, offers, promotions these were what defined brand in the eyes of the consumer. But the view of brand has changed radically over the last decade. Where branding once stopped with the purchase of a product or service, now the entire customer experience represents the brand. Today, post-sales brand management is every bit as important if not more so than sales and marketing activities. This shift in brand perception means that every touchpoint, including customer service, must enforce the brand. However, companies have found it difficult to measure the effect of customer service on brand. They have been forced to rely on gut feel about the best way to deliver service experiences that positively reinforce the brand s image in the minds of consumers. What is needed is an ability to align the service experience with brand in a way that is appropriate for customers, yet enables the company to effectively manage costs, compliance, and other key performance indicators (KPIs). This requires the ability to measure the effect of each service interaction on brand perception and the rest of a balanced scorecard. With the advent of evidence-based methodologies, customer service organizations now have a practical methodology that helps them measure the effect of changes to the service experience on their brand. Evidence-based service leverages the lessons of evidence-based medicine, which applies data gained from scientific experimentation to predict the outcome of a medical treatment. Using experimentation and rigorous measurement, customer service organizations can determine how each customer interaction affects brand. By deliberately changing and testing a service process and then re-measuring the impact, the organization can discover the best possible process to satisfy customers and reinforce brand while meeting company objectives for cost control, compliance, and revenue generation. Implementing evidence-based service requires an agile customer service platform that can support controlled experimentation, monitor the effects in real time, and facilitate immediate response to improve the experience. KANA has developed a service experience management solution to meet these requirements. Evidence-based service is a practice that can be used to align all customer touchpoints with brand promise. In this paper, we focus on the relationship between customer service 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 3

and the brand promise, discuss how evidence-based methodologies can be applied to service operations, and provide guidelines for ways to implement evidence-based service in your organization. A well-honed brand evokes in consumers an emotion and a promise of what it will deliver, without the consumer having to do much if any research. Allen Adamson Managing Director Landor Associates branding firm The contact center is the single place where an organization demonstrates its concern for, and value to, the customer. These interactions make or break the brand promise. The Changing Face of Brand A brand is a promise. Once simply a manufacturer s mark, brands now play a starring role in the global economy. It is no exaggeration to say that brand power underpins the prosperity of nearly every successful organization, and for many companies the brand is the largest asset on the balance sheet. By creating a meaningful context for the relationship between company and customer, the brand answers the two most important questions in the purchase process: Why buy? Why buy from you? In the past, brand was controlled by the company and defined by sales, marketing and advertising activities. Post-sales brand management was not emphasized and in many cases the customer experience after the purchase of a product was very different than its pre-sale brand image. There has been a shift in the global economy from manufacturing to services, and a parallel shift from transactions to relationships. Now, every interaction between a company and customer affects the brand, and the power of the customer to shape the brand has never been greater. Now, it is a world of undifferentiated products, competition, and one in which the voice of the customer is heard loudly via social media outlets such as blogs, discussion boards, rating and review sites. The brand is no longer controlled by the company, and post-sales activities significantly influence a customer s perception of a brand. In fact post-sales service has become critically important to the bottom line of most companies. Michael Maoz Gartner THEN AND NOW. BRAND WAS DEFINED AND DRIVEN BY SALES AND MARKETING ACTIVITIES. NOW, THE COMPLETE RELATIONSHIP WITH THE CONSUMER AFFECTS BRAND, AND CUSTOMER SERVICE HAS BECOME A PRIMARY DRIVER OF THE CUSTOMER S PERCEPTION OF BRAND. The Importance of Aligning Brand and Customer Service The new reality means that the right customer experience can be ensured only when every customer touchpoint aligns with the brand promise. As Forrester Research points out, what companies must do now is to consistently deliver on brand promises that resonate with customers at all customer touchpoints. In this business reality, it is crucial that the post-purchase experience matches a company s brand. This entails: 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 4

JetBlue successfully aligns customer service and brand. JetBlue s customer service mirrors its branding as selfservice for travelers who want low-cost airline flights. They offer exhaustive Web selfservice and only limited email and phone support. Customers who choose the email option are warned that response may take up to seven days, which encourages them to use selfservice. A JetBlue customer is not disappointed with the lack of white-glove service because they would never expect it from the airline it is not their brand promise. Delivering on brand promise in a repeatable, dependable, and consistent manner across every touchpoint. Understanding the essence of your brand, and aligning your service experience with your brand in a way that resonates with your customers. This alignment is of critical importance as companies attempt to compete in today s highly competitive business environment and reduce costs for increasing revenue over the lifetime of the customer. Guidelines for Aligning Customer Service to Brand But what does it mean to align customer service to a brand? The simple reaction might be to conclude that the highest quality, highest-touch service is always the best choice for supporting a brand. In fact, this is not the case. Alignment does not mean that you always have to deliver the best service theoretically possible. Service needs to be in line with the company s business model and customer expectations. As Forrester s Bruce Temkin points out, customer experience is not about delivering Disney-esque moments or trying to make people happy at all costs. Good customer experience management is about consistently delivering on brand promises that resonate with customers. So you can t rate a firm s customer experience management efforts without fully understanding its brand strategy. If your brand is low-cost self-service, then your customer service offering can reflect that with simple, self-help Web service and limited assisted-channel support. If you brand is expensive products delivered with the utmost care, then your service offering will likely require multiple high-touch channels including the phone and live chat. Tiffany s brand of luxury, highend retailing requires hightouch customer service. To Tiffany, it s all about the experience including customer service. Tiffany supports its brand by encouraging customers to call so that it can provide person-to-person assistance. Their Website reflects this model with a Customer Service page that simply presents the phone number to call. An email option is available, but even on the email form page, the 800- number appears directly under the title. This requires aligning your customer s expectations and satisfying them with a service experience within your targeted market. Determining the right type of service requires careful analysis and understanding of your service operations, as well as the nature of inquiries, customer preferences, costs, and infrastructure demands. In essence, you need to translate your brand promises into measurable service KPIs such as cost of service, customer satisfaction, retention, and compliance overhead. To do this you will need to: Understand your target market and the detailed personas within this market that have been defined by your Marketing organization. Understand the goals and objectives for each persona within your target market. Measure customer satisfaction and loyalty according to the different personal segments using such techniques as the Net Promoter score, market awareness, and customer satisfaction surveys at the end of each customer interaction. By following these guidelines, you can strategically tune your offering to your customers needs, your company objectives, and your brand. The Problem with Established Practices When companies attempt to attain their brand KPIs, success is often elusive. For example, 86% of software deployments are not considered highly successful 1; poor service caused 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 5

50 million US telecom and entertainment customers to churn in 20092; and Forrester predicts that poor customer experience quality caused a swing of $242 million for a large bank and $184 million for a large retailer.3 This is not an indictment of customer service organizations, but rather a reflection of how difficult it is to systematically measure post-sale customer support programs against a company s brand and business goals. The following table summarizes common errors that are routinely made on the road to brand alignment. Common Errors Common Errors Results Results Service offering is Produces brand confusion and unrealistic expectations when not in line with brand customer service does not match the brand. expectation Service activities are not tied to business outcomes There is a language disconnect between customer service managers, who talk in the language of average handle time and volume of emails, and C-level executives who care about company performance, overall customer loyalty, and churn. This results in a lack of executive support for tactical customer service initiatives. Blinded by the accepted truth Applying a deeply held, but unexamined and untested ideology can lead to inefficient service. Relying on the past Benchmarking the wrong factors Applying processes and technologies that worked in the past can lead to productivity challenges if they are used blindly without sufficient regard for your new company s size, maturity, or management philosophy. Past lessons are relevant, but it is important to thoroughly analyze what the problems were, how the company operated, whether there were any measurable results, and whether or not the methodologies are appropriate for your organization. Results in focusing on the wrong lessons which may not be fundamental to a customer service organization s success. How to Align Customer Service to Brand The key steps to align service to your brand include the following: Measure the impact of your brand via customer surveys, analysis of market awareness, and Net Promoter Score. Measure your service offering against your brand. Tie outcomes and any changes to your service experience to outcomes. 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 6

Traditionally, service organizations do not have flexible solutions that allow them to quickly roll out service offerings, baseline them against their brand promise and other KPIs, and systematically optimize the offering. Fortunately, there are established practices from other industries that can be applied to achieving this goal. The Value of Evidence-Based Practices The difficulty in determining the best course of action to achieve a distant or hard to measure outcome is not unique to customer service. It has long been a problem in the field of healthcare and has led to an innovative approach called evidence-based medicine. Evidence-based medicine emerged in the 80 s as physicians began systematic reviews of the evidence for preventive services when writing clinical-practice guidelines. Evidencebased medicine applies the best available evidence gained from a scientific method to ensure the best prediction of outcomes in medical treatment. It is becoming the gold standard for clinical practice. Evidence-based service is a practice that tests how well you are doing against your customer service goals. Applying evidence-based practices to customer service requires the systematic and randomized testing of modeled service experiences against a balanced scorecard of KPIs. This provides the relationship to business outcomes and brand. The medical field s evolution in thinking has led to several other evidence-based practices, including evidence-based policy and evidence-based management. Regardless of the field to which it is applied, evidence-based methodologies have a few things in common: Rigor: A commitment to fact-based decision making, which means being committed to getting the best evidence and using it to guide actions. However, you do not need to wait for the best evidence, just the facts at hand. If you wait to gather optimal facts, the opportunity may pass you by. Experimentation: Treating the status quo as an unfinished prototype, and encouraging experimentation and learning by doing. Testability: Avoiding decisions based on untested but strongly held beliefs, past practice, or uncritical external benchmarking. Aspects of evidence-based practice are already in use outside the medical field. For example, Yahoo! frequently uses experimentation to determine what has the biggest impact on its users. On its home page, Yahoo! typically runs over 20 experiments at a time, changing aspects such as colors, placement of ads, and location of text or buttons. Outcomes of these experiments can have a huge effect. Yahoo! discovered that moving the serach box from the side to center of the home page generated enough click-throughs to bring in about $20 million more revenue a year. The Next Wave: Evidence-Based Service Rigorous, evidence-based practice provides the best solution for escaping the high-risk game of managing a complex service function based on instinct and emulation. With the appropriate collection and use of evidence, aligning the service experience with brand promise is now feasible. 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 7

The goal is to determine through experimentation and rigorous measurement how each service activity affects the KPI scorecard, such as the cost of the interaction; customer satisfaction with the experience; compliance with company policy; and the ability to generate more sales. By deliberately changing the process, and re-measuring the impact, you can determine the best possible process to you achieve a balanced scorecard and tie the discrete service activity to business outcomes. USING EVIDENCE-BASED SERVICE, ORGANIZATIONS CAN DIRECTLY LINK SERVICE ACTIVITIES TO BUSINESS OUTCOMES TO DETERMINE THE EFFECT OF THE SERVICE EXPERIENCE ON BRAND. Evidence-Based Service Guiding Principles There are several guiding principles for implementing evidence-based service: Evidence-based service models each interaction from end-to-end, and then measures its impact on a balanced scorecard of KPIs. It then deliberately changes the process and remeasures the impact on the scorecard. Choose the right starting point for your organization. Evidence-based service is a management philosophy which can be implemented at a micro or macro level. It can be used at a granular level to tune a particular service process or function, like autoresponse rates for email service, or it can be implemented at a global level across all the people, processes, and technologies used to support the service offering. Commit to incremental improvement. Don t assume that current business processes are too much of a mess to fix or impossible to change because of organizational resistance. Benchmark your baseline performance and then continuously drive incremental change. Demand data. All decisions must be data driven and managed to a balanced KPI scorecard. If you do not have the data, invest in the processes and systems required to get it. As most activities in a service organization are mediated by IT systems, these can be leveraged to obtain data for measurement. Look outside your organization. As in health care, customer service is an area with a lot of precedent. Get real data on what has statistically worked for other companies and apply it thoughtfully to your particular situation. Use a customer s eye view. Start with a realistic, honest benchmark of your service experience before launching on an evidence-based service project. Your goal is to impact the brand, which means measuring the impact on customer perception, not just internal performance metrics. 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 8

Implementing Evidence-Based Service As we have noted, you can use evidence-based techniques at any point in your call center or Web self-service lifecycle, such as when implementing an email system, at the point where you integrate email with knowledge management, or for a complete transformation across your service operation. There are several key steps to implementing evidence-based service. THE PROCESS FOR IMPLEMENTING EVIDENCE-BASED SERVICE ENABLES CONTINUOUS REFINEMENT AND IMPROVEMENT OF SERVICE ACTIVITIES TO ALIGN WITH COMPANY BRAND AND CUSTOMER EXPECTATIONS. 1. First, assess the current service experience, define the solution and strategy. Start by determining the communication channels that your customers expect you to offer and which are in line with your brand. Look at the types of service issues you manage and determine which issues are best supported by each channel. Define your goals, objectives, KPI metrics, and growth strategy. 2. Define and implement your technical and business solution. Use your on your goals, objectives, and metrics to define the technical solution and pinpoint company-specific strategies that will guide the Implementation. Implement using standard quality assurance methodologies to make sure deployments are completed on time and on budget; meet business objectives; are stable, scalable and easily maintained; and achieve the projected ROI. 3. Benchmark your organization against a maturity model. A benchmark against a maturity model will help you assess your service operation against industry best practices to identify where changes and improvements can be made. The outcome of the benchmark will be a gap analysis and recommendations for complying with best practices. Using evidence-based service, you can then optimize your solution to implement the recommendations of the benchmark. 4. Plan to holistically transform the maturity of your service organization. With evidence-based service guiding your decisions, you can transform your total service offering by analyzing and reengineering each aspect of the service experience. This can include: Process Optimization Accessing the maturity and performance of customer service processes. 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 9

Segmentation Optimization Assessing the effectiveness of service delivery for each market segment. Multi-Channel Optimization Assessing each channel against the maturity model and benchmark. Content Audit and Transformation Evaluating customer service content and authoring processes to effectively re-engineer content. Knowledge Management Tuning Improving search usability to increase the fundability of content. How KANA s Service Experience Management Solution Supports Evidence-Based Service Applying evidence-based practices to customer service requires a technology solution that offers several key capabilities including the ability to: Easily model and deploy service processes across all of the people and technology involved in the process. Apply evidence-based techniques by changing discrete elements in a process to measure the impact on balanced scorecard of KPIs. Deploy these processes in a randomized manner. Monitor and measure a process and changes made to it in real-time, so that impact is immediately understood and can be instantly modified to achieve improved business outcomes. KANA has designed a service experience management solution to deliver an evidencebased service platform that meets these requirements. The KANA platform enables you to design the complete flow of any service process, from a simple automatic response to an email to a complicated process for managing the discovery of information across data sources, knowledge, case tracking, and email components. Each process can be visually modeled by business owners and then immediately deployed for use by agents in a randomized way or visitors to your Web site. The KANA platform then monitors and measures the success of the process based on your KPIs in real time. You can choose which KPIs to measure at each step in the process. The process can then be changed at any time and at any step to determine the optimal solution. 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 10

KANA S SERVICE EXPERIENCE MANAGEMENT SOLUTION PROVIDES A PLATFORM FOR APPLYING EVIDENCE- BASED PRACTICES TO CUSTOMER SERVICE OPERATIONS. These unique capabilities enable your organization to deliver the service experience that is ideal for maintaining a balanced scorecard of KPIs and effectively supporting your company s brand. By enabling you to orchestrate all your processes, knowledge, and technology, KANA helps you maximize the value of each service interaction to your customers and your business. Conclusion When customer service and brand promise are in alignment, you can deliver experiences that will resonate with your customers, helping increase satisfaction and loyalty, while effectively managing the costs for service delivery. Evidence-based service offers a powerful new way of thinking about customer service. Just as the medical community has learned that evidence-based practices yield measurable benefits in patient outcome and cost benefits, customer service operations can apply these lessons to effectively support the company s brand image and achieve a balance between the often competitive pressures of reducing costs, satisfying customers, increasing revenue, and complying with ever-growing regulation. To learn more about evidence-based service, and how KANA can help you create customers for life, please call us at 1-800-737-8738. 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 11

Copyright 2011 KANA Software, Inc. KANA and the KANA logo are registered trademarks of KANA. Other company, product and service names may be service marks of their respective owners. 840 W California Avenue, Suite 100 Sunnyvale, CA 94086 T 650.614.8300 F 408.736.7613 www.kana.com Contact us at http://www.kana.com/contact-us/contactsem.php Twitter @KANASoftware Linkedin: http://www.linkedin.com/groups/kana-software-1129?mostpopular=&gid=1129 Facebook: https://www.facebook.com/pages/kana-software-inc/146154198748782 All Rights Reserved. 0110-01 i 1 Complexity Avalanche, JB Wood, 2009 2 The Science Of Churn: When And Why Consumers Switch Service Providers, Sally Cohen, Forrester Research, 2009 3 Bruce Temkin, Forrester Research, The Business Impact Of Customer Experience, 2008 2011 KANA Software, Inc. 840 W California Ave, Ste 100, Sunnyvale CA 94086 1.800.737.8738 sales@kana.com www.kana.com PAGE 12