Managed Business Process Services Executive Report Elevating Customer Experience to the Next Level for a Major Consumer Electronics and Products Company Finding innovative actions to improve customer service
Introduction In the highly competitive Consumer Electronics industry, hundreds of new products are launched in the market every month and millions of consumers jump from brand to brand, buying what they believe to be the best product and best value. With so many alternatives available to choose from, customer service can play a crucial role in consumer loyalty and retention. A negative customer service experience can result in customer loyalty falling by 50% or more and 90% percent of unhappy clients say they will never purchase from the company again. To make matters worse, these disgruntled consumers will often share their negative experiences with friends and family, magnifying the damage. A leading consumer electronics and products company is constantly striving to find innovative actions to improve customer service without increasing operational costs. Already engaged in a business process outsourcing deal with IBM, the company selected IBM to drive a transformation plan to be a best in class customer service operation, thereby further differentiating their top-flight products while optimizing their overall operational investment and costs. According to a recent benchmarking study of the top 12 competitors by the Consumer Electronics Association in 2008, the company ranked second overall with 82 percent completely satisfied with action taken and third overall in ranking customers as very satisfied with knowledge of representative Through the six-year (and counting) relationship, the company and IBM successfully transformed many aspects of the company s customer experience, enabled leading edge self service options, deployed a new system of measurements, responded quickly and adeptly to several market crises, and rebalanced the global delivery strategy to meet business objectives. A Successful Partnership IBM and the company developed a new partnership to co-design an end-to-end CRM and customer service solution that would provide significant value to both companies. The company would outsource their contact center needs in North America for several key brands which comprise their consumer electronics and personal appliance product portfolios. The contact centers resolve consumer inquiries for general information, product features and capabilities, technical support, product replacement, orders and exchanges. The centers provide service seven days per week with extended business hours. Support channels include voice (inbound and outbound), white mail (mailroom) and back office functions with language capabilities for English, Spanish, and French. The company s primary objectives in seeking a customer service outsourcing partner were two-fold: deliver superior customer experiences while simultaneously driving down operational costs. These high objectives were to be met with a best in class operational model, improved processes, and call center and service optimization. IBM participated heavily in determining the outsourcing strategies that would fulfill these objectives and was eventually chosen as the preferred vendor. IBM was the clear choice in that they had the strategic purview to envision a new model, the operational expertise to get the job done right, and the global resources and infrastructure to deliver high quality service at a competitive price point. Perhaps most important in the selection of IBM vs. other providers was IBM s philosophy of delivery excellence,
2 Elevating Customer Experience to the Next Level for a Major Consumer Electronics and Products Company meaning the deal had to be formed perfectly to meet business objectives while being economically robust for both parties. The relationship started in April of 2004 with initial delivery locations in Florida; Canada; and Southeast Asia deploying 300 FTEs. IBM took over business as usual operations immediately, fulfilling customer service requests. Soon after the engagement began, customer satisfaction scores jumped to leadership levels. After consistently ranking outside of the Top 10 Consumer Electronics companies in the Consumer Electronics Association (CEA) yearly ranking, the partnership with IBM support brought the company all the way up to 3rd place in 2009. Remote Triage helped improve how service calls were prioritized and reduced overall product repair costs. The impact to the company s business - and bottom line - became apparent very quickly. Starting in 2008, IBM and the company responded to a series of market changes. These and other company needs of transformation initiatives were launched to improve the company s customer service experience while reducing costs. These included: 1. 2. 3. 4. 5. 6. Simplicity Advantage Services, Remote Triage and ebooking. Re-design of the IVR System Implementation of NPS customer experience tracking model to drive customer loyalty Moving Offshore Customer Support Onshore Rapid Event-Driven Contact Center Deployment in Canada and Europe Transitioning New Products Each of these initiatives will be discussed in more detail below. 1. Simplicity Advantage Services, Remote Triage and ebooking. IBM and the company undertook some significant changes in how consumers are handled, including instituting Simplicity Advantage Services, remote triage, and ebooking. Each of these boosted the company s brand and reputation, differentiating it from competitors. The company s Simplicity Advantage program offered a compelling new level of service for consumer electronics customers. Certain customers automatically receive three key benefits of the Simplicity Advantage program: lifetime technical call-center support, prompt scheduling of in-home warranty repairs where geographically available, and a simplified exchange program. In addition to the projected $3M in annual savings in product repair avoidance by performing more effective product triage through the call center, the company realized many benefits and improvements: ebooking optimized the scheduling of in-home repairs by enabling call center agents to coordinate service appointments. The company saw measurable improvement on many significant customer service metrics, including Customer SAT increasing from low 70 s to mid 80 s, never before achieved at the company. The successful execution of these programs demonstrates the company and IBM s dedication and ability to drive change within the business. 2. Re-design of the IVR System IBM and the company determined there was a significant opportunity to improve customer value and improve advocacy through re-designing the Interactive Voice Response (IVR) system to address usability issues while complying with the complex call routing rules required by the business. Many of the results stemmed from a dramatically simplified IVR system, which enables accurate routing of consumers to appropriately skilled personnel by product. IBM engaged IVR and Cognitive
3 Psychologist experts, who were able to improve usability, while complying with the company s business requirements, satisfying two major goals. The redesigned system also created a streamlined and more pleasant end-user experience and reinforced the company s commitment to its Sense and Simplicity vision, resulting in much calmer customers being delivered to the customer reps. The IVR changes dramatically reduced repeat calls, reduced IVR minutes overall, reduced transfers from 40% to 2%, and reduced call abandons from 15% to less than 5%. We re thrilled to see the success the company has had as a business, as a brand and as a partner with this solution. The company is now a referencable IVR client for IBM and I don t think there is a greater compliment they can give us. said Vanessa Michelini, Associate Partner, CRM BTO Delivery. 3. Implementation of NPS customer experience tracking model to drive customer loyalty Companies across the globe are reevaluating the tools and techniques they use to understand customer desires and expectations and how to act on them. The better a company can do this, the more likely they will build customer advocates or customer promoters. Customer advocates are the best customers: they typically buy more products, stay loyal to the brand, are less sensitive to price fluctuations, and recommend products to others. One powerful technique for understanding customer advocacy is the Net Promoter Score (NPS). More sophisticated than traditional satisfaction or call center metrics, NPS provides a more accurate picture of how well service is meeting customer objectives, and more specifically, how it is creating advocates out of the customer base. IBM was a great proponent of NPS, as IBM was proactively monitoring the service market. In 2008, IBM launched a NPS pilot at the company and in 2009, the company and IBM engaged in deploying the NPS program globally across all company locations. The objectives of the program were to identify and deliver exactly what customers value, when and where they need it at the expected quality level. By doing so, the company and IBM were able to prioritize aspects of the customer experience, focusing and investing intently in areas the customer finds important, optimizing the interactions that were less important, and eliminating (or minimizing) activities that do not add value in the customers eyes. Through this process, a new service strategy was devised that improved customer advocacy at an optimized cost. Upon devising the strategy, IBM and the company developed a systematic approach to take certain actions. Now, our NPS scores have consistently shown a high level of performance, exceeding goals in 17 out of 19 months. According to a recent benchmarking study of the top 12 competitors by the Consumer Electronics Association in 2008, the company ranked second overall with 82 percent completely satisfied with action taken and third overall in ranking customers as very satisfied with knowledge of representative. The NPS initiative highlights the company s and IBM s appetite and capacity to address customer experience challenges in new ways, looking beyond the day-to-day operational needs to truly provide a strategic insight into the advocacy of the company s customer base. 4. Moving Offshore Customer Support Onshore The company had determined that they would meet their customer objectives better by transitioning a service center located in Southeast Asia to a U.S. Midwestern city. Most impressively, the center remained cost neutral despite being moved from what was considered a lower cost market to a higher quality onshore center.
4 Elevating Customer Experience to the Next Level for a Major Consumer Electronics and Products Company The shift enabled many new benefits and was cheered as eventless in its transition, meaning that there was no interruption in the eyes of the company s business leaders or customers. The project lifecycle took 75 days from LOA sign to the first Go Live resulting in 100% Go Live success for 186 agents across three phased training waves. IBM executed a successful on-time transition, decommissioning two sites in parallel while launching Midwest operations from the ground up. Exceeding expectations, IBM was able to decommission the Southeast Asia site two weeks ahead of transition schedule. The company s site in Florida was decommissioned on schedule with the transition plan. The new center met and exceeded customer experience expectations. After just two weeks of being operational in the Midwest, an NPS score increase of 39% above target was achieved and sustained (25% achieved vs. 18% target). Critical metrics for Average Speed to Answer, Call Abandonment, First Time Resolution and Remote Resolution were met or exceeded during the first three months of transition. One company executive overseeing the project stated This was the smoothest transition ever. 5. Rapid Event-Driven Contact Center Deployment in Canada and Europe A potential issue was identified by Health Canada in regards to the chemical Bisphenol A (BPA), which had been used in older baby bottles in the company s popular infant product line. The company ran a campaign to replace all older baby bottles containing BPA for newer BPA-free bottles for Canadian consumers from May through August 2008. Generally, the team was in an emergency mode, working at extremely fast paces and needing results immediately. The company and IBM jumped into duty quickly to create a call center solution to handle consumer calls for BPA bottle exchanges. A bilingual call center solution was implemented within three business days and launched in Canada. Achievements included: Team of 45 agents were onboarded and trained via creative resource strategies and relationships Provided bilingual support for English and French consumers Enablement of tools, process, telephony and reporting Within a few days of implementation, team was handling 3000+ calls per day, far exceeding initial forecasted volumes. The metrics for the three-month effort are shown below: Month Calls Offered May 51,005 June 11,273 July 1,083 In 2009, a coffee maker recall had the company reaching out to IBM for quick support. IBM set up product recall support to the company s customers within three weeks for six countries in the European market. IBM was able to staff and train 900+ agents servicing customers in six different languages. IBM executed this four-month engagement to meet government guidelines in all countries. IBM provided Inbound, Outbound, e-mail and white-mail support to ensure maximum consumer communication and pro-active consumer resolution. IBM s approach allowed the company to be able to quickly get the message to the consumer and comprehensively respond to their customers during a difficult product recall campaign. By leveraging existing management resources and specific product knowledge, the company knew that IBM services would speed transition and ensure positive customer satisfaction and continued brand loyalty. Perhaps the most impressive aspect of both efforts was how IBM could enable speed and agility to a traditionally infrastructure- and time-intensive activity.
5 6. Transitioning New Products The company had determined that they would transition the servicing of key products previously handled in house, to the U.S. Midwest center. The project started in November 2009, with a mere four weeks to get the center up and running by the December 14th launch date. This also coincided with the peak holiday season, both increasing the level of capacity needed and raising the relative risk level overall. Transition plans included development and documentation of business processes, telephony migration and application updates. IBM and the company worked together to use company training materials and delivered initial product and process training. Successful transition of the center happened on schedule and as needed. Overall, the NPS showed very quick and positive improvements, showing a 36% improvement from December performance of 14% to finish March at 50%. In Closing The company and IBM s six-year history in managing North American service has already provided a rich track of experiences and success stories that have helped both companies grow and thrive. As a look backwards, these case studies provide us with a demonstration of our mutual efforts, our ability to collaborate, and our ability to roll up our sleeves and do a job well done. Looking forward, they set the stage for what we can achieve in the future, further improving the advocacy of the company amongst its customer base and further improving the operational prowess and efficiency that drives profitability for our firms.
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