Customer Experience: Essential Requirements for Company Profitability and Competitive Success By Dr. Natalie Petouhoff TABLE OF CONTENTS Executive Summary...1 Economic Imperative of Focusing on the Customer Experience Journey...1 Why Companies Don t Get the Customer Journey Right... 3 How Leading Companies Provide Great Customer Experiences... 4 Conclusion... 6 Executive Summary Companies are experiencing mounting pressure to improve the customer experience and reduce costs at the same time. Customers empowered by the Internet, social media and mobile technologies can quickly and easily find and share information on a company s products, services and pricing whenever they need it. With real-time choices at their fingertips, customers are able to make faster comparisons of competitors, and are thus more demanding of responsiveness from businesses than ever. But most companies are not prepared to cost-effectively provide great, real-time customer experiences over multiple channels integrating phone, email, Web, social media, mobile devices and in-store locations. Businesses are finding it extremely difficult to track, manage and correctly route all customer interactions based on context, history and value much less provide experiences that drive customer loyalty. Failure to do so decreases customer satisfaction, thus increasing the cost of serving them. This combined effect contributes to decreasing revenues, margins and profits for businesses. It s no longer an option to focus on the customer experience it is an economic imperative for successful, profitable companies. Economic Imperative of Focusing on the Customer Experience Journey The reason best-in-class companies see customer experience as an economic imperative is they realise it increases customer loyalty, advocacy and referrals. This results in higher customer lifetime values and decreases the cost to serve customers. In particular, when companies evolve their contact centres from cost-centres to profit-centres, not only do the costs for customer service go down, but the revenue for the company overall increases. This economic trend was recently studied by McKinsey. Savings come from increasing operating efficiency and effectiveness, and at the same time providing a better customer experience that drives less churn and negative word-of-mouth, which influences other customers purchases. The increase in revenue happens because satisfied customers are more loyal, they buy more, and they recommend the company, its products and services to their friends and family. A satisfied customer is also more open to up-sells and cross-sales. In its study, McKinsey compared companies that focus on the customer experience journey as opposed to addressing individual customer touchpoints. Companies that focus on the customer experience journey have a large advantage over their competitors.
Customer Experience: Essential Requirements for Company Profitability and Competitive Success / page 2 For example, a customer-focused company receives a: 10-15% increase in revenue growth 15-20% reduction in cost to serve customers These increases in revenue and decreases in costs are a result of several factors. The McKinsey study showed that when companies are focused on the comprehensive customer experience journey instead of individual touchpoints, they achieve customer satisfaction scores that are 36% higher. In addition, customers are: 19% more likely to remain a customer 28% more willing to advocate for and recommend the company to others 33% less likely to cancel or churn Customer experience is defined by the cumulative customer interactions across the entire customer journey, typically over many different channels. It is this accumulated experience over time that drives satisfaction See Figure 1. Customers expect to use their mobile app, the Internet or a tablet to find answers to their questions. And the use of mobile devices has drastically impacted how companies interact with their customers. In fact, studies show that 77% of customers use more than one channel, yet less than 50% are satisfied when moving across channels with the potential of loyalty leakage around 10% when switching is experienced. Website Mobile App Contact Centre Back Office Branch Purchase Journey Onboarding Journey Account Change Journey Problem Resolution Journey Renewal and Repurchase Journey Figure 1. Cumulative touchpoints and interactions across multiple channels can define a customer journey. Customers are quickly becoming familiar with the different communication channels available to them and expect them to be accessible at all times. Astonishingly, many people actually prefer not to engage via the voice channel when talking to companies, evidenced by consumers completely giving up their landline, with many only using the voice channel for more complex interactions. While some interactions are best over the phone, calling a company using the voice channel sometimes means that other channel options available (such as email, chat, etc.) don t work well enough as they may not be appropriate to the need. Reluctantly, these customers then have to pick up the phone when there are less familiar options available. They know the agent will ask them to repeat the same information they shared during previous unsuccessful attempts on other channels, and they will have to recount their whole journey thus far, costing them more time than it s worth and creating a very difficult and unsatisfying experience. Instead of going through all that, the trend is to just move on to a competitor or use social networks to complain. In fact, of the people who use social media, nearly half of them use social media as a channel for customer service.
Customer Experience: Essential Requirements for Company Profitability and Competitive Success / page 3 While millions of people may not post in social networks, they are reading what others have posted. If your company is providing great products and customer experiences, the reviews and posts online will be positive. But if customers experiences are poor, social media posts which are a permanent record of those customer experiences that will last forever will reflect those negative experiences and drive potential customers away. As new channels emerge, customer service can no longer be considered a phone-centric activity. Companies have to begin interacting with customers in digital channels, including over the Web, social and mobile. And the expansion from phone-centric customer service means the metrics to measure success also must change. It s no longer just about average handle time or average abandonment rate. Companies are looking to new, more strategic metrics like Net Promoter Score (NPS) and Customer Effort Score (CES), which can be better predictors of loyalty, driving more revenue and profit. To successfully meet the demands of today s customers, the traditional call centre must evolve into a multi-channel contact centre that supports interactions with customers in the channels they choose. Why Companies Don t Get the Customer Journey Right Multi-channel touchpoints have greatly complicated the end-to-end customer journey. And the reason most companies don t get the end-to-end customer journey right is that the technology they ve chosen does not align with their strategies and business goals of improving the customer experience. In most organisations, functional departments don t collaborate to deliver a consistent customer experience across various channels. They may also have different customer-facing strategies and technologies. Marketing might own the social media channels and the website. Customer Service might own the phone and email channels. Because the customer experience traverses many different channels, an isolated business unit approach results in a disjointed, confusing and unsatisfying customer experience. In addition, customer-facing processes and associated back office departments are often siloed from the functional departments and the lines of business. The result? The context of the customer s question or issue is not carried between channels or between departments. This means the customer s journey will be made up of: Countless emails, calls and chat sessions Numerous handoffs and transfers Repetition of information and lost context with inefficient processes Deeply dissatisfying experiences that lead to customer churn and negative word-ofmouth Many companies do not understand or underestimate the power of negative word-of-mouth. Studies from Nielsen and Edelman show that when customers post negative things about a company online or describe to their friends how horrible it is to do business with a company, ~80% of all customers believe each other more than they believe that company s marketing and advertising messaging. This means that regardless of how strong the brand might be, customers sharing of poor experiences will increase customer churn and reduce future sales and profits. As a result, companies must begin to focus on driving positive customer experiences that result in positive word-of-mouth.
Customer Experience: Essential Requirements for Company Profitability and Competitive Success / page 4 But even if functional departments do collaborate on a customer experience strategy, it s impossible to provide great customer experiences across the end-to-end journey when using disparate technology across multiple touchpoints and channels. The ability to serve customers properly requires that business agents and representatives have access to the right data required to best serve the customer need. Customer big data insights can be difficult to implement across multiple interaction channels consistently, especially if the effort has not been part of the strategy or technology choices from the beginning. When a company delivers inconsistent and disconnected channel experiences, it s usually because they have not planned out a proactive engagement strategy and instead, their days are filled with fighting fires and reacting poorly to customer issues resulting in impersonal and static experiences. Companies that provide reactive customer care often have the following problems in common: Poor resource assignment Poor ability to carry the customer s context when transferring engagement to other channels Poor customer data available to solve complex customer interactions Poor priority customer handling processes No SLA enforcement for deferred channels No multi-channel workforce optimisation applications such as interaction recording, workforce management, speech & text analytics, or Quality Management No automated workflows from speech & text analytics for routing updates, notifications or training How Leading Companies Provide Great Customer Experiences Companies leading the charge and meeting their Customer Experience challenges are evolving their strategies and technology choices to include voice, web, email, text/im, social media, mobile, SMS and video in customer interactions. They are focused on improving the overall customer journey by being able to systematically offer personalised and adaptive experiences that are proactive at key moments, and provide: Best resource assignments Priority customer handling SLA enforcement Context across different channels throughout the customer journey Use of 100% of the voice of customer through feedback and surveys Multi-channel workforce optimisation apps with automated workflows To deliver a profitable customer experience, most companies will have to do a customer experience makeover See Figure 2. This starts with creating customer journey maps that look at the current experience from the customer s point of view. Most makeovers require evolving from an individual touchpoint focus to reflecting a continuous customer experience journey that is consistent and seamless across all channels and devices. Throughout the customer journey, the voice of the customer must be heard and incorporated into the process, ensuring positive experiences and word-of-mouth, both on- and offline.
Customer Experience: Essential Requirements for Company Profitability and Competitive Success / page 5 Designed Customer Journeys Multi-channel Proactive 1 to 1 Journey Design Multi-channel 1 to 1 Touchpoint Design Touchpoint CX Design Random Journeys Figure 2. To deliver profitable customer experience journeys, companies need to evolve from designing around single touchpoints to creating multi-channel, proactive customer journeys across all touchpoints. To be able to provide great customer experiences every time a customer contacts your organisation, you must determine the best possible treatment that matches their intent and delivers value. Your strategy and technology must balance these with your service level objectives and real-time resource availability across both front and back office. It s no longer acceptable to use linear, queue-based routing systems that limit the flexibility for how customers are handled and scale exponentially in complexity, or hardware-based routing technologies that lead to complex designs offering only marginal improvements and high cost of ownership especially for multi-site deployments. These old routing methods result in long wait times, multiple transfers, underutilised personnel, unhappy customers and increasing operating costs. A customer journey redesign typically includes the following areas See Figure 3. Coverage for the overall customer journey across all touchpoints and channels using the most experienced, best-skilled, available resources the first time Customer segmentation coming from big data customer analytics Coverage for back office work items to ensure all SLAs are met Measurements showing indicators of customer loyalty All Touchpoints & Channels Back Office Work Items Comprehensive Coverage by Journey Customer Journey Redesign Map Meet Back Office SLAs Big Data Customer Analytics Segment Analysis/ Customer Journey Discovery Analytics Closed Loop System Iterative Refinement NPS & Customer Effort Scores Measurement Figure 3. Customer journey re-design requires closed loop systems and iterative refinement.
Customer Experience: Essential Requirements for Company Profitability and Competitive Success / page 6 Conclusion Companies that want to increase revenue and decrease operating costs must evolve their customer experience strategy to address the end-to-end customer journey. Doing this costeffectively and efficiently means using a customer experience platform that brings together all the elements needed to proactively identify and address customer needs across key touchpoints and multiple channels of self- and human-assisted service. The platform must not only track the status of each customer interaction, but also identify the patterns of activity to determine if the business is making progress toward their measurement goals, and at the same time ensure a positive customer experience. This type of customer experience makeover will transform a costly, inefficient operation and call centre to a strategic business asset. It will allow your organisation to drive a superior customer experience and design a connected end-to-end journey that will increase loyalty and revenue over the long term for the whole company, making it more profitable and competitive. Author Bios Dr. Natalie Petouhoff About Genesys Genesys is a leading provider of multi-channel customer experience and contact centre solutions. With over 3,500 customers in 80 countries, Genesys orchestrates more than 100 million customer interactions every day across the contact centre and back office. Genesys helps customers power optimal customer experiences that deliver consistent, seamless and personalised experiences across all touchpoints, channels and interactions. Dr. Natalie guides companies in transforming their contact centres by performing assessments that deliver a recommendations and business cases to help justify changes to senior leadership. Dr. Natalie has worked in Customer Experience for over 20 years, has written hundreds books, articles, ebooks, white papers and been interviewed in publications like The New York Times, Wall Street Journal, Fast Company, Business Week and provides executive workshops on Determining the Value and Strategy for Driving Top Customer Experience Programs. Dr. Natalie speaks at many conferences and teaches at UCLA. Her keynote speeches on Customer Care are designed to engage, inform and inspire new ideas and more profitable businesses. You can follow her work at www.twitter.com/drnatalie and www.drnatalienews.com For more information visit: www.genesys.com/uk, or call +44 (0) 1276 457000. Genesys Telecommunications, Unit 100 Frimley Business Park, Frimley, Camberley, Surrey, GU16 7SG Tel: +44 1276 457000 Fax: 44 1276 457001 www.genesys.com/uk Genesys and the Genesys logo are registered trademarks of Genesys Telecommunications Laboratories, Inc. All other company names and logos may be trademarks or registered trademarks of their respective holders. 2014 Genesys Telecommunications Laboratories, Inc. All rights reserved.