How to transform your customer experience by making your customer service proactive

A Publication by Adrian Swinscoe | RARE Business Caz Yetman and Danielle Sheerin | BrightCultures

Contents

Introduction

Chapter 1 The Business Case

Chapter 2 Finding Opportunities

Chapter 3 Implementing An Effective Strategy

Conclusion

About The Authors

IntroductionTraditionally, customer service is reactive. But, reactive customer service is both expensive and un-engaging. Meanwhile, proactive customer service offers cost saving and customer engagement opportunities.

Whilst proactive customer service is not a new concept, the majority of companies are still only organised to deliver customer service reactively.

Firms need to look at what reactive customer service is actually costing them, in terms of extra resources and costs and what they are, potentially, losing out on.

This white paper highlights the business case for offering proactive customer service, showcases some great examples of organisations already doing this, how they are benefiting and outlines a process for getting started and for developing ideas and initiatives for improvement.

“Between 25% and 40% of all calls to UK contact centres are either unnecessary or avoidable.”

There are four different types of (overlapping) proactive customer service:

1.Anticipatory e.g. understanding common customer issues and providing solutions before the customer asks.

2. Relevant e.g. service that understands the customer context and provides support relevant to that i.e. customer location data etc.

3. Self-serve e.g. letting customers find their own solution through things like FAQs etc.

4. Preventative e.g. letting customers know that there may be a problem so they can avoid it or be prepared i.e. text notifications etc.

Chapter One

The Business Case Here are a few reasons that explain the potential opportunity of proactive customer service (the business case):

1. There is a clear opportunity to reduce costs. Research by Sabio and the Customer Contact Association found that

between 25% and 40% of all calls to UK contact centres are either unnecessary or avoidable. According to the research, the most common causes of these calls included: customers chasing information about deliveries or updates on what was due to happen next in the purchase cycle; customers calling to clarify issues regarding pricing or terms and conditions; and customers having to re-call the contact centre again as the contact centre had failed to address their problem first time around. This research is supported by work conducted by the Corporate Executive Board who found that that 57% of all inbound calls to a contact centre could largely be attributed to a customer not being able to find what they were looking for on a company’s website.

2. Customers want to be contacted proactively. A survey by inContact found that 87% of customers surveyed said they

wanted to be contacted proactively by a company, when it came to customer service issues. Also, nearly three quarters (73%) of those who had been contacted proactively and had a positive experience said that it led to a positive change in their perception of the business that contacted them.

3. A proactive customer service strategy delivers cost savings and boosts retention.

Further research by Enkata put all of this together and showed that an effective proactive customer service strategy can:

1. Reduce inbound customer service call volumes by between 20-30% over a 12 month period;

2. Lower call centre operating costs by as much as 25%; and 3. Has a positive effect on customer retention, boosting it by 3–5%.

4. Digital technology means it’s easier than ever to offer proactive customer service.

Digital technology has increased customer expectations. But it also means that it’s now easier than ever to service the needs of large volumes of customers at once. Organisations can now capitalise on digital technology by creating content that anticipates the needs of a wide audience via self-serve content (e.g. video support etc.). Ultimately, organisations can add value-add services around common customer pain-points that remove the need to support entirely. This means that customers who will require 1-on-1 support will only be those with more complex issues and that higher volumes of customers can be served at lower costs. In addition, studies show that social agents are able to handle four to eight times more issues per hour than those that operate purely on the phone (Gartner, 2012) and each interaction costs less than $1 as compared to $6 per call for phone and $2.50 to $5 per email (NM Incite 2012).

These data points help outline the opportunity that is in front of many companies.

However, leading, innovative and creative companies already understand these insights and they are using them to steal a march on their competitors, deliver cost savings, higher revenues, better customer metrics and an overall better customer experience.

“57% of all inbound calls to a contact centre could largely be

attributed to a customer not being able to find what they were looking

for on a company’s website”

Chapter Two

Finding OpportunitiesAn analysis of leading companies show that they realise that relying just on reactive customer service is no longer sufficient in order to compete, differentiate and drive their businesses forward. Increasingly they are now implementing proactive customer service strategies which is allowing them to lower costs, drive additional revenue, improve satisfaction and NPS scores, increase customer engagement and, also, boost customer loyalty and retention.

Identifying where opportunities to be proactive lie, Kate Leggett of Forrester in a recent post on trends in customer service in 2015 suggested that:

“In 2015, we expect organizations to explore proactive engagement ……delivered at the right time in a

customer’s pre-purchase journey to help answer customer questions. ”

However, the following firms demonstrate that value can be delivered not just in the pre-purchase phase but across the whole customer life-cycle (pre-purchase, purchase and post-purchase):

1. Pre -Purchase: Proactive service can begin before a prospect is a customer.

• Proactivity is allowing Budget to reduce call volume, costs and drive revenue. US Consumer and commercial truck rental firm, Budget Truck Rental, is using IntelliResponse’s intelligent virtual agent web self-service tool to provide instant answers to questions from prospective customers. Following implementation of Intelliresponse’s technology, Budget was able to achieve a 28% reduction in inbound call centre calls from those prospective customers and $875,000 of cost savings and online revenue gains in the first 7 months of operation.

• Similarly, using the same technology and approach, Copa Airlines achieved a 40% reduction in call and chat volume freeing up their live agents’ time to focus on helping customers that have urgent inquiries and that require live agent support.

2. Purchase: Proactive service improves the customer experience of existing customers.

• AT&T is utilising SundaySky’s SmartVideo technology to proactively minimise ‘bill shock’, for their new and returning customers. ‘Bill shock’ occurs when the customer is shocked when they receive their first bill as they do not understand all the different elements of the bill. This results in a significant number of inbound calls. Utilising SundaySky’s technology, each new and returning customer receives, along with their bill, a link to a personalised video that uses their actual bill and their specific data and explains all of the different elements of the bill. Implementing this strategy has allowed AT&T to realise a material reduction in inbound calls, a significant increase in the uptake of value enhancing services, like paperless billing, and an increase in their NPS scores.

 

3. Post-Purchase: Proactive service maintains and improves the ongoing relationship.

• Virgin Mobile is proactively communicating with it’s customers to minimise appointment failure. Virgin Media in the UK has around 2500 engineers providing free-of-charge servicing for their broadband customers. However, through the operation of their business, they know that on average 10% of all their service appointments fail, largely because their customers forget about the appointments. This has huge utilisation and cost implications for Virgin Media. Therefore, Virgin Media utilises Contact Engine’s technology to proactively communicate with their customers via various channels (text, email, web etc) in the run up to appointments to make sure that customers don’t forget about the appointment. This is driving a dramatic reduction in the 10% of failed appointments, saving Virgin Media millions of pounds per year in utilisation and engineer costs and, at the same time, is driving increased customer satisfaction and higher NPS scores.

• Anglian Water, one of the UK’s largest water companies, utilises Aspect’s proactive messaging technology to improve operational efficiency. The firm proactively notifies 80% of their customers whose phone numbers they have on file regarding water outages relevant to their location. This has allowed them to save hundreds of thousands of pounds in call centre costs every year and has improved their overall customer experience, which is supported by the positive feedback they receive.

These examples provide inspiration and food for thought of the scale of the opportunity that proactive customer service can offer.

Chapter Three

Implementing an effective proactive

customer service strategy

Before any organisation can start to implement a proactive customer service strategy, it must first explore what gets in the way and address the barriers.

One of the primary reasons for most businesses of not doing this already, is that they are organised, run and measured in a way that works against the sort of collaboration and cross-functional working that a proactive customer service strategy would require.

According to a McKinsey report, academic research indicates that companies with better collaborative management capabilities achieve superior financial performance. However, the bigger and more complex a company becomes, the more likely it is that silos will start to emerge, and this can prevent organisations from tapping into the many sources of value created by collaboration across businesses including improved customer experience.

In a heavily siloed organisation, people rarely have the autonomy to act on the things they think can be improved, employees might not understand how they can contribute or there might not be enough trust that someone is not doing something in the best interest of the organisation.

Organisations that are trying to overcome these challenges are addressing the three key areas of a highly collaborative organisation - autonomy, transparency and trust. In order to do this, and gradually shape the collaborative learning culture throughout the system, organisations are developing leadership skills, using collaborative social platforms, hosting collaborative workshops and creating communities of practice.

To overcome these barriers and push forward with the development and implementation of this type of strategy, customer service and experience leaders should adopt an agile approach and follow the following steps:

1. Investigate: Use data tools to identify the most frequently occurring customer questions and problems across the customer life-cycle

Companies that have been successful in implementing a proactive customer service strategy have focused quickly on addressing the mostly common and costly problems that exist across the different Pre-Purchase, Purchase and Post-Purchase stages.

2. Design: Work collaboratively, leveraging technology, to develop effective solutions to identified problems.

Given that customer problems exist across the different stages of the customer life-cycle this will require a collaborative approach across organisational functions to ensure the design and delivery of a successful strategy. Successful proponents of proactive customer service understand this and ensure that the design of new customer interactions involve all of the right people.

3. Plan and Pilot: Aim for quick wins to generate momentum and organisational support.

Most organisations are still reactive when it comes to the delivery of their customer service. Therefore, in introducing a new proactive approach it is essential that any strategy focuses initially on piloting one or two new solutions to commonly occurring and costly customer issues. These pilots allow the business to test hypotheses, learn, quickly deliver benefits to the business and its customers and help build support for future initiatives. In the UK banking sector, first direct, is a leading proponent of this approach and uses it’s ‘Lab’ initiative as a vehicle that allows it to test new service ideas and concepts.

4. Measure and Adjust: Pilots will allow the business to learn and adjust for maximum return.

Starting the implementation of a proactive customer service strategy with pilot projects will ensure that organisations minimise risk and resource requirements and take a learning and agile approach thus allowing them to learn and adjust new initiatives so that they deliver the maximum returns. Like first direct, Brazilian telecom company, Vivo, benefited from taking a pilot-based approach when launching a new mobile bill payment service and through its pilot gained valuable insights on obstacles to adoption and scaling their new service.

5. Scale: Once proven pilots should be released, adapted and implemented across the organisation.

Taking an agile and collaborative approach to the development and implementation of a proactive customer service strategy will allow the organisation to minimise risk and start on the road to achieving the significant benefits associated with proactive customer service.

Moreover, the aim of these five steps is to build trust and engagement both internally (across functions and departments) and externally (with customers) so that both the organisation and the customer benefits, for example:

ConclusionTo take advantage of the benefits of implementing a proactive customer service strategy using the four steps above, organisations must first become more collaborative.

If they do this, they can start to reduce costs, meet customer expectations, boost retention and harness the opportunities that are in front of them.

There are plenty of opportunities to service customers proactively at every stage of the customer journey. More companies need to take up the challenge to become more proactive, more valuable, more collaborative and more innovative.

About The Authors

Adrian Swinscoe | RARE Business

We are a consultancy focusing on the design and delivery of break-through and exceptional customer service and customer experience.

Led by Adrian Swinscoe, a noted consultant, speaker, thought leader and Forbes contributor in this space, our work and pragmatic approach always results in cost savings, higher revenues, better service and an improved overall customer and employee experience. We work with large, international and ambitious businesses solve their customer related growth, service or experience problems.

www.rarebusiness.co.uk | hello@rarebusiness.co.uk | @adrianswinscoe

Caz Yetman & Danielle Sheerin | BrightCultures

We are the most experienced consultants in creating social customer care for regulated companies.

Our unique blend of practical processes and people-thinking means we can help you integrate social media into every aspect of your social customer care offering, whether you’re just starting up, or wanting to develop a 360° customer care centre. We work with international brands like O2 and organisations that are heavily regulated like Barclays, DirectLine and RBS.

www.brightcultures.com | info@brightcultures.com | @brightcultures