| The idea of incremental improvement, or Kaizen, was all the rage in manufacturing a few years ago. It was the perfect environment for making small, incremental changes to a repetitive process, monitoring the impact and institutionalizing change. As a result of the momentum and success of these approaches, the discipline was expanded into some of the softer management sciences, but the results and interest really waned and marketing was ignored. Even with the development of sophisticated customer relationship management tools and systems, it was difficult to apply Kaizen because the effects of advertising, branding and messaging on buyer preference are far less quantifiable than process improvements in manufacturing.
The one real exception is direct marketing. The beauty of the theory of direct marketing is that it is completely transparent. With every conversation or contact, you have an immediate answer. It’s truly the perfect environment to test and model every aspect of building a client relationship. Those companies that look at the long-term value of their clients’ experiences and actively seek to improve every aspect of each customer transaction are the ones that are going to be successful.
The amount of data that is available for customer care programs is often overwhelming. It ranges from typical information such as wait time and call lengths to more complex data such as first-call resolutions and post-call satisfaction surveys. However, what’s often missing is the analysis of these data — identifying the relationships between the various factors, developing a return on investment (ROI) plan and pulling the various levers to achieve the goals of the program.
InfoCision recently had the chance to put direct marketing theory into practice on a save-and-retention customer care program. It was a perfect split test, in which half the calls were routed to us and the other half to a competitor for several months. What we found was remarkable. In short, very small improvements in several customer care performance indicators build upon each other and create a critical mass. If the lifetime value of the customer is significant, the returns are extraordinary.
We started by examining the plethora of opportunities to improve the satisfaction of the end customer. We focused on why they were calling, what they wanted, what would make them happy and how they defined a great call. Then, we looked at our client and defined what was important to them — cost to handle, conversion rate, customer satisfaction, etc. What we found was that customers were on hold for so long that the calls ended up being longer than necessary because our Communicators had to apologize for the delays. Furthermore, there was no opportunity for upselling because the Communicators had neither the time nor the resources to offer alternatives and saves were nearly impossible because the customer was angry and frustrated from being on hold.
To move past these roadblocks, we identified the key metrics that we thought would lead to success before we ever made the first call. Those metrics were: service level (answering 90 percent of the calls in 10 seconds or less), abandon rate (less than two percent), one-call resolution (85 percent of the time), follow-up calls to settle unresolved issues, length of call (under four minutes), cross-sell percentage (15 percent goal), and customer satisfaction (measured through a brief survey). Based on other successful programs, we knew this model would achieve such a high ROI that the cost of our services would be irrelevant — we could provide a better return for the client even if the competitor’s services were free.
The next real challenge was making the investment necessary to ensure that we achieved those metrics. For instance, hitting the service level goal was just a matter of staffing, but it took 48 hours to bring a new Communicator up to speed, which was a very significant cost. Similarly, we had to build a system that put all the service alternatives at the Communicators’ fingertips so they could quickly and easily offer alternatives or downgrades in order to save the customer. In addition, we had to create a database of possible questions and corresponding answers so that Communicators could offer an immediate and viable alternative to customers who wanted to cancel their service. Finally, we developed a process for logging open issues that included both internal accountability and resolution with the customer.
The results were nothing short of remarkable, as Table 1 shows. No single key performance index overwhelmingly drove the success of the program, but together they built a significant case for the investment. The emphasis on quickly answering the call, efficiently responding to questions and offering alternatives during the conversation ultimately resulted in a 20 to 1 ROI over the competition. Of course, the lifetime value of the customer is very significant in this case.
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When you’re trying to build the perfect customer experience, it’s often as simple as doing the obvious. Define success for the end customer, understand what makes your client happy and develop key performance indicators that will drive results. Most important, develop a tactical plan to achieve the programs’ goals and be willing to make the investment necessary to succeed. Always remember, there are no shortcuts to customer satisfaction.
Steve Boyazis is Executive Vice President at InfoCision Management Corporation. Reach him at (330) 670-1400 or [email protected]. Founded in 1982, InfoCision Management Corporation (www.infocision.com) is the second largest privately held teleservices company and is a leading provider of inbound and outbound marketing for nonprofit, religious and political organizations. InfoCision is also a leader in customer care services, commercial sales and marketing for a variety of Fortune 500 companies and smaller businesses. InfoCision operates 28 call centers at 12 locations in Ohio, Pennsylvania and West Virginia. For the second consecutive year, InfoCision has been named one of the 10 best places to work in Ohio by the state chamber of commerce. The company is celebrating 25 years in business in 2007.
How Much Is Superior Customer
Care Worth?
By Tracey E. Schelmetic, Editorial Director, Customer Interaction Solutions
Research consultancy Bain & Company recently conducted a survey of several hundred customer-facing companies. The companies were asked if they provided a superior customer service experience to their customers. Eighty percent of the companies surveyed were confident they did. The research group then queried the customers of those organizations whether they were supplied with a superior customer experience. The result? Eight percent agreed that they had received excellent customer care. Though these statistics are enough to make you choke the first time you read them, it is sadly not an uncommon scenario.
Why such a great gap between the perception many companies have of the customer care they provide and the reality? First of all, it’s easy to agree that other people are getting terrific customer care if you are the one ostensibly providing it, not the poor chump who stays on hold for 17 minutes only to be transferred nine times. Even if the customer’s issue was resolved, chances are he or she left the call feeling dissatisfied, while the company the customer just hung up with counted it as a resounding success since, technically speaking, “first-call resolution” was achieved.
Second, measuring “customer satisfaction” and taking steps to fix problems based on these measurements is tricky, and most organizations lack the experience or the resources to do so without assistance.
The Listening Company, a London-based customer insight specialist organization, released the results of a study that queried 1,000 adults about their attitudes toward customer care. Sixty percent of all consumers interviewed stated that they would take business away from a company as a result of poor service from the call center. Can you imagine any company willing to undertake the risk that they’ll have to replace fully 60 percent of their customer base once a quarter, once a year or even once a decade? Yet many companies continue to focus on costs only and blunder their way through customer care programs that do more harm than good. But ignorance is bliss: as long as it says at the top of the memo that the company provides great customer service, it must be so.
This short-sighed approach to customer care was what prompted many companies to flock to low-cost offshore destinations. For some services related to customer care, offshore locations work very well. Depending on the vertical market, the quality of the agent, whether telephone contact is part of the package and the complexity of the product or service supported, some offshoring programs work quite well. For direct customer-to-customer telephone contact and high-touch transactions, offshore outsourcing to places like Southeast Asia has not been so successful, and many companies, were they to lay their apparent cost savings out against softer or more long-term costs (think of that 60 percent of dissatisfied customers who would take their business elsewhere as the result of a bad transaction) would find that trying to squeeze more costs savings out of customer care program is a bit like spitting into the wind.
It sounds simplistic to say that policies to provide superior customer care pay for themselves, but it should be said anyway: policies to provide superior customer care pay for themselves, often a lot faster than many companies could imagine. The old corporate adage, “You can’t manage it if you can’t measure it” has never been truer. If you’re guessing your way through your customer care, it’s probable that you’re among that 80 percent of organizations who think they are giving their customers great service — just do your best to pretend not to notice that your customers aren’t calling you anymore.
The author may be contacted at [email protected].
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