Escaping the downward customer service spiral

Customer satisfaction with UK companies is worsening. That’s the stark headline finding from the latest Institute of Customer Service (ICS) UK Customer Satisfaction Index (UKCSI).LinkedIn_Spiral_v2

Researched every six months, the Index fell in July 2014 for the third consecutive time, with over half of organisations seeing a drop of at least one point in their ratings. Satisfaction levels fell in 12 out of the 13 sectors surveyed and just 28 out of 197 organisations saw their scores rise.

Running since 2009, the UKCSI is based on nearly 41,000 responses from 9,522 demographically representative customers from across the UK. Overall the index score of 76.3 out of 100 is 1.9 points behind the peak of 78.2 from January 2013, and down 0.8 points from 77.1 in January 2014. For the first time responses were broken out by age group, with younger people, on average, less satisfied than the older age groups.

So what is driving this continued fall – and how can it be arrested? The ICS research talks about five areas that could be behind the decline:

1. Higher expectations
The first thing to realise, as the ICS points out, is that consumer expectations are continually rising. Service levels that were considered good six months ago are no longer adequate as customers continually demand more

2. Underinvestment
The impact of the recession is still being felt as previous cuts in customer service budgets have yet to be addressed.

3. Change of focus
During the downturn many companies focused on retaining their existing customers. As we move into growth, there is a corresponding push by companies to expand aggressively and chase new customers, potentially to the detriment of existing business.

4. Evolving needs
We are moving into a genuine ‘relationship economy’ where customers are looking beyond price to areas such as convenience, ease of doing business and speed across multiple channels. Therefore, companies have to engage successfully with changing customer needs if they are to retain them.

5. Trust
There is an increasing focus on how businesses behave, with scandals around operating practices such as tax avoidance, impacting customer perceptions. Stories spread quickly over social media, meaning companies are continually in the public spotlight.

Overall the UKCSI findings point to a need for greater engagement with customers, understanding their needs and quickly delivering what they are looking for, while building an emotional bond between the brand and consumer. Service is at the heart of this and there are four areas that Eptica believe companies should focus on:

1. Lead from the top
The customer experience and satisfaction levels are vital to organisational success. They shouldn’t just be left to the contact centre. The customer relationship is part of everyone’s job so initiatives should start at board level and involve the entire organisation.

2. Move fast
Companies have to be flexible and ready to change quickly as customer needs evolve. At the heart of this is better understanding of what customers want, so companies should look at technologies such as linguistics and customer feedback to analyse interactions on a large scale.

3. Join up service
Organisations have to deliver service across multiple channels, but in a joined-up, consistent way. This means bringing together processes and information so that they can be accessed by everyone involved in the customer journey – whether staff in branches or shops, outsourced contact centre partners or in-house agents.

4. Benchmark beyond your peers
Customers expect the same high levels of service from a utility as a retailer, raising the bar for everyone. Therefore, while organisations should benchmark against their nearest competitors, they must also look further afield and see what they can learn from companies in completely different industries.

The continual fall in customer service is worrying for the whole UK economy – the service sector is responsible for 78% of UK GDP and 70% of the population are in customer facing jobs. Such is the level of concern that the All-Party Parliamentary Group on Customer Service has been set up, with the aim of increasing awareness and increasing the quality of service and engagement. With the move to a relationship-based economy, now is the time for companies to review their processes and get closer to their customers if they want to succeed and escape the downward customer service spiral.

The growth of customer engagement – and the impact on your revenues

Delivering the right service, products and overall experience has always been central to building a successful business. Companies know that retaining existing customers is far cheaper than winning new ones, and have built systems and processes to ensure that they can provide what customers want cost-effectively.Customer engagement impact

This trend has been accelerated by two key factors. The recent recession made consumers much more wary about spending money, increasing competition across all markets. And customers are now much more demanding and connected – they will not tolerate poor service and will research and check every purchase, reading reviews, asking contacts on social media and searching for relevant news stories before they commit.

Customers therefore increasingly look to buy from companies that they feel engaged with at an emotional level. As research company Gallup points out, customer engagement – which it describes as “a customer’s emotional or psychological attachment to a brand, product, or company” – is therefore at the heart of business growth. Industry analyst Gartner agrees, recommending that organisations replace their contact centres with Customer Engagement Centers (CEC), that provide the technology, processes and people to underpin customer engagement.

Gallup’s Customer Engagement Score (CES) is based on three questions:

  1. Company X always delivers on its promises
  2. I feel proud to be a customer of Company X
  3. Company X is the perfect company for people like me

Based on responses to these questions, Gallup categorises customers into three groups:

  1. Fully engaged – emotionally attached and rationally loyal to a company
  2. Indifferent – neutral towards a company both emotionally and rationally
  3. Actively disengaged – ready to switch brands and share poor experiences with others

Gallup finds that there is a strong correlation between engagement and profitability. A fully engaged customer represents a 23% premium when it comes to revenue and profitability, compared to a 13% discount for their actively disengaged counterparts. Actual results vary by industry, but in the US Gallup’s research discovered that fully engaged customers delivered 37% more annual revenue to their bank when compared to the actively disengaged. For example, in the insurance sector fully engaged policy holders bought 22% more types of products than the actively disengaged.

At Eptica, we’re seeing this need for greater engagement and an improved customer experience driving increased sales for our innovative, linguistic-powered customer engagement software. We have just announced record quarterly revenues, with Q2 revenue up 30% on the same period in 2013, accelerating the success of Q1 2014.

During our last quarter, Eptica signed new customers in the retail, banking, telecoms and public sectors, including Transport for London (TfL) – Capita, as well as Crédit Agricole, BforBank, Phonehouse and the Ministère de l’Education Nationale in France. In Asia-Pacific, we are expanding staff numbers in its Singapore office to meet growing demand.

Additionally the strength of Eptica’s technology and approach was recognised by Gartner, which positioned the company in its 2014 Magic Quadrant for the CRM Customer Engagement Center. The sole European company in the report, Eptica was one of only two vendors to transition with the same product from the retired Magic Quadrant for CRM Web Customer Service (WCS) Applications. This marks the fourth consecutive year that we have appeared in a Gartner Magic Quadrant.

Gallup’s research demonstrates the growing importance of customer engagement, as companies see the financial benefits of building strong relationships that underpin their entire operations. Now is the time to act and put in place the right strategy, technology, processes and training. This will not only retain existing sales, but will also safeguard future revenues through happier, fully engaged customers.

Marrying the physical and virtual customer experience: the ‘new normal’

In most sectors, the customer journey is growing in complexity, spanning interactions across multiple channels with customers interweaving digital interactions with physical (in-store or branch) experiences. Customer service and the customer experience needs to evolve in order to stay on top of these changes.Marrying the physical and virtual customer experience: the ‘new normal’

Previously a lot of information people might have needed before a purchase was delivered face-to-face by an in-store sales assistant. But now a consumer quite often gathers information online on their phone before making a purchase. They might look for what others have said about the product in online reviews, visit a brand’s website or Facebook page, or interact with its customer service channels.

Companies therefore need to understand the evolving customer journey and adapt the customer service experience they deliver – finding ways to provide information, answer questions and interact with the customer digitally either before, during or after they visit a shop.

Management consultant McKinsey and Company suggests that the way companies engage customers in these digital channels matters profoundly—“not just because of the immediate opportunities to convert interest to sales, but because two-thirds of the decisions customers make are informed by the quality of their experiences along their customer journey”.

According to McKinsey, how companies deliver a seamless convergence of digital and physical interactions is critical to success. They paint a picture of a couple that has just bought their first home and is looking to buy a washing machine and a tumble dryer. Mike and Linda visit various websites and build a wish list of appliances on one of them. When they visit the physical store to see the appliances, the retailer has already texted them a reminder link to their online wish list, as well as links to updated specs and prices for the machines they were interested in (captured through their click trails on the retailer’s website). They have also been texted about a special discount on one of the items.

When Mike and Linda tap on the wish list text, the app provides a store map directing them to the home appliances section and a “call button” to speak with an expert. The example ends with the couple making a purchase; taking advantage of the discount they were offered. They leave with a delivery date – knowing they will receive a text reminder on the day of delivery.

How do you prepare for this merger of virtual and physical experiences?  Here are some important considerations:

  • Use a centralised knowledgebase. Provide a single source of information that is instantly available, whatever the channel. It can be used via self-service on your website, by agents on the phone, email or social media channels or by in-store staff, to give consistent answers, whatever the channel.
  • Make sure your systems are joined up. Integrate information across the customer journey, combining all the digital and physical interactions that a customer has with the company to help personalise service and engagement.
  • Analyse and automate. The number and frequency of customer interactions with companies is growing rapidly. So use technology such as linguistics to scale your operations, analyse incoming interactions and provide automatic responses where possible. Use linguistics to analyse longer term interactions – what are customers asking and how can you use this to change your products and services?
  • Be proactive. Use tools such as proactive web chat in the same way as a shop assistant, triggering online help sessions if customers seem to be stuck. Arm sales staff with mobile access to information so that they can deliver consistent, fast answers in-store as well.

The true, seamless merger of the physical and virtual worlds in the customer journey may still be some way off. But things are changing. Customers now expect to access more information on products and prices while they are shopping and want to engage with customer service while in-store. Post purchase they want to be able to track deliveries so they can plan their day accordingly. Joining up the customer data, channels and systems to create this seamless experience is going to require consistent processes and knowledge and may initially be uncomfortable as companies adapt. But the pain will be worth it, with a seamless experience delivering competitive differentiation, greater efficiencies and increased revenues.

 

The viral impact of poor customer service

Social media has radically changed the relationship between customers and companies, tilting the balance of power towards the consumer. Poor experiences can now be transmitted around the world in seconds, hurting brand reputation and potential revenues.Viral Impact of poor customer service

US cable company Comcast is the latest business to find itself in the global spotlight, after a simple request from a customer to cancel his internet service turned into an ‘epic harangue’ from the agent, who refused to give up on persuading him to stay. A recording of the last 8 minutes of the 20 minute conversation has been heard to by an estimated 5 million people in just a few days, after it went viral via social media. You can listen to the call itself here.

Clearly, the customer service agent felt that he was doing his job, by trying to persuade the subscriber to stay, but his refusal to take no for an answer means that not only has Comcast lost one customer, but may potentially miss out on new subscribers, who decide to buy elsewhere. The company has since apologised for the agent’s behaviour and said it is investigating the incident.

Analysing the scenario, there are four lessons for every company to learn:

1. Put the right incentives in place
The agent was obviously incentivised to try and retain the customer, hence his increasingly desperate attempts to persuade them to stay. However, given it was obvious from the outset that he wanted to switch, the best course of action would have been to respond graciously and helpfully. That way there was the chance that the subscriber would come back to Comcast in the future. Incentives were obviously playing too much of a role in driving the wrong agent behaviour, and ended up being counter-productive.

2. Match staff to the right roles
One of the key skills a telephone agent requires is empathy – they need to demonstrate that they understand the customer point of view and take on board what they are saying. In this case the agent failed to take no for an answer or show any understanding of the caller’s situation. Some people have strong written skills, whereas others are more suited to verbal communication – match your staffs’ abilities to the right roles for them.

3. Provide multichannel options
It is classic business practice to make people cancel via a voice-based channel such as the telephone as it gives the opportunity to talk people out of their decision. However this has to be weighed against the annoyance and inconvenience it causes the customer – if you have to hold for a long time before being bullied into changing your mind, the customer service cost can outrank the retention gain. So offer multiple channels to make contact by, rather than forcing people onto the phone.

4. Remember the power of social media
A few years ago a conversation such as this would have been shared with family and friends. Now it is simple to record, disseminate and spread around the world, with coverage on major news sites and social media. Companies need to ensure that if the worst does happen, and a customer issue spreads rapidly, that they have the ability to monitor conversations and respond quickly before major damage is done.

When it comes to a customer service interaction going wrong, Comcast is not alone – there may well be thousands of similar issues at other companies that don’t make the same splash. This means organisations need to put in place the practices, systems and training to make sure that they both guard against giving poor service and also act swiftly to apologise for mistakes before they escalate further.

A Shock to the System?

Figures released this week by the Energy Ombudsman show that complaints against energy companies in the UK are at their highest ever level. They more than doubled, from 10,598 in the first six months of 2013 to 22,671 in the same period of 2014. 84% of complaints related to billing and this news follows previous large fines for misselling for a number of utilities.

Driven by a desire to open up the market to greater competition industryEptica Utility Customer Service regulator Ofgem has introduced new measures to make it easier to switch supplier and to simplify tariffs for customers. This includes the ability to move utility within three days by the end of 2014 – while next day switching will be in place by the end of 2018. Currently it can take five weeks to switch, including a two week cooling-off period where customers can change their minds.

All of these developments, along with consumer dissatisfaction at rising bills, put the spotlight on customer service. Making it easier to switch increases the power of customers, and they are likely to demand a better service to win and retain their business.

So, how is the utility industry faring, when it comes to the customer experience? The picture is mixed, according to the Eptica Multichannel Customer Experience Study, which evaluated 10 leading UK utilities. It replicated consumer behaviour by measuring them on their ability to provide answers to ten routine questions via the web as well as their speed, accuracy and consistency when responding to email, Twitter and web chat.

The headline findings show a real difference between channels:

  • Utilities answered an average of 66% of routine questions on their websites, although this varied between companies. Three companies scored 80%, while two only answered three out of ten questions.
  • Email performance worsened. Just 40% of companies answered a question emailed to them, down from 70% in 2012.
  • The time taken to respond to email also deteriorated. One company took over 317 hours to reply – hardly helpful for next day switching. The fastest response was 6 hours 22 minutes.
  • Twitter was more promising, with 50% of companies successfully answered a tweeted question. The fastest took just 20 minutes, but the slowest replied in 95 hours 15 minutes.
  • At the time of the research no utility offered web chat, which is a proven way of delivering fast, personalised service to customers.
  • Consistency was also an issue. Two companies provided the same answer on two channels – others either failed to respond or gave different responses.
  • Channel choice was patchy. For example, one utility didn’t offer email to non-customers or have a Twitter handle, meaning that if consumers couldn’t find an answer on their website, they were forced to call the company to get an answer to their question.

The rising tide of consumer dissatisfaction and increasing legislation mean that customer service will be crucial to utilities in winning and retaining business moving forward. While some utilities are already providing fast, helpful service, there is a great variation between different channels and different companies. Utilities need to benchmark themselves against market leaders and ensure they are on the channels that their customers want to use – the time to act is now, before faster switching changes the competitive landscape forever.

The importance of the agent user experience to delivering customer engagement

Contact centre agents are at the front line of providing customer service, acting as the public face of an organisation. It is therefore critical to give them the training, tools and information they need to deliver a superior and joined-up customer experience.Contact Centre

However, as they have often grown in a channel-based, ad hoc manner, many contact centres struggle to integrate information from different systems or make it easily available to agents. The result? Agents are unable to deliver a consistent, fast response to customer queries, leading to longer calls, email backlogs, inefficient service, angry customers and demotivated staff.

Analysts and contact centre managers recognise the need to integrate information into a single repository that underpins all customer interactions. Forrester calls knowledge management “the jewel in the customer service crown”, for example. Centralising information raises customer satisfaction, ensures consistency and increases First Contact Resolution rates.

Giving agents the right information is only part of the solution. The systems that agents use have to be simple and intuitive to operate – they need to have the right tools at their fingertips to access information in an efficient, fast manner. The user experience (UX) is therefore critical to the customer experience (CX). So how can you deliver this?

Involving agents in system design
One straightforward way is to involve the agents themselves in the design and development of their systems – this delivers ownership and ensures that technology has the functions they need when doing their jobs. Two good examples of this are Eptica customers Domestic & General and NHS Business Services Authority (BSA).

Domestic & General has 6 million warranty customers in the UK. It needed to ensure its 1,400 front line agents provided excellent, efficient service, through access to consistent, comprehensive information when responding to callers. However, this information was stored in a paper based system meaning staff had to search physical folders to find answers to customer questions. The pace of service was hindered, reducing consistency and lowering First Contact Resolution rates. It transformed operations with a centralised knowledge management system from Eptica, but knew that ensuring agents used the knowledgebase was vital if customers were to benefit. Domestic & General gave the new system a high internal profile by branding the project as Fido and assigned a full time project team to work on the implementation. Fido aims to be the agents’ best friend when it comes to getting the answers they need.

This has helped drive adoption, as has a simple, intuitive interface that enables agents to provide comments and ratings on specific articles. Customer call times have been reduced by nearly a quarter (22%) and annual support and training costs have been lowered significantly. First Contact Resolution rates have increased, hold times halved and the time taken to train new agents has decreased by 20%.

Like Domestic & General, the NHS BSA, which is responsible for a wide range of healthcare administration services, heavily involved customer service agents in designing its system, which was named Sherlock. The information in Sherlock was collected through agent focus groups and was rolled out with a month of intensive training and feedback before it went fully live. Agents access information by simply typing questions into Sherlock and are able to flag where content needs updating with a single click. As well as 3,000 articles the system has useful phone numbers, desk aids and telephone messaging and a Buzz Area which lists updates to the knowledgebase by stream and time.

As in any area of technology, the user interface is constantly evolving. Consequently, we today introduced Eptica 9.1, the latest version of our multichannel customer interaction software suite. The focus for Eptica 9.1 has been on the user interface, with new features including:

  • Clearer layout, including adaptive width for messages and red borders for over-delayed requests
  • Improved agent response panel making it even more intuitive and easy to use
  • Re-styled controls with better contrast for improved accessibility
  • Modern, flat style icons and design with hover effect and re-skinned editor toolbar
  • Automatic, multi-language spell check that works as agents type

Organisations need to improve efficiency while meeting the increasing demands of customers. To achieve this, they need to empower agents with the right systems that make it simple to access information and deliver a consistent and fast service to customers. Therefore to achieve a better customer experience, start by improving the user experience for agents.

5 impacts that Amazon has had on customer experience

Last month Amazon turned twenty. In 1994 founder Jeff Bezos left his job, drove to Seattle and set up the business in his garage. Originally going to be called Cadabra (as in Abracadabra), the name changed to Amazon after fears that people would mishear it as “cadaver”. It now offers over 230 million separate items for sale in the US alone and had 2013 revenues of $74.5 billion.

Amazon has radically changed how consumers shop, read and watchamazon films, and affected a wide range of industries, from bookselling to video rental, and now, with the new Amazon Kindle Fire phone, mobile telecoms. So what have been the 5 key impacts on the customer experience?

1. Make it simple
As a web-based business Amazon has focused on making the customer journey as straightforward as possible. Ideas like One Click shopping (and now ordering via Twitter) ensure that the checkout process is fast and simple, without consumers having to re-enter credit card details or addresses. This also applies to customer service. If consumers have a query or want to return an item information is readily available and automated, with the maximum use of self-service, supported by channels such as web chat and email.

2. Share the experience
Amazon was the first company to introduce customer reviews and has made them central to the online shopping experience. Now, almost every retailer provides an opportunity to review the product that you have just bought – even down to a pack of nails from a DIY site, while most people won’t make a major purchase without checking relevant reviews on both products and the retailer itself.

3. Offer what customers want
Twenty years ago, customers were limited in what they could buy through the physical size of their local shops. The internet changed all of that, but led to the opposite problem – too much choice. Due to its size Amazon is able to capture a huge amount of data and uses it to deliver personalised offers and recommendations based on previous purchase history, tailoring information to particular customer needs.

4. Keep innovating
When Amazon started, people saw it solely as an online bookstore. However, this was never the long term goal – it was simply a start point to build customer trust in the then new experience of buying online. Since then Amazon has expanded far beyond retail – offering streaming services, digital downloads and physical hardware such as the Kindle ereader, Fire tablet and new Fire Phone. These not only integrate closely with the retail side of the business, but add innovative new features. For example, the Fire Phone has a near 3D screen and the ability to provide information on anything it sees or hears. Amazon has never rested on its laurels, and is continually moving forward.

5. Always put customers first
Compared to competitors with physical stores, Amazon operates on very low margins. From the beginning Jeff Bezos talked about being focused on customers, rather than competitors, and taking a long term view. It is rumoured that its core retail business just breaks even, and overall profits are still small compared to total revenues. Amazon’s strength is that it aims to think like a customer and provide what they want, building loyalty in a crowded market.

The internet has radically changed consumer behaviour over the last twenty years, widening choice and shifting the balance of power between companies and customers. Amazon has been at the heart of this and is helping reshape how we shop, both now and in the future.

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