Water, water everywhere…….

Water is a constant topic of conversation across the UK. We complain about having either too much or too little rain and currently seem to have the worst of both worlds, with the wettest drought on record.

Leaving the weather aside, utilities in the water sector are now facing tougher sanctions if they don’t deliver excellent customer service. Industry regulator Ofwat has introduced the Service Incentive Mechanism (SIM), a new customer service metric that is designed to encourage better service across the sector. It combines quantitative and qualitative data to measure the experience of customers who have contacted their water company. The results for each utility are then ranked, allowing customers to compare the performance of their water company with others. To demonstrate the importance Ofwat places on customer service, it intends to use data from future SIM reports for considering service incentives when it next sets price limits.

So water companies need to look at their customer service processes and performance to ensure that they are achieving good results if they don’t want to be marked down by the regulator. Technology is at the heart of delivering this performance – by centralising knowledge and making it easy to access, companies can ensure that they provide a consistent, well-informed, efficient and accurate response to customer queries.

Bristol Water and Wessex Water are two examples of utilities that are using knowledge management technology to deliver the highest level of customer service. While they were ranked in the top 5 in Ofwat’s first SIM report in October 2011, they understand that expectations are always rising and that they needed to innovate to ensure that customers always get the right answer to their queries.

To do this Bristol Wessex Billing Services Limited (BWBSL), the joint venture that handles billing customer service for the two utilities, is implementing Eptica’s dynamic, self-learning, knowledge management software.

BWBSL will use Eptica’s software to create a centralised source of customer service information that covers both Bristol Water and Wessex Water customers. This will initially be used by agents within BWBSL’s billing contact centre to deliver fast, consistent, accurate answers to telephone customer service enquiries for each company. Essentially they will be able to type in customer questions in plain English and then quickly access answers, ready to pass onto callers. This will increase First Contact Resolution (FCR) and reduce Average Handle Times (AHT) for calls.

Customer service is moving up the agenda in the water industry. This means it is time for other utilities to look at how they can also use technology to ensure they deliver the best possible customer experience – or face the regulatory consequences.

Listening to customers on social media

Customer services (Photo credit: gordon2208)

New research from American Express demonstrates the growing importance of social media to customer service. The US survey found that companies that resolve queries and complaints through Facebook and Twitter saw 21% more sales than those that just relied on the phone or via email. 17% of consumers are now using social media for customer service, with 20% of them turning to social media first before contacting the company through other channels.

What’s interesting is that there are varied reasons given by consumers for contacting companies through social media:

• 46% of consumers did use it to complain
• 47% used it to share their experience with a wider audience
• 48% wanted to praise the company for a great service experience
• 50% just wanted a response to their query

So the stereotype of consumers simply using social media as a channel for complaints doesn’t hold water – it is much more varied than this. Customers want to be listened to and have their queries addressed quickly and comprehensively. In many cases simply receiving a response and acknowledgement is the critical factor – consumers want to feel valued by the companies they deal with. Do it right and they will spend more money with you – it really is that simple.

The American Express research also found that, despite increased company focus on customer service, 93% of consumers aren’t happy with the level of service they receive. This is leading them to vote with their wallets – over half (55%) have walked away from a transaction due to dissatisfaction over service. Nearly one in three (32%) currently believe businesses are paying less attention to delivering good customer service, up from 26% in 2011. In a recession this equates to slamming the door in the face of people that want to buy from you.

Companies need to take on board the findings of this research and ensure they’ve got a strategy (and technology) in place to listen to their customers’ views and deliver joined up service – whatever channel consumers want to use to contact them.

How business leaders are fighting the battle against customer churn

This is a guest blog post from Jo Causon, chief executive of the Institute of Customer Service, the professional body for customer service.

We live in an age of ‘austerity spending’, where businesses have to work harder than ever to hang on to their customers.

Last year we commissioned research that concluded that the average cost to replace a lost customer is around £6,500 and 56 days. A potential to cost UK businesses of just under £2.3 billion over the next three years.

The research indicates that business leaders agree. 58% think that customer retention is vital to the sustainability of their business while more than a third (35%) identify churn as the greatest threat.

Service and experience are the key strategic drivers of loyalty
The UK Customer Satisfaction Index (UKCSI) shows that companies that differentiate on customer experience are well positioned to achieve market growth.

Conversely, those that don’t risk losing their customers. We can see an example of this in Tesco’s response to disappointing financial results – it stated that it would refocus its efforts on its customers’ experience.

In other words, service is the key differentiator when it comes to holding on to customers in difficult market conditions.

Here’s how the market leaders improve customer experience:

1. Establish a relationship with new customers quickly
Your new customers must understand what you’re offering from the start of the relationship.

Vodafone has developed a Perfect Start programme to make sure first time customers understand how to use – and get the best from – its service.

Simplyhealth calls new customers directly to make sure they understand what and when they can claim on their insurance policies.

2. Solve problems quickly
Empower staff to own customer service issues from start to finish so that they can decide when, and how, they can solve problems quickly. Customers don’t want to be sent around departments unnecessarily.

As first direct show, a consistent, personal experience leads to better customer retention and loyalty rates.

3. Use customer insight to drive training and employee engagement
Boots surveys 30,000 of its customers every week in order to identify problems and opportunities to improve the customer experience.

It uses this data to focus on customer care, which means it continues to invest in more training, better recruitment and better rewards.

4. Make it personal
By concentrating on the emotional aspect of the business/customer relationship, organisations can establish authentic connections with their customers.

Simplyhealth’s telephone operators are measured on the empathy and care they demonstrate. Eurostar has used research into its customers’ emotional journey to make service design changes.

5. Measure the impact of customer service on top and bottom line results, and report at board level
Boots have seen their customers’ very satisfied rating increase from 45% to 71.9% over the last 4 years.

They’ve also linked this to sales improvements, concluding that every 5% increase in customer satisfaction reaps a 1.5% improvement in sales.

Similarly, Vodafone have recorded a 1-4% reduction in customer churn since the introduction of their Perfect Start programme – figures that are reported to their board.

In a time of austerity spending, cutting back on service might seem to provide a way of protecting profits.

But for sustainable growth it’s critical that businesses invest in the whole customer experience, align their offerings and invest in training and development to drive employee engagement and understanding.

Why retailers shouldn’t ignore social media commerce

Graph of social media activities (Photo credit: Wikipedia)

When Facebook launched its e-commerce platform, a huge number of high profile retailers opened virtual stores on the social media network. Since then many of these have closed amidst poor customer take-up – for example recent research found that just 2% of French consumers would buy through Facebook. However new retailers are still opening F-commerce stores and niche boutiques are recording impressive sales figures. And don’t forget that Facebook itself has grown to become the most visited site on the web with around 850 million members.

While the jury may be out on F-commerce itself, there’s no doubting the importance of social media to retailers’ strategies. Here are five areas, based on Eptica’s experience working with retailers across Europe, where social media can be incorporated into overall operations.

1          Listening to your customers
Social media provides a perfect forum to listen to and learn from your customers. A great example of this is a current thread on parenting site Mumsnet discussing Mothercare. It may contain a lot of criticism but the key point is that this is the right demographic giving detailed feedback about what is holding them back from buying from the retailer. Make sure you are listening to your customers – and acting on what they say.

2          Engaging with customers
Fashion retailers have been particularly successful in using their presence on social media sites such as Facebook to build stronger relationships with their customers. Obviously in many cases, their target audience are avid Facebook users which makes it the perfect channel to engage on. Recent research found that a combination of regularly updated content, special offers and instore promotion had led to Topshop attracting over 2.2 million fans for its page.

3          Social customer service
As we’ve discussed before social media gives a megaphone to anyone who has experienced bad (or good) customer service, enabling them to broadcast their thoughts to the world. Retailers need to ensure they have both monitoring in place and also a way for customers to ask and receive answers to their queries through Facebook and Twitter. What is important is that this social customer service is integrated with other customer service channels to avoid duplication of resources and inconsistent answers.

4          Driving traffic through special offers
While some consumers don’t want to buy through Facebook, one of the key reasons they give for following brands is access to special offers. So retailers can use social media to distribute vouchers and also to trial new ranges or styles to an engaged audience.

5          Social sharing
The key difference between traditional e-commerce and selling via Facebook is the social element. So make it easy for customers to share what they are doing with their friends, get their opinions and replicate the social elements of a high street shopping trip on your Facebook page.

While it is only the beginning of May, online retailers know they don’t have much time to prepare their strategies and platforms for Christmas 2013. So make sure that you consider social commerce as part of your overall plans – with 850 million potential customers on Facebook alone, it simply can’t be ignored.