Aligning Customer Support to Customer Preferences


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This research brief delves into the preferences stated by customers and then explores the practices adopted by organizations – leading to a gap analysis of what the industry is offering versus what customers want, at this point in time.

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Aligning Customer Support to Customer Preferences

  1. 1. WHITEPAPERAligning Multi-Channel Service to Customer Preferences Published: 2012
  3. 3. ABSTRACTIn today’s rapidly changing world where customers are presented with many methods to connectwith family, friends and organizations, it is vital for organizations to recognize the opportunity tobetter meet the needs and preferences of customers in terms of contact methods.With at least six major categories and at least 24 individual potential customer service channelsavailable to customers, it is not about offering as many channels as possible for customers tointeract with your organization. The channel strategy involves developing an integrated approach tomulti-channel service that aligns with the varied customer preferences, while meeting businessgoals.This whitepaper firstly delves into the preferences stated by customers and then explores thepractices adopted by organizations – leading to a gap analysis of what the industry is offering versuswhat customers want, at this point in time. 3
  4. 4. CUSTOMER PREFERENCESCustomer Channel Usage is Changing to New and EmergingChannelsThe current convergence and integration of customer service channels and the increasingsophistication and use of multi-media channels and devices by customers means the customerservice landscape is changing rapidly.Usage of live agent, IVR and web self-service declined since 2011, while email and emergingchannels such as web chat, VoIP, SMS, social media and smartphone apps have all increased since2011 (Figure 1).Figure 1: Channels used by customers in the past three months 86% 71% US 11 US 12 64% 51% 53% 51% 34% 28% 28% 29% 19% 20% 16% 10% 10% 10% 9% 4% 3%Base: US Consumers n=420In addition, customers are open to engaging in new service channels; two in five customers (41%)indicate they are keen to use new contact options for customer service queries as soon as theybecome available (Figure 2). 4
  5. 5. CUSTOMER PREFERENCESFigure 2: Attitude towards new technology that becomes available for customer service queries I prefer to use more traditional 24% contact methods for my customer service queries (such as talking to someone over the phone) 35% I won’t necessarily use new contact options for my customer service queries until Im more confident using them I am keen to use new contact 41% options for customer service queries as soon as they become available Attitudes to new technologyBase: US Consumers n=420Customers are becoming more and more technologically advanced and have higher expectationsthan ever before, primarily driven by the increased uptake and usage of smartphones and mobiledevices. Customers require the choice of multiple channels and will use these channels based onwhat is convenient for them, thus the rise of the multi-channel customer.However, without getting too carried away with technology advances, it is important toacknowledge that live agent support is still the primary contact channel used by customers and willremain the primary customer service channel for a while. 5
  6. 6. CUSTOMER PREFERENCESNot All Channels Meet Customer ExpectationsThere are many ways in which organizations measure the customer experience; customersatisfaction scores, Net Promoter Scores (NPS) and Loyalty, among others.Based on Fifth Quadrant’s research, how customers rate their experience is significantly impacted bywhether the customer’s query is resolved. For example, we have seen up to a 40% difference incustomer satisfaction scores between customers who have had their query resolved the first timeversus customers who have not.Query resolution rates in the US range from 59% resolution for IVR to 89% resolution for VoIP basedqueries.The highest query resolution rates are evident in the following channels: 1. VoIP (89%) 2. Live agent (88%) 3. Smartphone app (81%) 4. IVR and Live agent (81%) 5. Web chat (80%)The channels where resolution is lowest are: 1. IVR (59%) 2. Social media (63%) 3. Web self-service (66%) (Figure 3) 6
  7. 7. CUSTOMER PREFERENCESFigure 3: Query resolution rates VOIP 89% Live Agent 88% Smartphone App 81% IVR & Live Agent 81% Web Chat 80% SMS/Text via Mobile 76% Email 75% Web Self-service 66% Social Media 63% IVR 59%Base: US Consumers n=420Query resolution is used by approximately half of organizations as a customer experience measure.Given the importance of query resolution in driving the customer experience, it is essential that isincluded as a core part of any customer service performance management program.Another key component of measuring the customer experience is understanding the level of effort(in terms of time and money spent) and the level of satisfaction per channel.When looking at both these variables together, there is a direct correlation between the level ofsatisfaction with a channel and the level of effort required for that channel. The lower the effortrequired the higher the satisfaction with the channel.This is shown in Figure 4 where the IVR channel has the highest effort and lowest satisfaction andweb chat has the lowest effort and highest satisfaction. 7
  8. 8. CUSTOMER PREFERENCESFigure 4: Channel performance rating – effort v satisfiedBase: US Consumers n=420No matter what channel customers use to contact organizations they expect the same level ofservice to be delivered.Consequently, a carefully planned customer driven multi-channel strategy assists in designing amulti-channel service that is integrated and capable of delivering a consistent experience tocustomers. Channels will interoperate and not merely coexist, driving efficiency and effectiveness ofoperations in delivering customer service, and potentially reducing the costs of providing services tocustomers. 8
  9. 9. CUSTOMER PREFERENCESChannel Preference Vary By Age and Inquiry TypeIn defining which channels of interaction are appropriate for which audience, it is important tounderstand the preferences expressed by customers and what drives them. This section details thepreferences stated by US customers.Gen Y customers are using more channels than older customers, in particular they are more likelythan Baby Boomers and the Silent generation to use smartphone apps (13% vs. 5% and 3%respectively), social media (17% vs. 7% and 6% respectively), SMS (19% vs. 6% and 3% respectively)and web self service (25% vs. 14% and 12% respectively) (Figure 5).Figure 5: Channels used in past three months Email 59% 67% Web Self-service 64% SMS/Text 25% 59% 24% 19% Social Media 13% 14% 17% 11% 6% 12% Smartphone App 7% 3% 13% 13% 6% 5% 3% Gen Y Gen X Baby Boomers SilentBase: US Consumers n=420 9
  10. 10. CUSTOMER PREFERENCESTechnical queries (26%) and general inquiries (22%) contribute the largest share of contact centerinquiries (Figure 6).Figure 6: Share of contact center inquiries General inq 22% Technical issue 26% Billing 11% Purchase 10% Complaint 13% Updating info New account / 11% service 7%Base: US Consumers n=420 10
  11. 11. CUSTOMER PREFERENCESThe live agent channel is the preferred channel when customers make complaints (66%), purchases(62%) and technical queries (70%).The email and web self-service channels are preferred more for general inquiries (47% and 25%respectively) and updating information (45% and 30% respectively) (Figure 7).Figure 7: Channel prefer to use for inquiry types 48% 40% 62% Live Agent 66% 70% 47% Email 45% 34% IVR 38% 27% 19% 16% 9% 8% 12% Web Chat 9% 17% 20% 19% 17% 30% Web Self-service 25% 20% 9% 15% Complaint General Inq Purchase Technical Updating Info QueryBase: US Consumers n=420 11
  12. 12. CUSTOMER PREFERENCESAlong with understanding who would use which channels and for what purposes, it is important tounderstand the drivers behind customer usage of each particular channel.The drivers in the usage of live agents, web self-service and social media are explored in thefollowing section.Not surprisingly, being able to talk with a live person drives preferences for live agent channel usageamongst customers in the US (Figure 8).Figure 8: Why do you prefer to use live agents over other contact methods?Base: US Consumers n=214 12
  13. 13. CUSTOMER PREFERENCESCustomers in the US use web self-service because they are looking for information and perceive it tobe easier and convenient (Figure 9).Figure 9: Why do you prefer to use web self-service over other contact methods?Base: US Consumers n=26Engaging with other people to get help drives social media usage (Figure 10).Figure 10: Why do you prefer to use social media over other contact methods?Base: US Consumers n=15 13
  14. 14. INDUSTRY DEPLOYMENTCustomer Service Critical to Organization SuccessCurrently, most organizations have four key enterprise-wide strategic plans including Finance, IT &Operations, Human Resources and Marketing & Sales. In the last 12 months, organizations havebegun to recognize the importance of the ‘Customer Experience’ in driving business performance.This is seen as the contact center’s top strategy for the next 12 months, where improving thecustomer experience/satisfaction is the top strategy for three in four organizations (73%).Other key strategies stated by organizations include improving agent training (53%), introducing self-service channels (35%) and improving knowledge management systems (30%) (Figure 11).Figure 11: Contact center’s top strategy or initiative for the next 12 months Improve level of customer satisfaction/experience 73% Improve agent training and coaching 53% Introduce self-service options for customers 35% Improve Knowledge Management system 30% Increase communication to customers 28% Improve first call resolution 25% Improve quality monitoring initiatives 25% Improve customer experience measurement … 20% Reduce avoidable contact 13% Increase number of staff 13% Improve telephony platform 8%Base: US Organizations n=128In most sectors the customer service experience accounts for up to 50% of total Advocacy andLoyalty ratings by customers; hence, customer service has a strong link to organizationalprofitability. The availability to customers of channel options, access, speed and convenience arebecoming key drivers for these Loyalty metrics.As such, Fifth Quadrant believes that a Customer Service Strategy is of critical importance toorganizations and should indeed be the fifth strategy that CEOs and Boards discuss on a regularbasis. 14
  15. 15. INDUSTRY DEPLOYMENTLive Agent and Email the Primary Channels Offered by IndustryWith the coming of the multi-channel customer, it is important for organizations to attend to thesevarying needs in terms of channel choice.On average each organization has implemented 4.3 customer service channels in the contact center.Live agent (84%) and email (81%) are the top two channels currently implemented by USorganizations. Web self-service has also been implemented by two-thirds of organizations (66%)(Figure 12).Figure 12: Channels currently implemented 84% 81% 66% 49% 46% 46% 43% 39% 27% 13% 11% 6% 6%Base: US Organizations n=128Any multi-channel service will need to incorporate the traditional channels of contact such as liveagent and email. Although customer usage of these channels shows a decline in usage over the last12 months, they are still the top two channels used by customers, as are the top two channelsoffered by organizations. 15
  16. 16. INDUSTRY DEPLOYMENTWeb Chat Earmarked for Implementation in 12 MonthsWith the rapidly changing channel environment there has been an uptake in customer usage ofemail and emerging channels such as web chat, VoIP, SMS, social media and smartphone apps,which have all seen an increase in usage over the last 12 months.From an industry perspective, the top four channels planned for implementation in the next 12months include: 1. Web chat (16%) 2. Web self-service (12%) 3. SMS (12%) 4. Smartphone app (11%) (Figure 13)In terms of the next 24 months, the top three channels planned for implementation are: 1. Web chat (42%) 2. Smartphone app (27%) 3. Social media (26%) 4. SMS (23%)Figure 13: Future Channel Implementation Web chat 16% 26% Web self-service 12% 5% SMS/Text 12% 11% Smartphone app 11% 16% VOIP 9% 11% IVR & Live Agent 9% 5% IVR 9% 2% Email 7% Social media 7% 19% Remote Support 2%2% Letter / Fax 4% Live Agent Will offer within 12 months Will offer within 24 monthsBase: US Organizations n=57 16
  17. 17. ANALYST INSIGHTSKey Insight #1: Organizations are Prioritizing Customer ExperienceStrategyThe role of the ‘Customer Experience’ is becoming widely recognised by organizations as being acritical part of driving business performance. Improving the customer experience/satisfaction is thenumber one priority for three in four contact centers in the US.The strategic focus on the customer presents great potential for the organization’s bottom line: 1. 83% of customers will buy more from companies that make it easier to do business with them1 2. 70% of customers are willing to spend more money with a company that provides good customer service (up from 58% in 2010)2 3. 15% of customers said they would spend 20% more with companies with good service (up from 5% in 2010)3Key Insight #2: Align Industry Offerings to Customer Usage PatternsTwo in five customers in the US are open to use new technologies to contact organizations.While live agent (71%) remains as the top channel used by customers in the US, there is an evidentincrease in the usage of email and emerging channels such as web chat, VoIP, SMS, social media andsmartphone apps in the last 12 months.Industry seems to be in line with customer usage patterns, with web chat (16%), web self-service(12%), SMS (12%) and smartphone apps (11%) all planned for implementation in the next 12months.The social media channel has more of a medium term focus with 7% planning to offer the channel inthe next 12 months and an additional 19% planning to implement social media as a channel in thenext 24 months. There is opportunity to expedite the implementation of social media as a channel asthis channel has had the greatest growth rate in the US over the last 12 months (33% growth incustomer usage in last 12 months).1 BTGS The Autonomous Customer, January 20112 With Customer Service, Real Person Trumps Text, Joe Light, Wall Street Journal, April, 2011 17
  18. 18. ANALYST INSIGHTSKey Insight #3: Low Effort Channels Tend to Have High Satisfactionand High Query ResolutionThere is a correlation between query resolution, the level of satisfaction with a channel and the levelof effort required for that channel.The lower the effort, the higher the satisfaction and query resolution with the channel.The channels that require low effort and where customers experience high levels of satisfaction andquery resolution are: 1. VoIP (89%) 2. Live agent (88%) 3. Web chat (80%)The channels that currently require high effort and therefore where customers experience lowerlevels of satisfaction and query resolution are: 1. IVR 2. Social media 3. Web self-serviceThere is opportunity for organization to potentially improve their service delivery through thesenewer channels which will ultimately deliver improved customer satisfaction ratingsKey Insight #4: Effective Channel Design by Understanding VaryingCustomer PreferencesChannel preferences differ according to several factors, including the age of the customer and thetype of inquiry.The drivers for using different channels also vary, for example: 1. Customers use the live agent channel as they want to be able to talk to a person, particularly with regard to a complaint, purchase or a technical query 2. Customers use web self-service because they perceive it to be easier and convenient to use, especially when looking up information for general inquiries or updating information 3. Social media is preferred by the younger generations as they wish to engage with other people to get help.An effective channel design should take into account the multitude of differences and be customisedaccordingly by customer segments and inquiry types. 18
  19. 19. APPENDIXResearch MethodologyThis whitepaper is based on two primary pieces of research designed by Fifth Quadrant, an industrystudy and a consumer study.Industry Study  Methodology: Online survey promoted via email to a targeted list of customer support professionals  Number of surveys: A total of 128 executive interviews were collected  Fieldwork Period: July 13 - 25, 2012  Target audience: Must be involved in the management or decision making for their organization’s contact centerConsumer Study  Methodology: Online survey using the GMI US consumer panel  Number of surveys: A total of 420 consumer surveys were collected  Fieldwork Period: July 4 - 11, 2012  Target audience: Those who have contacted a customer service center in the past three months (aged 18+ years old) 19
  20. 20. APPENDIXDefinitions of Customer Service ChannelsCustomer Service Channel DefinitionPhone conversation only Speaking directly to a customer service representative onlyAutomated phone system Where customers push numbers on their phone’s keypad or whereonly (IVR / Speech they respond to a computerized voice without interacting with aRecognition) customer service representativeCombination of automated Using an automated system before speaking to a customer servicephone system & representativeconversationOnline phone call Click a button online to speak to a customer service representativeSMS/Text (via Mobile) Your customer sends a text message to your company’s representativeMobile Smartphone App Use an app on their smartphones to interact with your organization’s customer service centerWeb self-service Provide an area on your site where customers can access information or perform routine tasks online e.g. filling in an application / inquiry form, without requiring any interaction with a representative of the businessWeb chat Where customers can chat with a customer service representative in real time over the web (similar to instant messaging), either through the company’s website or a pop up windowSocial media or online forum Facebook, Twitter, You Tube or networking siteEmail Customers send an email to a general customer service email addressOther Correspondence Customers can send information in letter or fax format to a customer(Letter or Fax) service centerRemote support screen Via the phone, website or chat, customers can join a remote supportsharing screen sharing session with CSRs to have their issues resolved 20
  21. 21. About Fifth QuadrantWho we areEstablished in 1998, Fifth Quadrant Pty Ltd is a Service Strategy Management Consultancy andAnalyst organization. We provide management consulting, service industry reports, customerexperience design, customer research and executive training programs. We work across contactcenter, face-to-face, online, correspondence and social media service channels.  Management Consultants  Researchers  Analysts  EducatorsWhat we doWe work with our clients to design and operationalise service strategy in order to enhance customerexperience, reduce operating costs, drive revenue and optimise operations across multiple servicechannels.Fifth Quadrant conducts extensive research within the contact center and customer service industry,producing Analyst reports that underpin our approach to consultancy with evidence-based statisticsand analysis.Fifth Quadrant | is our online, publishing and social media division providingCustomer Management industry professionals with news, insights and research within the AsiaPacific region. 1. Enhance customer experience 2. Reduce operating costs 3. Drive Revenue 4. Optimise operations 21
  22. 22. Our ServicesFifth Quadrant’s services include: 22
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