May 27, 2009 Social Media Club The ROI of Social Media: Customer Service Communities Natalie L. Petouhoff Senior Analyst Covering: Social Media, Customer Experience and Customer Service Forrester Research

The #1 Customer Service 2009 initiative should be social media.

Why is social media important to customer service? Using Forrester’s TEI Methodology to Calculate ROI What are the benefits of online communities? What are the costs of online communities? What is the ROI of customer service social media? Agenda

Why is social media important to customer service?

Using Forrester’s TEI Methodology to Calculate ROI What are the benefits of online communities?

What are the costs of online communities?

What is the ROI of customer service social media?

Why is social media important to customer service? It’s… Twitter Online communities- Lithium, Helpstream, Jive… Facebook, LinkedIn, MySpace RightNow, Parature and nGenera It’s not just a… Forum A wiki A blog… It’s a community that interacts with each other on an ongoing basis

It’s…

Twitter

Online communities- Lithium, Helpstream, Jive…

Facebook, LinkedIn, MySpace

RightNow, Parature and nGenera

It’s not just a…

Forum

A wiki

A blog…

It’s a community that interacts with each other on an ongoing basis

Customer disdain, social media and customer service have… … formed a perfect storm that is super charging change

… formed a perfect storm that is super charging change

What is a Customer Service Online Community? Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report Online communities have evolved from “bulletin boards” Today they are “posts” in the form of forums, blogs, and chats. Updated “posts” sent via email or RSS syndication subscriptions This instantly distribute new information to EVERYONE

Online communities have evolved from “bulletin boards”

Today they are “posts” in the form of forums, blogs, and chats.

Updated “posts” sent via email or RSS syndication subscriptions

This instantly distribute new information to EVERYONE

Who’s got an online community? B2C… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Who’s got an online community? B2B… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Verizon… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

iRobot… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

myFICO… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Intel… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Why is social media important to customer service? Using Forrester’s TEI Methodology to Calculate ROI What are the benefits of online communities? What are the costs of online communities? What is the ROI of customer service social media? Agenda

Why is social media important to customer service?

Using Forrester’s TEI Methodology to Calculate ROI

What are the benefits of online communities?

What are the costs of online communities?

What is the ROI of customer service social media?

TEI ™ is Forrester’s ROI methodology Costs (Impact on budget) Benefits (Impact on business) Flexibility (Options) R I S K Uncertainty Impact of “assumptions” Benefits Quantified value Defined metrics “ Options” created Are there new opportunities the future? Cost People Process Technology Source: August 4, 2008, “The Total Economic Impact ™ Methodology: A Foundation For Sound Technology Investments” Forrester report Total Economic Impact

Uncertainty

Impact of “assumptions”

Benefits

Quantified value

Defined metrics

“ Options” created

Are there new opportunities the future?

Cost

People

Process

Technology

Assumptions Multiple customer service goals Attracts super users Engages community to be honest about their opinions Company is interested in community’s opinions… Small to medium sized call center Three year time frame for analysis Has federated search Allows agents to have access to the community Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Multiple customer service goals

Attracts super users

Engages community to be honest about their opinions

Company is interested in community’s opinions…

Small to medium sized call center

Three year time frame for analysis

Has federated search

Allows agents to have access to the community

Why is social media important to customer service? Using Forrester’s TEI methodology to calculate ROI What are the benefits of online communities? What are the costs of online communities? What is the ROI of customer service social media? Agenda

Why is social media important to customer service?

Using Forrester’s TEI methodology to calculate ROI

What are the benefits of online communities?

What are the costs of online communities?

What is the ROI of customer service social media?

Examples of benefits Cost savings Reduce call volume Reduce email volume Increase agent productivity Increase in FCR Reduce SEO costs Revenue improvements Increase customer lifetime value Increase product ideation Increase lead conversion rates Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report Benefits (Impact on business)

Cost savings

Reduce call volume

Reduce email volume

Increase agent productivity

Increase in FCR

Reduce SEO costs

Revenue improvements

Increase customer lifetime value

Increase product ideation

Increase lead conversion rates

There are many benefits of Customer Service Online Communities… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

The answers are in the community Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report Customers solve each other’s problems Less or no interaction from a company. Customers read posts Fewer call to the contact center And agents use the community-enhanced KM database Reduces their call time Provides more satisfying answers. DSL provider

Customers solve each other’s problems

Less or no interaction from a company.

Customers read posts

Fewer call to the contact center

And agents use the community-enhanced KM database

Reduces their call time

Provides more satisfying answers.

First Contact Resolution (FCR) goes up Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report FCR affects Customer satisfaction Purchase reprobability Good word of mouth… My question was answered !!!!!!!!

FCR affects

Customer satisfaction

Purchase reprobability

Good word of mouth…

Customer advocates create more value Source: February 2008 “Redefining High-Value Customers” report.

“Bad word of mouth” gets handled! Do the “ostrich” or… Handle it… Alert executives Quickly post a resolution to the community Avoid Brand damage and Increased call volume… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Do the “ostrich” or…

Handle it…

Alert executives

Quickly post a resolution to the community

Avoid

Brand damage and

Increased call volume…

Invest in turning customer informants Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report Even informants can be turned into advocates: Use a built-in system to recognize, rank, and reward users Acknowledge their suggestions Thank them for helping customers

Even informants can be turned into advocates:

Use a built-in system to recognize, rank, and reward users

Acknowledge their suggestions

Thank them for helping customers

What about the rest of the company? Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report Product Development New ideas coming from communities can save product development millions Product Q&A Get solutions that can’t be found any other way Marketing and Sales Now promoting a product that was designed with customer input.

Product Development

New ideas coming from communities can save product development millions

Product Q&A

Get solutions that can’t be found any other way

Marketing and Sales

Now promoting a product that was designed with customer input.

Why is social media important to customer service? Using Forrester’s TEI methodology to calculate ROI What are the benefits of online communities? What are the costs of online communities? What is the ROI of customer service social media? Agenda

Why is social media important to customer service?

Using Forrester’s TEI methodology to calculate ROI

What are the benefits of online communities?

What are the costs of online communities?

What is the ROI of customer service social media?

Examples of customer service online community costs People Training Staff Process Marketing of community Technology Community website design Single Sign-on Integration to contact center Platform subscription fee Analytics Reporting Costs (Impact on budget)

People

Training

Staff

Process

Marketing of community

Technology

Community website design

Single Sign-on

Integration to contact center

Platform subscription fee

Analytics

Reporting

Start-up costs of customer service online communities… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Recurring costs of customer service online communities… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Why is social media important to customer service? Using Forrester’s TEI Methodology to Calculate ROI What are the benefits of online communities? What are the costs of online communities? What is the ROI of customer service social media? Agenda

Why is social media important to customer service?

Using Forrester’s TEI Methodology to Calculate ROI

What are the benefits of online communities?

What are the costs of online communities?

What is the ROI of customer service social media?

The ROI of online customer service community is… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

The TEI of online customer service community is… Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report

Where to begin? Take the self-assessment Evaluate your organization Compare to best practices Get alignment Source: January 13, 2009, “Forrester Customer Service Innovation Framework and Self-Assessment ” Forrester report

Take the self-assessment

Evaluate your organization

Compare to best practices

Get alignment

Join the social media revolution Source: April 6, 2009, “How to Win Funding for Your Customer Service Project ” Forrester report

Thank you Natalie L. Petouhoff +1 310.919.8467 [email_address] www.forrester.com To Get the Slide Deck, go to: www.forrester.com/socialmediaclubla

Natalie L. Petouhoff

+1 310.919.8467

[email_address]

www.forrester.com

To Get the Slide Deck, go to:

www.forrester.com/socialmediaclubla

Research in this presentation July 2009, “Social Media Best Practices for Customer Service: Case Studies” May 2009, “The ROI of Online Customer Service Communities” April 6, 2009, “How to Win Funding for Your Customer Service Project” January 13, 2009, “Forrester Customer Service Innovation Framework and Self-Assessment” January 21, 2008, “The Economic Necessity Of Customer Service”

July 2009, “Social Media Best Practices for Customer Service: Case Studies”

May 2009, “The ROI of Online Customer Service Communities”

April 6, 2009, “How to Win Funding for Your Customer Service Project”

January 13, 2009, “Forrester Customer Service Innovation Framework and Self-Assessment”

January 21, 2008, “The Economic Necessity Of Customer Service”

Research in this presentation Why Talking To Your Customers Is Ruining Your Business, August 29, 2008 August 4, 2008, “The Total Economic Impact™ Methodology: A Foundation For Sound Technology Investments” July 2, 2008, “Customer Service: A Keystone Of Your Corporate Revenue Strategy” February 4, 2008, “Redefining High-Value Customers”

Why Talking To Your Customers Is Ruining Your Business, August 29, 2008

August 4, 2008, “The Total Economic Impact™ Methodology: A Foundation For Sound Technology Investments”

July 2, 2008, “Customer Service: A Keystone Of Your Corporate Revenue Strategy”

February 4, 2008, “Redefining High-Value Customers”