Proposal to Reduce CustomerService Costs at the Universityof DenverMike RiveraDU: University CommunicationsDU: University ...
Executive Summarye University of Denver (DU) serves a large number of constituents on a daily basis. Many are in need ofc...
Current State of Customer Service at DUe University of Denver enrolls 12,000 students, employs 3,000 professionals, has 1...
service requests are received via the web, email, social media channels, phone or in person. Each request istriaged, resea...
Position Title         # of People        Monthly Hours           Hourly Wage        Total Cost      Student Representativ...
A New SolutionGet Satisfaction (getsatisfaction.com)is a web-based customer serviceapplication that offers many bene tsand ...
• Customizable: the system can be altered to mimic the current DU brand and given a unique URL based  on our own du.edu ad...
Among teens, Internet use is even heavier at93%. (Purcell, 2011) All of these statistics indicatethat all Americans (and, ...
is running, but we can derive estimates based on internal metrics and the success rates of other GetSatisfaction users. e...
Crowdsourcing Savings CalculationWhile the following statistic is used by Get Satisfaction for marketing purposes (and the...
is reduction in cost is estimated to range anywhere between $120,557-141,696 per year, but re ectsthe savings DU should e...
ticketing system, but a switch to ZenDesk would make available to the world their technology centric  knowledge base which...
ReferencesCisco. (2010, June 2). Cisco Visual Networking Index: Forecast and Methodology, 2009-2014. Retrieved  from the C...
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Proposal to Reduce Customer Service Costs at the University of Denver

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The business case for DU to adopt a campus wide customer service system to reduce costs and increase customer happiness.

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Proposal to Reduce Customer Service Costs at the University of Denver

  1. 1. Proposal to Reduce CustomerService Costs at the Universityof DenverMike RiveraDU: University CommunicationsDU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver
  2. 2. Executive Summarye University of Denver (DU) serves a large number of constituents on a daily basis. Many are in need ofcustomer service to answer questions about the school, its programs, cost of attendance or any number ofother topics. Typically, these interactions occur in relative isolation from each other because the universityis operated in a decentralized manner where each unit has signi cant autonomy from all others. isoperational structure fosters an inefficient method of handling customer service issues. Duplication ofefforts, information bottlenecks and longer than necessary wait times are common and costly. is analysis centers around estimates from one of the primary customer service oriented divisions,Enrollment. Some of the ndings include:• Customer service needs are triaged, researched and responded to by a total of 91 staff members.• $376,524/year (excluding any associated bene t costs) is spent to staff customer service efforts.• A lack of precise data exists about the types of issues constituents face, how many incoming issues are received and the ability to track issues from beginning to end making analysis and progress difficult. To reduce the number of dedicated man-hours and cost while increasing our data pool and customerservice experience, DU can implement a university wide, online customer service tool called GetSatisfaction. While the tool will not eliminate all customer service issues, it can reduce many of them anddo so at a cost savings compared to the current approach (again, estimates apply to Enrollment):• A 10% reduction in the amount of duplicated effort on the part of staff members efforts• A 32% reduction in volume of incoming requests as people help one another (no DU intervention).• A net savings of $25,000 for the rst year of use, $116,000 for the second. Subsequent years would see the same or better results.• Calculations could be extrapolated to the rest of DU’s organization for even greater efficiencies.DU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 1
  3. 3. Current State of Customer Service at DUe University of Denver enrolls 12,000 students, employs 3,000 professionals, has 110,000 living alumniand sees over 9,000 interested new student applicants each year. (University Communications, 2011) eschool website attracts 4 million people a year who view nearly 40 million pages in total. (University ofDenver, 2011) With so many people interacting online with the university at any given time, it’s importantto have resources available to answer questions, provide guidance and troubleshoot issues when theyoccur. DU does this through a decentralized approach where each academic and administrative unitdedicates people to handle customer service requests within and for their unit. However, online visitors arenot always knowledgeable about this decentralized structure and where or who they should send theirrequests. For example, DU’s website offers a “contact us” form that acts as a central place where anyone canget help. Messages from this source are triaged by University Communications department personnel whoforward each inquiry to the most appropriate person or department on campus based on the speci ccircumstances of each request. Other times, people will opt out of the general “contact us” channel in favorof contacting a speci c department or person if they’re con dent that their choice is the best one. DU’sAdmission department is representative of this method of interaction. e department is continuouslycontacted by prospective students who have speci c issues to sort out. Financial Aid and academicadvisors within academic departments are similarly contacted about speci c issues relating to their areasof focus. Even though the triage process creates extra work for DU staff, it works well for visitors who don’t knowor care to research who best to send their speci c concerns. However, the system does have limitations anddownsides. It relies on DU staff to handle all issues internally at a signi cant cost to the university. A bettersystem could be employed, but anything new won’t completely eliminate all downsides or costs. Indeed,many incoming messages will always need to be handled by internal staff because of the highly customizedor sensitive nature of a each request. Many others, though, could be bene tted with a different approach. Let’s look at how customer service inquiries are handled today within a single campus division—enrollment—and speci cally the undergraduate admission and nancial aid groups. First, customerDU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 2
  4. 4. service requests are received via the web, email, social media channels, phone or in person. Each request istriaged, researched, responded to and then re-responded to as need be until the issue is resolved.According to Emily Forbes, Director of Communications—Enrollment Division, these two groupsrespond to anywhere from 6,500-8,500 inquiries per month. It’s important to note that although thisproposal discusses a web based solution, we need to be aware that customer service also happens offlinewhether over the phone or in person. However, this proposal is not limited to having impact on a web-only basis. Companies who are already following a customer service approach over social media whereinquiries are answered by non-staff users (crowdsourced) are already witness to a reduction in all forms ofcommunication, not just online. (Customer Portfolio Management, 2011) e characteristic to keep in mind in all of this back and forth is that it isn’t systematically saved forfuture bene t. If two people have the same or similar questions, they are asked independently from eachother and are, in turn, processed independently as well. ose two questions are likely never to cross pathsas they get answered. is environment of duplication of efforts (and therefore cost) is incurred by theuniversity without its knowledge of occurring since it’s not tracked or measured. And if it does happen toknow that similar requests are being independently answered two, three or more times, it is currentlypowerless to do anything about it. Staff may create a list of ready-made responses to simplify and shortenresponse times, but those efficiencies do not eliminate the cost of the effort completely. e following chart summarizes the estimated costs associated with customer service within theundergraduate admission and nancial aid groups. (Emily Forbes, personal communication, February 25,2011)Enrollment Division’s Current Customer Service Costs(Dollar amounts exclude benefit costs for employees who qualify) Position Title # of People Monthly Hours Hourly Wage Total Cost Enrollment Specialists 5 43 $15 $3,225 Visit Coordinators 2 87 $15 $2,610 Admission Counselors 13 43 $19 $10,621DU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 3
  5. 5. Position Title # of People Monthly Hours Hourly Wage Total Cost Student Representatives 60 12 $8 $5,760 Work Studies 2 173 $11 $3,806 Financial Aid Advisors 9 35 $17 $5,355 Monthly Subtotal $31,377 Yearly Grand Total $376,524 As evidenced from the chart, many people have customer service oriented duties as part of theiremployment with the university’s enrollment division. In aggregate, their time and effort costs DU$376,524 a year. If we take the total dollar amount and divide it by the range of emails received per year(78,000-102,000) we learn that DU spends somewhere between $3.69-4.83 per email to resolve customerservice inquiries. Whether this number looks big or small to you, it only includes two groups within DU(albeit two groups that have signi cant customer service responsibilities and signi cantly more staffdedicated to the effort than other campus groups). Nonetheless, this number doesn’t re ect any of thecustomer service costs borne by the rest of the university (nor the bene t costs incurred by staff as alreadymentioned in the chart). But for this analysis, we need only look at these costs to see how a new systemwould reduce costs and bene t both DU as well as DU’s external audiences.DU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 4
  6. 6. A New SolutionGet Satisfaction (getsatisfaction.com)is a web-based customer serviceapplication that offers many bene tsand the promise of lower overallcosts. e major features of GetSatisfaction’s tool includes:• Feedback options: people can ask a question, share an idea, report a problem or give praise all in the same place and using the same interface.• Storage: all information entered into the system is stored into a knowledge base where the most popular topics are automatically aggregated into an FAQ.• Accessible: the system can be integrated into the DU website in a variety of ways. It can also be integrated into Facebook and accessed via mobile devices.• Analytics: the system comes with an analytics package in order to mined for useful data that can inform future decisions.• Extensible: the system can be integrated with ZenDesk, a support ticket system, and CRM tools.DU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 5
  7. 7. • Customizable: the system can be altered to mimic the current DU brand and given a unique URL based on our own du.edu address.• Moderation: topics can be moderated so that offensive material can be removed.• Hosted: the system is run by a third party so DU is not responsible for security, servers and other concerns. e company also offers a service level agreement for peace of mind.• Exportable: all data can be exported if the need arises in the future.Cost/Benefit AnalysisIdeally, a new customer service approach would simultaneously decrease costs and increase customersatisfaction. Get Satisfaction can make these ideals real. ree main trends drive this possibility. First, the sheer amount of inquiries DU receives (6,500-8,500 per month for one division). As shown inthe chart above, 91 people are fully or partially tasked to handle the volume. And, arguably, the highnumber of requests are an indication that answers to questions are not available or are difficult to nd.Inquiries can be analyzed with the help of Get Satisfaction’s analytics package to spot trends and patternsthat can help inform the university about what issues are most pressing and how answers to commonquestions might best be communicated in order to further decrease the number of incoming requests. Second, society is increasingly willing to engage in online “self help.” e Pew Internet & American LifeProject has studied the impact of the internet on American society since 1999. Among their 2010 ndingson adults: (Pew Research Center, 2010)• 79% used the Internet• 78% conducted online research about a product or service they considered buying• 61% used a social networking site like Facebook and LinkedIn• 59% look for "how-to," "do-it-yourself " or repair information (2008 data)• 32% posted a comment or review online about a product they bought or a service they receivedDU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 6
  8. 8. Among teens, Internet use is even heavier at93%. (Purcell, 2011) All of these statistics indicatethat all Americans (and, in particular, teens whoare a primary target audience for the admissiongroup at DU) are increasingly using social mediasites on the Internet to research and comment onproducts and services. ird, there is an incredible amount ofdigitized information available on the Internetand it is being shared and moved in massive quantities. It was estimated that 500 billion gigabytes ofinformation was stored on the Internet in 2009 (e Guardian, 2010) Additionally, Internet traffic ispredicted to reach a total of 767 exabytes, or 64 exabytes per month (an exabyte is equal to a billiongigabytes) by 2014. (Cisco, 2010) Digitized data allow information to be stored, manipulated and accessedinde nitely. In combination, these three trends can be leveraged by DU to con dently provide its varied audiences anonline “do-it-yourself ” customer service system that will be embraced while lowering the university’scosts. How will cost be lowered? Two ways:1. Reducing the number of responses to duplicate inquiries: once an answer is stored, people can be directed to the archived answer in the future. is eliminates the effort needed to respond by an employee.2. Reducing the overall number of questions that need to be answered: since the system is based on a social media model where people can freely participate and interact with the content, anyone using the system can answer anyone else’s questions or be able to provide feedback, insight, etc. is reduces the amount of inquiries an employee has to answer. To determine what Get Satisfaction’s potential cost savings are to DU, we need to know how muchduplication would be eliminated as well as how many inquiries would be answered through acrowdsourced model. e rst two of these numbers are difficult to compute accurately before the systemDU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 7
  9. 9. is running, but we can derive estimates based on internal metrics and the success rates of other GetSatisfaction users. e cost of the tool is also an estimate, but can be accurately estimated. Costs arecomputed using the following rationale.Duplication Savings CalculationUniversity Communications categorizes all the customer service emails received from the DU website.Based on those measures, it estimates an average reduction of 2% of email volume in the rst three monthsof Get Satisfaction’s operation (mainly due to Get Satisfaction’s ability to reduce the amount of spam thatenters the stream), increasing to 5% within 6 months (as people are exposed to the system and driven touse it) and then to 10% by the rst year’s end (staff is trained and the system is populated with a widevariety of help topics). Using the cost gures per email given earlier, we learn that over the rst year, GetSatisfaction would save a total of about $25,400 in duplication costs. Aer year 1, savings would totalapproximately $37,650 based on a continued 10% reduction rate.Yearly Cost Savings From Elimination of Duplication (based on 6,500 Emails/month rate) Monthly # Emails Cost/Email # of Months Total Saved 2% Email Reduction 130 $4.83 3 $1,884 5% Email Reduction 325 $4.83 3 $4,709 10% Reduction 650 $4.83 6 $18,837 Total $25,430Yearly Cost Savings From Elimination of Duplication (based on 8,500 Emails/month rate) Monthly # Emails Cost/Email # of Months Total Saved 2% Email Reduction 170 $3.69 3 $1,882 5% Email Reduction 425 $3.69 3 $4,705 10% Reduction 850 $3.69 6 $18,819 Total $25,406DU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 8
  10. 10. Crowdsourcing Savings CalculationWhile the following statistic is used by Get Satisfaction for marketing purposes (and therefore skewstoward the most successful outcome), it gives insight for this portion of the analysis. A case study statesthat Spring Partners, the maker of a note taking application, reduced the number of support emails itreceived by 80% while seeing a rise in customers helping each other to solve problems without employeeintervention. (Get Satisfaction, 2011) ere is no indication what portion of the 80% reduction was due tonon-employee action, but it does lend support that crowdsourcing can happen in a customer servicesetting. And the Pew Research Center again shows evidence that people can and do take actions relevantto an online community as is found on Get Satisfaction: (Pew Internet, 2010)• 32% of adults rate products, services or people using an online rating system• 32% of adults post online comments or reviews about products bought or a services received• 28% of adults categorize or tag online content like a photo, news story or blog post ese types of activities are the hallmarks of the groups known as creators, conversationalists and criticsas de ned by authors Charlene Li and Josh Bernoff in their book Groundswell: Winning in A WorldTransformed By Social Technologies. e book’s companion interactive tool indicates that these groupsrepresent 46-50% of 18-24 year olds, 33-46% of 25-34 year olds, 23-34% of 35-44 year olds, 19-37% of45-54 year olds and 12-18% of people 55 and older. (Forrester Research, 2009) Averaged out, these agerange percentages overlap the Pew Research Center numbers. We can apply the same averaged percentage(32%) to our analysis given the supporting evidence from the two independent, concurring sources above.Yearly Cost Savings From Crowdsourcing Effects Yearly # Emails Cost/Email % Reduction Total Saved 6,500 Emails/Month Avg. 78,000 $4.83 32% $120,557 8,500 Emails/Month Avg. 120,000 $3.69 32% $141,696DU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 9
  11. 11. is reduction in cost is estimated to range anywhere between $120,557-141,696 per year, but re ectsthe savings DU should expect once the system is launched and constituents are regularly aware of andusing it. e cost savings will not be this high the rst year, but an exact amount will be contingent on howquickly the tool can be rolled out, how quickly awareness and use build and how well the tool ismaintained on an ongoing basis to ensure that it is and continues to be of value through active moderationon the part of DU staff. I estimate the rst year savings to be a quarter of this range, $30,139-35,424. One area where Get Satisfaction cannot compete well with the current model is under circumstanceswhen an inquiry is too speci c to warrant a generic answer that others will nd value in. Some people willalso need to share personal data in order to nd resolution and neither the customer nor DU will wantthat information to be part of the public sphere. While the system cannot eliminate these types of requests,sensitive topics can be moved off the system and onto a private channel like email or telephone.Other ConsiderationsGetting Get Satisfaction running smoothly for the university would require one-time cost forimplementation and ongoing costs for maintenance, training and moderation. However, other costs suchas a reduction in the amount of triage that a decentralized organization creates could be reduced. Furtherresearch and analysis into these variables as well as into DU’s current customer service processes wouldresult in greater accuracy of gures and expectations. Some bene ts and costs of this proposal are intangible variables and cannot be pegged to speci c dollaramounts:• A reduction in the amount of time spent by DU staff on customer service could result in cost reduction through personnel reductions, but could also free managers to better utilize their employees.• Users of the tool may be able to nd answers to their questions quicker and easier than they otherwise would. is creates goodwill, better customer experiences and happier people.• Analysis of Get Satisfaction’s statistics may uncover insights into problem areas for the university which would otherwise go unseen and unknown.• Additional areas of cost savings may materialize. Once such possibility is that Get Satisfaction integrates with ZenDesk, a bug/problem ticketing system. University Technology Service’s Help Desk service uses aDU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 10
  12. 12. ticketing system, but a switch to ZenDesk would make available to the world their technology centric knowledge base which is currently locked inside that group.Final TallyAn enterprise version of Get Satisfaction was quoted by a sales representative at the company to cost$25,000/year. An exact gure would need to be nalized based on DU’s particular circumstances, but evenif the tool cost twice this amount, it would still pay for itself within its rst year of use. Adding bothduplication and crowdsourcing effect cost savings, Get Satisfaction would reduce expenses anywherebetween $50,539-55,824. In its second year, savings would reach between $140,957-162,096. In subsequentyears, costs could be reduced even further as the system is expanded to handle other areas of businessprocess, such as internal customer service support in addition to external support (for example, HumanResources providing service to employees).Recommendationsis analysis uses a multitude of estimates to arrive at costs and savings gures. Nonetheless, theconclusion is readily evident: DU should purchase Get Satisfaction and incentivize all campus units toadopt it. e net cost savings are signi cant (remember, this analysis only estimates savings for a singledivision at DU) and many intangible bene ts exist including a richer website experience, quicker and moreefficient feedback on average and better insight for staff on problems, solutions and new opportunities.DU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 11
  13. 13. ReferencesCisco. (2010, June 2). Cisco Visual Networking Index: Forecast and Methodology, 2009-2014. Retrieved from the Cisco website, http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ ns827/white_paper_c11-481360_ns827_Networking_Solutions_White_Paper.htmlCustomer Portfolio Management. (2011, February 28). Airline shis customer service away from call centre [weblog message]. Retrieved from Call Centre blog, http://www.callcentre.co.uk/ccf-news-content/full/airline-shis-customer-service-away-from-call-centreGet Satisfaction. (2011). Retrieved March 2, 2011, from the Get Satisfaction website, http://getsatisfaction.com/success-storiesForrester Research. (2009). Retrieved March 3, 2011, from the Groundswell webiste, http://www.forrester.com/empowered/tool_consumer.htmlPew Research Center. (2010, May). Retrieved March 2, 2011, from the Pew Internet & American Life Project, http://www.pewinternet.org/Static-Pages/Trend-Data/Online-Activites-Total.aspxPurcell, K. (2011, February 9). Retrieved March 2, 2011, from the Pew Internet & American Life Project, Trends in Teen Communication and Social Media Use. http://www.pewinternet.org/Presentations/2011/Feb/PIP-Girl-Scout-Webinar.aspxUniversity Communications. (2011). Retrieved February 28, 2011, from the University of Denver website, http://blogs.du.edu/today/about/fast-facts-about-the-university-of-denverUniversity of Denver. (2011). Retrieved February 28, 2011, from the Google Analytics website, https://www.google.com/analytics/Wray, R. (2009, May 18). Internet data heads for 500bn gigabytes. Retrieved on March 2, 2011, from e Guardian, http://www.guardian.co.uk/business/2009/may/18/digital-content-expansionDU: University Communications // Proposal to Reduce Customer Service Costs at the University of Denver 12

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