You Can Have It All: Satisfied Customers and Profitable Operations

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A whitepaper by Frost & Sullivan's analysts on Customer Dynamics Optimization, developed for NICE Systems.

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You Can Have It All: Satisfied Customers and Profitable Operations

  1. 1. You Can Have It All: Satisfied CustomersAND Profitable Operations A Frost & Sullivan White Paper Sponsored by NICE Systems
  2. 2. Does this sound familiar? The CEO declares this is “the year of the customer.” Postersthroughout the company pledge commitment to “Customers First.” Customer satisfactionobjectives are built into every employee’s performance goals.And yet, nothing really ever changes.Saying you put your customers first is like praising motherhood and apple pie—table stakesfor any business. All companies want to make their customers happy and stay profitabledoing it. But simply pledging commitment to the doctrine of “customers first”is not adequate.Why? Because “Customer Dynamics” (the ongoing exchange of information, opinions, andcommerce that occurs between businesses and their customers) is complex. The expandinguniverse of options that customers have when they want to make contact—from Web tochat to social media and beyond—raises the challenge and raises the cost of service.To make real headway, businesses must: • Recognize the customer’s intent, • Understand what is actually going on inside customer interactions, and • Implement best practices that improve every interaction to the mutual benefit of the customer and the business.This approach is referred to as “Customer Dynamics optimization.” It is a way ofunderstanding customer relationships as a series of interactions, and managing theinteractions to improve customer experience and business results. Achieving either of thesegoals alone isn’t difficult. It’s easy to delight customers if you give everything away for freeand provide 24x7 personal attention. It’s easy to reduce costs by cutting contact centerstaff and pushing customers to self-service. But neither approach alone is sustainable.To optimize Customer Dynamics and achieve both goals, you need to understand andmeet the intent of both your customers and your business. For example, Cincinnati Bellembarked on a mission to increase customer retention (and thereby revenue), whileslashing costs from their operations.Customer Dynamics optimization addresses: • What the individual customer really wants. What are the most common wants and needs that you can address? Where do you focus? • What the business wants to accomplish. “Wowing” the high-value customers? Selling more to the customers who are ripe for purchase? Retaining those who are thinking of leaving? “Firing” the customers who are a drain on the business? Protecting loss from interactions that violate regulations or are potentially fraudulent?The companies who rise to this challenge and drive their operations to ask and answer suchquestions are the ones who ultimately reign supreme in their industries. Frost & Sullivan 2
  3. 3. DELIVERING GREAT SERVICE IS HARD!There are four reasons why it is difficult for so many companies to fuse their business goalswith the customer intent.First, the most prevalent structures for customer interaction are built around silos.For example: • The departmental silos that hamper sharing of data and insights. For example, when customer information in CRM systems is managed separately from quality data on agent performance, it is difficult to identify root causes of ongoing problems or customers who might be receptive to properly framed up-sell offers. • Partitioned information about customer interactions, even when they all reflect the same basic customer intent. For example, a customer who migrates from a Web search to a chat session into an agent call is really conducting one long attempt at finding a solution to a problem. But in most service organizations, the channels themselves are separate, as are the data tracking them, and, in most cases, the metrics used to judge success or failure. • Within the contact center, multiple systems have overlapping, siloed and sometimes conflicting views of the customer. For example, much data is housed in the CRM system, far removed from the interaction recordings. Data from other contact channels—Web pages visited, feedback surveys submitted—are rarely collated with contact center data. Survey Question: Have You Integrated Your Contact Channels Salt River Project, an For a Single View of the Customer? electric utility in Arizona, received data Yes from various sources No, But Plan to Integrate in 2 Years to pinpoint the issues No, and No Plans to Integrate most troubling to Don’t Know their customers. By unearthing and focusing, they realized reductions in dissatisfaction (28 percent), escalations (35 percent) and repeat calls (11 percent). Source: Frost & Sullivan Contact Center Survey, 2010Second, most centers are only hearing part of the story when they look for answers. Mostof the “knowledge” that companies use to understand their customers is activity-based andtransactional. Telephony systems describe the contours of a call in terms of how long ittook and how that relates to averages. CRM systems capture transactional and demographicdata about the customer. Other systems deliver data about how the agent performed andwhat steps he took in response to specific call types or problems reported by the caller. Frost & Sullivan 3
  4. 4. These data are all gathered from structured sources. But the largest and richest reservoirof information that contact centers have is in the form of the voice calls themselves.Because that data is unstructured, it is usually overlooked as a source of insight for decision-making and analysis. It is only recently that tools like speech analytics have allowed peopleto use this unstructured data to gain significant benefit. The majority of contact centersreport that more than 40 percent of their existing data is in unstructured form.Third, most contact centers lack the sophisticated cross-channel analytic tools to take themassive amounts of structured and unstructured data available and turn it into insights thatsolve problems. Such analytic capability is available today—the challenge is to implementand utilize it in the right way that truly helps drive results.Finally, contact centers cannot usually act on what they know in time to meaningfullyaffect the outcome of an interaction. Most of the analysis that is done today happens in therear-view mirror, long after the interaction has passed—and with it, the chance to takesome corrective (or proactive) measures.If an agent had access insights from real-time analysis, the business would be able topinpoint the most important moments and guide the agent through the perfect action. Thismight be providing the best resolution to a problem, recognizing and addressing churn risk,or offering just the right product or service to cross-sell.SECRETS OF SUCCESSThere are several leading companies that do know how to put the pieces together to Wisconsin Physiciansoptimize Customer Dynamics. The key characteristic they exhibit is that they have focus Service, a not-for-and clarity into how their high-level strategies relate to and intersect with specific, day-to- profit insurer,day operations: reduced cancellations, improved customer • They hear, parse and understand customer intent, by “listening” through all available satisfaction, and channels and all data sources, structured and unstructured. They recognize how increased use of self- important it is to drill into these, and put the teams and processes in place to ask the service options right questions about customer intent during interactions. through comprehensive • They focus on tying together all the strands of cross-channel complexity into a analysis of call and big-picture view of what interactions actually look like from the customer’s point of screen content, and view. They then strive to affect the customer experience where it has the most impact, proactive at the moment of interaction. This requires real-time awareness of circumstances, but process it makes a company much more flexible and adaptable in the face of change. improvements. • They are also very clear on where the business’ priorities stand so they can balance customer demands with business needs. This allows a company to focus time and resources on what it considers appropriate opportunities and goals, whether that’s customer retention, up-selling or personalizing service for high-value customers. Frost & Sullivan 4
  5. 5. They understand, very specifically, the implications of Customer Dynamics on both Nationwide, one of customer experience and profitability. With that kind of insight, they can prioritize the worlds largest resources and focus their improvement efforts. insurance and financial firms,• They react in real time—at the level of the actual interaction—to make sure that provides context- service delivery is aligned with the company’s big-picture goals. specific guidance during interactions• They understand that customer intent is not static; it is a moving target that is shaped that enables long before (and after) any one interaction. To shape it, they build processes to monitor representatives to customer intent in real time and give service agents tools to influence current and improve customer future intent. experience and retention while Cincinnati Bell Uses Analytics to Combat Churn improving efficiency. This solution is an "all Cincinnati Bell was aware that its contact centers had some issues that were affecting win" for customers, customer satisfaction, customer service and sales. Churn was higher than the representatives, and company wished, first-call resolution was not where it should be and the contact the business itself. center experienced a high rate of transferred calls, which was putting a dent in customer satisfaction and increasing average handle time. Cincinnati Bell’s first priority in turning to analytics was improving customer satisfaction. The company was hoping to be able to spot problems—and find resolutions—much more quickly than it had in the past. “We needed to find where the potential for efficiencies were. We also wanted to increase sales across all of our centers,” said Doug Alcorn, manager of Analytics and Process Improvement for Cincinnati Bell. The company also wished to reduce customer churn, but first, it realized it needed to correctly identify the reasons behind churn. “We knew that a lot of agents weren’t following through with the correct actions to resolve customer problems and were not doing what they promised for customers. That was a big problem,” said Nick DelleCave, manager of Analytics and Process Improvement for Cincinnati Bell. Cincinnati Bell began using NICE Systems Interaction Analytics call flow analysis to determine how calls were being handled and if the process could be improved. Automatic call categorization let the company build effective “buckets” for faster and more efficient call analysis by type. “Now, we can isolate calls by product type or agent. We were really operating in the Dark Ages prior to NICE Interaction Analytics,” said DelleCave. “We knew we had some issues, but we needed a way to find out exactly what the sources were. For customer churn, Interaction Analytics helped us quantify how bad the problems were in terms of lack of follow-up on the part of agents.” Frost & Sullivan 5
  6. 6. “We were really astounded by how useful we found the talk analysis feature,” said Alcorn. “We discovered that some agents were talking too little during the course of the call, letting the customer ramble and not taking control of the calls. This really flagged a problem we had with training, and we were able to correct it by adjusting our coaching.” The company then tackled the process of identifying the reasons for customer churn and taking steps to mitigate it. “In our post-paid and tech-support groups, we uncovered a lot of agent coaching opportunities,” said Alcorn. “If a call was flagged by Interaction Analytics as the third call in a short period of time from the same customer, for example, we could find and analyze the first two calls to discover what those agents did incorrectly. Interaction Analytics uncovered areas of opportunity so necessary coaching could be provided to agents who needed it.” Interaction Analytics also helped Cincinnati Bell examine its existing contact center processes in-depth to discover where it could find process efficiencies. As a result of the data uncovered by NICE Interaction Analytics, Cincinnati Bell is well-positioned to begin reducing customer churn and improving satisfaction, improving its agent training, decreasing its average handle time, and increasing first- call resolution.What these successful companies have in common is that they built a system to optimizethe dynamics of the conversation. First they listen (across channels) to understandcustomers’ intent. Then they analyze what they are hearing to gain some insight into how theintent fits with corporate goals. And then they act on that insight to affect business resultsin real time.This virtuous circle is effective at the level of single customer interaction. But it is trulytransformative when applied on a wide scale to the entire customer base and the body ofcross-channel interactions. Companies that excel automate and institutionalize the processof capture, analysis and impact. Frost & Sullivan 6
  7. 7. HAVE YOUR CAKE AND EAT IT TOOOnly a fraction of companies achieve this today. The problem for most is not a lack of ability(or even lack of vision), but limited access to technology that allows them to implement afully-rounded service vision. The complexity of today’s Customer Dynamics has exceededthe capability for even the most committed organizations to turn interactions into value.They must have the proper tools to get control of the overload of customer and interactiondata, to analyze it and pinpoint how and where to apply the insight that flows from it.When properly implemented, companies with this holistic view of service delivery canhave it all: outstanding service, high customer retention rates, and lower costs. It isachievable for every business that is willing to look at service delivery as a dynamic processwhere individual interactions and contacts combine to paint a vivid, actionable picture ofcustomer intent.In a recent survey, Frost & Sullivan asked contact center managers what business processeswould be most impacted if they were able to collect and consolidate their customer inputs.The most cited answer (66 percent) was customer satisfaction and loyalty, followed by first-call resolution. Nearly all the responses referred to processes that impact large-scale goals,like sales effectiveness and back office improvement. Frost & Sullivan 7
  8. 8. CONCLUSIONTodays contact centers dont have to settle for disappointing results. This can be the "yearof the customer"—and every year after that. Companies like Cincinnati Bell, Sallie Mae andNationwide demonstrate that when you leverage technology to gain insight into customers,you gain the power to direct interactions onto more profitable pathways. Agents performbetter, centers deliver bottom-line results, and customers are more satisfied. When youlook at all the structured and unstructured data through a Customer Dynamics lens, a finerpicture emerges. Delivering great service is hard, but todays insightful companies aremaking it a reality. Frost & Sullivan 8
  9. 9. Silicon Valley 331 E. Evelyn Ave. Suite 100 Mountain View, CA 94041 C O N TAC T Tel 650.475.4500 Fax 650.475.1570 US San Antonio 7550 West Interstate 10, Suite 400, San Antonio, Texas 78229-5616 Tel 210.348.1000 Fax 210.348.1003 London 4, Grosvenor Gardens, London SWIW ODH,UKAuckland Tel 44(0)20 7730 3438Bangkok Fax 44(0)20 7730 3343BeijingBengaluru 877.GoFrostBogotá myfrost@frost.comBuenos Aires http://www.frost.comCape TownChennaiColomboDelhi / NCRDhakaDubaiFrankfurtHong KongIstanbulJakartaKolkataKuala LumpurLondonMexico CityMilanMoscowMumbaiManhattanOxfordParis ABOUT FROST & SULLIVANRockville CentreSan Antonio Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate theirSão Paulo growth. The companys TEAM Research, Growth Consulting, and Growth TeamSeoul Membership™ empower clients to create a growth-focused culture that generates,Shanghai evaluates, and implements effective growth strategies. Frost & Sullivan employs over 45Silicon Valley years of experience in partnering with Global 1000 companies, emerging businesses, and theSingapore investment community from more than 35 offices on six continents. For more informationSophia Antipolis about Frost & Sullivan’s Growth Partnership Services, visit http://www.frost.com.SydneyTaipeiTel Aviv For information regarding permission, write:Tokyo Frost & SullivanToronto 331 E. Evelyn Ave. Suite 100Warsaw Mountain View, CA 94041 9

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