GREETING YOUR CUSTOMERS BEFORE THEY ARRIVE

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1 WHITE PAPER GREETING YOUR CUSTOMERS BEFORE THEY ARRIVE Strategies for a Successful Digital Customer Experience Transformation April 29, 2018 Written by Alexander A. Kloubek EXL Consulting Digital Partner, Next Generation Operations and CX Practice Leader lookdeeper@exlservice.com

2 GREETING YOUR CUSTOMERS BEFORE THEY ARRIVE Strategies for a Successful Digital Customer Experience Transformation The customer service (CX) value proposition is experiencing a revolution. A swath of competitors, born on digital platforms, are infiltrating established industries, disrupting the way companies do business. Not only do these disrupters bring buyers new access points for purchases and interactions, but they ve viscerally changed expectations around the customer experience. Instead of settling for broad-based market segmentation that targets the masses, the innovators are customizing and personalizing each customer interaction right down to a segment of one. To compete, established businesses need to create the same level of customer intimacy as these emerging competitors, and consistently deliver the kind of experience their customers really want. This paper explores how organizations can successfully transform their customer experience using a bespoke blend of customer intelligence, dynamic analytics, artificial intelligence, automation and other digital tools. It s a journey that pays off in growth and profitability. Understanding the End Game How Customer Expectations Have Changed One of the biggest differences impacting the market today is the competitive vantage point. Consumers simply have more choices. EXL Digital CX Future Needs Hierarchy Model 5 Grow & Mature Know where your customer is going and greet them before they arrive EVOLVE WITH YOUR CUSTOMER 4 Customize/ Personalize Deliver services to a Segment of 1 KNOW YOUR CUSTOMER Sophisticated Customers must be serviced at higher levels early in their tenure 3 2 Efficient Execution Respect customers time and LOE (level of effort) Expert Resolution Whatever you promise, deliver with expertise VALUE CUSTOMER TIME DELIVER EXPERTISE Less Sophisticated Customers are quickly becoming sophisticated in the digital market Experience 1 Brand Promise Delivery Say what you do and do what you say ESTABLISH TRUST EXLSERVICE.COM 2

3 Just consider the options people have to buy groceries, insurance, mortgages or near anything else, these days. They can physically go to a location, like before, or get everything they need from a web marketplace or mobile app in minutes. Instead of relying on what the company declares, buyers are turning to reviews crowds of people providing direct feedback on products and services and price comparisons that are just a Google search away. Wellplaced advertising and promotion continue to play important roles, but now, more than ever, it is the voice of the masses that say which companies will win and which are going to lose. And the deciding factor often comes down to the service experience. their own blue screen of death, never bringing their systems back online. At a high level, companies can gauge how closely their present service solution is meeting changing customer expectations by looking at CX in a five-stage, hierarchal model. The foundational level of service for any business is delivering on the brand promise. For example: Delivering a guaranteed refund, without hassle, regardless of how long the buyer has held the product. Offering price match guarantee on all products. Consistently executing reliable, overnight shipping. Companies have to consistently do what they say they re going to do; and deliver as advertised to establish trust with the customer. That is the CX baseline. Historically, a company s reputation and ultimately, its competitive position, was built principally upon the core product or service delivered to the customer. Today, it s more about what that buying process feels like; the convenience factor when there s an issue, or speed to resolution for a claim. In seemingly commoditized industries, the product or service itself is now secondary to the customer s connection with the company. Organizations that make the experience easy, fast and personal are rewarded. Those that don t are experiencing Level two is delivering that brand promise with expertise. Doing what is expected, and doing it like a professional. A company that promises easier claims might guide customers through warranty coverage features on line and explain how the claim process works as the customer fills out the claim form. A software company might advise a customer on how to re-install the security software on her new laptop and walk her through the customization features. A demonstration of expertise, in a relevant way, reinforces the buyers purchase decision and the quality value proposition. Level three is executing efficiently in a way that values customers time and level of effort delivering conveniently, in fewer steps. This convenience can come in many forms; from using biometrics technology to identify and authenticate the customer; enabling mobile scanning for uploading of reimbursement receipts, or improving the internal search capability tools available to a customer service representative to dramatically expedite call handling. At this stage, the company has invested in EXLSERVICE.COM 3

4 process, technology and analytical changes that visibly reduce the amount of effort it takes for customers to accomplish their desired objectives. Level four is personalization; knowing the customer well enough to customize offerings and experience to a segment of one, based on personas, behaviors and previous interactions. For example, instead of giving a call center representative the basics, the company arms that representative with a complete, omni-channel customer history, so she can access all of the caller s previous interactions to more accurately distill and interpret her needs and sentiments. The pinnacle level five comes when companies know their customers so well that they can predict where they re going and greet them before they arrive. At this level, organizations have evolved their CX processes to the point where they can proactively present their customers with products and services that fulfill their needs, with a high degree of success, before those customers articulate what they want. Leveraging intelligent analytics integrated with digital and non-digital customer journey interactions, in real-time, is how successful organizations achieve this level. Insurance and healthcare companies achieve this level with tailored coverage needs recommendations, and health and wellness program enrollment based on physiological diagnostic data, activity levels, diet, and other curated information. Companies that do this well provide personally curated recommendations, research, and intelligence that demonstrate their understanding of and appreciation for the customer without drowning them in a deluge of content. Getting from the baseline to a mature, transformed digital and personalized customer experience is not a matter of haphazardly applying digital shiny object tools to existing processes and hoping for the best. While digital technologies are certainly key drivers of a transformed CX organization, it s critical to start by identifying, gathering and analyzing data on what customers really value. Then, to identify where the existing organization is falling short of CX expectations and not fully utilizing the broad suite of technology solutions available in the market. By doing the initial groundwork, at the customer level, companies ensure they will focus investments in areas where change will bring the greatest persistency and loyalty returns. The CX Evolutionary Process Step One: Define Customer Touchpoints and Desired Outcomes One of the biggest mistakes companies make when it comes to the customer experience is assuming that they know what the customer wants. Instead of assumptions, it s essential to take the time to clearly document journeys from the customers line of sight while identifying and quantifying what customers actually value. It s critical to actually speak to representative customers, based on target personas, in addition to aggregating and analyzing transactional data and response data from a variety of feedback mechanisms, including surveys, logged complaints and personal interviews. Walking in customers shoes provides context, enabling the company to identify and empathize with: What customers want that the company is not doing. What customers value that the company is doing and wants more of. What the company is providing that customers don t value as much as the company believes. What part of the product, service or experience customers don t like. This analysis should focus on re-evaluating the value proposition and typically comes with some surprises. Rarely do the internal assumptions match up with actual customer expectations or the assumed worth of value proposition components. EXLSERVICE.COM 4

5 Customer Journey Map Digital & Human Touchpoints This artefact captures current channel journey and enables future state Omni-Channel experience design that is seamless, contextual and connects the digital and human touches to drive the targeted customer experience I Need I Explore I Buy I Receive I Use, Pay & Stay Customer Channels Post Call Text App Web I designed / built my own plan Customer service provided me right products based on my needs I was provided with opportunities to bundle my products and get a discounted quote I called two days later to confirm order, associate was able to recognise and help me based on my needs I received my contract in 5 easy steps I was able to track my order status / appointment status My contract pack was delivered as promised I was able to check the status by sending a text My personalised welcome letter was delivered I received personalise offers for new smart products I submitted my read which was used for my bill I received a text that my bill has been sent I reviewed my bill and paid on app I received ontime and accurate bill Online Journey Phone Journey Step Two: Contrast Customer Value Drivers to How the Company is Currently Operating After looking externally to track and document the customers footsteps and doing the appropriate diligence to understand their needs, the company has to take a deep dive into internal operations. The goal is to map each existing process journey, and overlay this present-day experience with the customer journeys and expectations identified during Step One. The idea is to document gaps between expectation and delivery. Maybe the company is sending daily texts on purchase updates when customers only want to be contacted when the product is shipped. In this case, the extra is a wasted expense, because it has no perceived value. Similar customer journeys for similar competitive products or services will typically have the same end goal, but, it is what customers experience along the way to that end point that impacts overall satisfaction. Step Three: Prioritize Required CX Changes At this point, the company will have a clear picture of processes that need to change, based on customer value drivers. With so many journeys and interaction points, no organization can nor should try to change everything. Instead, prioritize the list by Total Customer Value, which EXLSERVICE.COM 5

6 is the aggregated experience volume (the number used to identify how many customers take each specific journey) multiplied by the overall impact value of the experience. Going back to the credit card example, of the pool of customers, how many go through the charge dispute journey each year and what are the ramifications of a less-than-stellar experience? If 35 percent of the total customer base had disputed a charge, and historical data analytics found that 80 percent of those customers were so dissatisfied with the process that they cancelled their card within the following six months, the resulting economic impact would indicate this journey as a top CX priority. If a challenging process for changing a flight has so many people talking to social media that it is damaging the brand, that s a significant impact. On the other hand, if a journey impacts a small number of customers and has little bearing on their loyalty, ongoing purchases or overall satisfaction levels, it will likely not be worth the effort or expense required to change. Example: Take the Journey of Disputing a Credit Card Charge The customer may want to have the option to dispute the charge on the account page or through an app, instead of making a phone call. If she has that option, she files the dispute and starts the journey. From working with another credit card provider, the customer may expect to be credited for the disputed charge immediately, and for the company to stay in contact by , text or phone as the company researches the situation depending on customer preference. Even with a temporary credit, the customer still wants to stay in the loop until resolution, in case it actually turns out to be a forgotten charge, or something she ll eventually have to pay. The experience she wants saves her time, and assumes she is right from the beginning. Even if it ends up being a charge she forgot about, she ll happily pay because the journey was simple and painless for her. By contrast, if the journey starts by giving her only one channel for filing a dispute and she waits 10 minutes on hold before finally talking to a customer service representative, there s already a disconnect. Her time has already been wasted. If she s told that they ll investigate, but until the company determines that the charge isn t hers, it will remain on her bill, that s another negative. If she has to follow up to find out status, instead of the company proactively reaching out to her, the experience disintegrates further. Both journeys get to the same end point: resolution. But, one solidifies the customer relationship, while the other tears it apart even though the outcome is the same for both. EXLSERVICE.COM 6

7 After analyzing what the company isn t doing that customers want, organizations should also examine features or extras the company is providing that customers don t value. Based on this information, companies can eliminate or reduce the use of some specific functionality, and funnel investment into new functionality customers will value. At the end of this process, companies have a clear view of their optimum future state, including what CX features they need to build, boost, shave or shrink to realize that vision. Step Four: Create an Execution Plan Using the Right Mix of Non-Digital and Digital Tools Now that the organization has a clear direction of where it needs to go, the next step is creating an execution game plan, using the right mix of operational and digital tools. Operational, process and organizational design must be engineered in conjunction with the digital solutions put in place. While each CX solution will differ from company to company, the digitally transformed organization will likely include all or some of the following: Customer Interaction: including virtual assistants to quickly address customers queries; enhanced self-service, mobile application development, and integrated omnichannel contact solutions Artificial Intelligence: including natural language processing, machine learning, and computer vision. These tools automate the CX process and effectively mimic human interaction to the point where customers receive a comparable interaction as when working with real people. Companies can eliminate hold times during peak periods, add after-hour support, and, quickly know Components of Digital Transformation Customer Interaction Next Gen Solutions Niche Solutions Disruptive New Technologies Self Service, Virtual Assistance Personalization Omni-channel Customer Engagement Artificial Intelligence Automation & Robotics Business Process Automation Robotics Cognitive Automation Intelligent Execution Customer Context Machine Learning Natural Language Processing Computer Vision Dynamic Analytics Data Enrichment Data Management Actionable Analytics Data Visualization EXLSERVICE.COM 7

8 the emotional state of the customer (confused, angry, happy) in seconds. Dynamic Analytics: quickly analyzes structured and unstructured data to predict what individual customers actually want much faster, so companies can proactively offer the right product, service or experience before the customer knows he or she needs it. Automation and Robotics: the application of business process automation tools, robotics and cognitive automation to the overall operation enables the organization to improve performance, efficiency and satisfaction. Next Generation Digital Solutions: disruptive new technologies that integrate data using IOT sensors, support increased traffic at higher speeds, improve performance or provide niche solutions for specific industries. The right blend of functionality, data integration and supporting technologies transforms the CX value proposition into a distinct value driver that utilizes each interaction to continually gain increased customer insight. Step Five: Put Measurements and Metrics in Place to Quantify Results As the CX operation transforms, it is critical to put measures and metrics in place to ensure that each new CX journey meets the expectations that were set by the customer. For example, if data shows that customers expect to have a credit in 24 hours, and a claim resolved in two weeks, companies have to set up controls that measure those performance points. For a fully transformed customer experience, organizations must continually have the business intelligence to know where they re meeting the goals, when they re falling short, and why the metrics were not achieved in certain cases. If companies don t measure what they ve learned with regard to customer value drivers, and identify when and if they are hitting the mark, they won t have the data to resolve issues, grow NPS scores and turn detractors into promoters. Just as companies can t assume what customers want, they can t assume that what they ve put in place is consistently delivering the desired outcomes without monitoring and measuring results. Step Six: Ensure Stakeholders Are Informed, Engaged and Empowered Even the best digital tools won t change the customer experience unless the supporting staff is fully on board with the change. For a successful transformation, staff members have to clearly understand the goals, the It s also important to loop sales and marketing into the mix, so these teams can publicize how the company has changed its CX approach to more closely align with customer need. new processes and how their work impacts the entire customer experience. Team members have to be given the opportunity and tools to go above and beyond for customers. CX redesigns won t achieve their full potential if staff isn t allowed to cross certain internal boundaries to delight the customer. That customer focus has to become an integral part of the culture. It s also important to loop sales and marketing into the mix, so these teams can publicize how the company has changed its CX approach to more closely align with customer need. Through the transformation, the company has significantly altered its brand promise. To maximize the value of the CX investment, let customers know about the change. EXLSERVICE.COM 8

9 Step Seven: Ongoing Review and Recalibration A digital customer service transformation is never a once and done endeavor. Customer expectations are constantly evolving. To keep delivering the kind of service experience individuals want, companies have to recognize and quickly respond with iterative analytical experiments and operational changes. Companies that approach CX as a continuous work-in-process are the ones that turn customer centricity from a concept into a viable, long-term competitive advantage. utilizing direct insight and analytics to paint a clear picture of what customers value, while judiciously redesigning the service solution by way of operational, digital and analytical tools to deliver a differentiated CX value proposition, companies can create longevity, and sustainable, profitable growth. Those nimble enough to anticipate need, know where customers are going, and greet them before they arrive gain a clear competitive advantage in an increasingly customer-centric world The Final Analysis Today, established organizations stand at a crossroads, contemplating the direction forward that will be most rewarded by the digitally-empowered consumer. By EXLSERVICE.COM 9

10 EXL (NASDAQ: EXLS) is a leading operations management and analytics company that designs and enables agile, customer-centric operating models to help clients improve their revenue growth and profitability. Our delivery model provides market-leading business outcomes using EXL s proprietary Business EXLerator Framework, cutting-edge analytics, digital transformation and domain expertise. At EXL, we look deeper to help companies improve global operations, enhance data-driven insights, increase customer satisfaction, and manage risk and compliance. EXL serves the insurance, healthcare, banking and financial services, utilities, travel, transportation and logistics industries. Headquartered in New York, New York, EXL has more than 27,000 professionals in locations throughout the United States, Europe, Asia (primarily India and Philippines), South America, Australia and South Africa ExlService Holdings, Inc. All Rights Reserved. For more information, see GLOBAL HEADQUARTERS 280 Park Avenue, 38th Floor New York, New York T F United States United Kingdom Czech Republic Romania Bulgaria India Philippines Colombia South Africa EXLSERVICE.COM lookdeeper@exlservice.com