State of Customer Service Experience 2017

Transcription

1 The Northridge Group s State of Customer Service Experience 2017 New data reveals insights on delivering a seamless omni-channel customer experience and how service impacts cost, complexity and customer effort. The Northridge Group Management Consulting & Quality Monitoring A Publication of 1

2 Introduction For industry-leading companies, the importance of customer experience in today s marketplace is well-understood as a competitive differentiator. Many companies also recognize that, when executed well, customer service drives brand loyalty, business growth and reductions in cost. Yet, digital technology is quickly changing the game for how companies and consumers interact with one another, setting a precedent for quick, convenient and easily accessible issue resolution. New data from The Northridge Group suggests that for companies seeking to drive sales, service, reputation and loyalty through a seamless omni-channel customer experience, the opportunity and challenges have never been greater. Just as customers are becoming more digitally savvy, so too must the companies that serve them. Our data shows that customers want to be met on their channel of choice and have little tolerance for multiple contacts, long hold times, slow responses and ineffective issue resolution. While digital self-service channels allow customers to be more selfsufficient, consumers still want direct, personal assistance for more urgent matters. Companies that know what customers are looking for within each channel and delivering that seamless experience across all channels will have a competitive advantage. With consumers in the driver s seat, time is of the essence. In fact, more than 80% of consumers say they will switch to a different company as a result of poor customer service with only about a chance of returning. The stakes are high, but brands that recognize this as an opportunity to establish a relationship with their customers will win. 2 While we see great promise in leveraging an effective omni-channel customer experience as a means of satisfying consumers and differentiating brands, we are perhaps more inspired by the level of interest among businesses in getting it right. For the third year, The Northridge Group shares the following data and insights in the spirit of improving end-to-end customer experience and building the value of the brands that do it well. The 2 Northridge Group The Northridge State of Customer Group State Service of Experience Customer Service 2017 Experience 2017

3 Methodology The Northridge Group s State of Customer Service Experience 2017 study surveyed more than 1,000 United States consumers 1 over the age of 18 on their expectations and experiences with omni-channel customer service issues, inquiries, and responses over the past year. 2 In addition to the overall results, this report focuses on differences by generation, looking at contrasts among four generations as defined by The Pew Research Center 3 : Millennials (ages 18 to 35) Gen-Xers (ages 36 to 51) Baby Boomers (ages 52 to 70) Silent Generation (ages 71 to 88) 1 The survey was conducted online in April The response rate was 76%. 2 Chart totals may reflect rounding. 3 The Pew Research Center 3 The Northridge Group The Northridge State of Customer Group State Service of Customer Experience Service 2017Experience

4 Table of Contents I. Reasons for Customer Frustration II. The Cost of Poor Customer Service III. Why Customer Effort Matters IV. Important Changes in Channel Preferences V. Emerging Technology VI. Guiding Principles 4 The 4 Northridge Group State of Customer Service Experience 2017

5 Key Highlights Neglecting Customer Experience Means Losing Customers Many customers prioritize service experience over cost, historically one of the greatest influencers in purchase decisions. In fact, eight in ten consumers (81%) say they are likely to defect to another company as a result of poor customer service. Web and Mobile App Self-Service Channels Do Not Deliver on Their Potential Customers want to use different channels for different situations. Many customers prefer to leverage self-service channels to address their needs and only contact a business directly when those solutions fail them, but over four in ten consumers (45%) are not successful or only somewhat successful in locating information on company websites. Additionally, over half of these experiences require at least two attempts to achieve resolution. Companies should understand which channels their customers are choosing and for which type of inquiry. Emerging Technologies Have More Consumers Choosing Digital Channels Interactive Virtual Assistants (IVA) have become a powerful way in which companies are providing more information to their consumers and driving higher resolution on their digital channels. Over 55% of all consumers are likely to use an IVA, but usage skews notably higher for Millennials (67%) and Gen-Xers (59%). The integration of the IVA solution can make selfservice easier for consumers to use while dramatically reducing costs for businesses. Untapped Data Leads to Missed Service Opportunities Brands have an opportunity to use the customer data they have to drive a personalized service experience. While customer profile data may be available, it often goes untapped by companies as a means of enhancing customer service. Over one-third of consumers (36%) report they rarely or never communicate with agents who demonstrate knowledge about their account, thus creating more customer effort and a frustrating interaction. 5 5

6 Phone Continues to Decline in Channel Preference, Social Media Spikes When customers turn to the phone to attempt resolution of a service issue, they have generally either had an unsuccessful self-service experience or are calling with a time-sensitive issue. Across the board, by many metrics, customer service via phone is worsening. Over 30% of consumers indicate that resolution by phone is difficult, and the phone has declined as the preferred channel when compared to other options, dropping to 43% in Social media as a preferred channel spiked to 10% while other digital channels remain stable. Despite the general trend of dissatisfaction with customer service over the phone, 52% of consumers still prefer it for mission critical issues. Increased Speed of Resolution Can Drive Cost Reduction As consumers get more comfortable with omni-channel customer service options, they are more inclined to toggle between channels. In fact, 36% of customers will switch channels if their issue is not resolved within an hour, which drives multiple interactions and increased service costs. This trend is expected to continue over time as Millennials are even less tolerant of prolonged resolution times, with 44% of them switching channels within the hour and 21% within just a few minutes. 6 The 6 Northridge Group State of Customer Service Experience 2017

7 I Reasons for Customer Frustration 7

8 Reasons for Customer Frustration Companies often misunderstand the real goals of the customer service experience. Many believe that delighting the customer is the key to brand loyalty, but having a wow factor is secondary to providing the customer with effortless support that creates a personalized and emotional connection. An interaction focused on customer care that includes simple, fast, and personalized service will leave a greater impact than the bells and whistles of delighting each customer. Often, dissatisfaction occurs between the customer and the technology before a live agent is even brought into the mix, which sets the stage for the customer s initial interaction with a brand. Many times, online experiences are fraught with issues including lack of information, challenging navigation, ineffective search capabilities, and long wait times for online chat. These difficulties result in channel switching that can evoke irritation in a customer as they are then obligated to pick up the phone to contact an agent. Expectations by Channel Consumers generally know what they want when it comes to customer service timely, personalized assistance, accurate answers, or an outlet for comments and suggestions. The study finds that a majority of the time, customer service channels are meeting or exceeding expectations, particularly on phone (85%), (85%), and online chat (83%). However, these positive stats may be misleading; often customers expectations are low based on previous negative experiences. Even with the caveat of low expectations, there are still some channels that fail to meet even those expectations. One in three consumers feel that text message (31%) fails to meet expectations, while one in four believe that social media (25%), web self-service (24%) and mobile app self-service (24%) all fail to meet expectations. Having a wow factor is secondary to providing the customer with effortless support that creates a personalized and emotional connection. 8

9 The Consumer Experience How often do you experience the following when contacting a company for a customer service issue or inquiry? Some companies may have the misconception that bad customer service is rare. There are handfuls of extreme examples of egregiously poor service, but there are many more occurrences of unsatisfactory service that happen on a daily basis. Some problems are so commonplace, it can appear to the consumer that a business has no intention or desire to improve, which can lead to a customer switching over to a competitor. For example, more than two in three consumers frequently encounter longer than expected wait times, have trouble navigating the automated help system, or experience an inability to reach a live representative. Nearly two-thirds report being asked to repeat information again and again. Companies that address these baseline frustrations for their customers will defy the norm on unsatisfactory service and differentiate themselves by simply being consistently easy to contact. Ongoing Agent Training Is Essential Regular training, coaching, and call calibration sessions not only address service issues, but provide an opportunity to share successes and discuss areas of improvement with the team to create a differentiated customer experience. Over half of consumers feel that agents frequently lack knowledge, and one in three feel that agents are not friendly or polite. These customer experience issues can be addressed with agent training, coaching, and call calibration sessions that role-model great service and focus on common behaviors that agents are missing with customers. 9

10 5Steps for Improving Agent Performance 1. Develop targeted training and coaching plans with new and experienced employees. 2. Establish small-group-call listening sessions to share best practices and provide peer coaching. 3. Provide timely updates on important product information and business changes. 4. Leverage speech analytics, CRM, and other software solutions to design and enable personalized service. 5. Leverage a customer-centric, third party quality monitoring program with analytical capabilities to provide actionable insights and to ensure expert and unbiased examination of customer interactions through calls, , chat, and social media. 10

11 II The Cost of Poor Customer Experience 11

12 The Cost of Poor Customer Experience Once a consumer has experienced poor customer service and considers switching brands, there is only about a chance that a company can ever win that customer back. If you are considering leaving a company due to poor customer service, which of the following best describes your normal course of action? Poor customer service is rarely kept secret and almost always has financial ramifications. Six in ten consumers strongly agree or agree that they will tell others about a bad customer service experience. Likewise, 54% will try a new brand or company for better customer service, and 51% are willing to spend more with a company they know provides excellent customer service. How much do you agree with the following statements? 12

13 What Prompts Consumers to Abandon a Brand? Which of the following challenges are most likely to result in you NOT doing business with a company? Rank your top three choices. Over half of consumers rank agents who are not knowledgeable as one of their top three reasons they would stop doing business with a company, followed by long wait times, and agents who aren t polite or friendly. As these issues occur singularly or en masse customers will walk away with an impression of how much the business cares about their patronage based on how many of these issues exist. As a result, contact center agents have a significant influence on customer retention. The coaching that an agent receives is one of the most critical elements to assess given the importance of having knowledgeable and friendly representatives. Customer service agents want to provide great service, and most of them think they are doing so with each interaction. Having the time and focus to listen to calls with supervisors and peers is a great way to help agents hear how they can be even more effective on calls. Role-modeling best practices and providing specific feedback on the behaviors that matter most to the customer will also create a more satisfied and engaged workforce, which reduces costly and disruptive attrition. Poor Service Experience Can Put Even the Most Loyal Customers at Risk Businesses understand the value of consumers who are brand advocates. As customers become brand-loyal, they feel a personal and emotional connection to a product or a company that transcends other factors such as price. 13

14 In general, how often do you receive the following kinds of personalized service when you contact a company? Poor customer service experiences put brand loyalty at risk. It can be tiresome for even the most loyal customer to reach out for customer service only to find the agent has no knowledge of their history with the company. This problem results in increased customer effort such as verification of details that the consumer may have previously provided and a longer time spent resolving the issue. Additionally, over half of consumers rarely or never feel that agents know about previous reasons for contacting a company, and over four in ten feel that agents do not know their history with the company, don t know the consumer or use the consumer s name appropriately. Not only does this miss the opportunity to create an engaging, personalized dialogue with the customer, but it also increases operational costs by having them repeat information. Interactive Voice Response (IVR) systems can procure identifying information from callers which allows agents to pull up a customer profile. Websites and mobile apps can track historical information to allow users to see details about their account. By Customer service agents should use their screen pop-up information and CRM solutions to create a personalized experience for each customer. All of the data is there and the technology just needs to effectively display it for the agent. equipping agents with as much information as possible, they ll have a more complete understanding of previous interactions and potential issues, in addition to providing a faster, more accurate solution. 14

15 The Cost of Poor Customer Service Experiences Customers may choose to stop doing business with a company for a variety of reasons. In the past year, have you stopped doing business with a company due to poor customer service? Many consumers prioritize customer service over cost which historically, has been one of the greatest influencers in purchasing decisions. In fact, eight in ten consumers say they are likely to defect to another company or brand as a result of poor customer service. That is to say, consumers would be willing to pay more for better service. Price alone generally does not drive brand loyalty. Business will be lost when consumers are dissatisfied. Speed Still Wins Rank the three most important characteristics of excellent customer service. 15

16 Nothing Replaces the Human Touch In this year s survey, participants were asked to rank various aspects of their customer experience. Participants ranked rapid problem resolution, personalized and caring human support, and knowledgeable service teams as the most important characteristics of excellent customer service. Flexibility of contact channels, easy-to-use web and mobile app selfservice, online forums, and social media are still important but secondary to the influence that live support has on customers. In a tech-driven world, consumers still prefer sharing bad service experiences by word of mouth in person and on social media. While a face-to-face interaction is the most likely choice for airing grievances (34%), social media is another preferred channel (24%). Live customer support is typically a stressful situation where frustrations are high, the need for quick resolution is urgent, and consumers feel vulnerable to the capacity of a business to help. Taking care of consumers on the phone or through online chat is critical to their satisfaction. 5Preliminary Steps to Improving Customer Experience 1. Review current state of customer service experience through an operational assessment that investigates upstream issues impeding success and ongoing, third party quality monitoring from an analytical and unbiased independent resource. 2. Measure common success metrics (e.g., FCR, Net Promoter Score, Customer Satisfaction, and Customer Effort Score) to discover the biggest gaps in the call center. 3. Benchmark current state against best-in-class performers, particularly among new entrants and disruptors, to find truly innovative ways to improve. 4. Develop a roadmap that prioritizes the implementation of initiatives that would clearly create differentiation in the short-term and provide future-state visualization. 5. Align the scorecard and performance metrics with clearly defined customer and business outcome metrics. 16

17 III Why Customer Effort Matters 17

18 Why Customer Effort Matters In general, how easy do companies usually make it for you to contact them about a customer service issue or inquiry through the following channels? Customers want easy and have come to expect that level of service from their brands. However, the data suggests that there continues to be a gap between customer expectations and experience. For example, 50% or more of consumers across all channels do not feel companies make it easy to contact them about a customer service issue or inquiry. Digital channels like text message, social media, web and mobile app self-service are rated among the most difficult to use. Phone is no exception; only 46% of consumers feel companies make contact using the phone easy compared to 56% in The following graph is a year-over-year view of the channels in which consumers rate to be easy to use for customer service. 18

19 The year-over-year decline in the ease of use of phone as a channel could indicate that it has become too complicated. Interactive Voice Recording (IVR) systems, poor speech recognition, and automated messages have made the channel that customers rely on most for mission-critical tasks more difficult to use when compared to digital channels. Response and Resolution Rates What kind of response do you USUALLY get when you contact a company about a customer service issue on the following channels? Half of consumers find all customer service channels difficult to use. Once consumers are able to reach a brand, the data suggests consumers receive different response and resolution outcomes based on the channel used. For example, a majority of consumers receive a response and a resolution when using the phone; however, nearly 30% of consumers who use online chat and to reach a company say they usually do not receive a response or resolution to their service issue or inquiry. The number increases upwards of 40% across other digital channels like web self-service and mobile app self-service. Social media (57%) and text message (58%) are the channels with the lowest response rates according to consumers, who report they usually do not receive a response or resolution when they contact a brand on these channels. 19

20 With Every Contact the Customer Effort Increases How many times do you typically need to engage with a company on the following channels before a customer service issue or inquiry is resolved? While almost two in three consumers report obtaining first contact resolution (FCR) by phone, over one in three still require two or more phone contacts. This significantly misses the mark for organizations targeting a 90% FCR score and can be directly correlated with agents who aren t knowledgeable. More than half of consumers report they need two or more contacts to achieve resolution by web, mobile app, social media, letter, , and text. When it comes to the effort required by a customer to resolve a service issue or inquiry, less is more. The less effort required from a customer, the better the service experience. Handling an issue at the first point of contact is a key component to reducing customer effort, eliminating the need for multiple contacts on multiple channels. It is important to gain insight into the true measure of FCR by implementing and operationalizing internal monitoring processes such as third-party quality monitoring. Clear definition of metrics, objective reporting and real-time visibility into results provide a more accurate view into the customer service provided over time. 20

21 Channel Switching If your customer service issue or inquiry isn t adequately addressed, how long do you wait before you contact the same company using another channel or method of contact? When a customer contacts a live agent whether on the phone or through online chat that customer needs immediate assistance. The frontline of customer service should be striving for engagement in a matter of minutes. If not, businesses are at risk of consumers switching channels, which drives up cost and customer effort. Increased channel switching by consumers creates added effort for them and duplication of support from valuable business resources, which increases operating costs. In 2017, roughly one in five consumers will migrate to alternative channels within a few minutes and about one in three will switch within an hour. The rate of channel switching has increased from 2016, which shows that consumers are becoming more comfortable with technology, more impatient with delayed service, and more proactive in finding help. 21

22 IV Important Changes in Channel Preference 22

23 Important Changes in Channel Preference While phone is still the preferred customer service channel, this preference is declining year-overyear, which means that companies should focus on creating a seamless and integrated experience across their alternative channels. Customers will gradually migrate to these alternative channels as they become more effective and easy to use. For example, social media is the only channel to have a significant spike in preference, which could indicate enhanced customer service by leading brands on social media. In general, which is your most preferred channel or method to contact a company with a customer service issue or inquiry? Critical Issues With Live Agents Which is your preferred channel or method to contact a company for each of the following customer service issues or inquiries?* *Some channels have been omitted for clarity due to nominal influence. 23

24 Overall, consumers prefer phone, especially for handling critical issues such as resolving a timesensitive problem, handling a billing or payment question, asking a service or product question, and making changes to an account. The tougher the issue, the more consumers want a live resource who can provide immediate assistance. Consumers are more willing to turn to than to phone to make a comment or suggestion or to complain/give critical feedback, though many consumers are making a shift from to live chat when an inquiry requires a resolution. This report highlights the importance of making the phone a solution that provides fast support with knowledgeable resources who can offer clear and consistent answers to complex questions in a timely fashion. It also underscores the need for robust web selfservice or mobile app self-service capabilities if businesses want to direct some of the phone traffic to another channel. If the answers aren t easy to find, consumers will pick up the phone to receive live support. The result is a more frustrated customer, who was forced to switch channels and spend more time getting the help they need. In short, as customer effort increases, customer satisfaction decreases. The Challenge of Finding Answers Online In general, when searching on a company s website, please rank the two MOST SIGNIFICANT CHALLENGES you encounter when trying to find information to resolve your inquiry or issue. The most significant challenge, by far, when consumers go online for customer service, is that they simply cannot find what they are looking for on the website. Consumers often find information so buried in web pages that they either cannot find the answer, the answers seem too generic or not tailored to the specific issue, or the information is inaccurate or inconsistent. A robust website or mobile app designed with the customer in mind can greatly reduce the amount of interactions customers initiate with live agents. Most consumers would prefer to find the answer 24

25 without calling an agent because it is faster, easier, and more convenient. Customers also expect powerful search capabilities, live chat, and Interactive Virtual Assistants to help them complete their online service experience. Companies that create a seamless online experience make it easier for their customers and can dramatically reduce their costs. 5Ways to Improve Digital Channels 1. Evaluate digital usability and effectiveness often to ensure links and content are up-to-date and that content needed by the customers is easy to find. 2. Analyze the detailed reason and resolution of customers online and mobile app requests and use that data to drive enhancements on an ongoing basis. 3. Evaluate the search, IVA, and chat data for common keywords and questions to prioritize which content to add and what language to use in the design. 4. Monitor the analytics to determine frequent page visits, drop-off rates, and downloads. 5. Review the data that is passing to the customer service agent regularly to ensure the right information is available to create a more seamless interaction. 25

26 Which of the following channels provides the FASTEST resolution from customer service? Since the inception of this study in 2015, consumers have viewed the phone as the fastest channel for customer service, but those numbers are declining. In 2015, two-thirds (66%) of consumers believed the phone to be the fastest channel. In 2016, that number had dropped to 61%, and in 2017, just over half (51%) said the phone was the fastest. With the exception of online chat, all other channels have remained steady in consumer perception of speed of resolution. In 2015, 15% of consumers said online chat was the fastest channel for issue resolution, but in 2017, 23% of consumers chose chat as the fastest method. Businesses that adopt live chat for customer service may see increased customer adoption and fewer phone interactions. In both preference and usage, social media is gaining traction with consumers. Social media usage has increased slightly to 21%, which puts it above other digital channels like web self-service, mobile app self-service, and text message. Social media has also seen the greatest rise in customer preference, showing an 8% increase since 2016, while phone has shown a 7% decline. All other channels remain relatively stable in preference. Text Message Availability and Use Automated text message is a valuable addition to the customer service channels offered by businesses as it creates a more personalized experience and saves the customer valuable time. A status update, appointment and payment reminders, as well as emergency notifications, are all easy to implement within an SMS text message system. The data suggests that businesses are not keeping pace with consumers increased use of text messaging, as 47% find that text message is not offered. Consumers are looking for quick transactional options for customer service issues that can be dealt with through straightforward communication. If an option is available for self-service or through nondisruptive channels, consumers will gravitate toward it for less complex issue resolution. 26

27 V Emerging Technology for Customer Service 27

28 Emerging Technology for Customer Service Companies are beginning to offer customer service through Interactive Virtual Assistants (IVA) such as Apple s Siri, Amazon s Echo/Alexa, Microsoft s Cortana, or Google s Google Now. How likely is it that you would use a voice-activated personal assistant to contact a company in the next year, if a company provides this option? While some channels like are declining for customer service, other tools are emerging and connecting consumers with information and businesses in new and innovative ways. Perhaps the most notable this year is the emergence and accessibility of artificial intelligence in the consumer sector. For example, voice-activated intelligent personal assistants are making their way into the market, and consumers are beginning to adopt these tools to book reservations, check movie times, locate the nearest hardware store, and play their favorite podcast. About half of consumers are likely to use voice-activated intelligent personal assistants in the future and even more will do so in the future as the technology and availability evolve. Over one-third of Millennials and Gen-Xers are more likely to use voice-activated intelligent personal assistants as they become available compared to Baby Boomers or the Silent Generation. However, as the technology becomes more ubiquitous, older generations may find these systems to be an attractive option. Businesses also have a vested interest in adding emerging technologies to their channel portfolio as a means to communicate with their customer base. For example, Apple recently announced the launch of their Business Chat feature that directly connects consumers to businesses through a text message functionality on the company s web page. Consumers can schedule appointments, learn about product information, acquire location information, and access account details. Emerging technologies are working to fill the gap between existing tools and evolving consumer needs. With the adoption of voice-activated intelligent personal assistants and the emergence of integrated web self-service and text, businesses are responding to the convenience and effortlessness consumers crave. Organizations attempting to simplify the customer service experience should look closely at the process flow for their customers so that solving problems and finding answers can be as easy as possible. 28

29 VI Guiding Principles 29

30 Guiding Principles A comprehensive review of the end-to-end customer service experience creates an outside in view of your business from your customers perspective. These insights highlight specific pain points and weaknesses in an organization s service-delivery model and identify areas of differentiation to be more fully leveraged. The scope of the review is tailored to the unique needs of each business to maximize the impact and results that can be realized. Quick-hit improvements are always identified to enable positive change quickly but also a detailed set of initiatives that will drive for a transformational change over time. Invest in Channel Design Customers want to use different channels for different situations, so the concept of a preferred channel is actually three dimensional: who is requesting assistance, what they specifically need, and how easily they can find it. The first step is to understand which channels your customers are using for what types of questions, concerns, and issues. The second is to assess how effectively those needs are being met and resolving the issues. The last step is critical: information should be monitored, managed, and shared across all of those channels to drive the most effortless experience possible. Make Self-Service Easy Customers prefer to use self-service for transactional requests, so making it easy is a win for them and your business given the associated reduction in overall operating costs. The key is to design the self-service channels based on the needs of your customers and not your business priorities. There is a wealth of data available in digital experience monitoring and speech/text analytics that can be used to clearly define what functionality is needed and the overall effectiveness. Investing in digital usability will yield a strong ROI and improved customer experience. Commit to Quality Monitoring and Agent Coaching and Training Consumers have more options today than ever before and with that choice comes a greater need for excellent service above and beyond the competition. Customers are clear about what they expect: knowledgeable agents, accurate information, caring and personalized service, and quick resolution. Companies that deliver a seamless experience consistently will outperform the competition and can command a premium for their products. Agents want to do a great job, so providing them with clear expectations, best practices, coaching feedback and suggestions, and targeted training will enable them to deliver for the customer and your business. Get Personal Brand loyalty is achieved when consumers feel an emotional connection to a product, service, or brand. To cement that connection, businesses can create personalized customer service experiences by leveraging customer profiles with all of the information that is necessary to create that integrated, seamless experience. With the right information at their fingertips, agents can provide proactive service by predicting what other questions or issues they might have based on their experiences with other customers. This also enables the agent to personalize the interaction and save them valuable time to create a customer for life. 30

31 Start improving your customer service experience today by contacting The Northridge Group. CONTACT US The Northridge Group 9700 West Higgins Road Suite 600 Rosemont, IL P ABOUT US The Northridge Group is a management consulting firm specializing in Customer Experience solutions, Quality Monitoring services, and Business Transformation initiatives, utilizing advanced data analytics and business process redesign to deliver results. Northridge provides professional services for Fortune 200 enterprises in healthcare, telecom, financial services, travel and transportation, as well as key government agencies. The Northridge Group Management Consulting & Quality Monitoring A Publication of 31