Customer Service in a Multi-Channel World How to Profit from the Shift to Multi-Channel Customer Service August 2008
Customer Service in a Multi-Channel World 2 Table of Contents Executive Summary 3 It s a Multi-Channel World 4 Channels and service need 5 Channels and communication preference 5 Channels and business goals 5 What is True Multi-Channel Customer Service? 6 The ROI of Multi-Channel Customer Service 7 Customer value 7 Business efficiency value 8 Multi-Channel Service in Action: KANA Case Studies 9 City of Amsterdam increases citizen satisfaction by 15% 9 JetBlue reduces email volume by 40% 9 Conclusion 10 Additional Resources 10
Customer Service in a Multi-Channel World 3 Executive Summary Multi-channel customer service is here to stay. When it comes to getting help and answers, customers are no longer willing to accept just one or two channels. Today, they take it as a given that they can get service over just about any channel they want. Phone, email, chat, Web self-service, in-store kiosks, IVR, SMS, or in-store visits all are the expected norm. Companies are motivated by the ROI that multi-channel service can yield as well. Offering multiple ways to contact a company has been shown to increase customer satisfaction and loyalty, and the cost advantages of online channels, such as email and Web self-service, have been well documented. But for multi-channel service to truly meet the needs of the modern customer, it must do more than simply provide many channels. Too often, each new channel is implemented as a silo, resulting in multi-channel service that is disconnected and inconsistent. True multi-channel service delivers an integrated and seamless experience that is completed in as timely, consistent and effective a manner as possible regardless of channel. In this paper, we will discuss the nature of true multi-channel service to explore: The business drivers behind multi-channel service The components of true multi-channel service How true multi-channel service positively impacts ROI How KANA multi-channel solutions have improved customer loyalty and business efficiency
Customer Service in a Multi-Channel World 4 It s a Multi-Channel World Providing customer service used to be simple. Whenever customers needed help, they showed up at your place of business or called on the phone. But the explosion of online communications, the changing demographics of our society, and the costs of providing service have radically altered the way customer service is delivered. Customers now live a far more multi-channel life, and are pushing companies to do the same with expectations of service that lets them select and combine channels. They easily switch between online self-service, phone calls, email, SMS and chat, IVRs, store visits and kiosks all in search of the channel that will best meet their particular service issue at a particular moment and preferred communication style. As Jupiter Research has concluded, consumers are contacting customer service through an increasing number of touch points. The phone continues to be an important channel, but is no longer the sole choice for customer service. Source: US Customer Service Consumer Usage Survey, Jupiter Research, 2007 Multi-channel usage is driven by three key factors: Channel selection based on service need Customer communication preference Business goals for higher customer loyalty and service cost reduction
Customer Service in a Multi-Channel World 5 Channels and service need A customer s activity at a given moment is a very strong driver of channel selection. Research has shown that customers choose a channel based on accessibility and the nature of the inquiry. 1 As the chart below indicates, Web self-service ranks ahead of the phone or email for research. On the other hand, the Web ranks lower than either the phone or email when it comes to getting customer service help. Source: Match Channel Capabilities To Customer Goals: Grading Six Essential Capabilities 0f Commonly Used Channels, Moira Dorsey, Forrester October, 2006 Channels, however, are not created equal when it comes to their ability to help customers accomplish tasks. Companies need to analyze the types of customer service interactions to ensure proper channel availability and alignment. For example, simple informational requests, such as details on product capabilities, can be effectively supported with Web self-service or automated email responses. Issues with a high degree of complexity, such as technical troubleshooting, may be better handled in real-time via the phone or interactive secure chat. Channels and communication preference Demographics also play a part in channel choice. Forrester has extensively researched channel usage and has concluded that channel preference strongly correlates to age groups. Those defined as Seniors generally prefer the phone, while Gen X and Gen Y like online chat. Some channels are popular with all age groups, such as email, which appeals to everyone as a service medium. 2 Channel preference can also be driven by the technical savvy of customers with the younger generations as the lead adopters of online channels. Channels and business goals Given the importance of channels to customers, businesses across all industries are leveraging channels to meet customer needs and reap the benefits of higher customer satisfaction and loyalty. Equally compelling is the potential to reduce service operational costs through lower-cost online channels. Research has shown that costs for service provided
Customer Service in a Multi-Channel World 6 through high-touch channels such as the phone can be reduced more than 95% using Web self-service or 60% using email. Source: Self-Service Initiatives for Contact Centers, Elizabeth Herrell, Forrester April, 2006 What is True Multi-Channel Customer Service? Often, multi-channel customer service is simply defined as the availability of several communication channels. Companies that provide e-mail and phone support can say they have implemented multi-channel service. But in many cases, these channels operate as silos with little integration between them. This style of multi-channel service can easily frustrate customers because it delivers a service experience that is disconnected and inconsistent. Think of the typical experience of sending an email asking for information, then following up with a phone call only to find the phone agent has absolutely no knowledge of your email. The result is a start-over experience for the customer (and agent), which provokes annoyance. Customers, in fact, are highly sensitive to repeating information. In a survey, 62% of respondents cited having to repeat information about identity during a service interaction as very frustrating. 3 To meet customer expectations and reduce costs, multi-channel service is much more than just the availability of channels. There are three key elements to true multi-channel customer service: Fully integrated channels that deliver a seamless experience and facilitate the sharing of data across channels. At its most basic level, a true multi-channel solution lets customers seamlessly contact the company over the channel of their choosing, and combine channels when necessary without the context of the conversation being lost. A consistent experience across channels. Consistency requires a single set of knowledge and unified processes available to both agents and customers, so that answers and actions are the same over every channel. A reliable experience that takes place without interruption or slowdown. A true multi-channel solution is built on a foundation that combines scalability with a high degree of flexibility for augmenting channel availability without creating channel silos.
Customer Service in a Multi-Channel World 7 The ROI of Multi-Channel Customer Service As Forrester points out, companies in all industries are determined to improve the customer experience as a way to differentiate and inspire higher rates of buying and loyalty. At the same time, they want to cut costs by shifting more customers from human-assisted channels to self-service channels. 4 Multi-channel service can effectively serve all these interests, delivering value to the customer, while benefiting the company with higher rates of customer loyalty, revenue generation, and reduced operational costs. Customer value Given that customers have demonstrated their desire to use multiple communication channels, a multi-channel strategy addresses the most fundamental requirement the ability to choose a channel based on preference and servicing need at a particular moment. A true multi-channel implementation also delivers the consistency of cross-channel interactions that enable a smooth, seamless experience. The overall positive service experience has proven to be one of the most important contributors to customer loyalty and revenue generation. Research has shown that a good customer experience correlates highly to loyalty and a willingness to buy more. Source: North American Technographics Customer Experience Online Survey Forrester, 2007 The revenue value of the good customer experience is compelling. For example, analysts estimate that customer experience quality could cause a swing of $242 million for a large bank and $184 million for a large retailer, 5 while a $1 billion business could add $40 million in profit by increasing its customer-facing capabilities by 10%. 6 The following table summarizes some of the results analysts have documented regarding the relationship between customer service and customer loyalty.
Customer Service in a Multi-Channel World 8 Benefits 87% of respondents to a Purdue University survey said that good customer service influenced the decision to do business with companies again. 7 Companies that obtained top consumer loyalty ratings had a 3-year average annual operating income growth that was 682% higher than the companies that scored low in customer loyalty. 8 A 1% increase in customer loyalty has more than double the impact of a similar improvement in price, triple the impact of improving cost structures, and 8 times the impact of volume. 9 Failure to Deliver Consequence 63% of respondents said they would become disloyal because of a bad experience with a contact center agent. 10 48% of consumers share their negative customer service experiences with friends and family. 11 Business efficiency value While building customer loyalty, generating higher revenue and increasing brand awareness are key drivers for a multi-channel implementation, for many companies the potential cost efficiencies are equally compelling. In a survey, 65% of business executives said that it is either critical or very important to shift customer interactions to the Web in order to cut costs. 12 By identifying the types of issues that can be effectively resolved via online channels and using these channels at appropriate moments, companies can achieve better use of resources and deliver faster service. For example: One model found that large financial services institutions deflecting just 5% of calls to Web self-service would save more than $4 million in service costs. 13 Multi-channel solutions based on unified knowledge, processes and an integrated platform reduce data redundancy and the costs for creating and supporting knowledge and business logic. Multi-channel service can help companies scale service capacity by simplifying and speeding up the processes required to answer customers inquiries across all channels, reducing such cost generators as hold time, average handle time, error rates, and escalations by double digits (based on experiences of KANA customers.) Industries with significant regulatory requirements can facilitate compliance through lower-cost agent compliance tools and an ability to effectively monitor adherence to regulations.
Customer Service in a Multi-Channel World 9 Multi-Channel Service in Action: KANA Case Studies Research and surveys about the benefits of multi-channel service certainly provide indicators of the value it can deliver. However, the real test for multichannel service is actual performance. KANA customers have found that the ROI from a well-implemented multi-channel strategy is indeed impressive, resulting in significantly higher rates of customer satisfaction and substantial reductions in service cost generators. The following two short case studies are representative of the results many KANA customers have achieved. City of Amsterdam increases citizen satisfaction by 15% The City of Amsterdam has deployed a multi-channel solution for its 750,000 residents to help them quickly find a wide range of information about civic services such as licensing procedures, passports, social services, and taxation. The City implemented a full multi-channel solution using KANA Contact Center for case management, KANA IQ for a unified knowledgebase used by both agents and self-service customers, and KANA Response for high-volume email management. As a result, the City now offers residents multiple channels for finding information while ensuring answers are consistent and accurate across each channel. The benefits have been significant. Citizen satisfaction has increased nearly 15% because the new solution makes it so much easier for residents to obtain information and resolve issues. Residents have quickly embraced the selfservice site with the number of self-service inquiries rising 400%, while the number of contact center interactions has dropped by 50%. The strategy has also produced impressive gains in agent efficiency as average call time has been reduced by 40%, and the completeness and accuracy of answers has increased from 30% to 75%. JetBlue reduces email volume by 40% Destination crm.com 14 reports that JetBlue s Web self-service initiative, powered by KANA IQ, has helped the airline significantly improve its customer service capabilities while reducing service costs. JetBlue s mission is to provide superior service in every aspect of its customers' air travel experience." With an expanding customer base, the number of inquiries was growing exponentially, and JetBlue found it increasingly difficult to maintain its standard of service. JetBlue had implemented KANA Response in 2000 with notable success, achieving a 77% accuracy rate in addressing its customers' needs. The airline decided to build on that success by implementing KANA IQ to offer customers expanded service opportunities with a self-service capability. JetBlue called the new service AskBlue and infused the KANA IQ interface with the airline's brand. The self-service site quickly provided relief for the company's service agents and increased customer satisfaction. Customers were not only willing to help themselves, but many preferred using AskBlue. And with KANA IQ and KANA Response fully integrated, JetBlue ensures that inquiries which cannot be resolved through AskBlue are forwarded to an agent immediately.
Customer Service in a Multi-Channel World 10 By implementing KANA IQ as JetBlue s self-service solution, the airline has: Achieved a 40% decrease in customer service emails. Been named the top ranking firm in the 2005 and 2006 J.D. Power and Associates Airline Customer Satisfaction studies. Decreased turnaround of response for customer inquiries from five days to same-day. Conclusion Customer service isn t what it used to be easily delivered over just one or two channels. As companies look to compete on quality of service, the customers growing desire for multiple methods of interaction requires development of a service strategy that incorporates multiple channels in an intelligent and targeted way. By integrating channels, businesses can empower customers to interact when, where and how they want, while ensuring a seamless and consistent experience. The results, as analyst research and the experiences of KANA customers have demonstrated, can be dramatic. Double-digit increases in customer satisfaction, higher loyalty and more frequent purchases combine with significantly reduced service costs for truly impressive ROI. Additional Resources This paper is one of a continuing series about the values of multi-channel service and best practices for delivery. Please visit the Resource Center at www.kana.com or ask your KANA account executive for the following related white papers: Six Best Practices in Agent Knowledge Management Best Practices to Accelerate the Quality, Consistency and Speed of Email Service To learn more about how the KANA suite of multi-channel solutions can help you create customers for life, call 1-800-737-8738 or visit www.kana.com.
Customer Service in a Multi-Channel World 11 Copyright 2008 KANA Software, Inc. KANA and the KANA logo are registered trademarks of KANA. Other company, product and service names may be service marks of their respective owners. 181 Constitution Drive Menlo Park, CA 94025 T 650.614.8300 F 650.614.8301 www.kana.com All Rights Reserved. 0708-01 1 Unified Customer Service Exploring ROI and Drivers of Investment, Jupiter Research, 2007 2 The Consumer s Expectations: Online Consumers Go Across Channels: Data Uncovers Cross-Channel Buying and Service Behaviors, Bruce D. Temkin Forrester, January, 2008. Seniors is defined as 63 and older, GenX as 28-41, and GenY as 18-27. 3 Jupiter Research/Ipsos Insight Consumer Survey, 2008 4 Match Channel Capabilities To Customer Goals: Grading Six Essential Capabilities Of Commonly Used Channels, Moira Dorsey, Forrester, October 2006 5 The Business Impact of Customer Experience, Bruce D. Temkin, Forrester, March 2008 6 Customer Service: A Keystone of Your Corporate Revenue Strategy, Natalie Petouhoff, Forrester, May, 2008 7 Unified Customer Service Exploring ROI and Drivers of Investment, JupiterResearch, 2007 8 "Loyalty Report: Online Retail" Walker Information 9 Frederick F. Reichheld, Bain and Co. 10 "Combining Service Excellence With Profitability, Dr. Jon Anton, Benchmark Portal 11 2006 Survey of 2,000 US & UK consumers, Accenture 12 Match Channel Capabilities To Customer Goals: Grading Six Essential Capabilities Of Commonly Used Channels, Moira Dorsey, Forrester, October 2006 13 Match Channel Capabilities To Customer Goals: Grading Six Essential Capabilities of Commonly Used Channels, Moira Dorsey, Forrester, October 2006. 14 Gaining Altitude: JetBlue implements a Web self-service solution to power customers to field their own questions and let agents focus on the human touch, Jessica Sebor. http://www.destinationcrm.com/articles/readarticle.aspx?articleid=42159