Cost deflection strategies deteriorate customer loyalty
By: David Barrow, Vice President, Vision, Solutions, and Architecture, Chordiant Software, Inc.
"Your call is important to us....please hold"
"We've automated our phone system for your convenience."
"Our agents are busy helping other customers."
As consumers, we are all too familiar with these rote statements that are somehow supposed to make us feel all warm and fuzzy while we cool our heels wishing we could talk to a real live human being. Whether you have a question about your mortgage rate, problems with your printer, or simply want to find out when a movie is playing, chances are you'll have to run through a maze of options before you get the answer you want. With companies seeking to squeeze every penny out of operating costs, by deflecting customers to use less expensive means of communication (the Web versus the phone) it seems we're stuck in self-service purgatory. In reality, this drive for cost deflection is alienating customers and eroding profits.
According to a recent JupiterResearch report, "self-service deployments continue to exhibit low levels of satisfaction and resolution for customers, spawning recontact through channels (e.g., phone, e-mail) of which self-service tried to decrease use."[i] The era of cost deflection in the contact center has passed because customers do not want to deal with having to use multiple channels to get an answer to a fairly simple question. This aggravation is what spawned Paul English's blog giving away the secrets to circumventing automated systems at more than 100 companies.
Cost deflection strategies at the risk of customer defection.
Self-service certainly has its place for basic transactions, but for high-value high-touch interactions nothing replaces person-to-person contact. If a customer has a dispute, or wants to know if he's choosing the right service option, live agent communication is warranted. Moreover, customers want to feel they are special. These conversations present very real opportunities to add value.
Case in point: A customer calls his bank to inquire about a home loan. The automated system requests his account number, pin number, his mother's maiden name, and is then asked for the amount of his last deposit. He doesn't recall this information, so he hangs up the phone, calls his wife to check their records, and then starts all over again. After he's entered all this information a second time, he finally reaches an agent, who asks for his account number again. Of course he's already fuming because he's wasted all this time fighting the bank's bureaucracy. He's then asked endless questions about his financial and work history before the agent can recommend an appropriate loan program.
What if his experience goes like this: He calls the bank. His call is routed to an agent that has the necessary skills and authority to handle what is his call is predicted to be about. Critical information is extracted and delivered to the agent regarding the type of accounts the customer already has, his financial transactions, and what he does for a living. The agent is alerted that the customer is an independent consultant with a strong understanding of finance who has already paid off two previous mortgages. The agent skips the discussion about mortgage basics, and advises the customer about a special program for independent 1099 workers in his income bracket that will save him two points on his loan. The customer not only feels his time is valued, but that the agent understands his needs and is delivering advice that is pertinent to his situation.
CRM vendors have long touted this "personalized" service but many call centers found these systems offered little value in live conversations. Even if customer history was integrated with the CRM system, agents would have to scroll through pages of records to find nuggets of information that might be helpful in a live conversation.
A new approach
Organizations today are turning to customer experience solutions that deliver this information in an easily digestible format so they can impact conversations in real time. Instead of rigid scripts, agents receive visual cues for directing a conversation. It may start scripting the agent to ask a few questions before approaching the customer. As the customer answers questions, the system quickly responds by prompting the agent on the best service to offer the customer. It may advise the agent that offering a new service at this time would not be prudent, or suggest that the agent explain how the customer can save money with a different service plan.
The system should leave room for agent discretion. He should be free to engage in a casual conversation but still receive progressive guidance along the way with the next best actions as the call continues. This approach also alleviates a common complaint from customers who feel companies are constantly pushing new products with no regard for the customer's situation or even if the customer already has the product in question.
A UK-based wireless carrier uses customer experience software to achieve a higher level of trust from its customers. If an agent sees that a customer is on the wrong service plan, he makes recommendations for saving the customer money. If the customer isn't happy, the agent is given ideas right away on how to help turn them around. The agent can easily see not only usage rates but how the customer is using his phone (number of text messages, usage patterns, etc) so they can offer him the best deal. This positive customer outreach has had a tremendous impact. Agents report "customers feel like we ‘get' them."
Done correctly, this type of interaction can occur in a seamless, low-key way. The customer may not even realize that the agent has all this information at his fingertips, but the resulting conversation can have a profound impact.
Even seemingly mundane queries are opportunities for customer retention. Banks, for example, know that if a customer is inquiring about the payoff amount for his mortgage, he's likely to be either selling his home or considering refinancing with another lender.
What if instead of simply answering the customer's question, agents were armed with special offers or scripts to respond to these queries. This request for the loan payoff amount, for example, should trigger the agent to engage in a dialogue so they don't miss the opportunity to keep the customer. Savvy businesses today are using customer experience solutions to leverage such retention offers at the point of contact.
Honing customer interactions
Tying this information together with analytics provides a rich understanding of customer needs and wants, down to a fine level of detail. For example, a wireless carrier recently discovered its customers were far more receptive to new offerings when engaged in a conversation. By supporting its agents with timely and pertinent advice as the conversations progresses, they've increased close rates from the traditional low response rates of direct mail up to 58 percent and up to 80 on Sundays when customers have more time to talk.
Preventing Post Purchase Dissonance
It's important to look at the overall lifecycle of a customer, from acquisition to development, to servicing, to retention. Understanding what the customer is going through at each stage brings added context to each interaction. For example, auto manufacturers know that when drivers buy their first vehicle, they often experience some level of regret, or post-purchase dissonance. To curb this anxiety, some manufacturers send welcome aboard letters and have the dealer make a follow-up call to answer any questions about the vehicle's operation and share tips of getting the best mileage.
One auto manufacturer has mastered the art of alleviating post-purchase dissonance, starting with its no haggle policy designed to produce a buyer's experience that's free from sales pressures. The philosophy was created based on the recognition that buyers of lower priced vehicles were highly mistrustful of car dealers. To avoid having customers leave the showroom worried that they didn't negotiate well enough to get the best deal, the auto manufacturer established a no-haggle policy. When a customer arrives at the dealership, he finds the price clearly marked on the vehicle.
When a customer comes in to pick up his new car, the service team has made sure it's freshly cleaned, the gas tank is full, and the fluids are topped off, all at no extra charge. The team makes a big fuss, taking his picture and congratulating him over the intercom. His sales rep introduces him to the service team, shows him how to check the fluids and where the spare tire is located. The sales reps call the customer a few days after their purchase to make sure everything is alright with the car. Every time the car is brought in for service it is hand washed.
The company also hosts highly popular customer events, including tours of their plant and invitations to meet the people who build their vehicles. More than 36,000 owners showed up for their first customer event.
This all may seem superfluous, but consider the alternative: You walk into a showroom excited to test drive that new car you've been reading about. After taking you for a quick spin around the block, the sales rep disappears into the back room to "negotiate" your price with his manager. Meanwhile you wait endlessly. You finally nail down the price and plan to return the next day to pick up the car.
The next morning, you arrive promptly to get your car, yet no one in the dealership is in any particular hurry or seems to care about this major purchase you just made. They page the sales rep and you again find yourself twiddling your thumbs while they leisurely get the car out of the back lot. You drive away with your car, fumbling with the new buttons trying to figure out what's where. A week later, a maintenance light goes off on the dashboard. Concerned that something may be wrong, you call the dealership and after running through their automated phone system you eventually reach a service person, who tells you the light means your windshield washer fluid is low.
All of these simple interactions were opportunities for the dealer to make you feel good about your purchase. Companies need to carefully consider each stage in the sales process in order to develop successful techniques for reinforcing the customer's choice of their product. Smart businesses understand the psyche of the customer experience, and learn where to interject activities at the right moment. This is what keeps customers coming back.
Gaining customers' loyalty requires fulfilling their desired experiences. To do so requires a keen understanding of not only factual information such as existing products and previous history but insight into their preferences for how to engage with the company. This gives organizations an unprecedented ability to resolve customer conflicts and more accurately target new offerings for far greater success rates. Businesses that truly connect with their customers are reaping the benefits-gaining an average 25 percent more repeat business and generating between 30-50 percent higher net margins than traditional firms.
[i] JupiterResearch, "Online Self-Service; The Slow Road to Search Effectiveness," February 2006, Zach McGeary
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