Contact Centers Enter The Loyalty Mix

Over the previous decade, companies have squeezed costs out of their contact centers through automation, offshore labor, and self-service alternatives. But no matter how hard they try, most companies can’t take human contact out of the service mix.

Many companies are realizing that some of their contact center interactions represent more than just costs; they’re moments of truth for customers, points in time that significantly impact customer loyalty.

I’ve been doing a lot of work around contact centers lately. It’s clear that companies are beginning to reinvest in these important customer contact points. So I’ll be writing more about contact centers in the near future. But for now, I just want to introduce the idea of viewing contact centers as loyalty drivers, as opposed to the historical view that they are cost centers.

Here’s how I’d compare the two approaches.

Loyalty Drivers also tap into the deep customer insight from their contact centers within their voice of the customer (VoC) programs. This goldmine has been completely untapped in most contact centers, but the rise of voice and data analytics is helping to unlock this valuable asset.

The bottom line: Contact centers affect loyalty whether you take advantage of it or not.

A Good Week For Customer Service

Customer service is underapreciated in many companies. So it’s great that we are celebrating Customer Service Week. In honor of the occasion, I’ve collected some of my thoughts (and posts) about customer service:

• Customer Service Attracts Loyal Customers highlights an important fact that consumers that are looking for good customer service are much more loyal than those that are looking for low prices.
• Customer Service Trumps Price shows how consumers prefer good customer service more frequently than low prices across 12 different industries.
• Comparing Price Seekers And Service Seekers shows that most consumers want both low prices and good service, but those that want only good service far outnumber those that want only low prices.
• Don’t Confuse Customer Service With Customer Experience discusses how customer service represents some of the key moments of truth when looking at an overall customer experience strategy.
• Customer Service Champs From BusinessWeek highlighted the list of companies with great customer service like Amazon.com and USAA.
• AOL, Comcast Headline Customer Service Hall of Shame gives a list of companies that aren’t delivering great customer service.
• Discussing Zappos’ Culture With Tony Hsieh gives insights into how you create a culture needed to deliver great customer service.
• Dial 1-800 For Customer Service shows that most consumers want ot get customer service over the phone and that 40 year-olds are the most interested in self-service phone applications.
• With Customer Service, CARES Beats ACES introduces the “CARES“ framework for evaluating customer service interactions:
  • Communication (clearly communicate the process and set expectations)
  • Accountability (take responsibility for fixing the problem or getting an answer)
  • Responsiveness (don’t make the customer wait for your communication or a solution)
  • Empathy (acknowledge the impact that the situation has on the customer)
  • Solution (at the end of the day, make sure to solve the issue or answer the question)

The bottom line: Customer service deserves more than a week of focus.

Phone Satisfaction Snapshot- USAA, Credit Unions, and Amazon.com Top The List

We asked more than 4,500 US consumers about their satisfaction with experiences across 12 different industries: airlines, banks, cell phone service providers, credit card providers, hotels, insurance firms, Internet service providers, investment firms, medical insurance companies, PC manufacturers, retailers, and TV service providers. Our analysis looked at phone, store/branch, and Web interactions.

I’ll start with some highlights of consumer feedback on phone interactions. The analysis looked at satisfaction rates at an industry level and changes from last year’s results, examined satisfaction for individual companies, and compared responses across generations of consumers.

• Highest industry satisfaction: Insurance providers (84%)
• Lowest industry satisfaction: TV service providers (60%)
• Most improved industry: Retailers (improved 3%)
• Least improved industry: TV service providers (declined 6%)
• Highest company satisfaction: USAA (93%), credit unions (92%), and Amazon.com (91%) 
• Lowest company satisfaction: Charter Communications- TV (47%), Comcast- TV (54%), Time Warner Cable (54%), Aetna (54%), Comcast- ISP (55%), HSBC (55%), Sprint (58%), and Dish Network (59%)
• Most satisfied generation: Seniors were most satisfied for nine of the industries
• Least satisfied generation: Gen Yers were least satisfied for eight of the industries
• Largest generation gap: Airlines (Older Boomers at 81% versus Gen Y at 62%)

The bottom line: What’s it like when customers call you?

Experiences That Satisfy Consumers, 2009

I just published a report called The Experiences That Satisfy Consumers, 2009 that examines consumer satisfaction with Web, phone, and in-person experiences. My analysis looked at more than 100 companies across 12 industries. Here’s an overview of the results:

Only hotels and investment firms cross over the 80% satisfaction mark in every channel, while health insurance plans and TV service providers don’t even make it to 70% in any channel.

The report also analyzed changes from last year, differences across generations of consumers, and satisfaction levels for individual companies. As I did with last year’s report, I’ll create separate posts to examine satisfaction with Web interactions, phone interactions, and in-person interactions.

The bottom line: Consumers aren’t as satisfied as they should/could be.

The “Problem” Of Call Waiting Times

A McKinsey Quarterly article called Maintaining the customer experience caught my eye. It discusses scenarios where companies were trying to figure out the design point for a couple of customer experiences, one of which was the call waiting time for a call center. Here’s how the article sets up the problem:

Consider service levels, specifically average time-to-answer, which is one of the most common metrics used in call centers. Service levels-often based on regulation or historical precedent-are set by call-center managers and then used to calculate staffing requirements. But service levels are challenging to maintain and costly to improve: raising them by 10 percent requires much more than a 10 percent increase in staff

My take: This is an area where companies can make a lot of costly mistakes if they don’t understand what drives customer satisfaction. So I sent the following comment to the McKinsey Quarterly editors…

Conceptually, the Kano Model does a good job of helping dissect thinking in this area. In particular the model’s focus on three types of attributes: Must-be, One-dimensional, and Attractive.

Must-be attributes need to deliver a minimum threshold of value or the customer will be extremely dissatisfied. But the customer does not notice if that threshold is exceeded. Think about the brakes on a car; you expect them to work, but don’t notice much more than that.

One-dimensional attributes are those that continue to increase the value to customers. Think about price; the lower the better.

Attractive attributes are unexpected aspects of the experience that dramatically increase the value perceived by a customer. Since they don’t expect them, there aren’t any negative consequences if they are not there. Think about a call from the CEO of an airline after you’ve had a service problem; wow, that could make a significantly positive impression.

Using this model, we can better understand the mistake that companies often make about attributes like call waiting times. In most cases, I’d classify call waiting times as a must-be attribute. It’s a problem if the waits are too long, but there’s no lasting perceived value by customers if you shorten them under that threshold. So companies shouldn’t invest in dramatically shortening waiting times, but should figure out how to minimize the number (or impact) of people that experience a wait that goes beyond the threshold.

You may have noticed that offered up the option of either solving the problem (customer who have a wait time above the threshold) or lessening the impact. It may be very expensive to eliminate all customer waiting times that go beyond their must-be threshold. So companies may be better served to try another approach: like an apology from the call center rep or some more substantial service recovery option (maybe even some “attractive” options).

By understanding these differences, companies can focus their energy and investments in the right areas to drive up customer satisfaction. This is particularly important in these times when companies are cutting back; they need to make every investment count.

The bottom line: Figure out what’s must-have, attractive, and one-dimensional.

Phone Satisfaction Snapshot: USAA And The Hartford Top The List

We asked nearly 5,000 US consumers about their satisfaction with experiences across nine different industries: banks, credit card providers, health plans, insurance firms, Internet service providers, investment firms, retailers, TV service providers, and wireless carriers. Our analysis looked at phone, store/branch, and Web interactions. I’ll take a look at each channel over the next three days.

I’ll start with some highlights of consumer feedback on phone interactions:

• Investment firms (84%) and insurers (83%) had the highest satisfaction rates
• TV service providers (66%), health plans (67%), and Internet service providers (67%) had the lowest satisfaction rates
• USAA, The Hartford, and Charles Schwab led the pack with satisfaction rates of 90% or more
• Charter Communications, Medicaid, and Sprint fell to the bottom with satisfaction rates of 60% or less
• More than one-third of the firms had satisfaction rates less than 70%

The bottom line: What’s it like on the other end of your 1-800 number?

NetFlix Ends Email Support; Tries Another Disruptive Strategy

NetFlix decided to stop its email customer service and, instead, beef-up its phone support. According to an article in the New York Times:

Netflix took an unusual step for a Web-based company: it eliminated e-mail-based customer service inquiries. Now all questions, complaints and suggestions go to the Hillsboro call center, which is open 24 hours a day.  

My take: Wow! Gutsy move. Okay, now for a more analytical discussion…

NetFlix probably recognizes the realities of handling customer service emails — it’s incredibly difficult to do right. Here are some datapoints to think about:

• Most emails deliver a poor customer experience. In a recent Forrester research report called Best And Worst Of Email Interaction Design, 2007, we evaluated the email service experience delivered by 16 large firms. None of the 16 firms passed our reviews — although Circuit City came closest. The biggest problem: Emails lacked essential content.  
• Consumers aren’t thrilled with email. We asked about 5,000 consumers how satisfied they were in handling customer service through different channels. Here are the satisfaction numbers for different channels: in-person (44%), phone (29%), Web (15%), and email (13%). (Forrester Research clients can read: Match Channel Capabilities To Customer Goals).

So NetFlix is just focusing on an area that it can deliver better experiences. And the firm isn’t outsourcing its call center overseas to save money, it’s investing in its Hillsboro, Oregon facility. NetFlix thinks that it can staff that location with empathetic phone reps.

In a previous post, I defined Five Disruptive Customer Experience Strategies:

1. Ultrasimplicity: stripping away features to better meet the needs of customers.
2. Online infusion: integrating online features into core offerings.
3. Service infusion: integrating service features into core offerings.
4. Service amplification: investing in distinctly high levels of service.
5. Value repositioning: offering a radically different value proposition.

NetFlix has been one of the examples that I use to explain online infusion — it integrates a robust set of online features to deliver value well beyond just DVDs by mail (for another great example of this strategy, check out WebKinz). With this move to enhance its phone support, the company is adopting another one of the disruptive strategies: service amplification. While most companies are looking at phone service as a cost center, NetFlix is investing in it as an experience differentiator.

My advice to NetFlix: Augment this strategy with a strong online chat capability. That will provide a solid option for customers that really want to complete the interaction online.

The bottom line: If customer service drives a key portion of NetFlix customers’ overall experience, then this disruptive strategy could be a great move. If it’s not, then they’re likely to move the call center offshore within 24 months. In any case, there are three disruptive strategies left for them to try!

USAA: A Positive Example Of Customer Experience

I was recently giving a speech to a group of executives at a large financial services firm; talking about my favorite topic: Experience-Based Differentiation. After I was done, one of the attendees came up to me and shared a recent experience that she had with USAA. (Note: USAA was not the organization that I was speaking to at the time).

She told me that she was looking for an auto loan and had called around to get a number of different quotes. Before she picked one, she thought she’d give USAA a call (she’s a member of USAA). While she was on the phone, the USAA phone agent asked her a few questions and then said that she could beat the lowest rate that the woman had received by a point. That’s right – one full percentage point lower than any other provider. The phone agent asked her how much she needed for the loan, but she wasn’t sure. So the phone agent said that they’d send her a blank check and that she could fill in the amount up to a specific amount (well above what she needed for the car). The phone agent told her that all she had to do was to go to the Website and answer 5 questions to finish the process.

Well, the woman went to the Website and answered 5 questions and received a blank check the next day.

Let’s disect what went right.

1. It was a great sales process. All large financial institutions want to cross-sell products, but not many make it quite as easy as this. The combination of a low rate and a no-nonsense process immediately closed the sale.
2. USAA acted like it knew her. How was USAA able to offer such a great rate? She was a member of USAA, so they have  a lot of information about her. They used the information to deliver a rate that reflected what they already knew about her.
3. The phone agent was empowered to solve problems... How many financial institutions allow phone reps to send blank checks to customers overnight? Probably not too many. But that’s part of what was needed to meet the customer’s needs.
4. … And the agent knew the online process. In many organizations, phone agents aren’t very familiar with what happens when a customer goes online. In this case, the agent clearly understood (and communicated) the process that the customer needed to go through online
5. The online process was simplified. The only way that USAA can cut the online process down to 5 questions is by limiting their questions to things that they don’t know about the person. Since the loan applicant was a member, USAA didn’t make her input information that it already knew about her.
6. USAA did what it said that it would do. When a company doesn’t live up to its promises, you can say goodbye to customer goodwill. But that’s wasn’t an issue here. USAA set clear expectations with the customer — and delivered exactly what itpromissed.

This type of experience is not a random occurance for USAA — they have very high levels of member loyalty. As a matter of fact, USAA has been at the top of Forrester’s Customer Advocacy rankings for the last three years. It wouldn’t hurt if other financial institutions (and companies from other industries) learned a thing or two from USAA.