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Reinvent

Accenture Service Transformation 3

ReinventWith poor service quality remaining the number one force pushing customers into the arms of waiting competitors, the message to companies is clear: the key to growth and profitability is to retain customers by delivering a satisfying experience. Satisfied customers cost up to 25 percent less to serve and can generate up to 30 percent more new revenue. Moreover, a company’s ability to win customer loyalty is the defining characteristic of high performance in marketing and customer management, according to Accenture research.

But attracting and keeping customers for the long haul has never been harder. Their expectations continue to rise, regardless of the economic climate. Thirty eight percent of consumers say they have higher expectations for customer service today compared with one year ago: service should be faster, more convenient and more informed, among other factors. Fifty-seven percent say they have higher expectations today than they did five years ago.

From the consumer’s point of view, the verdict is in: Companies are not keeping pace with their customers’ expectations. Globally, only 40 percent of respondents tell us that companies meet their expectations frequently or always—a decline of 13 points since 2007. As consumers expect more and more, they feel their expectations are being met less and less. Their high rate of switching is a direct result of this widening gap.

How to redefine the service experienceFindings like these show how imperative it is for enterprises to move beyond a one-size-fits-all approach to customer service—particularly those serving a diverse customer base in which customer preferences and values vary widely by age, location, intention and many other factors.

Companies understand that different consumers desire different things and value them differently. However, companies tend to address these differences only in their marketing strategy and neglect them in the later stages of the customer life cycle. We believe that differentiated messages and treatment are core principles to be applied throughout the entire life cycle, including the post-purchase realm of customer service, technical support and even collections.

In a truly customer-centric model, companies would differentiate service experiences using the closely understood expectations and requirements of specific customer segments, and according to the current and potential value of those segments.

This model would help avoid overinvesting in aspects of the experience that customers do not value commensurately to the cost of

Why rethink customer service?

Consumers have become more diverse, more demanding and less loyal than ever. The problem of consumers switching the companies they do business with has never been more acute worldwide. Nearly seven out of 10 consumers (69 percent) took their business elsewhere at least once during the past year because of poor customer service, according to the 2009 Accenture Consumer Satisfaction survey. That’s a 10-point increase over the 59 percent who switched in 2007—and the highest level of switching in the survey’s history.

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delivering them. Delivering value-based service experiences also results in more predictable customer behavior and, ultimately, higher loyalty among a company’s most important segments. Moreover, as customers at the lower value levels experience the service elements they expect, they also become less likely to defect, and they join the ranks of profitable, loyal segments sustaining the enterprise.

10 universal truths

We have found that observing 10 universal truths of the customer service experience helps companies achieve the optimal balance of what is satisfying to the customer and profitable for the company.

1. Customers have a single view of their providers, but rarely do providers have a single view of them. Most large enterprises have a product-centric view of customers: over time, they

have developed multiple product lines and designed customer interactions around individual offerings rather the total customer experience. Customers, however, see just one provider—and one experience—regardless of the number of products or services they receive from that provider. Service leaders know how to deliver a single, relevant view of customers and a common experience across the enterprise. They understand the moments of truth in the client life cycle and remove internal barriers that can result in disjointed service experiences.

2. Companies should move away from one-size-fits-all support models and opt for more tailored customer experiences based on customer value and need. All customers are not created equal nor do they have the same service needs. Serving every customer through the same undifferentiated model will inevitably disappoint some expectations and is likely to result in excessive support costs. Instead, companies should

differentiate treatments by thinking of the holistic value of the customer across products and services (page 9)—including differentiated processes, tools and agent skill levels. The key element, however, is the customer’s ability to configure the experience, with the degree of configuration possible tied to the customer’s value to the company and changing needs. For instance, a company may decide to enable its highest-value customers to choose which channels they use to obtain service, which agents they want to interact with and which service options they expect to be offered. Service leaders give more valuable customers more ability to configure and personalize their service experience, according to individual needs and preferences.

3. Any enterprise serves a finite number of distinct customer intentions. However, few would be able to list those intentions if asked. When it comes to understanding why customers

Companies should move away from one-size-fits-all support models and opt for more tailored customer experiences based on customer value and need.

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seek service, virtually every company knows the high-level reasons. Yet high-level information is not enough. Our experience shows that when customers contact companies for service, their intentions often cross functional and service channel boundaries, and they end up being transferred from agent to agent—one of the most frustrating aspects of the service experience. Service leaders begin with a customer-centric view of intentions, resulting in more efficient processes, improved customer experiences and higher workforce performance.

4. Customers may use multiple service channels to satisfy their intentions, and they expect integration and interaction visibility across all channels. Channel integration is the biggest service challenge facing enterprises this decade. Collaboration tools and support channels—from telephones, mobile devices, interactive voice response (IVR) and the Web, to set-top boxes, kiosks, social networks, micro-blogging, retail and field service—will proliferate faster than ever before, all aiming to improve the customer experience. However, if channels are not well integrated, customers become frustrated quickly. Service leaders develop an integrated service-enabling technology stack that provides seamless cross-channel customer experiences, with the flexibility to accommodate future technological innovations.

5. It’s human nature to self-serve as long as these variables are present: availability, speed, consistency and accuracy. Customers will naturally self-serve if they can access a capability that clearly satisfies their intention, completes the transaction faster and achieves a similar level of quality or success as agent contact. If any one of these factors is absent, however, self-service generally fails. Service leaders design their customer enablement programs with this in mind. They view self-service as a customer experience enhancement in addition to a cost-savings tool and pay close attention to generational and cultural preferences.

6. Contrary to popular belief, the cost-versus-quality tradeoff does not apply to customer service. In fact, the same factors that drive reductions in customer service costs also are strongly correlated with higher customer satisfaction and loyalty. Many air travelers, for example, prefer to check in and print their boarding passes from home computers or airport kiosks. This is a customer-controlled experience that meets customers’ expectations for speed, convenience and personalization. Likewise, improved resolution or call transfer rates not only reduce service costs but improve customer satisfaction. Service leaders are vigilant in optimizing costs while serving the customer’s desire for control, pulling every lever of the customer-care value equation (see sidebar on page 11t).

7. Customers don’t expect perfection, they expect precision. Loyalty is much more tightly linked to how well an enterprise responds to a customer’s support needs than to eliminating the customer touch altogether. Too often we hear, “The best contact is the one that didn’t happen at all.” But relationships are based on interactions. Companies frequently fall victim to thinking that if they haven’t heard from their customers, then their customers must be happy. Service leaders maximize the value of every touch. They leave a lasting impression with customers that says, “We know you, value your time, appreciate your business, apologize for any inconvenience we may have created and will act with precision to make it right.”

8. Customer service technology is reaching the point where even large enterprises can deliver the “general store” experience at scale. Remember the “good old days,” when you could walk into your favorite local store and be served by someone who knew your name, preferences and purchase history? He could provide tailored advice, recommendations and experience that perfectly matched your needs. Each visit deepened your loyalty and kept you coming back. Unfortunately, large enterprises historically have been unable to create that same connection, more often delivering a series of disjointed

and faceless interactions connected only by a brand name. Service leaders apply technology to deliver one-to-one customer experiences at scale. They also enable the delivery of these experiences by having the right people in place at key touch-points.

9. Analytics alone add no value. It is the application of insight that matters. Prepare for one of the most overused buzzwords of the twenty first century. All enterprises will talk about analytics, but few will apply them to deliver improved customer experiences. But analytics can be applied to power the “general store” experience. A central decisioning engine can pre-process all that is known about the customer against a company’s finite set of customer intentions and business events. Predictive analytics can have the next best action predefined and available to all support personnel and channels. Service leaders know how to apply analytics to tailor their service models to meet the needs of target customers at an appropriate cost.

10. Most enterprises need to rethink the role of service agents. Most service transactions still involve live agent support—particularly the most complex interactions. Yet few companies use these touch points to learn how to improve either individual transactions or the overall experience. Our research indicates that the top-performing 10 percent of customer service agents produce six positive interactions for every negative one, while the bottom 10 percent produce only three positive interactions for every four negative encounters. Given that labor cost typically accounts for nearly two-thirds of service delivery costs, measuring, analyzing and improving live-agent interactions can yield large returns. Refocus the role of service agents on supporting corporate strategy, deepening customer relationships and increasing revenue. Service leaders recognize that understanding what drives service agent performance is a key element in maximizing the value of each customer interaction.

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How to reinvent the service experienceWe can help transform your service organization to deliver differentiated customer experiences that reduce churn and improve profitability. With our help you can:

• Improve the service experience at both transactional and relationship levels.

• Develop cost-efficient service delivery that balances value to the customer with enterprise value.

• Get the right answer to the right customer through the right channel at the right time.

• Enable a differentiated service proposition across the entire value chain and customer life cycle.

• Access the right person every time to answer every inquiry the first time.

We have the depth and breadth of experience to analyze and transform every aspect of your customer experience, from the time a service request is received until the time it's completed, across every channel and every employee that helps shape this experience. We can help you continuously monitor and fine-tune customer contact so that you sustain initial cost benefits and continue to deliver a satisfying service experience even as customer expectations change.

Our comprehensive portfolio of solutions and services—strategic, analytical and operational—is anchored in proprietary methods, sophisticated tools, well-tested and pre-integrated architectures and processes, and a worldwide network of resources for solution delivery and operations management.

Accenture’s service transformation group offers three sets of services.

Differentiated service strategy and channel integration

We help you evaluate current service operations, segment and analyze the customer base, and devise a customer experience blueprint that balances the cost of service with the current and potential value of your customer relationships. The blueprint leverages your brand positioning and adds behavioral insights and attitudinal inputs from customers to develop the appropriate service experience across key channels.

Our differentiated service-experience offering helps you develop and implement a customer experience blueprint across the enterprise and reengineer processes to deliver the desired moments of truth across key touch points to reinforce your brand value proposition. We incorporate customer behavioral insights to continually refine the experience, ensuring that treatments are appropriately targeted and result in desired customer behavior. We also identify and implement the required employee skills, competencies and performance measurements to support delivery of the desired customer experience.

Our work helps you obtain a better return on investment for capital spending on new service initiatives and leverage new revenue opportunities across your customer base.

Our customer enablement and channel integration offering helps you identify high-impact opportunities by tracking customer intentions and behaviors from channel to channel to understand preferences, failure points and how each channel affects one another. In this way automated channels not only reduce cost, they also increase customer satisfaction and revenue. We use educational strategies to increase customer usage and maximize the benefits of particular channels. By receiving consistent information

and capabilities across all channels, and leveraging the strength of each channel, customers get the right answer no matter how they choose to interact.

Our proven design, development, testing and reporting solutions also reduce time to implementation and speed the realization of benefits.

Service delivery management and optimization

We work with you to enable and optimize technology that better supports your customers in real time and improves your operating margins.

Our service-enabling technology and architecture offering streamlines your operations and provides visibility across all touch points within one framework so that the experience can be quantified from the customer’s perspective. Customer contacts can be routed to the best sourcing option using business rules you define, such as contact history, service tier, quality, cost or fulfillment time. We also leverage desktop analytics to optimize tool usage, drive adoption and quantify bottlenecks.

Our service operations and analytics offering helps companies define a common framework and business capability to manage customer-centric metrics. We identify areas that can drive down the cost of service and ramp up revenue while providing a consistent customer service experience. We use global benchmarks and financial modeling to reveal operational opportunities, and advise on contact- center consolidations that can improve financial results and enhance tactical service delivery. We also apply metrics to drive strategic and tactical workforce management. In addition, we reengineer vendor management to better achieve service targets at the lowest cost.

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Service execution

We focus on your workforce and transaction processes to enhance service, add revenue, and increase cross- and up-selling opportunities.

Our service workforce and processes offering helps you measure, manage and maximize workforce performance throughout the employee life cycle, including onboarding, service delivery and career management. By aligning workforce and culture, we can help you reduce costs and add revenue. Cost savings result from increased employee engagement, less attrition, better attendance, improved selection and intake processes, lower average call handling time and increased first contact resolution. Additional revenue results from better account retention, higher cross-sell and up-sell ratios, solution selling and improved coaching from front-line managers.

Our service transactions and processing offering addresses convergent billing, revenue assurance and real-time prepaid and postpaid billing. Unique assets leverage our years of experience in telecommunications billing to increase customer value, reduce costs, add revenue, improve speed to market and simplify service.

Achieving high performance

Companies that want to grow their business with profitable customer relationships must adopt new service models that have the potential to appeal to a more varied consumer base while also delivering the right experiences to the right customers.

How well a company is able to target the right sets of customers and use technology to create service experiences that appeal to those customers will be crucial, especially

in emerging markets, where customer loyalty appears to be particularly elusive.

Organizations that recognize they need not be all things to all people and, consequently, deliver a differentiated service experience when and where it matters most will be best positioned to outperform their competitors and accelerate their organization’s journey to high performance.

We can help transform your service organization to deliver a differentiated customer experience that reduces churn and improves profitability.

Contrary to common belief, lower costs and higher customer satisfaction are not mutually exclusive. Consider these recommendations for optimizing the “customer care value equation.”

Reduce minutes per subscriber

Decrease contact rate

• Eliminate issues that detract from the experience and remove the root causes for service inquiries—including, for example, simplifying pricing and billing, improving point-of-sale practices, monitoring service outages and product defects, and identifying channel or policy inconsistencies.

• Enable customer self-service where possible based on customer intention, channel and preference. Actively identify and fix self-service break points resulting in unsuccessful service transactions.

• Reduce transfers and misdirected calls through customer-centric process design, agent-level performance monitoring, misroute analysis, etc.

• Improve resolution rates by implementing new metrics that drive resolution accountability to the service agent level, identifying performance outliers and integrating knowledge management capabilities.

Increase handling efficiency

• Streamline business processes to make each interaction more efficient.

• Give service personnel the tools they need to minimize interaction time.

• Optimize call handling to ensure seamless information transfer and routing to the most capable agents.

• Value the customer’s time: shift interactions to offline channels when possible.

• Standardize the processes to establish the benchmark for call handling: most companies vary widely in call handling efficiency.

• Give supervisory agents the tools and insight they need to coach and manage their teams to higher performance levels.

Decrease cost per unit

Improve agent yield

• Agent yield—total talk minutes divided by total payroll minutes—generally exceeds 60 percent at high-performance businesses (approximately 6,000 minutes per agent per month). Agent yield is a better assessment of overall performance than occupancy or other traditional call center metrics.

• Improve agent yield by decreasing off-phone activities—for example, make training more efficient and timely, or use low-volume times to support back-office transactions.

• Continuously monitor forecasts and adhere to schedules to maintain forecast accuracy, optimal staffing and service delivery quality.

• Reduce the number of small call queues and virtualize call volume across centers.

• Add as much variable staffing as possible to your sourcing mix: use part-time agents, vendors and home workers to staff peak-call intervals without affecting overall agent yield.

• Manage attrition and absenteeism.

Optimize vendor contracts to minimize cost per unit

• Motivate call center vendors to compete for your volume at the interval-level. Generally, we recommend sourcing at least 40 to 50 percent of total volume through third parties, spread across three to four vendors.

• Establish cost-per-productive-minute contracts to shift the risk of underutilization to the vendor. Ultimately, a vendor’s performance determines the volume it receives relative to other suppliers.

Labor arbitrage

• Use offshore labor strategically to minimize cost.

• However, take care to align sourcing strategy with customer intentions and customer segments.

Reduce operations overhead • Minimize overhead allocations, such as IT, human resources, etc.

• Generally manage the central operations team to five to seven percent of total care operational expense.

• Centralize scheduling and workforce planning.

• Automate manual quality monitoring: rather than monitoring three to five calls per agent per month, focus on monitoring performance “outliers” in the workforce. Leverage technology and analytics to assess every interaction instead of the statistically insignificant number typical of most companies.

Turning beliefs into action

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