Build, Buy, Or Outsource Customer Service Solutions? Here's An Approach To Help You Decide

How do you choose the right customer service solution for your needs? It’s always best to take a systematic approach: (1) benchmark your current operations using our Assessment Framework to pinpoint areas for opportunity and (2) pragmatically investigate options to source your missing capabilities. Options range from repurposing technologies used elsewhere in your company, to outsourcing, to purchasing suites or vendor point solutions. I recommend using the following process to step through the choices: 

  • Step 1: See if your company is using similar technologies that you can leverage. Web self-service, mobile, social, email, and chat solutions, for example, are often deployed by sales and marketing. If you choose to leverage existing technologies, make sure that they can scale and operate at the level of performance and reliability to support customer service operations. Also make sure that the experience that the customer receives when interacting with these technologies is consistent across functional organizations.
  • Step 2: Consider outsourcing. If there are no existing technologies that you can leverage, consider outsourcing this entire capability, or perhaps a portion or all of your customer service operations, to a third-party organization. In a recent Forrester survey, we found that 10% have already outsourced some or all of their operations or are very interested in doing so. Outsourcing can help reduce cost of operations, but can also improve the quality of services delivered and allow you to focus on core business activities that are mission-critical to your company.
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Siri Is Shining A Spotlight On Virtual Agents

Siri, Apple’s voice-activated virtual agent (VA), has raised the profile of this technology category. Siri provides the right engagement paradigm: ask a question and get an answer - a right answer. Because of Siri, companies focused on increasing customer satisfaction scores to move the needle on customer loyalty often ask “Why can't we offer Siri-like experiences on our web or mobile sites to help customers ask questions in their own words?”

Let's look at the facts: customers today are trained to go online to get answers to their questions by navigating a company’s FAQ list, or by typing in keywords to surface the right piece of content. In fact, 66% of customers use this channel. But at 51%, the satisfaction ratings for this channel are the lowest of all the communication channels that Forrester tracks. It's because keeping content in line with customer demand and making it easily accessible to customers is very hard to do.

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Market Consolidation In The Customer Service Space - A Slew Of Companies That No Longer Exist

I know the customer service market is consolidating as it matures. I’ve been tracking the consolidation of the knowledge management, multichannel management and EFM space for a while. However, at no time has this consolidation been quantified as when I recently helped my colleague William Band update his maturity model of the CRM space, known as a Forrester TechRadar.

Have a look at this partial list of vendors that have been acquired or have merged with another entity:

Field Service:

  • Dexterra acquired by Antenna Software (2009)
  • Sybase iAnywhere acquired by SAP (2010)
  • Servigistics acquired by PTC (2012)
  • Syclo acquired by SAP (2012)

Enterprise listening platforms and community platforms:

  • Radian6 acquired by salesforce.com (2011)
  • Overtone acquired by KANA Software (2011)
  • Leverage Software acquired by Telligent (2011)
  • Collective Intellect acquired by Oracle (2012)
  • Cymfony acquired by Visible Technologies (2012)
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How To Build A Business Case For Customer Service Investments

We know that investing in customer service is good for business and can positively impact your revenue. However, building a business case for customer service investments is challenging, as you must understand the benefits and associated costs of the investments.

For some customer service technologies, such as workforce management, email, and chat, the business benefits are very clear. For other customer service technologies, such as social customer service or knowledge management, the business benefits are more difficult to precisely quantify. Yet in all cases, business benefits fall into one of three categories: reducing operational costs, improving productivity, or enhancing the customer experience. Examples include:

 

Technology

Business benefit

 

Reducing operational costs by…

Improving agent productivity by…

Increasing customer satisfaction by…

Chat

- Resolving customer issues with shorter average speeds to answer (ASA)

- Reducing the average interaction cost

Reducing re-contact rates

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Customer Service Tips For Today's Digital World

Today, the gap between customers’ expectations and the service they receive can be huge. There’s an explosion of communication channels that customers use—voice, digital channels like email and chat, and social channels like Facebook and Twitter. There’s also an explosion of touchpoints, like smartphones, tablets, and self-service kiosks. Customers expect efficient, consistent, personalized service experiences across these channels and touchpoints.

There’s no denying that mastering the service experience is hard to do. Yet focusing on leveraging digital channels is one way customer service leaders can move the needle on customer experiences.

Here’s how:

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Why Pay Attention To Your Customer Service? Because It Will Impact Your Revenue

Enterprises must pay attention to the quality of customer service they offer because:

  • Good customer experiences boost repurchase probability and long-term loyalty. Customer loyalty has quantifiable economic benefits as measured over three dimensions: willingness to consider another purchase, likelihood to switch business to a competitor, and likelihood to recommend to a friend or colleague.
  • Poor customer service experiences lead to increased service costs. The cost of failing to meet these expectations is high: 75% of consumers move to another channel when online customer service fails, incurring costs.
  • Poor customer service experiences risk customer defection and revenue losses. Customers who have poor service experiences – estimated at 30% – are at risk of defecting, even if they do not complain – and the revenue impact of churn can be easily quantified.  
  • Poor customer experiences can quickly damage the reputation of your brand. Customers who are disappointed at the service they receive are quick to voice their disappointment, which is amplified over the social channels and can erode brand value. Forrester’s Social Technographics® ladder shows 68% of B2C consumers and 80% of B2B customers fall into the “spectator” category, which consists of people who read negative comments posted on social media sites.
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Dreamforce Musings (A Month Late)

I go to many industry events in my job, and as the fall event season passes its peak, there is one event that has stayed with me a month after it was hosted. It's Dreamforce – salesforce.com’s annual event, which was held on Sept 18-21 in San Francisco and which attracted more than 90,000 users (per salesforce.com's count). It wasn’t the size that made this event noteworthy, even though it was the biggest event that salesforce.com had ever hosted. It wasn’t the energy that permeated the venue, the numerous DJs, the MC Hammer performance before Marc Benioff's keynote, or even the theatre that surrounded every product keynote. It was the “positive-ness” that customers, both big and small, voiced at the event – positive-ness that made you believe in the “social enterprise” vision of the company, and that the company could deliver its ability to connect customers, partners, employees, and even products together.

Instead of focusing on features, functions, and product road maps, salesforce.com kept most messaging at the high level, hitting on the notes of “what do these applications do for me” and “why should I be interested?” Salesforce.com used customers and customer videos from the likes of Activision, Rossignol, GE, and Burberry, to name a few, to describe the real impact that salesforce.com has had on these companies. Some stories were down to earth – like Activision’s use of social channels to provide customer service to its customers. Some were more extreme – like GE’s using Chatter communities to monitor the health and performance of jet engines (engineers and products collaborating??).

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What I Have Learned Being A Customer Service Analyst

The anniversary of my two-year tenure at Forrester quietly snuck by me last week, and when I remembered about the milestone, it gave me pause to think about how much the customer service landscape has changed these past years and how quickly it keeps on changing. Here are my key thoughts:

  1. The customer service landscape is complex. We mapped the maturity and business value of 24 key contact center technologies in our Forrester TechRadar on this topic and found a number of technologies – case management, channel management, WFM, IVR, etc. – at the peak of the maturity curve, which is no surprise given that contact center operations are focused on productivity and process optimization. However, there are newer technologies such as real-time decisioning, process guidance, interaction analytics, VOC, and social service that are starting to be leveraged by companies needing to differentiate themselves on customer experience. I expect to see an acceleration of technologies used in organizations outside of customer service to start being leveraged by contact centers.
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The 4 P's Of Customer Service

We all know the 4 P’s of marketing – product, price, placement, promotion – that dictate the success of your marketing initiative. But, what about customer service? To me, 4 different P’s apply, which are:

  • Pain – Or more specifically, lack of pain. Customers want effortless service from the touchpoint (web, tablet, in person, etc.) and communication channel of their choice (ex. voice, chat, email, social). They want to receive an accurate, relevant, and complete answer to their question upon first contact with a company. They want to be able to start a conversation on one touchpoint or channel and continue it on another without having to repeat themselves. Forrester data backs this up: 66% of customers say that valuing their time is the most important thing a company can do to provide good service. 45% of US online adults will abandon their online purchase if they can't find a quick answer to their question.
  • Personalization – Customers don’t want a “one size fits all” service experience. They want the interaction to be tailored to the products and services that they have purchased, to their specific customer tier, to their past interaction history, and to their specific issue at hand.
  • Productivity – Customer service organizations must pragmatically walk the balance between customer satisfaction and cost. A customer service experience has to be reliable and efficient. This is a service experience that gets positive customer satisfaction ratings and that can also be delivered at a cost that makes sense to the business.
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The Customer Service Market Keeps Consolidating: Consona And CDC Software Merge

Or perhaps I need to title this blog "Another One Bites The Dust" as this is just one more merger in the multitude of mergers and acquisitions that are happening  in the customer service space.

On August 7, CSC Software merged with Consona Corporation to form a new entity called Aptean (see the press release about the news here). There have been no details communicated about the go-forward plan for both companies’ products, but here are my views about their respective CRM assets.

Consona, founded in 1986, has its roots in ERP. Over the years, it has acquired a number of ERP solutions, which include DTR, Cimnet Systems, AXIS, Encompix, Intuitive, Relevant, and SupplyWorks - which have good strengths in a variety of vertical markets. More recently, it has acquired an open-source, SaaS-based ERP software vendor, Compiere. In 2006, it made a foray into the CRM market by acquiring Onyx CRM and then KNOVA for knowledge management (2007) and SupportSoft (2009), a support automation vendor. Its recent CRM focus has been on customer support automation application for the high-tech vertical, as there is good synergy between CRM, support automation, and knowledge management for this user base.

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