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The Impact of Self-Service on Customer Loyalty

The Impact of Self-Service on Customer Loyalty. SpeechTEK by John Goodman, Vice Chairman. Agenda . Key Questions: What are the key benefits of customer self-serve? What are the downsides? How do you decide which transactions to allocate to self serve How do you measure the impact

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The Impact of Self-Service on Customer Loyalty

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  1. The Impact of Self-Service on Customer Loyalty SpeechTEK by John Goodman, Vice Chairman

  2. Agenda • Key Questions: • What are the key benefits of customer self-serve? • What are the downsides? • How do you decide which transactions to allocate to self serve • How do you measure the impact • Who is TARP? • Customer behavior, expectations, and preferences • Quantifying the impact • Key actions to make voice driven self-service effective

  3. About TARP • Founded in 1971—35 years delivering dramatic impact • USA’s customer service (instigated 800#s) • Malcolm Baldrige (influence criteria; TARP has a Senior/Alumni examiner on staff) • Assisted 5 Baldrige Winners and 43 Fortune 100 Companies • Initiated concept of “word of mouth” (TARP/Coca-Cola 1978 Study) and “word of mouse” (eCare and Click & Mortar studies 1999) • Offices in Wash., D.C. and London • Optimization of cross-channel experience • Industry leader in customer experience measurement and management • Deliver insightful and actionable financial impact and tracking

  4. The Key Issue • YOU CAN’T SAVE YOURSELF INTO PROSPERITY! • ONLY SAVE MONEY WHEN YOU CAN’T MAKE MORE MONEY!

  5. Benefits of Self-Service • Lower cost due to no need for personal interaction • Broader hours of support at low cost • Is attractive to certain segments (e.g. antisocial “New Yorkers”) • Does provide opportunity to position human support as a higher priced option • Clearer characterization of customer perspective and desires if you offer self-logging of issues and desired response time

  6. Why Transaction Surveys Don’t Tell The Whole Story And Can Actually Mislead Too Specific Too General Transactions Survey Issue-based survey Relationship survey “My most serious problem is…” “I would like you to….” Could you modify the policy by doing x…? “You delighted me by breaking the rules…”

  7. Identifying Issues Inappropriate for Self Service • Differentiate between basic transactions and more complex issues • Identifies risk and opportunity associated with issue by type of customer • Quantifies non-complaint rate • Identify opportunities to delight customers

  8. Limitations of Self-Service • Precludes leveraging transaction • Limited opportunity to “connect” with customer • Limited opportunity to cross-sell or up sell • Limited opportunity to delight • Little opportunity to explain policies • Little opportunity to gather additional data • Pre-supposes that customer will decide when to get service – misses idea of proactive communication • Harder to understand motivation for customer actions

  9. Key is to segment transactions and customers • Leverage opportunities • Delight, educate, up-sell using empowered reps • Spend time with those segments that want it • Spend time with influencers • Efficiently handle those transactions that have no upside • Simple transactions • Segments that don’t want a social experience • Segments with no future payoff

  10. Barriers to Using the Web and Voice Self Service “I won’t be able to do what I want to do. • One unsuccessful attempt confirms all of the above • Not as personal, but human-like interaction • Implied actions • Measure whether tried website and why left website • Better communication on what voice or Web process can do • Rotating education on no more than two items at a time • Education while waiting, even for 15 seconds “I won’t be able to find the answer I need easily.” “If I have a problem, I’ll have to call a live person anyway.”

  11. Customer Behaviors Impacting The Bottom Line

  12. Key Factors Driving Satisfaction • No Unpleasant Surprises • If Trouble Encountered • Accessibility☺ • Taking Ownership☺ • Apology • Clear Explanation☺ – critical: based on customer current perspective • Timeliness☺ • Courtesy • Keeping Promises☺ • Handle on First Contact

  13. Causes of Customer Dissatisfaction The majority of dissatisfaction is not caused by employee errors or attitude. Employee Customer 20%-30% 20% • - Wrong expectations • - Customer error • Fails to follow policy • Attitude • - Fails to follow policy Company 40%-60% • - Products and services don’t meet expectations • - Marketing miscommunication • - Broken processes • - Products and services don’t meet expectations • Marketing miscommunication • - System fails • - Units fail to coordinate

  14. Personal Interaction has 20 Times More Impact than Advertising and Sponsorships(Retail Finance Customers) How many of those told took action on your referral? 1 out of 4 !!!

  15. Impact of Delightful Experience on Top-Box Loyalty by Type of Action

  16. Problems Raise Sensitivity to Price Percent of customers dissatisfied with price rises with number of problems. % Dissatisfied with price or fees

  17. Calculating The Impact of Customer Experience on Revenue

  18. Impact of Having a Problem With Voice System or Dissatisfaction With Overall Transaction • Voice system did not understand me – 14-48% impact on willingness to recommend • Hitting voicemail when you have an immediate issue causes 17% damage to loyalty • Average problem has 20% impact on loyalty or willingness to recommend • Complaint rates about technology are low but often a cause of escalation

  19. Why Do We Care?Response Impacts Loyalty Satisfaction and Loyalty drops significantly if the customer is not very satisfied with the response received Source: TARP’s 2005 e-care study

  20. x x x 40% Satisfied 5% Not Repurchasing 3,500 50% Complain 35% Mollified 25% Not Repurchasing 15,313 350,000 Customers with Problems 25% Dissatisfied 70% Not Repurchasing 30,625 50% Do Not Complain 45% Not Repurchasing 78,750 128,188 Total Customers At Risk Market Opportunity Calculation of Revenue Lost from Customers with Problems = = = = =

  21. Why Do We Care?Response Impacts Word of Mouth/Mouse Source: TARP’s 2005 e-care study

  22. Preferred Contact Method Which communications method(s) do you prefer when contacting us for each of the following reasons? (from 7442 web users) Source: TARP’s 2005 e-care study

  23. Recommendations

  24. Print Key Word Options Where You Print the Phone Number Support Phone Matrix

  25. Measure Effectiveness by Type of Transaction by Channel Transaction which is biggest opportunity for improvement Misuse of resources to intensively measure this transaction

  26. Be proactive, flexible, and human-like • Identify transactions which can be leveraged and encourage contact rather than self-service • Identify customers and customer segments that want self-service and DON’T want self service • Always provide options! • Use simple English and test with idiots • Always provide immediate link to live rep using multiple channels • Humanize self-service as much as possible • Measure the impact by issue and channel to verify

  27. Summary • DO IT RIGHT OR DON’T DO IT! • FOR PAPERS AND ARTICLES: • jgoodman@tarp.com or 703-284-9253

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