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NOVEMBER 2012 Cross-Channel Consistency: The New Mandate in the Age of Digital Service As customer service moves to social and Web channels, providing a consistently excellent experience within and across all channels is the new name of the game. An exclusive survey and research report from Bloomberg Businessweek Research Services

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1BLOOMBERG BUSINESSWEEK RESEARCH SERVICES NOVEMBER 2012

Cross-Channel Consistency: The New Mandate in the Age of

Digital Service

As customer service moves to social and Web channels,

providing a consistently excellent experience within and across

all channels is the new name of the game.

An exclusive survey and research report from Bloomberg Businessweek Research Services

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NOVEMBER 20122BLOOMBERG BUSINESSWEEK RESEARCH SERVICES

Table of ContentsMethodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Increased Reliance on Digital Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Elevating Chat to a Human Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

A New Metric: Customer Effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

The Rise of Social . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Low Consistency of Service in Digital Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Summary: The Digital Tipping Point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Sponsor’s Statement: How to Deliver Excellent, Consistent Cross-Channel Customer Service. . . 10

Copyright and Disclaimer NoticesBloomberg Businessweek does not make any guarantees or warranties as to the accuracy or completeness of this report. Bloomberg Businessweek shall not be liable to the user or anyone else for any inaccuracy, error or omission, regardless of cause, or for any damages resulting therefrom. In no event will Bloomberg Businessweek nor other companies or third-party licensors be liable for any indirect, special or consequential damages, including but not limited to lost time, lost money, lost profits or lost good will, whether in contract, tort, strict liability or otherwise, and whether or not such damages are foreseen or unforeseen with respect to any use of this document.

This document, or any portion thereof, may not be reproduced, transmitted, introduced into a retrieval system or distributed without the written consent of Bloomberg L.P.

© Copyright 2012 Bloomberg L.P. All rights reserved.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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MethodologyBloomberg Businessweek Research Services (BBRS) launched a survey and research program in summer 2012 to discover and analyze the views of C-level and line-of-business executives around the world on customer service across channels. The research sought to determine these executives’ perceptions on the challenges of delivering customer service both within and across channels, in addition to their insights on the technologies that help deliver consistent customer service.

The goals of this program included: n Understanding how organizations view the state of their

customer service performance now and in the future. n Discovering how companies are incorporating digital channels

into their customer service approaches and offerings. n Identifying the challenges of moving to digital channels. n Examining the key technologies, tools and systems that enable

cross-channel consistency.

This research program included both quantitative and qualitative components: n A global survey of director-level or above executives at midsize

and large companies from around the world. A total of 318 director-, vice president- and C-level executives responded to the July 2012 survey. For more information about the demographics of the survey, refer to the “Methodology” charts, at right.

n Interviews with leading independent consultants, industry analysts, academics and business enterprises, in addition to survey data from research firms. The organizations involved include:

BBRS and the author of this report, Lauren Gibbons Paul, are grateful to all of the executives who provided their time and insights for this project.

This research project was funded by a grant from SAP but was written independently of this sponsor. The editorial department of Bloomberg Businessweek magazine was not involved in this project.

n Altimeter Groupn Coop@homen Corporate Executive Board n Reliant of Houstonn Social Media Today

n T-Mobilen Technology Services Industry

Associationn Ventana Researchn Yaskawa America

Methodology

Respondents by Region

Respondents by Company Size

Respondent by Industry Sector

Respondents by Title*Total exceeds 100% due to rounding

Respondents by Primary Function*Total exceeds 100% due to rounding

Source: Bloomberg Businessweek Research Services, 2012

Asia: 34%

North America: 37%Europe: 29%

Small* ($100–$499 million): 15%

Enterprise (>$5 billion): 21%

Large ($1–$5 billion): 35%

Medium ($500–$999 million): 29%

Other: 23%

Retail/Wholesale: 16%

Business Services: 11%

Manufacturing/Industrial: 34%

Manager: 26%

Vice President/Senior VP/Executive VP/General Manager: 29%

Director: 13% C-Level: 33%

Financial Services: 16%

Customer Service: 15%

Finance: 21%Operations/Production: 24%

Sales: 15% Supply Chain: 26%

*1000 employees or more

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Executive SummaryThe business world is inexorably moving toward increased use of digital channels to deliver customer service, according to an exclusive survey by Bloomberg Businessweek Research Services. This is already raising many concerns within customer service organizations, the most immediate of which is providing consistent service in an omni-channel world.

The BBRS survey revealed the following insights about customer service organizations in the next two years:

n The desire to delight customers continues to move toward a “top priority” ranking for customer service organizations, with companies in North America and the EMEA region rating it at 2.64 and 2.59, respectively, by 2014 (with “3” being highest priority).

n In two years’ time, digitally enabled channels of customer service will become more important than in-person and phone-based channels. More respondents gave a “high importance” ranking to mobile, Web and social media channels in the 2014 timeframe than they did to traditional channels.

n Customer service consistency levels are low across all channels but are particularly dismal in digital channels, with less than a third of respondents reporting consistent levels of service on social media today.

n Roughly 70 percent of survey respondents think social media and online communities will positively impact customer service delivery in the next two years.

n Nearly three-quarters of survey respondents are working to implement technology that enables a unified view of the customer—a particular challenge as service channels proliferate.

As reliance on digital channels grows, companies need to ensure consistent service within each individual channel and work toward cross-channel service consistency. To do this, it will become increasingly critical to integrate customer service processes and data, so that employees are working with the most complete and updated view of customers, no matter which channel they use.

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Introduction Customer behavior and expectations are changing quickly, especially as the mobile and social Web forever alter how both consumers and business customers engage with vendors and pursue answers to their questions and problems. Meanwhile, with rampant commoditization, companies are more focused than ever on providing a distinctive and differentiated customer experience.

These trends are causing a major rethink of how customer service should be performed, in both the B2C and the B2B worlds. Companies are now striving to provide service in more flexible, customer-centric ways that reflect customer demand for an always-available, personalized response to their needs. In fact, the desire to delight customers, according to an exclusive survey by Bloomberg Businessweek Research Services, will continue to grow in importance as a function of customer service for many companies around the world over the next two years, particularly in Europe and North America (see Figure 1, “Delighting Customers Growing in Importance,” at right).

As part of this effort, companies will become more focused on digitally enabled channels providing both customer service and a superior customer experience, according to the BBRS survey (see Figure 2, “Digital Trumps the Personal Touch,” on page 6). In-person and telephone customer service will recede somewhat in importance by 2014, while serving customers via mobile apps, the Web and social media all will rise in importance.

To succeed in this transformation, however, companies will need to overcome a major challenge that the survey also revealed: maintaining consistently high levels of service within and across channels to provide a consistent experience no matter which channel the customer is using. According to the BBRS survey, customer service consistency is low across all channels but is particularly dismal in digital channels.

With channel proliferation, organizations need to achieve consistent levels of support not only within a channel but also across channels. Customers expect the same experience, outcomes and updated information no matter how they interact with a company. Those customers also expect each customer service agent (live or virtual) to know about past transactions or interactions they had with the company. Fulfilling this expectation involves making real-time customer information available across channels and training service reps on engaging with customers via digital channels.

Increased Reliance on Digital Channels

A good example of a company that has worked hard to develop a consistent cross-channel customer experience is Coop@home, the online shopping division of Coop Group, a $31.3 billion grocery retailer in Basel, Switzerland. When Coop@home was developing a mobile grocery-shopping app three years ago to add to its online shopping choices, cross-channel data integration was necessary to enable a mobile shopping experience on par with in-store shopping. For example, Coop@home’s Ellen Brasse, head of sales and marketing, was adamant that the iPhone app show users real-time prices and product availability. Mobile shoppers can also scan the barcode of a product on their iPhone and the app will recognize whether the product is available in-store, Brasse says.

Enabling this functionality required data to flow from Coop@home’s mobile app, into its CRM and ERP systems and then back again. But in some ways, Brasse finds it easier to attain consistent levels of service in Coop@home’s digital channels than the more traditional ones. “It is actually much easier to maintain a consistent customer service experience in an online shop than

Figure 1

Delighting Customers Growing in ImportancePlease rate the importance of “delighting customers” (measured as customer satisfaction, customer loyalty, etc.) to your customer service operation on a scale of 1 to 3, with 3 being high priority.

Overall

North America

EMEA

APAC

Source: Bloomberg Businessweek Research Services, 2012

2012 2014

2.532.55

2.612.64

2.512.59

2.422.46

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in many stores with thousands of salespeople,” she says. The biggest customer service challenge her team faces in the mobile venue is ensuring that delivery people provide the expected quality of service.

Elevating Chat to a Human Level

Coop@home has succeeded in making a fairly prosaic market segment—groceries—a source of appreciation and even delight for customers. At Reliant of Houston, a unit of $9.1 billion NRG Energy, that challenge is perhaps even steeper. Unlike many areas of the United States, Texas consumers can choose which electricity provider to do business with, so they are free to move from one provider to another for any reason at all.

“We’re selling a product that you can’t see, you can’t feel, you can’t package,” says William Clayton, vice president of customer care operations. To differentiate its offering, Reliant strives to provide excellent service through a number of different channels, he says. For instance, customer service agents at Reliant are trained to express “warmth, empathy and empowerment” for every customer, in every transaction, Clayton says. But, increasingly, they need to create those good vibes in digital channels such as the company’s 24x7 live-chat offering.

Whereas call center agents can take cues from the customer’s tone of voice, it can be harder to gauge a customer’s openness to light-hearted banter in a chat session. In the first few seconds of the exchange, customer service agents categorize customers into one of four groups—controllers, thinkers, entertainers and feelers. If the conditions seem right, a service rep might insert an emoticon (such as a smiley face) into the chat to make the interaction more human. “For the first two groups, we may not send emoticons, but the other types might be open to it,” Clayton says. “We adapt to the personality type and style of the customer.”

If the agent succeeds, the customer may come away feeling that Reliant is more hip and responsive than the average utility company. Clayton’s ultimate goal is for Reliant’s customer service agents to be “wing men” and “wing women” to customers, steering them to the solutions that best meet their needs. To that end, service reps are empowered to offer customers a range of additional fee-based services (such as surge protection programs) to help with unexpected costs and to provide protection for their homes. Customers can also elect to receive text messages or e-mails if their electrical usage exceeds defined thresholds, so they have more control over monthly bills.

A New Metric: Customer Effort

Reliant’s increased emphasis on digital channels is tied to its goal of providing support that requires the least possible time and exertion on the customer’s part. “It’s really around how much effort our customers spend on getting their issue resolved,” Clayton says. In fact, Reliant was featured in a Harvard Business Review article1 that advocates use of the Customer Effort Score (developed by the Customer Contact Council of member-based advisory company CEB) as a better predictor of customer loyalty

1 Matthew Dixon, Karen Freeman and Nicholas Toman. “Stop Trying to Delight Your Customers.” Harvard Business Review. July-August 2010. http://hbr.org/hbrg-main/resources/pdfs/extras/stop-delighting-the-customer-the-idea-in-practice.pdf

Figure 2

Digital Trumps the Personal Touch?Please indicate the importance of delivering service to your organization’s customers by each of the following channels in 2012 and 2014, on a scale of 1 to 5, with 5 being extremely important. (Percent of respondents choosing a 4 or 5.)

In-person

E-mail

Phone

Via mobile device such as a smartphone

Web self-service

Web-assisted (chat, co-browsing, video, etc.)

Social media

Source: Bloomberg Businessweek Research Services, 2012

69%79%

80%74%

77%80%

66%63%

76%74%

72%62%

75%70%

2012 2014

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than customer satisfaction surveys or the Net Promoter Score. That is because a negative customer service transaction—defined as one that involves a high amount of effort on the customer’s part—is much more likely to drive disloyalty than a positive experience is to drive loyalty, according to Matthew Dixon, Ph.D., executive director of CEB.

“Most service executives are using traditional customer satisfaction or Net Promoter Score to gauge loyalty in service interactions, but these metrics fail to capture the most powerful driver of disloyalty—the amount of personal effort a customer has to put into the service experience,” Dixon wrote in a press release announcing the metric.2

If Reliant customers can solve their problems more seamlessly via Web chat than by e-mail—and Clayton says they can—then Web chat is a better channel for them, even though it may cost the company more than the traditional contact center. “I’m looking to reduce use of those high-effort channels,” he says. “They work for some customers, but these new innovative channels that Reliant is using reduce customer effort and deliver a great customer experience. We won’t save a nickel to lose a dollar.”

Given the commodity nature of Reliant’s product, senior management well understands the importance of customer relationships and the role personal connection plays in retention. “Management views customer service as a value center,” Clayton say, “not a cost center.”

The Rise of Social MediaIn a world increasingly focused on digital channels of customer service, no company—whether B2C or B2B—can afford to ignore the discussions, questions, complaints and other feedback available through online communities and social media. According to the BBRS survey, social media will only grow in importance in the next two years (see Figure 3, “Growing Importance of Social Media,” above).

According to the “Social Customer Engagement Index 2012,”3 conducted by online community Social Media Today, more companies are adopting social media as a channel for serving and engaging with customers. Over a third of respondents (34 percent) to the Social Media Today survey say their company has gathered two-plus years of experience using social media tools for customer service, compared with 20 percent in 2011. Additionally, the number of companies handling more than 25 percent of customer service inquiries via social media doubled this year, growing to 18 percent.

As social influence grows, organizations will struggle to assimilate—and act on—all the messages with which they are being bombarded. “For the enterprise space, the cost of having a mistake happen in social or mobile channels is potentially millions of dollars,” says Jeremiah Owyang, industry analyst, customer strategy, at Altimeter Group.

Yaskawa America Drives and Motion Division, a $350 million provider of industrial control and automation products in Waukegan, Ill., has begun its foray into social-based service by targeting online customer communities. According to Dennis Fitzgerald, vice president of customer satisfaction, the company monitors and participates in online support communities and then uses those dialogues to shape its understanding of customer needs and the overall direction of the market. Over the next two years, Yaskawa will work to capture the information found in online forums and transmit it into the company’s CRM system,

Figure 3

Growing Importance of Social Media Please indicate the current and potential impact of each of the following trends that relates to your customer service organization’s capabilities, on a scale of 1 to 5, with 5 being extremely important. (Percent of respondents choosing a 4 or 5.)

Smartphone adoption

Customer service becoming a profit/loss center

Independent customer support communities on the Web

Social media (Facebook, YouTube, Twitter)

Source: Bloomberg Businessweek Research Services, 2012

Current Impact Potential Impact in 2 Years

74%74%

73%73%

63%68%

78%63%

2 Corporate Executive Board Press Release. “Delighted Customers Aren’t Always Loyal Customers.” Dec. 16, 2008. http://ir.executiveboard.com/phoenix.zhtml?c=113226&p=irol-newsArticle_Print&ID=1236803&highlight=3 Social Media Today. “Social Customer Engagement Index 2012.” http://socialmediatoday.com/social-customer-engagement-index-2012?reference=smt_twitter

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where it will be measured, analyzed and incorporated into future plans and strategies. Fitzgerald acknowledges this will require more data integration than Yaskawa has done so far.

Online communities are particularly important for companies, like Yaskawa, that rely on field engineers to support highly sophisticated pieces of equipment, says John Ragsdale, vice president of research at Technology Services Industry Association (TSIA). According to TSIA research, the average cost of a typical field service call is $1,011—and it is climbing. “There is tremendous pressure to cut costs, but companies worry that cuts will impact the customer experience,” he says. Today, technology firms are evaluating the role of mobility and video to optimize operations without impacting satisfaction.

Some B2B companies facing this conundrum are taking what might seem like radical action. For instance, a major networking technology vendor eliminated e-mail support a few years ago in favor of online communities, according to Ragsdale. “It was costing too much, and the satisfaction levels were not good,” he says. The vendor’s staff monitors the action on these forums to correct wrong information and dispense useful information, greatly reducing support costs, Ragsdale says.

Low Consistency of Service in Digital Channels Customers expect the same level of experience from a company, whether they call in for help, launch an e-mail query or engage with an agent on Web chat. Unfortunately, those expectations are not always met. Just half of respondents to the BBRS survey (53 percent) report that their companies offer consistent service most of the time either in-person or via phone and only one-third provide consistent service via digital channels (see Figure 4, “Lack of Consistency in Channel Service,” above right).

These low ratings are likely exacerbated by channel proliferation. “The high-level problem is that companies add channels one at a time without integrating them,” Ragsdale says, with little data or process shared from one channel to another. “When you’re opening a new channel, it’s like blasting a hole in the side of your company—people can get in. All it takes is one employee who starts monitoring Twitter with or without corporate approval,” he says.

Without a holistic strategy, there is little chance that the details of a service interaction occurring in one channel—say, a Web chat—will be shared with other channels, such as the call center. Such disconnects lead to high customer frustration and an incomplete view of the customer. As the “Social Customer Engagement Index 2012” says, “as more interactions take place over social channels, companies will need to be prepared to handle multichannel interactions that can see a single customer inquiry move across networks, modes and people. We expect the pace of integration between traditional and social channels to quicken as customer expectations grow and vendors bake these integrations into their technology stack.”

Wireless provider T-Mobile has put systems and processes in place to ensure customers do not experience such a disconnect. Using analytics, the privately held company designs highly targeted promotions for defined customer segments and, based

Figure 4

Lack of Consistency in Channel Service Respondents were asked, for each channel, whether they provide consistent levels of service and response independent of the channel most of the time. (Percent of respondents who said they offer consistent levels of service in that channel.)

In-person

Phone

E-mail

Via mobile

Web self-service

Web assisted

Social media

Source: Bloomberg Businessweek Research Services, 2012

53%

33%

47%

31%

43%

27%

33%

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on the segment, it either sends the offer via text, e-mail or mobile app, or makes it available the next time the customer visits a store or calls the contact center. Importantly, the system records whether the promotion is accepted or declined, and customers are never presented with the same offer twice. “If you were to call into the call center and got an offer and accepted it, the system knows that, so it won’t bother you through another channel, says Alison Bessho, former director of IT enterprise systems at T-Mobile. “If the customer goes to the Web site the next day, or visits a retail store, we know not to present it again.”

Reliant Energy’s Clayton calls consistent customer service “a crusade without a finish line.” His team continually reviews its customer experience standards, agent communications, training programs and tools to further the company’s goals of delivering great customer care. Toward that end, Reliant—like 74 percent of BBRS survey respondents—is working to implement technology that enables a unified view of the customer by 2014 (see Figure 5, “360-Degree View Is Highly Valued,” at right).

Digital channels—and particularly the addition of social media—make the job of creating a truly unified view of the customer even more difficult, according to Richard Snow, global vice president and research director at Ventana Research. “Customer data sits in so many systems in so many formats that it is almost impossible to bring it all together to create a complete view of the customer,” wrote Snow in a company blog post.4 Advances in master data management (MDM) and analytics will get most companies most of the way there over time, he added.

Having a complete 360-degree view—one that includes data from social media and other digital channels such as mobile and the Web—is a key enabler of providing consistent customer service across all channels.

Summary: The Digital Tipping Point Over the next two years, the business world will clearly move toward increased use of digital channels to deliver customer service. During this time of transition, enterprises face the challenge of meeting customer expectations consistently and enabling customers to move from channel to channel without any degradation or disconnect in their service experience.

Customers expect the same high levels of service no matter which channel they use for service and interaction. At a minimum, companies need to ensure consistent service within each individual channel and work toward cross-channel service consistency.

The stakes are rising, along with increased reliance on digital service channels. To win at the game of balancing cost with value, it is critical to carve out a strategy that unites customer service processes and data as the foundation for consistency.

Figure 5

360-Degree View Is Highly Valued Respondents were asked how critical it was to have a true 360-degree view of the customer when delivering service and also their plans to enable a 360-degree view.

All

Operations/production

Customer service

Sales

Supply chain

Finance

Source: Bloomberg Businessweek Research Services, 2012

Critical Have It Now Will Have It

74%65%

74%

91%65%

72%

79%70%

81%

79%64%

70%

68%64%

81%

51%60%

62%

4 Richard Snow. “Sharpen Your Effectiveness with Customer Analytics.” Ventana Research blog. March 30, 2010. http://ventanaresearch.com/blog/commentblog.aspx?id=1834

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SPONSOR’S STATEMENT

How to Deliver Excellent, Consistent Cross-Channel Customer Service A comprehensive CRM platform provides the foundation for a seamless customer experience across telephone, Web and social media. It also can cost less than a host of point solutions.

The proliferation of customer support channels and the consequent rise of inconsistent service across the telephone, Web and social media spectrum confuses customers and their suppliers, in addition to raising costs. To better un-derstand how organizations can improve the consistency and efficiency of the myriad support channels, Bloomberg Businessweek Research Services interviewed SAP’s Gert Tackaert, vice president of solution management. He is responsible for SAP’s solution portfolio for customer service-related applications. Tackaert is an engineer who has a Masters degree in Industrial Management and more than a decade of experience advising midsize and large organi-zations about how to optimize their customer-facing operations, such as call centers and field service operations. An edited Q&A of that discussion follows.

How much of the inconsistency in multi-channel customer service is due to the wide variety of data sources involved? Is there a solution to the source variability issue that plagues so many customer service managers? From a customer’s perspective, they should get the same answer no matter which channel they use. And each channel should be aware of what has already occurred.

Inconsistencies have arisen because many companies have opted for a short-term answer for each channel, using a point solution. In addition, they built a different team for each channel and each team created its own data silo.

The right approach is to deploy a comprehensive customer service platform that manages the data, processes and people. SAP CRM can serve as both the platform and the source of data and processes for all customer service channels. This platform provides an easy way to add another channel as technology evolves. In addition, a robust CRM platform avoids the skyrocketing costs of supporting all those point solutions.

The survey data indicates that demand for telephone-based customer service may be slowing or may even decline in the future. Given the spiraling costs to support so many channels, should companies begin to think about diverting telephone support funds and other resources to digital channels? Or is it premature to consider this? It is too early to write off telephone service. Depending on the type of customer and issue, telephone support may be a preference. The best way to manage the costs is to deploy what we call the virtual contact center. Telephone support agents do not need to be collocated physically today—they can be dispersed in different regions and work at home. Companies can manage the supply of agent availability by time zone.

And don’t forget that most customers are using multiple channels, depending on the product, the issue and the age of the customer. Many still consider the phone a “sure way” to get help when other channels fail.

Many of the cost mitigation techniques you describe require support from the IT department. What if IT is not providing support to the customer service department? If the IT department doesn’t think that customer service is a priority, then the company has a serious misalignment problem or, perhaps, competing priorities from other lines of business. This misalignment is not an issue that the IT and customer service departments typically can resolve on their own. They need the C-level to decide what is more important. Ultimately, IT priorities are a strategy question.

Gert Tackaert, Vice President of Solution Management, SAP

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However, part of this discussion with the C-level and the IT department should include customer service demonstrating the value that department brings to the organization. The importance of great customer service has direct top- and bottom-line impacts. Customer service needs to have a conversation with IT, so the technology department understands how these tools support the overall strategy of the enterprise.

Senior management always questions the cost and return on customer service expenditures. What is the latest thinking on how to measure and manage both parts of the ROI formula? The reason they look at it that way is because customer service traditionally has just been viewed as a cost. And when you only look at a function as a cost, all you can do with a cost center is minimize it. So it is common to look at cost per call or time per call. In this context, management never looks at the other side, the potential revenue from customer contact—such as direct purchases or upselling due to that interaction. Many surveys have found that deriving revenue from customer service operations is at least moderately important at most companies.

In addition to the direct revenue gains from customer service channels, executives need to remember the indirect revenue derived from great customer service. Customers are willing to pay more for good service—they’re not only more eager to buy, but they’ll pay a premium for great service.

We know there is a direct correlation between customer satisfaction and customer loyalty. And we know that loyal customers will generate incremental increases in revenue. In fact, those incremental revenues are often the most profitable revenues, because the cost of selling to an existing customer is so much lower than the cost of selling to a new customer. Especially in commodity markets, companies with great customer service can achieve higher margins from providing excellent customer service.

Furthermore, the converse also is true: If you don’t provide good customer service, you could lose revenue. If a company does not deliver good service, or doesn’t provide customer service at all, it will lose customers. That’s the way senior management should look at the cost and return of customer service.

So what other customer service cost containment tactics do you recommend? Two tactics that companies are deploying to great effect are mobile apps and scheduling optimization.

Equipping field service staff with mobile devices and apps that link to enterprise systems is a big cost saver. Technicians with mobile devices and the right apps have access to information and the ability to capture data accurately. They are able to fix more problems faster and avoid a lot of manual labor involving paperwork.

A closely related cost-saving tool is scheduling automation. This delivers more than optimizing the field resources and avoiding overtime costs. The right scheduling automation makes sure the right technicians with the right replacement parts are assigned to the right job, which vastly reduces the number of the most costly field service calls—those where the technicians need to come back a second time.

Scheduling optimization software is not just vital for optimizing field service costs. It is also invaluable for scheduling contact center agents. Based on demand forecasts, it can optimize contact staff based on seasonal needs.

What technologies do you see on the horizon that will help improve customer service and have a strong ROI? Two upcoming solutions hold great promise. One is SAP’s new HANA in-memory database technology. It will enable organizations to process huge volumes of sensor data from operating equipment remotely. This will empower customer service departments to proactively schedule maintenance before the assets fail. This just-in-time maintenance will avoid unplanned downtime.

Another technology soon to be available is 3D visualization of unstructured data about assets. CAD/CAM designs of in-field equipment will be available to technicians and are expected to provide a huge productivity boost during repairs.

For More InformationSAP’s Web site offers a wealth of information about how to provide an efficient and effective customer service platform. Please visit http://www.sap.com/lines-of-business/customer-service/index.epx

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