NASSCOM, April, 2007

Today, with more choices than ever, customers are demanding experiences that are meaningful to them. When a customer’s service is interrupted, they expect the service provider to not only know that they have been affected and to identify the cause of the impact, but also to resolve the problem as quickly as possible, while keeping them appraised of the situation. Service providers also recognize the need to move towards customer centricity. Adopting a customer-centric approach allows service providers to differentiate themselves from their competitors, reduce churn and improve profitability.

However, providing a unified service across different customer segments definitely has a retarding impact on overall profitability of the company. Most companies have approximately 20% highly profitable, high-value customers and another 20% unprofitable, low-value customers. It is easy to work out strategies for the top and bottom customer segments. It is the middle 60% that organizations struggle with – customers who cannot be ignored, but who are hard to serve in a profitable manner. Organizations face three significant challenges in handing the bulk of these customers:

• How to allow these customers to contact the organization in the way they want (phone, e-mail, chat, sms)

• How to manage this interaction profitably, and

• How to optimally balance automation and personalization

Change the way you use technology

Innovative businesses have successful ways of tackling this large middle segment. With the use of new service capabilities, they turn this segment into a huge source of growth and profits for the company. They shift the cost-value curve to create immense competitive advantage.

Organizations are now implementing powerful web collaboration tools to augment phone conversations, tools that allow the customer to almost be face-to-face with the contact center agent. The agent talks on the phone while walking the customer through product features on the customer’s web browser. Technology makes it possible for the customer to stop and take control of the web collaboration process, or enter some data at your end that he is not comfortable sharing with the agent. At the end of the session, the agent sends the customer an online transcript with links to information shared during the discussion. All this is done over the Internet – data and voice – at a fraction of the cost that a fact-to-face meeting would incur.

Let the engagement generate value

Today, the best companies in the world do not view their service interactions as “cost” alone. Instead, they see each interaction as a valuable opportunity to engage with, learn from, and advise a customer – after favorably resolving the customer’s problem. Several leading companies have developed sophisticated applications based on key technologies like case based reasoning that allow their agents to engage in “next best activity” with the customer at the end of the service interaction. “Next best activity” is a method of identifying the appropriate interaction to engage in with a customer after solving issues. It could be an attempt to learn more demographic or psychographic information about a customer or it could be a cross-sell activity that would be recommended by a reasoning system that uses known attributes about the customer. The goal of this process is to view the service interaction as an opportunity to build the brand by delivering on the promise on the promise of assistance and advice.

Introspect on automation

With more and more focus attributed to cost reduction, a number of organizations lose sight of the obvious goal of every business, which is to fulfill customer needs in a profitable manner. A myopic, uni-dimensional focus on cost reduction results in a significant fall in customer satisfaction and revenue. Organizations globally walk a tight rope as far as customer interactions are concerned – profitably and effectively balancing the level of automation and personalization. Self service would have delivered cost benefits such as lower agent costs and speedier customer service over the past years along with certain undesirable negative side effects, like silent customer attrition and agent skill misuse.

The level of automation and personalization is to be carefully analyzed to provide a trade off based on the value of the customer sent to the IVR, cost of an agent’s time versus the value of this call and whether the customer is likely to attrite without proactive interaction.

With customer interactions playing an increasingly important role in the overall brand experience, organizations are looking at ways to transform their contact centers from being cost centers to profit centers and becoming strategic value centers, adding value to the whole enterprise.

Author: Mr. K. Balakrishnan, Managing Director & CEO, Servion Global Solutions Limited.