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white paper | 2009




Seven Ways to Out-Service the Competition
         Exiting the Recession a Leader
Seven Ways to Out-Service the Competition
    Exiting the Recession a Leader
    Executive Overview
    It’s a well known fact to every business leader today: hard times have come again. And,
    unfortunately, the easiest strategies for survival have been exhausted. As a matter of
    fact, 86 percent of Fortune 500 executives admit that the low-hanging fruit of cost-cut-
    ting has already been implemented.1 Yet, within every challenge resides undiscovered
    opportunities. As the White House Chief of Staff Rahm Emanuel recently advised,
    “Never let a serious crisis go to waste. …it’s an opportunity to do things you couldn’t                     “Keep your business
    do before.”2                                                                                                 safe, but keep building
       History supports this thesis. In studying previous recessions, it’s clear that the com-                   for the future.”5
    panies that increase their marketing and customer interaction investments during tough                      —Jeffrey Immelt,
    times improved profit margins, sales, and market share relative to those that do                  not.3,4   CEO of GE

    The short-term objective of getting through this recession shouldn’t dilute the long-term
    goal of positioning your company to exit the recession a leader. To do so, you need to
    first recognize the unique opportunities that today’s downturn provides and second,
    capitalize on them while they exist.
       This white paper highlights seven such opportunities, each of which—if acted upon—
    allows a company to out-service its competition and secure the business benefits that
    are desperately needed now and in the years to come.




            The Seven Ways to Out-Service: Climbing Up from the Recession
             Today’s recession provides seven unique opportunities for a company to position itself
             as a service leader as we exit the recession and transition into recovery.


              1. Accelerate customer loyalty and company profits
              2. Enhance the customer experience and save money
              3. Close the gaps
              4. Leverage empathetic and emotional experiences
              5. Improve the multichannel experience
              6. Leverage a centralized knowledge base
              7. Use customer insight to drive agility




©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                           2
Where do you start?
     In challenging economic conditions, your company should be
                                                                            Figure 2: Importance of Customer Experience in a Recession
     asking two questions when thinking about each strategic invest-
                                                                            Many companies report that a continued economic downturn will
     ment. First, can the initiative produce a return within 60 to 120      cause customer experience to be more important.
     days? Second, how will a new initiative impact customers’ expe-
     riences with your company? “These questions are intertwined,”
     notes Marcus Bragg, Vice President and General Manager of the             Customer experience
                                                                                will be significantly                                      37%
     Americas for RightNow. “They reflect a recognition of a compa-                 more important
     ny’s need to deliver a current payback, on the one hand; and, to          Customer experience
                                                                                      will become                           26%
     ensure that the customer is nurtured on the other.”                            more important

        A majority of companies agree. 63 percent of firms report                        No change                            28%
     that the customer experience will be more important in the
                                                                              Customer experience                                   63% of       !
     presence of a continued economic downturn (see Figure 2). For           will become somewhat            8%                     firms think
                                                                                      less important                                customer
     companies wishing to act on that belief, today’s circumstances                                                                 experience will
                                                                               Customer experience                                  be even more
     provide seven opportunities to consider. These opportunities                 will be signicantly   2%                          important
                                                                                      less important
     represent a chance for your company to become stronger and
     more viable when the economic turnaround arrives.
                                                                                                                      Source: Forrester Research6




     Opportunity #1: Accelerate customer loyalty and company profits
     With fewer customers—and each spending less—in a recession, it is critical for your business
     to retain every customer and maximize their potential. Surprisingly, less than half (46 percent)
     of senior marketers have good insight into customer retention rates, lifetime value, and prof-
     itability. Not surprisingly, however, most (76 percent) believe that the full revenue potential of
     their current customers is unrealized.7
        Since it is five times more expensive to gain a new customer than keep an existing one,8
                                                                                                                  ”What is it about trust that
     retention is key. Achieving that goal is driven by the quality of the customer experience which
                                                                                                                   makes customers feel
     correlates with retention, future purchase rate and positive word-of-mouth.9
                                                                                                                   valued? In part, it commu-
                                                                                                                   nicates one-half of a part-
                                                                                                                   nership reaching out to the
        Getting It Done                                                                                            other half. And, customers
                                                                                                                   reward partnerships. The
         Map the customer journey. Identify the sequence of key customer-company interactions that                 smart money is on cus-
         illustrate the path from “need/find” to “buy/get” to “use/support” to “loyalty/profits.” While            tomer retention—turning
         each of these critical touchpoints either serve to build the brand (or to damage the relation-            transient samplers into
         ship), all are not created equal. In times of limited resources, focus on (a) those interactions          long-term partners.”10
         that are most influential, as determined by customer feedback; or (b) those products or ser-
                                                                                                                  —Chip Bell, founder of
         vices that are strategically most important for your company.                                            The Chip Bell Group
         Treat customers differently. Customers vary in their actual value and in their potential value.
         Knowing both types of value allows a company to invest more effectively. Concentrate on
         delivering superior experiences that either enhance customer loyalty or tap unrealized value.
         Doing so requires insights into each customer’s needs—the “why” behind the “buy.”11

         Service is the new sales. Customer service is especially important now, since the service
         interaction is one of the few times that companies have to personally interact with their cus-
         tomers.12 As indirect sales through channels become the norm, the first time that a company
         talks with its customers may be through service. This interaction shapes the perception of the
         brand which can influence future purchase consideration. Service experiences allow a com-
         pany to further understand a customer’s needs (e.g., the way in which a product is being
         used) and to leverage that knowledge to more effectively promote additional items.




©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                                      3
Opportunity #2: Enhance the customer experience and save money
    An economic crisis creates the urgent need to save money. That urgency sometimes hits expens-
    es that support the customer experience. If the economic downturn continues, only 20 percent of
    customer experience decision makers expect to continue the spending necessary to meet the
    desired customer experience levels, and 42 percent expect cuts
    at the same or at a higher rate than everything else.13 “During                                                  Getting It Done
    tough times, it takes courage to stay focused on the customer,”
                                                                        Understand the cost. The expense of mishandled cus-
    explains Bragg, “but that’s precisely what is required to thrive in
                                                                        tomer interactions has a financial impact on customer
    the upturn.”
                                                                        satisfaction and the willingness of customers to recom-
       Staying focused on the customer allows a company to save
                                                                        mend the brand to a friend or colleague.
    money in three ways:
                                                                        Always consider the customer’s perspective. Ask “Will
       1. By reducing the number of unsatisfactory customer experi-
                                                                        this new action enhance or reduce the strength of our
          ences, companies can reduce the costs associated with
                                                                        customers’ relationships with our company?” Increases
          resolving them.
                                                                        in long-term customer equity from superior experiences
       2. When service suffers, the reputation of the brand is dimin-   are more valuable than any short-term savings that
          ished through negative word-of-mouth, making it harder        damage customer relationships.14
          and more expensive to attract new customers.
                                                                        Demonstrate early wins. Show management that the
       3. By delivering excellent customer self-service (e.g., through  cost savings from superior experiences isn’t “theory.”
          customer-to-customer online support forums and dynamic        Choose and concentrate on a customer touchpoint that
          website FAQs), the company is able to deflect costs.          is (a) especially influential in impacting the customer
    “Self-service solutions can deliver a 30- to 50-percent reduction   relationship and (b) is one where small investments in
    in email volume and a 10- to 30-percent reduction in telephone      automation may have large benefits.
    calls, all while increasing customer satisfaction,” notes Bragg.




    Opportunity #3: Close the gaps
    Gaps arise during turbulent times, both internal and external
    to a company. Each gap represents an opportunity for a com-            Figure 3: Close the Gaps
    pany to improve its business performance (Figure 3). The               For companies seeking to exit the recession in a leadership position,
                                                                           a recession provides opportunities to close gaps accelerating busi-
    three key gaps focus on (1) funding, (2) best practices, and (3)
                                                                           ness performance.
    share-of-customer.
                                                                              Recognized Importance                   Funding of Customer
    1. Funding. There is a gap between (a) the recognition by com-            of Customer Service                     Service Initiatives
                                                                              for Business Growth
    panies of the importance of customer experience in driving
    growth and (b) the extent to which those areas are funded                 Existing Efforts to                      Best Practices in
                                                                                                                       Delivering Superior
    (Figure 4). By increasing investments in the areas that drive
    growth, a company is able to realize business benefits.
                                                                              Deliver Superior
                                                                              Customer Experiences      GAP            Customer Experiences

                                                                              Current Share-                           Potential Share-
                                                                              of-Customer                              of-Customer
    2. Superior Service. A gap may exist between a company’s
    current efforts to deliver superior customer experiences and                                                  Source: Peppers & Rogers Group

    accepted best practices. The size of this customer experience
    gap between leaders and laggards differs by industry, and is
    greatest for Internet service providers (39 percent), credit card providers (37 percent), medical
    insurers (32 percent) and airlines (31 percent). In all companies, a new phenomenon is emerging:
    customers are no longer comparing a company’s customer experience efforts against competitors
    in the same industry, but against all other companies in all industries. Ask yourself these questions:
    • If a customer can easily find the information that she or he needs on the British Airways website,
      why is search so difficult on our website?
    • If eHarmony offers its customers access to a highly effective foundation of answers to common-
      ly asked questions, why is the information on our company’s website limited and out-of-date?




©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                                   4
• If Overstock.com can provide a personal experience to every individual using its contact center,
      why can’t our company?
    Customers are making these comparisons and expecting the best practices from others to be best                                             “If customer experience is a
    practices from you. Unfortunately, only 16 percent of businesses state that their goal for customer                                         differentiation strategy in
    experience is to differentiate themselves from their industry.                                                                              good times, it is doubly so
                                                                                                                                                today. At a time when most
    3. Share-of-Customer. A recession may provide a chance for a company to close the gap between                                               firms will cut back, hunker
    a company’s current and potential share-of-customer by selling a wider range of products and ser-                                           down and reduce staff, it’s a
    vices. Since some competitors will have reduced investments in customer experience, you may                                                 wonderful time for those who
    now have the opportunity to grow your relationship if you deliver superior service. This positive                                           truly understand the potential
    customer experience can help you gain greater share-of-customer, create positive word of mouth,                                             of the customer experience
    and acquire new customers.                                                                                                                  to rise to the occasion.”15
       These influences may ultimately enhance your stock price, as suggested by the pattern of results
                                                                                                                                                —James Barnes, Ph.D., Principal,
    for companies with above average and rising American Customer Satisfaction Index (ACSI) scores.
                                                                                                                                                Barnes Marketing Associates Inc.
    Over the period from 1996-2006, which included both a bull and bear market, these companies
    grew more than twice the level of the Standard and Poor’s 500 (S&P 500) stock index. Even in the
    current economic cycle, retailers with improved ACSI scores experienced less of a share price
    decline than the S&P 500 in 2008.




           Figure 4: Are Companies Investing for Growth?
           When comparing marketing categories that (a) contribute more to growth with (b) those that the company most invests in,
           there is a gap. Note especially the misalignment of importance versus investment for the categories of customer experience
           and for customer service.


                                          Marketing Categories that Contribute to Growth . . .
                                          Advertising and branding                                                                              43
                                              Customer experience                                                          31
                                                  Customer service                                                    29
                                            Loyalty/CRM programs                                                 26
                            Direct sales channels (like eCommerce)                                        21
                                               Promotion and trade                                   17
                                           Traditional-media spend                                   17
                                                Demand generation                                  16
                                                 New-media spend                                  15
                                          Press and public relations                              15
                                                    Market research                8
                                                        I don't know               8
                                              Marketing technology             5
                                                       Sponsorships    1


                                                 . . . Are Not Necessarily Aligned with Investments
                                          Advertising and branding                                                                                   57
                                           Traditional-media spend                                                              34
                                               Promotion and trade                                               26
                                            Loyalty/CRM programs                                            22
                                                  Customer service                                     19
                                                 New-media spend                                      18
                                          Press and public relations                                17
                                              Customer experience                                  16
                                                       Sponsorships                          13
                            Direct sales channels (like eCommerce)                           13
                                                    Market research                         12
                                                Demand generation                      10
                                              Marketing technology         3
                                                        I don't know   1                                                   Source: Forrester Research16




©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                                                                   5
Getting It Done

          Understand the growth drivers. For each business objective, identify the customer-
          focused initiatives that are most likely to contribute to success and pair them with the
          processes and employee skills required to get it done. About 80 percent of businesses
          fail to meet their growth objectives for revenue and profitability, because of inade-
          quate consideration of opportunities and the lack of organizational infrastructure.17             ”If the Securities and Exchange
                                                                                                             Commission had any sense,
          Look broadly for best practices. Adopting customer experience excellence—regard-                   it would require all publically
          less of industry—is a proven way to accelerate closure of a performance gap. It                    traded corporations to,
          requires a mindset of “being humble enough to admit that someone else is better at                 along with their financial
          something and being wise enough to learn how to match and even surpass them at                     data, reveal their level of
          it,” advises APQC (formerly known as the American Productivity and Quality Center).18              customer satisfaction by
                                                                                                             some impartial method.“ 19
          Grow share-of-customer. By concentrating on fulfilling an expanding set of customers’
          needs with excellent experiences, opportunity exists for a company to increase the                 —Claus Fornell, Ph.D., Professor,
          value of its customers. Instead of differentiating products from those of the competi-             University of Michigan; and
                                                                                                             developer of the American
          tion, the goal becomes differentiating customers from one another, collaborating with
                                                                                                             Customer Satisfaction Index
          them, and selling an increasingly large number of products to them over the course
          of their lifetime.11




    Opportunity #4: Leverage empathetic and emotional experiences
    No doubt that the current economic crisis is causing anguish among consumers. The
    American Psychological Association reports that this economy is a significant cause of
    stress for most (80 percent) adults in the US, who recognize its impact on becoming sick
    (86 percent), having a heart attack or stroke (48 percent), or experiencing insomnia (36 per-
    cent).20 Under these conditions, companies have an opportunity to strengthen customer
    loyalty by delivering empathetic experiences that strengthen relationships. Ford, Hyundai,
    and GM are all now promoting programs that ease the burden of a car payment if a job is
    lost; Bank of America waives fees for customers who have lost their jobs; and FedEx Office
    invited job hunters to print their résumés
    free of charge.21,22 As the American poet                                                                            Getting It Done
    Maya Angelou once said, “people will forget
    what you said, people will forget what you             Capture and leverage the customer’s emotion. Use today’s advanced technol-
    did, but people will never forget how you              ogy to detect positive and negative emotions in contact center telephone
                                                           queues and within email text, and route the communication accordingly. For
    made them feel.”
                                                           example, when the contact center is integrated with a CRM system, it’s possi-
       Communicating concern for customers is
                                                           ble to provide high-value customers in a negative state of mind with interac-
    part of a company’s character—an important
                                                           tion treatments designed to quickly address the problem. In addition, the com-
    component for building and maintaining
                                                           panies are able to survey or request referrals from happy customers.
    trust: “a belief that the company has the best
    interest of the customer at heart, and can be          Train and incent for empathetic customer service. Just as it is possible to
    depended upon for respect, openness, toler-            understand customers’ emotional states, it is also possible to do the same for
    ance and honesty.”23 It’s important, because           contact center agents. Those who are empathetic may be rewarded, for
    trustworthiness has the greatest impact on             example; while those who are less so may be identified for training to
    customer loyalty;24 and, in the majority of            enhance their level of competency.26
    cases when a customer decides not to buy,              Convert complaints into satisfying emotional encounters. No company is
    the primary reason is lack of trust.25                 perfect, and few customers expect perfection. They do, however, expect that
                                                           problems will be resolved promptly and professionally, with courtesy and
                                                           compassion. Make it easy for your customers to voice a complaint—and, have
                                                           a complaint management processes in place to address the concerns. If han-
                                                           dled well, a resolved complaint can actually increase a customer’s loyalty.27




©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                                 6
Opportunity #5: Improve the multichannel experience
    It isn’t enough for companies to engender trust with their customers through empathetic encounters.
    Good intentions must be followed with excellent execution. Building trust requires both character and
    competence.28 In today’s multichannel world where customers assess a company’s trustworthiness in
    the store, on the web, over the telephone, through email and by using chat, companies can enhance
    trust by improving the competencies of continuity (i.e., seamlessly bridging conversations across chan-
    nels) and consistency (i.e., receiving equally accurate and com-                                                       Getting It Done
    plete information regardless of channel).
        For example, if a customer sends an inquiry through email,         Test drive your company’s own multichannel customer experience.
    will an agent in the contact center be able to pick up the conver-     Was the interaction pleasant, prompt and productive? Did it
    sation when that individual later calls about the same incident—       develop or diminish the perception of the trustworthiness of your
    or, will the customer need to begin again and repeat the               company? What’s helping (and hurting) the success of the multi-
    description of the problem? Will the customer be routed to             channel experience?
    the same agent who answered the email? Will that agent                 Develop a multichannel strategy. Assess how each channel might
    have access to prior transcripts of chat sessions with the cus-        optimally support your company’s brand promise.
    tomer? Will the information that customer receives be com-
                                                                           Develop a multichannel tactical plan. Design a dashboard of
    plementary to the FAQs that she first read on the company’s
                                                                           performance metrics that will help to establish accountability
    website? When continuity and consistency in a multichannel
                                                                           and drive budgets. Examine existing capabilities within your
    interaction break down, customers become frustrated, their
                                                                           company to identify opportunities for reuse or retooling, then
    relationship with the company is fractured, and service costs
                                                                           look for options to accelerate progress.
    escalate. In contrast, when it works well, the customer’s expe-
    rience is enhanced and the company’s costs are reduced.


    Opportunity #6: Leverage a centralized knowledge base
    In a recession when the resources of a company are limited, each must be used to its fullest. This is
    especially true for customer-facing personnel who have a direct impact on the strength of customer
    relationships.
       When customers contact a company, they expect to interact with an informed person who knows the
    company’s products and procedures. Today products are constantly being introduced and updated, so a                “A foundation of knowledge
    centralized knowledge base becomes essential for delivering support that is accurate and consistent across          is the bedrock upon which
    channels. Customers also expect to see a second type of knowledge displayed in the interaction: namely,             all successful customer
    knowledge of themselves—who they are, what products they own, and a record of their past inquiries.                 experiences are built.”
       Beyond increasing efficiency and effectiveness, a knowledge base further reduces costs by enabling               —Greg Gianforte, CEO
    self-service. When customers can answer their own questions by accessing a web-based knowledge                      and Founder, RightNow
    source, support costs are reduced.


        Getting It Done
         Start simply. Make a core set of answers to FAQs available and searchable. This improves the experi-
         ences of customers and the productivity of agents. Once the knowledge infrastructure is in place, it will
         be easy to add new information gradually.

         Push and pull content. Actively push content from the knowledge base to users to enhance its visi-
         bility, relevance and impact. Use artificial intelligence techniques such as collaborative filtering (i.e.,
         suggesting content based upon the pattern of information consumed by other users) and automatic
         usefulness rankings (i.e., ordering the sequence of answers to a question based upon their stated
         helpfulness to other users). Actively pull content from agents, other internal functional areas and
         from partners to enhance the knowledge base.

         Include the community. Customers increasingly use search, and social networking sites for self-service.
         These tools extend the depth and breadth of the knowledge base and the support experience. The
         dialog that occurs in these communities may be captured and used as the basis of new entries in the
         centralized knowledge base; and, agents may reach out and directly participate in discussions.



©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                                    7
Opportunity #7: Use Customer Insight to Drive Agility
     In turbulent economic times, it is especially important to say on top of the pulse of customers.
     Knowing more about your customers than your competition is a potent advantage that allows you
     to respond quickly to changing conditions. In addition, during a recession the pain of wrong deci-
     sions is exacerbated, placing a higher premium on fact-based, customer-centric knowledge in                  “The capability to support
     business planning.                                                                                            ‘learning relationships’—
        Customer service interactions provide a mechanism to secure that advantage by capturing                    one-to-one dialogs that
     feedback. When customers are already engaged via a service encounter, the opportunity exists to               become smarter with each
     glean insight. Customer feedback also allows a company to more quickly detect when a well-                    interaction—is a powerful
     intentioned change to customer service has gone awry.                                                         strategic advantage.”
                                                                                                                   —Don Peppers, Founding Partner,
                                                                                                                    Peppers & Rogers Group

        Getting It Done

          Don’t delay. Customer feedback is especially rich when it is collected immediately after an inter-
          action, when both the memory and the emotion of the incident is fresh. Doing so typically ele-
          vates response rates significantly. For example, an email containing a survey may be automati-
          cally sent when a support ticket is closed. Beyond assessing satisfaction, the survey can also
          solicit information that aids in understanding the customer’s needs and propensity to engage in
          beneficial behaviors (e.g., word-of-mouth referrals). Survey participation has also been shown to
          positively impact the likelihood of purchases and the responsiveness to promotions.29
          Keep it brief. Ask a small set of core questions that are stable over customers and over time.
          Allow ongoing comparisons; and supplement as needed with items specific to the customer
          segment or a timely business issue. Closed-end (i.e., rating scale) questions are easiest for
          customers to answer, but you should always give the option of providing open-end text com-
          mentary. Integrating all this data into your CRM system also allows your company to better
          customize communications and increase their relevance.
          Tune up the touchpoints. Because resources are limited in a recession and because not all touch-
          points are equally important, it may be beneficial to use customer surveys to gain insight into
          ways in which the customer experience may be improved—for example, the extent to which the
          channel(s) that were employed during a customer support incident were easy to navigate.




      Conclusion
      In today’s economic environment, opportunities exist for astute companies to improve their mar-
      ketplace position when the recovery occurs. Yet, opportunities do not guarantee business benefits—
      it’s the action you take to capitalize on them that propel profits. The opportunities described in this
      white paper simply can’t wait 12 to 24 months while enabling processes are established and tech-           “The world isn’t standing
      nology is installed. Today, more than ever before, it’s wise to start with results, adapt as you go, and    still.To gain competitive
      layer success upon success. It takes an iterative, focused approach that begins with a pilot and grows      advantage right now it’s
      into a program based upon insights along the way, minimizing risk and maximizing reward. “The               time to start out-servicing
      key is to start—to map the customer journey and to select the points of pain which, if ameliorated,         the competition—and,
      will have the quickest and greatest business impact,” notes Bragg.                                          outsaving the budget.”
          “When the recovery arrives, we won’t be returning to normal,” explains Don Peppers, Founding            —Marcus Bragg, Vice President
      Partner, Peppers & Rogers Group. “We’ll be beginning a ‘new normal’—the start of a period in                 and General Manager of
                                                                                                                   the Americas for RightNow
      which customers’ view of companies are forever colored by their experiences during this reces-
      sion.” The trustworthiness exhibited by companies during these times—both in their character
      and in their competence—will be long remembered, and the residual impact will be long lasting.
      By capitalizing upon today’s opportunities to out-service the competition, companies will be wise-
      ly securing both short-term gain and laying the foundation for long-term success. I



©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                                  8
Case Study

       Getting it Done at Motorola

                       Delivering a superior support experience can be challenging—especially when you have 28 contact
                       centers around the globe. Yet, Motorola is getting it done. Consider how the company has capitalized
                       upon the following opportunities.


      Opportunity: Accelerate customer loyalty and company             Opportunity: Improve the multichannel experience.
      profits. A key objective for Motorola has been to improve        When using 22 different and totally disconnected agent
      the customer experience and enhance loyalty. The compa-          desktop systems, Motorola was hindered in its ability to
      ny has succeeded: customer satisfaction is up 15 percent         preserve conversations across channels and to provide a
      year-over-year, as a direct consequence of the “One World,       seamless customer experience. Today, however, the com-
      One Desktop, Any Channel” initiative. Critical to this trans-    pany has implemented a single global platform and a
      formation has been the implementation of a global CRM            standardized set of processes to provide agents with com-
      platform providing integrated eService, Agent Desktop,           plete visibility to a customer’s support interactions.
      IVR, and a common knowledge base.                                Additionally, because the customer support and CRM sys-
         The initiative is guided by Motorola’s vision: “Great         tems are intertwined, a customer doesn’t need to repeat
      Support Experiences Today: Accelerating Innovation               information (e.g., product ownership details) when inter-
      Tomorrow.” For Motorola, “great” is defined by criteria          acting with the contact center, saving expense for the
      including responsiveness, accessibility, effectiveness, and      company and reducing frustration for the customer.
      pleasantness. “Our goal,” explains Dacia Hurter, Senior             “A link between all channels,” explains Hurter, “gives us
      Director of Customer Care at Motorola, “is to ensure that        the ability to bridge together customer support in a global
      customers are ‘always up’—always operating, always live,         on-demand environment, and to provide information that is
      and always successful.” Making the vision real has               always correct, consistent, and seamless across channels.”
      involved a cultural change, a shift in emphasis from the
      device to the customer’s experience with the device. “It is      Opportunity: Use customer insight to drive agility.
      not enough that the mobile device itself works fine—the          Motorola is now efficiently collecting voice of the customer
      phone is now part of an ecosystem of components (for             information through an automated email process that
      example, bluetooth connectivity to a PC), and the cus-           invites the individual to complete a standardized survey fol-
      tomer’s experience is based upon how well the entire             lowing each incident. On a weekly basis, insights are
      ecosystem works,” notes Hurter.                                  shared across the world-wide organization to drive ongo-
                                                                       ing enhancements. For example, using analytics on this
      Opportunity: Enhance the Customer Experience and                 rich customer feedback allows the company to identify
      Save Money. Motorola’s efforts are not only enhancing cus-       consistent trends between products and to address the
      tomers’ experiences, but also delivering significant savings:    common ‘pain points’ in the design of future products.
      about $15 million to $20 million annually, driven by                The insight also enables continuous improvement in the
      improvements in first call resolution (13 percent), average      customer support experience. Issues are able to be priori-
      handle time (32 percent), email deflection (66 percent), tele-   tized based upon an examination of customer dissatisfac-
      phone deflection (29 percent) and cost per contact (25 per-      tion and of failures to achieve first call resolution, which
      cent). “We’ve seen dramatically higher right-channeling          may result in the the addition of new content into the
      and self-service rates,” reports Glenn DuBois, Senior            knowledge base or of a proactive communication to cus-
      Operations Manager at Motorola, “with live agent channel         tomers to help them better understand a product’s fea-
      usage decreasing by 26 percent, for example.”                    tures. Additionally, by examining customer feedback by
         And, there is yet more to come. “We are in the process        agent, Motorola is able to recognize and share best prac-
      of rolling out CTI, which will allow for customer segment-       tices as well as to improve agent training.
      based routing to the most appropriate agents,” explains             “Customer data is shared across the organization,
      DuBois, “as well as on-device help (allowing customers to        including engineering, quality assurance, manufacturing,
      view knowledge base articles on their phone) and syndi-          and sales—all the way up to the CEO,” explains DuBois.
      cating our knowledge base content to the carriers’ websites      “Marketing is using the customer service database to tar-
      (making it easier for customers to access the content).”         get and segment opt-in customers for campaigns, too.”




©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                       9
RightNow
    RightNow (NASDAQ: RNOW) delivers the high-impact technology solutions and services organizations
    need to cost-efficiently deliver a consistently superior customer experience across their frontline ser-
    vice, sales and marketing touch-points. Approximately 1,900 corporations and government agencies
    worldwide depend on RightNow to achieve their strategic objectives and better meet the needs of those
    they serve. RightNow is headquartered in Bozeman, Montana. For more information, please visit
    RightNow.com. For more information, please visit www.rightnow.com.


    Peppers & Rogers Group
    Peppers & Rogers Group is dedicated to helping its clients improve business performance by
    acquiring, retaining, and growing profitable customers. As products become commodities and
    globalization picks up speed, customers have become the scarcest resource in business. They hold
    the keys to higher profit today and stronger enterprise value tomorrow. We help clients achieve
    these goals by building the right relationships with the right customers over the right channels.
        We earn our keep by solving the business problems of our clients. By delivering a superior 1to1
    Strategy, we remove the operational and organizational barriers that stand in the way of profitable
    customer relationships. We show clients where to focus customer-facing resources to improve the
    performance of their marketing, sales and service initiatives. For more information, visit
    www.peppersandrogersgroup.com


    Author
    With over fifteen years of marketing experience and advanced study in cognitive psychology,
    research methodology, and statistics, Thomas Lacki, Ph.D., is privileged to contribute to the cre-
    ation of higher value solutions through best thinking for the clients of Peppers & Rogers Group. In
    the role of Senior Advisor, Peppers & Rogers Group Faculty, he leverages his own expertise in
    understanding individuals behaviorally and analytically to achieve measurable marketing results
    today, and to elevate the practice of one-to-one marketing tomorrow. Lacki has shared his insights
    with conference audiences throughout the world, has published research about CRM, and serves
    on the editorial board of an international marketing journal.




©2009 Peppers & Rogers Group. All rights protected and reserved.                                               10
Endnotes
       1 Couto, V., Divakaran, A., Mani, M. and Lantz, C. (2009) Survival vs. Success: How Companies are Responding to the Recession, and Why It’s Not Enough.
         Retrieved June 1, 2009 from: http://www.booz.com/media/uploads/Survival_vs_Success.pdf
       2 (2009, January 28) A 40-Year Wish List. Retrieved June 1, 2009 from: http://online.wsj.com/article/SB123310466514522309.html
       3 Bartold, J. (2009) Fire Insurance: How to Survive an Economy in Flames. Retrieved June 1, 2009 from: http://www.colloquy.com
       4 (2009) The Opportunity of This Recession. Retrieved June 1, 2009 from:
         http://blog.willowcreativegroup.com/wp-content/uploads/2009/04/willow_article_short.pdf
       5 Prokesch, S. (2008) Crisis Advice from GE’s Immelt: Stay Committed to Growth. Retrieved June 1, 2009 from:
         http://discussionleader.hbsp.com/hbr/hbreditors/2008/10/leading_in_tumultuous_times_ad.html
       6 Temkin, B. (2009, February 20) Obstacles To Customer Experience Success, 2009. Forrester Research, Inc.
       7 (2008, December 8) Full Revenue Potential of Customers Not Being Realized, Report 76 Percent of Marketers. Retrieved June 1, 2009 from:
         http://www.cmocouncil.org/news/pr/2008/120808.asp
       8 Hart, C., Heskett, J. and Sasser, W. (1990) The Profitable Art of Service Recovery. Harvard Business Review
      9 Temkin, B. (2009, February 17) Customer Experience Correlates to Loyalty. Forrester Research, Inc.
      10 Bell, C. (1993) In customers we trust. Executive Excellence, 10(8), 13-14
      11 Peppers, D. and Rogers, M. (2004) Managing Customer Relationships: A Strategic Framework. Hoboken, NJ: John Wiley & Sons, Inc.
      12 (2007) The Boomerang Effect: How Market Dynamics Are Driving Customers Back to the Manufacturer. Retrieved June 1, 2009 from:
         http://www.rightnow.com/resource-wp-the-boomerang-effect.php
      13 Burns, M. (2009, March 17) Customer Experience Budgets Weather the Storm. Forrester Research, Inc.
      14 Peppers, D. and Rogers, M. (2005) Return on Customer: Creating Maximum Value from Your Scarcest Resource. New York: Doubleday
      15 Lavers, P., Todor, J. and Todor, W. (2008, December) The Importance of the Customer Experience in a Down Economy. Retrieved June 1, 2009 from:
         http://www.thewhetstoneedge.com/papers/cexdowneconomy.pdf
      16 Kemp, M. (2008, December 9) Can Marketing Deliver Growth In The Downturn? Forrester Research, Inc.
      17 Liabotis, B. (2007) Three Strategies for Achieving and Sustaining Growth. Ivey Business Journal Online
      18 (2009) Custom Benchmarking. Retrieved June 1, 2009 from: http://www.apqc.org/portal/apqc/site/?path=/services/custombenchmarking/index.html
      19 Fornell, C. (2003) Boost stock performance, nation’s economy. Quality Progress (36)2, 25-31
      20 (2008, October 7) Stress in America. Retrieved June 1, 2009 from: http://apahelpcenter.mediaroom.com/index.php?s=pageC&item=46
      21 (2009, March 31) Lost Your Job? Ford, GM Will Make Car Payments. Retrieved June 1, 2009 from: http://www.kptv.com/money/19060137/detail.html
      22 Feldman, A. (2009, April 16) Wooing the Worried. Retrieved June 1, 2009 from:
         http://www.businessweek.com/print/magazine/content/09_17/b4128024994922.htm
      23 Bondar, L. and Lacki, T. (2009) Connecting with Wireless Customers: The Relationship Opportunity. Retrieved June 1, 2009 from:
         http://loyalty.carlsonmarketing.com
      24 Smith, S. (2009, February 26) Winning Customer Loyalty in an Economic Crisis. Retrieved June 1, 2009 from:
         http://www.customermanagementiq.com/article.cfm?externalID=676
      25 (2009, March 31) Winning True Customer Loyalty and Trust in a Recession: A Conversation with Expert Shaun Smith. Retrieved June 1, 2009 from:
        http://www.customermanagementiq.com/podcenter.cfm?externalID=71
      26 Parish, J. (2002) Relational Intelligence Theory in Marketing. University of Alabama, Doctoral Dissertation
      27 (2009, May 22) Turning Customer Complaints Into Profitable Opportunities Using the Six Sigma Tool Kit. Retrieved June 1, 2009 from:
         http://www.customermanagementiq.com/article.cfm?externalID=850
      28 Covey, S. (2008, June 22) Trust Is a Competency. Retrieved June 1, 2009 from:
         http://www.managementparadise.com/forums/human-resources-management/30967-trust-competency-stephen-m-r-covey.html
      29 Borle, S., Dholakia, U., Singh, S. and Westbrook, R. (2007) The Impact of Survey Participation on Subsequent Customer Behavior: An Empirical
         Investigation.




©2009 Peppers & Rogers Group. All rights protected and reserved.                                                                                           11

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7 Ways To Outservice The Competition Wp

  • 1. white paper | 2009 Seven Ways to Out-Service the Competition Exiting the Recession a Leader
  • 2. Seven Ways to Out-Service the Competition Exiting the Recession a Leader Executive Overview It’s a well known fact to every business leader today: hard times have come again. And, unfortunately, the easiest strategies for survival have been exhausted. As a matter of fact, 86 percent of Fortune 500 executives admit that the low-hanging fruit of cost-cut- ting has already been implemented.1 Yet, within every challenge resides undiscovered opportunities. As the White House Chief of Staff Rahm Emanuel recently advised, “Never let a serious crisis go to waste. …it’s an opportunity to do things you couldn’t “Keep your business do before.”2 safe, but keep building History supports this thesis. In studying previous recessions, it’s clear that the com- for the future.”5 panies that increase their marketing and customer interaction investments during tough —Jeffrey Immelt, times improved profit margins, sales, and market share relative to those that do not.3,4 CEO of GE The short-term objective of getting through this recession shouldn’t dilute the long-term goal of positioning your company to exit the recession a leader. To do so, you need to first recognize the unique opportunities that today’s downturn provides and second, capitalize on them while they exist. This white paper highlights seven such opportunities, each of which—if acted upon— allows a company to out-service its competition and secure the business benefits that are desperately needed now and in the years to come. The Seven Ways to Out-Service: Climbing Up from the Recession Today’s recession provides seven unique opportunities for a company to position itself as a service leader as we exit the recession and transition into recovery. 1. Accelerate customer loyalty and company profits 2. Enhance the customer experience and save money 3. Close the gaps 4. Leverage empathetic and emotional experiences 5. Improve the multichannel experience 6. Leverage a centralized knowledge base 7. Use customer insight to drive agility ©2009 Peppers & Rogers Group. All rights protected and reserved. 2
  • 3. Where do you start? In challenging economic conditions, your company should be Figure 2: Importance of Customer Experience in a Recession asking two questions when thinking about each strategic invest- Many companies report that a continued economic downturn will ment. First, can the initiative produce a return within 60 to 120 cause customer experience to be more important. days? Second, how will a new initiative impact customers’ expe- riences with your company? “These questions are intertwined,” notes Marcus Bragg, Vice President and General Manager of the Customer experience will be significantly 37% Americas for RightNow. “They reflect a recognition of a compa- more important ny’s need to deliver a current payback, on the one hand; and, to Customer experience will become 26% ensure that the customer is nurtured on the other.” more important A majority of companies agree. 63 percent of firms report No change 28% that the customer experience will be more important in the Customer experience 63% of ! presence of a continued economic downturn (see Figure 2). For will become somewhat 8% firms think less important customer companies wishing to act on that belief, today’s circumstances experience will Customer experience be even more provide seven opportunities to consider. These opportunities will be signicantly 2% important less important represent a chance for your company to become stronger and more viable when the economic turnaround arrives. Source: Forrester Research6 Opportunity #1: Accelerate customer loyalty and company profits With fewer customers—and each spending less—in a recession, it is critical for your business to retain every customer and maximize their potential. Surprisingly, less than half (46 percent) of senior marketers have good insight into customer retention rates, lifetime value, and prof- itability. Not surprisingly, however, most (76 percent) believe that the full revenue potential of their current customers is unrealized.7 Since it is five times more expensive to gain a new customer than keep an existing one,8 ”What is it about trust that retention is key. Achieving that goal is driven by the quality of the customer experience which makes customers feel correlates with retention, future purchase rate and positive word-of-mouth.9 valued? In part, it commu- nicates one-half of a part- nership reaching out to the Getting It Done other half. And, customers reward partnerships. The Map the customer journey. Identify the sequence of key customer-company interactions that smart money is on cus- illustrate the path from “need/find” to “buy/get” to “use/support” to “loyalty/profits.” While tomer retention—turning each of these critical touchpoints either serve to build the brand (or to damage the relation- transient samplers into ship), all are not created equal. In times of limited resources, focus on (a) those interactions long-term partners.”10 that are most influential, as determined by customer feedback; or (b) those products or ser- —Chip Bell, founder of vices that are strategically most important for your company. The Chip Bell Group Treat customers differently. Customers vary in their actual value and in their potential value. Knowing both types of value allows a company to invest more effectively. Concentrate on delivering superior experiences that either enhance customer loyalty or tap unrealized value. Doing so requires insights into each customer’s needs—the “why” behind the “buy.”11 Service is the new sales. Customer service is especially important now, since the service interaction is one of the few times that companies have to personally interact with their cus- tomers.12 As indirect sales through channels become the norm, the first time that a company talks with its customers may be through service. This interaction shapes the perception of the brand which can influence future purchase consideration. Service experiences allow a com- pany to further understand a customer’s needs (e.g., the way in which a product is being used) and to leverage that knowledge to more effectively promote additional items. ©2009 Peppers & Rogers Group. All rights protected and reserved. 3
  • 4. Opportunity #2: Enhance the customer experience and save money An economic crisis creates the urgent need to save money. That urgency sometimes hits expens- es that support the customer experience. If the economic downturn continues, only 20 percent of customer experience decision makers expect to continue the spending necessary to meet the desired customer experience levels, and 42 percent expect cuts at the same or at a higher rate than everything else.13 “During Getting It Done tough times, it takes courage to stay focused on the customer,” Understand the cost. The expense of mishandled cus- explains Bragg, “but that’s precisely what is required to thrive in tomer interactions has a financial impact on customer the upturn.” satisfaction and the willingness of customers to recom- Staying focused on the customer allows a company to save mend the brand to a friend or colleague. money in three ways: Always consider the customer’s perspective. Ask “Will 1. By reducing the number of unsatisfactory customer experi- this new action enhance or reduce the strength of our ences, companies can reduce the costs associated with customers’ relationships with our company?” Increases resolving them. in long-term customer equity from superior experiences 2. When service suffers, the reputation of the brand is dimin- are more valuable than any short-term savings that ished through negative word-of-mouth, making it harder damage customer relationships.14 and more expensive to attract new customers. Demonstrate early wins. Show management that the 3. By delivering excellent customer self-service (e.g., through cost savings from superior experiences isn’t “theory.” customer-to-customer online support forums and dynamic Choose and concentrate on a customer touchpoint that website FAQs), the company is able to deflect costs. is (a) especially influential in impacting the customer “Self-service solutions can deliver a 30- to 50-percent reduction relationship and (b) is one where small investments in in email volume and a 10- to 30-percent reduction in telephone automation may have large benefits. calls, all while increasing customer satisfaction,” notes Bragg. Opportunity #3: Close the gaps Gaps arise during turbulent times, both internal and external to a company. Each gap represents an opportunity for a com- Figure 3: Close the Gaps pany to improve its business performance (Figure 3). The For companies seeking to exit the recession in a leadership position, a recession provides opportunities to close gaps accelerating busi- three key gaps focus on (1) funding, (2) best practices, and (3) ness performance. share-of-customer. Recognized Importance Funding of Customer 1. Funding. There is a gap between (a) the recognition by com- of Customer Service Service Initiatives for Business Growth panies of the importance of customer experience in driving growth and (b) the extent to which those areas are funded Existing Efforts to Best Practices in Delivering Superior (Figure 4). By increasing investments in the areas that drive growth, a company is able to realize business benefits. Deliver Superior Customer Experiences GAP Customer Experiences Current Share- Potential Share- of-Customer of-Customer 2. Superior Service. A gap may exist between a company’s current efforts to deliver superior customer experiences and Source: Peppers & Rogers Group accepted best practices. The size of this customer experience gap between leaders and laggards differs by industry, and is greatest for Internet service providers (39 percent), credit card providers (37 percent), medical insurers (32 percent) and airlines (31 percent). In all companies, a new phenomenon is emerging: customers are no longer comparing a company’s customer experience efforts against competitors in the same industry, but against all other companies in all industries. Ask yourself these questions: • If a customer can easily find the information that she or he needs on the British Airways website, why is search so difficult on our website? • If eHarmony offers its customers access to a highly effective foundation of answers to common- ly asked questions, why is the information on our company’s website limited and out-of-date? ©2009 Peppers & Rogers Group. All rights protected and reserved. 4
  • 5. • If Overstock.com can provide a personal experience to every individual using its contact center, why can’t our company? Customers are making these comparisons and expecting the best practices from others to be best “If customer experience is a practices from you. Unfortunately, only 16 percent of businesses state that their goal for customer differentiation strategy in experience is to differentiate themselves from their industry. good times, it is doubly so today. At a time when most 3. Share-of-Customer. A recession may provide a chance for a company to close the gap between firms will cut back, hunker a company’s current and potential share-of-customer by selling a wider range of products and ser- down and reduce staff, it’s a vices. Since some competitors will have reduced investments in customer experience, you may wonderful time for those who now have the opportunity to grow your relationship if you deliver superior service. This positive truly understand the potential customer experience can help you gain greater share-of-customer, create positive word of mouth, of the customer experience and acquire new customers. to rise to the occasion.”15 These influences may ultimately enhance your stock price, as suggested by the pattern of results —James Barnes, Ph.D., Principal, for companies with above average and rising American Customer Satisfaction Index (ACSI) scores. Barnes Marketing Associates Inc. Over the period from 1996-2006, which included both a bull and bear market, these companies grew more than twice the level of the Standard and Poor’s 500 (S&P 500) stock index. Even in the current economic cycle, retailers with improved ACSI scores experienced less of a share price decline than the S&P 500 in 2008. Figure 4: Are Companies Investing for Growth? When comparing marketing categories that (a) contribute more to growth with (b) those that the company most invests in, there is a gap. Note especially the misalignment of importance versus investment for the categories of customer experience and for customer service. Marketing Categories that Contribute to Growth . . . Advertising and branding 43 Customer experience 31 Customer service 29 Loyalty/CRM programs 26 Direct sales channels (like eCommerce) 21 Promotion and trade 17 Traditional-media spend 17 Demand generation 16 New-media spend 15 Press and public relations 15 Market research 8 I don't know 8 Marketing technology 5 Sponsorships 1 . . . Are Not Necessarily Aligned with Investments Advertising and branding 57 Traditional-media spend 34 Promotion and trade 26 Loyalty/CRM programs 22 Customer service 19 New-media spend 18 Press and public relations 17 Customer experience 16 Sponsorships 13 Direct sales channels (like eCommerce) 13 Market research 12 Demand generation 10 Marketing technology 3 I don't know 1 Source: Forrester Research16 ©2009 Peppers & Rogers Group. All rights protected and reserved. 5
  • 6. Getting It Done Understand the growth drivers. For each business objective, identify the customer- focused initiatives that are most likely to contribute to success and pair them with the processes and employee skills required to get it done. About 80 percent of businesses fail to meet their growth objectives for revenue and profitability, because of inade- quate consideration of opportunities and the lack of organizational infrastructure.17 ”If the Securities and Exchange Commission had any sense, Look broadly for best practices. Adopting customer experience excellence—regard- it would require all publically less of industry—is a proven way to accelerate closure of a performance gap. It traded corporations to, requires a mindset of “being humble enough to admit that someone else is better at along with their financial something and being wise enough to learn how to match and even surpass them at data, reveal their level of it,” advises APQC (formerly known as the American Productivity and Quality Center).18 customer satisfaction by some impartial method.“ 19 Grow share-of-customer. By concentrating on fulfilling an expanding set of customers’ needs with excellent experiences, opportunity exists for a company to increase the —Claus Fornell, Ph.D., Professor, value of its customers. Instead of differentiating products from those of the competi- University of Michigan; and developer of the American tion, the goal becomes differentiating customers from one another, collaborating with Customer Satisfaction Index them, and selling an increasingly large number of products to them over the course of their lifetime.11 Opportunity #4: Leverage empathetic and emotional experiences No doubt that the current economic crisis is causing anguish among consumers. The American Psychological Association reports that this economy is a significant cause of stress for most (80 percent) adults in the US, who recognize its impact on becoming sick (86 percent), having a heart attack or stroke (48 percent), or experiencing insomnia (36 per- cent).20 Under these conditions, companies have an opportunity to strengthen customer loyalty by delivering empathetic experiences that strengthen relationships. Ford, Hyundai, and GM are all now promoting programs that ease the burden of a car payment if a job is lost; Bank of America waives fees for customers who have lost their jobs; and FedEx Office invited job hunters to print their résumés free of charge.21,22 As the American poet Getting It Done Maya Angelou once said, “people will forget what you said, people will forget what you Capture and leverage the customer’s emotion. Use today’s advanced technol- did, but people will never forget how you ogy to detect positive and negative emotions in contact center telephone queues and within email text, and route the communication accordingly. For made them feel.” example, when the contact center is integrated with a CRM system, it’s possi- Communicating concern for customers is ble to provide high-value customers in a negative state of mind with interac- part of a company’s character—an important tion treatments designed to quickly address the problem. In addition, the com- component for building and maintaining panies are able to survey or request referrals from happy customers. trust: “a belief that the company has the best interest of the customer at heart, and can be Train and incent for empathetic customer service. Just as it is possible to depended upon for respect, openness, toler- understand customers’ emotional states, it is also possible to do the same for ance and honesty.”23 It’s important, because contact center agents. Those who are empathetic may be rewarded, for trustworthiness has the greatest impact on example; while those who are less so may be identified for training to customer loyalty;24 and, in the majority of enhance their level of competency.26 cases when a customer decides not to buy, Convert complaints into satisfying emotional encounters. No company is the primary reason is lack of trust.25 perfect, and few customers expect perfection. They do, however, expect that problems will be resolved promptly and professionally, with courtesy and compassion. Make it easy for your customers to voice a complaint—and, have a complaint management processes in place to address the concerns. If han- dled well, a resolved complaint can actually increase a customer’s loyalty.27 ©2009 Peppers & Rogers Group. All rights protected and reserved. 6
  • 7. Opportunity #5: Improve the multichannel experience It isn’t enough for companies to engender trust with their customers through empathetic encounters. Good intentions must be followed with excellent execution. Building trust requires both character and competence.28 In today’s multichannel world where customers assess a company’s trustworthiness in the store, on the web, over the telephone, through email and by using chat, companies can enhance trust by improving the competencies of continuity (i.e., seamlessly bridging conversations across chan- nels) and consistency (i.e., receiving equally accurate and com- Getting It Done plete information regardless of channel). For example, if a customer sends an inquiry through email, Test drive your company’s own multichannel customer experience. will an agent in the contact center be able to pick up the conver- Was the interaction pleasant, prompt and productive? Did it sation when that individual later calls about the same incident— develop or diminish the perception of the trustworthiness of your or, will the customer need to begin again and repeat the company? What’s helping (and hurting) the success of the multi- description of the problem? Will the customer be routed to channel experience? the same agent who answered the email? Will that agent Develop a multichannel strategy. Assess how each channel might have access to prior transcripts of chat sessions with the cus- optimally support your company’s brand promise. tomer? Will the information that customer receives be com- Develop a multichannel tactical plan. Design a dashboard of plementary to the FAQs that she first read on the company’s performance metrics that will help to establish accountability website? When continuity and consistency in a multichannel and drive budgets. Examine existing capabilities within your interaction break down, customers become frustrated, their company to identify opportunities for reuse or retooling, then relationship with the company is fractured, and service costs look for options to accelerate progress. escalate. In contrast, when it works well, the customer’s expe- rience is enhanced and the company’s costs are reduced. Opportunity #6: Leverage a centralized knowledge base In a recession when the resources of a company are limited, each must be used to its fullest. This is especially true for customer-facing personnel who have a direct impact on the strength of customer relationships. When customers contact a company, they expect to interact with an informed person who knows the company’s products and procedures. Today products are constantly being introduced and updated, so a “A foundation of knowledge centralized knowledge base becomes essential for delivering support that is accurate and consistent across is the bedrock upon which channels. Customers also expect to see a second type of knowledge displayed in the interaction: namely, all successful customer knowledge of themselves—who they are, what products they own, and a record of their past inquiries. experiences are built.” Beyond increasing efficiency and effectiveness, a knowledge base further reduces costs by enabling —Greg Gianforte, CEO self-service. When customers can answer their own questions by accessing a web-based knowledge and Founder, RightNow source, support costs are reduced. Getting It Done Start simply. Make a core set of answers to FAQs available and searchable. This improves the experi- ences of customers and the productivity of agents. Once the knowledge infrastructure is in place, it will be easy to add new information gradually. Push and pull content. Actively push content from the knowledge base to users to enhance its visi- bility, relevance and impact. Use artificial intelligence techniques such as collaborative filtering (i.e., suggesting content based upon the pattern of information consumed by other users) and automatic usefulness rankings (i.e., ordering the sequence of answers to a question based upon their stated helpfulness to other users). Actively pull content from agents, other internal functional areas and from partners to enhance the knowledge base. Include the community. Customers increasingly use search, and social networking sites for self-service. These tools extend the depth and breadth of the knowledge base and the support experience. The dialog that occurs in these communities may be captured and used as the basis of new entries in the centralized knowledge base; and, agents may reach out and directly participate in discussions. ©2009 Peppers & Rogers Group. All rights protected and reserved. 7
  • 8. Opportunity #7: Use Customer Insight to Drive Agility In turbulent economic times, it is especially important to say on top of the pulse of customers. Knowing more about your customers than your competition is a potent advantage that allows you to respond quickly to changing conditions. In addition, during a recession the pain of wrong deci- sions is exacerbated, placing a higher premium on fact-based, customer-centric knowledge in “The capability to support business planning. ‘learning relationships’— Customer service interactions provide a mechanism to secure that advantage by capturing one-to-one dialogs that feedback. When customers are already engaged via a service encounter, the opportunity exists to become smarter with each glean insight. Customer feedback also allows a company to more quickly detect when a well- interaction—is a powerful intentioned change to customer service has gone awry. strategic advantage.” —Don Peppers, Founding Partner, Peppers & Rogers Group Getting It Done Don’t delay. Customer feedback is especially rich when it is collected immediately after an inter- action, when both the memory and the emotion of the incident is fresh. Doing so typically ele- vates response rates significantly. For example, an email containing a survey may be automati- cally sent when a support ticket is closed. Beyond assessing satisfaction, the survey can also solicit information that aids in understanding the customer’s needs and propensity to engage in beneficial behaviors (e.g., word-of-mouth referrals). Survey participation has also been shown to positively impact the likelihood of purchases and the responsiveness to promotions.29 Keep it brief. Ask a small set of core questions that are stable over customers and over time. Allow ongoing comparisons; and supplement as needed with items specific to the customer segment or a timely business issue. Closed-end (i.e., rating scale) questions are easiest for customers to answer, but you should always give the option of providing open-end text com- mentary. Integrating all this data into your CRM system also allows your company to better customize communications and increase their relevance. Tune up the touchpoints. Because resources are limited in a recession and because not all touch- points are equally important, it may be beneficial to use customer surveys to gain insight into ways in which the customer experience may be improved—for example, the extent to which the channel(s) that were employed during a customer support incident were easy to navigate. Conclusion In today’s economic environment, opportunities exist for astute companies to improve their mar- ketplace position when the recovery occurs. Yet, opportunities do not guarantee business benefits— it’s the action you take to capitalize on them that propel profits. The opportunities described in this white paper simply can’t wait 12 to 24 months while enabling processes are established and tech- “The world isn’t standing nology is installed. Today, more than ever before, it’s wise to start with results, adapt as you go, and still.To gain competitive layer success upon success. It takes an iterative, focused approach that begins with a pilot and grows advantage right now it’s into a program based upon insights along the way, minimizing risk and maximizing reward. “The time to start out-servicing key is to start—to map the customer journey and to select the points of pain which, if ameliorated, the competition—and, will have the quickest and greatest business impact,” notes Bragg. outsaving the budget.” “When the recovery arrives, we won’t be returning to normal,” explains Don Peppers, Founding —Marcus Bragg, Vice President Partner, Peppers & Rogers Group. “We’ll be beginning a ‘new normal’—the start of a period in and General Manager of the Americas for RightNow which customers’ view of companies are forever colored by their experiences during this reces- sion.” The trustworthiness exhibited by companies during these times—both in their character and in their competence—will be long remembered, and the residual impact will be long lasting. By capitalizing upon today’s opportunities to out-service the competition, companies will be wise- ly securing both short-term gain and laying the foundation for long-term success. I ©2009 Peppers & Rogers Group. All rights protected and reserved. 8
  • 9. Case Study Getting it Done at Motorola Delivering a superior support experience can be challenging—especially when you have 28 contact centers around the globe. Yet, Motorola is getting it done. Consider how the company has capitalized upon the following opportunities. Opportunity: Accelerate customer loyalty and company Opportunity: Improve the multichannel experience. profits. A key objective for Motorola has been to improve When using 22 different and totally disconnected agent the customer experience and enhance loyalty. The compa- desktop systems, Motorola was hindered in its ability to ny has succeeded: customer satisfaction is up 15 percent preserve conversations across channels and to provide a year-over-year, as a direct consequence of the “One World, seamless customer experience. Today, however, the com- One Desktop, Any Channel” initiative. Critical to this trans- pany has implemented a single global platform and a formation has been the implementation of a global CRM standardized set of processes to provide agents with com- platform providing integrated eService, Agent Desktop, plete visibility to a customer’s support interactions. IVR, and a common knowledge base. Additionally, because the customer support and CRM sys- The initiative is guided by Motorola’s vision: “Great tems are intertwined, a customer doesn’t need to repeat Support Experiences Today: Accelerating Innovation information (e.g., product ownership details) when inter- Tomorrow.” For Motorola, “great” is defined by criteria acting with the contact center, saving expense for the including responsiveness, accessibility, effectiveness, and company and reducing frustration for the customer. pleasantness. “Our goal,” explains Dacia Hurter, Senior “A link between all channels,” explains Hurter, “gives us Director of Customer Care at Motorola, “is to ensure that the ability to bridge together customer support in a global customers are ‘always up’—always operating, always live, on-demand environment, and to provide information that is and always successful.” Making the vision real has always correct, consistent, and seamless across channels.” involved a cultural change, a shift in emphasis from the device to the customer’s experience with the device. “It is Opportunity: Use customer insight to drive agility. not enough that the mobile device itself works fine—the Motorola is now efficiently collecting voice of the customer phone is now part of an ecosystem of components (for information through an automated email process that example, bluetooth connectivity to a PC), and the cus- invites the individual to complete a standardized survey fol- tomer’s experience is based upon how well the entire lowing each incident. On a weekly basis, insights are ecosystem works,” notes Hurter. shared across the world-wide organization to drive ongo- ing enhancements. For example, using analytics on this Opportunity: Enhance the Customer Experience and rich customer feedback allows the company to identify Save Money. Motorola’s efforts are not only enhancing cus- consistent trends between products and to address the tomers’ experiences, but also delivering significant savings: common ‘pain points’ in the design of future products. about $15 million to $20 million annually, driven by The insight also enables continuous improvement in the improvements in first call resolution (13 percent), average customer support experience. Issues are able to be priori- handle time (32 percent), email deflection (66 percent), tele- tized based upon an examination of customer dissatisfac- phone deflection (29 percent) and cost per contact (25 per- tion and of failures to achieve first call resolution, which cent). “We’ve seen dramatically higher right-channeling may result in the the addition of new content into the and self-service rates,” reports Glenn DuBois, Senior knowledge base or of a proactive communication to cus- Operations Manager at Motorola, “with live agent channel tomers to help them better understand a product’s fea- usage decreasing by 26 percent, for example.” tures. Additionally, by examining customer feedback by And, there is yet more to come. “We are in the process agent, Motorola is able to recognize and share best prac- of rolling out CTI, which will allow for customer segment- tices as well as to improve agent training. based routing to the most appropriate agents,” explains “Customer data is shared across the organization, DuBois, “as well as on-device help (allowing customers to including engineering, quality assurance, manufacturing, view knowledge base articles on their phone) and syndi- and sales—all the way up to the CEO,” explains DuBois. cating our knowledge base content to the carriers’ websites “Marketing is using the customer service database to tar- (making it easier for customers to access the content).” get and segment opt-in customers for campaigns, too.” ©2009 Peppers & Rogers Group. All rights protected and reserved. 9
  • 10. RightNow RightNow (NASDAQ: RNOW) delivers the high-impact technology solutions and services organizations need to cost-efficiently deliver a consistently superior customer experience across their frontline ser- vice, sales and marketing touch-points. Approximately 1,900 corporations and government agencies worldwide depend on RightNow to achieve their strategic objectives and better meet the needs of those they serve. RightNow is headquartered in Bozeman, Montana. For more information, please visit RightNow.com. For more information, please visit www.rightnow.com. Peppers & Rogers Group Peppers & Rogers Group is dedicated to helping its clients improve business performance by acquiring, retaining, and growing profitable customers. As products become commodities and globalization picks up speed, customers have become the scarcest resource in business. They hold the keys to higher profit today and stronger enterprise value tomorrow. We help clients achieve these goals by building the right relationships with the right customers over the right channels. We earn our keep by solving the business problems of our clients. By delivering a superior 1to1 Strategy, we remove the operational and organizational barriers that stand in the way of profitable customer relationships. We show clients where to focus customer-facing resources to improve the performance of their marketing, sales and service initiatives. For more information, visit www.peppersandrogersgroup.com Author With over fifteen years of marketing experience and advanced study in cognitive psychology, research methodology, and statistics, Thomas Lacki, Ph.D., is privileged to contribute to the cre- ation of higher value solutions through best thinking for the clients of Peppers & Rogers Group. In the role of Senior Advisor, Peppers & Rogers Group Faculty, he leverages his own expertise in understanding individuals behaviorally and analytically to achieve measurable marketing results today, and to elevate the practice of one-to-one marketing tomorrow. Lacki has shared his insights with conference audiences throughout the world, has published research about CRM, and serves on the editorial board of an international marketing journal. ©2009 Peppers & Rogers Group. All rights protected and reserved. 10
  • 11. Endnotes 1 Couto, V., Divakaran, A., Mani, M. and Lantz, C. (2009) Survival vs. Success: How Companies are Responding to the Recession, and Why It’s Not Enough. Retrieved June 1, 2009 from: http://www.booz.com/media/uploads/Survival_vs_Success.pdf 2 (2009, January 28) A 40-Year Wish List. Retrieved June 1, 2009 from: http://online.wsj.com/article/SB123310466514522309.html 3 Bartold, J. (2009) Fire Insurance: How to Survive an Economy in Flames. Retrieved June 1, 2009 from: http://www.colloquy.com 4 (2009) The Opportunity of This Recession. Retrieved June 1, 2009 from: http://blog.willowcreativegroup.com/wp-content/uploads/2009/04/willow_article_short.pdf 5 Prokesch, S. (2008) Crisis Advice from GE’s Immelt: Stay Committed to Growth. Retrieved June 1, 2009 from: http://discussionleader.hbsp.com/hbr/hbreditors/2008/10/leading_in_tumultuous_times_ad.html 6 Temkin, B. (2009, February 20) Obstacles To Customer Experience Success, 2009. Forrester Research, Inc. 7 (2008, December 8) Full Revenue Potential of Customers Not Being Realized, Report 76 Percent of Marketers. Retrieved June 1, 2009 from: http://www.cmocouncil.org/news/pr/2008/120808.asp 8 Hart, C., Heskett, J. and Sasser, W. (1990) The Profitable Art of Service Recovery. Harvard Business Review 9 Temkin, B. (2009, February 17) Customer Experience Correlates to Loyalty. Forrester Research, Inc. 10 Bell, C. (1993) In customers we trust. Executive Excellence, 10(8), 13-14 11 Peppers, D. and Rogers, M. (2004) Managing Customer Relationships: A Strategic Framework. Hoboken, NJ: John Wiley & Sons, Inc. 12 (2007) The Boomerang Effect: How Market Dynamics Are Driving Customers Back to the Manufacturer. Retrieved June 1, 2009 from: http://www.rightnow.com/resource-wp-the-boomerang-effect.php 13 Burns, M. (2009, March 17) Customer Experience Budgets Weather the Storm. Forrester Research, Inc. 14 Peppers, D. and Rogers, M. (2005) Return on Customer: Creating Maximum Value from Your Scarcest Resource. New York: Doubleday 15 Lavers, P., Todor, J. and Todor, W. (2008, December) The Importance of the Customer Experience in a Down Economy. Retrieved June 1, 2009 from: http://www.thewhetstoneedge.com/papers/cexdowneconomy.pdf 16 Kemp, M. (2008, December 9) Can Marketing Deliver Growth In The Downturn? Forrester Research, Inc. 17 Liabotis, B. (2007) Three Strategies for Achieving and Sustaining Growth. Ivey Business Journal Online 18 (2009) Custom Benchmarking. Retrieved June 1, 2009 from: http://www.apqc.org/portal/apqc/site/?path=/services/custombenchmarking/index.html 19 Fornell, C. (2003) Boost stock performance, nation’s economy. Quality Progress (36)2, 25-31 20 (2008, October 7) Stress in America. Retrieved June 1, 2009 from: http://apahelpcenter.mediaroom.com/index.php?s=pageC&item=46 21 (2009, March 31) Lost Your Job? Ford, GM Will Make Car Payments. Retrieved June 1, 2009 from: http://www.kptv.com/money/19060137/detail.html 22 Feldman, A. (2009, April 16) Wooing the Worried. Retrieved June 1, 2009 from: http://www.businessweek.com/print/magazine/content/09_17/b4128024994922.htm 23 Bondar, L. and Lacki, T. (2009) Connecting with Wireless Customers: The Relationship Opportunity. Retrieved June 1, 2009 from: http://loyalty.carlsonmarketing.com 24 Smith, S. (2009, February 26) Winning Customer Loyalty in an Economic Crisis. Retrieved June 1, 2009 from: http://www.customermanagementiq.com/article.cfm?externalID=676 25 (2009, March 31) Winning True Customer Loyalty and Trust in a Recession: A Conversation with Expert Shaun Smith. Retrieved June 1, 2009 from: http://www.customermanagementiq.com/podcenter.cfm?externalID=71 26 Parish, J. (2002) Relational Intelligence Theory in Marketing. University of Alabama, Doctoral Dissertation 27 (2009, May 22) Turning Customer Complaints Into Profitable Opportunities Using the Six Sigma Tool Kit. Retrieved June 1, 2009 from: http://www.customermanagementiq.com/article.cfm?externalID=850 28 Covey, S. (2008, June 22) Trust Is a Competency. Retrieved June 1, 2009 from: http://www.managementparadise.com/forums/human-resources-management/30967-trust-competency-stephen-m-r-covey.html 29 Borle, S., Dholakia, U., Singh, S. and Westbrook, R. (2007) The Impact of Survey Participation on Subsequent Customer Behavior: An Empirical Investigation. ©2009 Peppers & Rogers Group. All rights protected and reserved. 11