Social CRM: serving the customer

ROE? Return on experience. Hands up those of you who have not been forced at least once to spend hours on the phone in the desperate attempt to fully understand the characteristics of a newly purchased technological gadget, to enforce the warranty of a product that has stopped working, or to dispute a wrong charge on a telephone bill.

Judging from a five-year study published by the research company Forrester, there are many companies in any sector with more than just a few problems in guaranteeing their customers a pleasant, consistent and efficient interaction through whatever channel they may have chosen. The customer experience of the 160 brands analyzed in fact received a negative judgment in 63% of cases, whilst only 3% of companies were evaluated as excellent, a group that has been in constant decline since 2007.

More than a pure statistical curiosity, today we know that an excellent user experience is correlated with millionaire economic impacts thanks to the loyalty that it produces. The brands that pay most attention to customer satisfaction tend to generate a greater number of repeated transactions over time, fewer defections to competitors, and more recommendations by those who already use the product or service. Forrester also calculates [1] that these effects are translated into incremental sales of 788 million dollars for wireless connection suppliers, 825 million dollars in customers who stayed in hotels, and 65 million dollars in tickets sold through word of mouth by airlines. If having enthusiastic customers brings such big advantages, at the extreme opposite end of the scale it is estimated that in the United States alone 83 billion dollars [2] are wasted every year on lost customers or new customers never completed because of the insufficient experience that the companies offer.

What is the main cause of customers’ dissatisfaction and disappointment? More than the product itself, in two thirds of the cases it is the service that influenced purchase decisions, consideration of the brand, the choice to opt for an alternative product, with 61% of consumers declaring to have switched to a competitor following a negative interaction, and as much as 71% ending a relationship with a brand in the last year because of problems with telephone operators, purchases with automatic services, exhausting waits or poor integration among channels.

A new relationship with a new customer

Responding in an excellent way to the expectations that customers and potential customers place in the interaction with the company over the last few years has become more important and more difficult at the same time. The growing spread of mobile devices and social media as information, communication and connection tools is generating an extreme division of channels to be monitored, in addition to new behaviours that companies must understand and address in order to become a profitable part of the world of Social Business.

If deep down consumers have always wished to exchange much more than money with companies when purchasing a good, what the social web has amplified out of all proportion is indeed the desire to be listened to and valued based on their own ideas, opinions and emotions. Through social media consumers want this contribution to be recognized, making themselves completely available to those entities that are interested in welcoming it, but also reacting aggressively when faced with a brick wall on the other side. These phenomena can be synthesized with the birth of a new customer, the social customer (see chapter 9, dedicated to Social Media Strategy).

In turn the changed expectations of consumers, together with an endless and continually changing choice of channels, impose new challenges on the company. In order to be successful and compete in a hyper-connected environment, in which its own prerogatives to control messages fail, the organization urgently needs to rethink things from the point of view of an extended ecosystem, reorienting its strategy, processes, internal culture and technological infrastructure in order to bring the social customer from a role of mere consumer to that of ally, partner and amplifier.

The first step is learning to see the company no longer as the centre of the universe, but as one of the actors in a community, a joint, transparent ecosystem, in which all parties benefit, as described by Paul Greenberg [3] in his definition of Social CRM [4]:

“Social CRM is a philosophy and a business strategy…designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment”.

In other words, it is the response from the company to the increased power acquired by the Social Customer.

If CRM [5] is a mixture of processes and technologies for the efficient management of the relationship and transactions with the customer, Social CRM moves from relationship to involvement. For the first time, the customer is invited to sit at the same table as the company, collaborating on improving the overall experience and the same quality of services and products. Going beyond a linear and one-way approach from the company to the market, Social CRM brings into the company the signs and conversations expressed by the market, dealing with any organizational, cultural, technological and process obstacles necessary to make the business more agile, innovative and reactive to the requests from the end users.

All of this is even more topical in the area of customer care and the more comprehensive customer experience, as the following stories show.

Support comes from the bottom up

Many companies declare they are centred on the customer, but how many of them truly are? To answer this we need to look at the organization from the outside, understanding the problems that the customer faces every day and realigning products and processes in order to provide a response that is mutually beneficial for the company and the market.

Particularly symbolic of this is the BestBuy case, the largest retailer of consumer electronics in the United States, whose customer service is considered a serious thing not only by the 21 “full time connectors”, i.e. full time agents who respond on behalf of the company to problems raised on Facebook and Twitter, but above all by the 180,000 employees who have the possibility to help the customer first hand after being appropriately trained in the use of social media. Through Twelpforce, 3,000 of them each day support the operators on a mission to discover and timely resolve the public’s mishaps with an average response time of 12 minutes. The contribution of the company’s employees is considerably increased by the forums managed first hand by the customers. With 84% of bottom-up generated responses and 26 unpaid experts who spend 8-12 hours there a day in exchange for recognition from the community, together with the official channels these online environments allow the company to drastically cut support costs by making available competencies that are not available in Best Buy, as occurs for example with the possibilities of integrating products sold by the company with articles offered by other suppliers [6].

Can one single user save the company millions of dollars? It would seem so, as Dell well knows: its technical forums “host” more than 7,000 customers and 4 million messages every week. Among the multitude of users there are some special individuals like Jeff Stenki, nickname Predator, who dedicate more than 123 days a year by providing punctual solutions to specific problems such as the functioning of optical disks, for the pure pleasure of helping others. Each of Jeff’s responses is publicly memorized in the forums and consulted thousands of times with a saving of 10$ for each call avoided to the call centre. With 50% of visitors who on average leave the site having found a solution, disintermediating technical conversations from the bottom up translates into an overall benefit for Dell equivalent to millions of dollars per year and different percentage points of greater customer satisfaction.

Surprisingly, there are ultimately some companies for whom the community has become the founding notion for the supply of any service, managed by the included customer. The experience of giffgaff [7], English mobile operator able to function with only 14 employees and without any call centre, falls into this category. The customer communities are used in practice to determine phone tariffs, to notify inefficiencies and to exchanges tips or solutions, as in generating word of mouth. By taking advantage of an incentive mechanism on points to be converted into services or money, and 10 super users who spend up to 10 hours a day in the forums, giffgaff is able to attract 25% of new customers, respond to 50% of questions in an average time of only 3 minutes and obtain a Net Promoter Score of 75, close to that of companies like Google or Apple. If a traditional phone operator like O2 applied the same service model as giffgaff, involving even only a quarter of its customer base, the saving would be around 20 million pounds a year.

The number of companies that have decided to review their customer care strategy by also making use of digital channels certainly does not end here but, as shown by the above cases, applying the principles of social media to customer service allows tangible benefits to be obtained both by the organization and by its respondents in terms of [8]:

  • Stronger capacity to intercept and put to good use feedback for the improvement of the product/service available in any channel, including online ones
  • Cutting of support costs and improvement of satisfaction level allowing customer communities to share bottom-up solutions freely
  • Increase in speed of responding to customer requests and in the level of trust in the brand through a transparent exposure of the employees to the outside world
  • Reinforcement of the relationship between the organization and the consumer from the point of view of word of mouth, loyalty and bottom-up promotion
  • Creation of retention opportunities, acquisition of new customers and cross-selling/upselling directly from the action of customer service operators.

Towards the future of Customer Care

Paul Greenberg, father of Social CRM recently wrote: “2011 was the year that 20th century customer service began to disappear”. Apparently words meant for effect, this statement in actual fact summarises a long list of organizational, social and technological phenomena that are bringing into discussion the fundamental principles on which customer service has been based until now, imposing not only an evolution of it, but also and above all a reflection of its role within the company. This is a role which, as we will see, will involve at least informally more and more individuals and company departments.

In the commonly accepted senses, customer service and marketing are two totally disconnected domains. Marketing is an activity aimed at generating business opportunities and tries to reach as many potential customers en masse as possible, at the lowest cost possible. Following the traditional funnel, the pipeline is fed by pushing customers in a linear way along the phases of awareness, interest, desire, action and possibly satisfaction, in order to capitalize on loyalty through future purchases. In any case marketing serves to capture new customers, not existing ones. In contrast, customer service is a cost centre whose main goal is to solve as quickly as possible and at the lowest cost possible, but in a primarily individual way, the problems that a customer comes across when interacting with the brand. Unlike marketing, customer service does not work on new customers, but on existing ones.

Under the weight of communities, influencers and social media, however, the possibilities to control messages and informational asymmetries existing in the past between the company and the consumer are reduced. In this way, the linear abstract concept of the purchase path is moving further and further away from reality, instead leaving the past on a decisional loop [9]:

  • Customers do not move in a linear way towards action. Today 53% of American consumers already declare they enquire online despite purchasing in a physical store. Thanks to the web and word of mouth an active evaluation has been born and, exactly at the time when the funnel should start to narrow, the potential customer widens its choice by discovering other alternatives.
  • Social media and word of mouth have an impact on the stages of approaching the brand in a non-uniform manner. If traditional marketing works very well in determining the mixture of brands that customers initially have in mind, word of mouth becomes 50% more effective when individuals enquire about the quality of different options.
  • Conversion is just the new starting point. Immersed in a global and disintermediated global social ecosystem, whatever happens after the purchase is for the first time more important than the strength and reach of traditional marketing. What is written online or said by people we know and respect can easily determine the behaviours that follow.

In the era of social media, in addition to acquiring new customers, the role of marketing is becoming that of keeping existing customers, surpassing their expectations, creating continuous occasions for contact and facilitating a role of fan and advocate. In other words, Marketing and Customer Service are moving closer together to reorient the mentalities and processes of the entire company around the customer:

  • Service is the new marketing, given that it is the experiences and considerations of customers that influence purchase decisions. An impeccable service like that of Zappos [10] is the key both to capturing new customers and to guaranteeing an average amount of second purchases totalling $145 against $125 for the first purchase. For FICO [11], 13% of sales come from support forums and 39% of site traffic from contents generated by users.
  • Marketing and service must be aligned. In order to guarantee an excellent customer experience regardless of the channel, every moment of interaction must not only be error-free, but it must also be consciously designed to maximise, from the point of view of marketing, a positive visibility.

The change that we are experiencing does not stop at marketing and service [12]. Excellent communication and great attention to the customer are quickly undermined by a defective product, not responding to market expectations, with an incorrect pricing or promoted by a Sales Force that does not know how to highlight the potentialities. Fully responding to the opportunities offered by Social Business means instead providing responses in real time, having a complete vision at all times of all customer interactions, leveraging on the company’s collective intelligence in order to timely work out solutions, and proactively using customer feedback for the continuous improvement of products and services.

Rethinking the service model

Faced with the emergence of the social customer, customer service is reinventing itself to strategically integrate every channel (both social and traditional), to react more and more in real time, to increase the level of knowledge of the product/service, to leverage the enormous potential offered by the internet.

To pragmatically address these challenges and to immediately start building the future of Customer Service, companies can put into action the ecosystem described by the following five components [13] (Fig. 1):

  1. Customer Service & Traditional Support: this is the method of support already implemented in most companies with the goal of centralising contact activities, lowering costs for the company, speeding up exchanges, reducing the number of calls to operators, and moving requests to more efficient channels. The channels used include the phone, e-mail, IVR, web self-service, online chat and video conference.
  2. Collaboration among CSRs [14]: in order to improve customer satisfaction, the next step consists in creating collaborative support for the operators’ work, pooling customer requests and CSR responses within a knowledge base. The operators are updated in real time and provide faster, more accurate and more consistent replies to the public.
  3. Social Care: in order to further meet the social customer’s expectations and extract intelligence from online conversations, many companies have started to follow their customers into the channels where such customers meet, connect and exchange comments with each other [15]. Similar initiatives to Twitter and Facebook Care humanise the organization and give back to the customer a feeling of an individual service, often making up for inefficiencies found on other channels. Social Care should be managed by the same operators as traditional Customer Care.
  4. Peer-to-Peer Customer Communities: in addition to the channels that companies have control over, users spontaneously join together in self-help communities and forums aimed at sharing impartial opinions, technical solutions, passions or even finding comfort after unpleasant experiences with the brand. If appropriately facilitated by organizations, these bottom-up spaces represent the sole key to sustainably scale down service, create ambassadors, anticipate potential PR crises and intercept new ideas on the product put forward directly by the customers.
  5. Enterprise-wide Social Support: the most advanced cases of the evolution of service towards Social Business, such as BestBuy’s Twelpforce, show the inevitability of supporting the work of operators by involving the entire organization that is directly exposed to the public, its criticisms, its needs, and its suggestions through social media. This last step is the most advanced sign of the centrality of the customer and the scalability of the service in terms of messages, channels, and schedules.

The above described steps would neglect the most transformational and deep effect of Social Customer Service if they were not completed by an underlying attitude to extract sense in conversations among customers, operators and other employees. On the customer’s side, understanding the bottom-up exchanges allows it to identify, en masse and at a reduced cost, hidden and unexpressed needs, guiding the evolution of communication and product strategies. Within the company, creating intelligence on the collaboration between operators and other functions instead means bringing to light gaps, inefficiencies and areas for improvement for a customer-centric review of business processes.

Bon voyage

The future of Customer Service expects a journey of change in the mid-long term in order to reduce silos, put the internal knowledge bags in touch with each other and correlate them to the enormous mass of information that we are beginning to gather on customers through social media. The final result will in all likelihood be an overall realignment of innovation, research, communication, sales and support able to maximise the ability to attract/keep new customers, but also the business value created together with them.

Without a shadow of a doubt, the evolution of customer service represents a unique opportunity to build a more human organization mindful of understanding, learning and constantly improving on the needs of all individuals feeding the ecosystem: stakeholders, customers, employees and partners.

More value for everyone
Interview with Esteban Kolsky

How is social media changing the relationship between individuals, communities and organizations?

The answer is simple: there are two ways. Firstly, social media allows all parties to interact more often and more efficiently by providing other channels to feed conversations. The second approach is taken advantage of only by more advanced organizations: it allows them to learn more about their customers, the communities they visit, their requirements and needs – and to show them how much the organization is doing to satisfy such expectations and desires. Once solid bases of intervention in social media have been set up, an infinite number of cases can be imagined that touch all processes the organization uses in doing business with the sole focus of creating value for both parties involved: company and customer.

Why do so many organizations struggle to understand what their customers expect and how to provide quality cross-channel experiences?

There are two parts to this question: firstly, companies struggle to understand their customers because they don’t know how to listen or what to listen to. Most companies have a strongly company-centric vision of the world and as a consequence they concentrate on what brings addition value to the company. With this modus operandi, customers are not easy to find, know or listen to. The company’s needs come first. Despite the channels selected – and none of these better serves the process of increasing the value of the customer’s voice than social channels – the organization is unable to find the indications that the customer is expressing, as it does not really pay attention to the information it receives. This leads to non-quality experiences with the customer (and here is the link to the second part of the question), as these experiences tend not to respond to the customers’ expectations but rather to the understanding that the company has of what the customers want. Listening correctly through the available channels provides the organization with sufficient data to offer better experiences to its customers. Once these experiences are achieved with feedback and appropriate measuring mechanisms, moving onto more channels and crossing channels is much easier.

Can you provide us with some examples of companies that take advantage of crowdsourcing and co-creation in order to improve their customer service? What benefits are obtained?

giffgaff is probably the company most frequently quoted as using communities and crowdsourcing to provide assistance to customers and for a good reason: the entire company has been designed based on the premise of giving a service to the customer through a crowdsourcing model. giffgaff benefits from not having to worry about having a customer service function in its company: its customers carry out the customer service function. Money saved in this way is invested in better products, more technology to enable customers to collaborate amongst themselves and in co-creation projects aimed at improving the company’s products and services. Apple is another company that is taking advantage of the laws of volume and co-creation to provide an excellent customer service: their ad-hoc communities are a very popular choice for obtaining responses. When clients ask a question in one of these forums, they obtain a faster and more exhaustive response than they would from any other channel offered by Apple. Nike, Logitech, and many other companies are moving in the same direction.

How will customer service evolve over the next 5-10 years?

In my opinion there are three tendencies that are preparing to dominate the attention of anyone working in customer service in the next 5-10 years:

  • Cloud computing and the ability to reach the customer always and wherever with a highly proactive service at the time of need.
  • Collaborative Customer Service with the evolution of the current first generation of communities and forums.
  • A fluid and truly cross-channel execution of the interaction with the public with the slow disappearance of customer service as a function in itself in favour of its placement within the more comprehensive world of the user experience.

These tendencies will be mixed in different formats within the interfaces through which the end user makes use of the service, guaranteeing at the same time a proactive presence of the company at the time of need and the availability of experts when a more sophisticated service level is absolutely necessary. This could take more than 10 years, but the bases of this approach will be set up over the next ten years.

Esteban Kolsky: Principal & Founder of ThinkJar

 

………..

[1] As described in The Business Impact of Customer Experience, Forrester 2012.

[2] For more details see Povero Customer Service (Poor Customer Service), Social Enterprise 2010.

[3] Author of the book CRM at the Speed of Light and nominated many times among the greatest international CRM experts.

[4] For a more complete description of Social CRM see “Il Social CRM mette il cliente al centro del business” (Social CRM puts the customer at the centre of the business), in HBR 2010.

[5] CRM stands for Customer Relationship Management.

[6] See for example How Do Best Buy Manage Social Customer Service?

[7] See http://thecustomerevolution.blogspot.it/2010/12/giffgaff-case-study-of-customers-in.html.

[8] See The Metamorphosis To Agile Customer Service, Forrester 2011.

[9] See The Consumer Decision Journey.

[10] Zappos is the world’s largest online shoe store and was recently purchased by Amazon for 1.2 billion dollars.

[11] Fico is a company that provides credit evaluation services.

[12] For further details see Customer Service Marketing e Social Business.

[13] The model presented was introduced and discussed by the author for the first time in Il Futuro del Customer service (The Future of Customer Service) and in Il Nirvana del Social Support (The Nirvana of Social Support).

[14] Customer Service Representatives.

[15] The channels where customers interact are not always under the brand’s control.

This site is protected by copyright. All rights reserved. ©2013 OpenKnowledge S.r.l. | Part. IVA 07900400966