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Customer Service Operations What s Hot, What s Not

2. Customer Service Operations are getting pulled in 2 different, competing directions. Business, cost and efficiency pressures. Customer service as a competitive advantage. Cut-backsOutsourcingCall center centralizationTechnology. Local presenceCSR incentivesNew media for customer accessTechn

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Customer Service Operations What s Hot, What s Not

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    1. Customer Service Operations – What’s Hot, What’s Not TPPA MC&S Conference March, 2003

    2. 2 Customer Service Operations are getting pulled in 2 different, competing directions

    3. 3 The bad news is: business pressures on Customer Service are very intense Major CSR lay-offs in the last 2 years Humana, Qwest, Union Pacific, Nextel, AOL, Ticketmaster, Cingular, AT&T, SBC, American Express Many are centralizing service/call centers to reduce operating expenses, e.g., Home Depot Outsourcing of customer service operations is on the rise What is the trade-off in cost savings v. quality? Some major brands outsource: Kmart, Amazon.com, IBM “Can I help you?” -- from India, Philippines, Caribbean H-P, American Express, GE Capital have overseas call banks Rationale is cost savings: wages are 50% less overseas, and turnover is 1/5 of that in the US Result? American Customer Satisfaction Index: 12% in 6 yrs.

    4. 4 But for some like public power, customer service can still be a competitive plus Customer service operations are a major driver in utility customer satisfaction Recognizing this, some like Dell are using CSR incentives 15% over base salary if efficiency AND quality metrics met Local presence may be becoming more important, surveys say

    5. 5 There are still ways to optimize the quality of each customer interactions Sequence People prefer encounters that Improve quickly over time End on a positive note Duration The more segments in a good encounter, the longer and better the encounter feels Reverse is true for bad encounters Blame People look for a single cause They tend to believe that deviations from rituals caused the problem They blame individuals, not the system . . . Unless they feel empowered

    6. 6 Technology is expanding ways to deliver customer satisfaction and service Electronic formats are increasing customer access points E-mail, web chat, bill presentment, on-line inquiry are becoming standard New formats force us to question conventional wisdom “They reduce the personal interaction that we do best” v. “They give customer choice and control” Expect electronic access media to dominate soon

    7. 7 A technology caution: CRM has a number of problems that have to be addressed Customer Relationship Management is “aligning business processes with strategies for building customer loyalty” (Boston Consulting Group definition) CRM has its problems 55% of CRM projects do not produce results (Gartner Group study) Senior execs: 20% of CRM projects actually made relationship with the customer worse CRM can be effective it is not viewed as: Just IT or software A substitute for a marketing strategy Something that does the marketing for you

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