Do You Really Want to Outsource Customer Experience Management (CEM)?

Customer is King, CRMIf you’re considering outsourcing your Customer Experience Management (CEM) or already outsource all or part of your CEM, it’s time to be sure you’re not doing more harm than good.

In today’s always on, device-crazed world, service providers are constantly challenged to win and more importantly, satisfy their customers in an effort to reduce churn. According to a study by Flurry Analytics in the spring of 2013, the U.S. consumer spends an average of 2 hours and 38 minutes per day on smartphones and tablets with 80 percent of that time (2 hours and 7 minutes) spent inside apps and 20 percent (31 minutes) spent on the mobile web. By tracking a day in the life of mobile users, Flurry also found that app usage steadily increases over the course of the day and ultimately peaks in the evening. This is an important factor for service provider customer care centers that need to be available to support customers with the right apps experience at the time when customers are in heavy use mode. But is caring for the customer and ensuring customer satisfaction enough?

Set the Right Goal
Many business experts argue that long-held customer satisfaction measurements cannot predict loyalty—now more than ever a critical element to a successful service provider’s strategy. This is an important change given the fact that for years companies established measurement strategies and outsourcing SLAs to chase customer loyalty through satisfied customers. But today, providers who focus on customer satisfaction are pursuing the wrong goal.  In the mid-90’s, researchers confirmed the “defect” factor proving that satisfied customers were only ever so slightly likely to remain loyal when compared to unsatisfied customers.  And for many service providers, satisfaction is measured by customer loyalty using technical metrics such as agent satisfaction scores and call drop rates. Again, providers measuring loyalty with these metrics are missing the mark. Satisfying customers without creating an emotional connection with them has no real value — none at all. What you really want are “engaged customers.”

But many of you may be wondering, what exactly is an engaged customer? And why is an engaged customer better than a satisfied customer? The answer is simple: brand loyalty and increased profits.  Customer satisfaction is a functional measurement that does a great job of delivering feedback on tangible features such as price or product features. But customer engagement includes emotions, perception and actions. So an engaged customer is one who has an emotional connection to your firm. This customer will advocate for you in the real and cyber world. They’ll not only buy your product, they’ll add services and comment on product functionality in a way that enriches your product. And researchers clearly measured higher ROI with highly engaged customers. Engaged customers feel a personal investment in the brand as well as the provider’s, or in an outsourcing situation, the provider’s employees. Selecting providers who are able to positively reduce customer frustration and resolve complex application issues and other problems that strike an emotion chord with users can make a difference beyond the brand. According to research study by Bain & Company, a 5 percent increase in customer retention rates can yield as much as 75 percent increase in profits for companies across a wide range of industries.

Differentiate Yourself
So now you’re ready to define or adjust customer care SLAs to address this notion of an engaged customer, but where should you start? Shri Balachandran, Senior Director in Alcatel-Lucent’s Managed Services business unit suggests starting with the right business objective questions:

  • How do we maximize the lifetime value of services offered to the end-user?
  • How do we maximize the lifetime value of the end-user to the service provider?

Next, define your scope holistically where customer care is not an island. This can be assessed with simple questions: “Are we doing the right thing? Are we doing the thing right the first time? Are we doing the thing right to the right customer?”

End-to-end customer experience starts with having a relevant, competitive and engaging product, customer support services that respond to issues immediately and honestly, delivers on commitments and then some, links to timely and accurate billing, and offers flexible payment with customer care or “engagement” integrated into all business processes. Lastly, link KPIs on value maximization to business objectives and to interaction and technical metrics. Focusing solely on technical metrics is not the answer to engaging your customer.

Given the commoditization within telecom, customer experience should differentiate your firm. So be sure if you outsource this function, your outsourcing provider can support your new goals for customer engagement. If your outsourcing provider does not understand your request to incorporate customer engagement-oriented SLAs, it may be time to find an outsourcing provider who does. Ask questions. Does your outsourcing provider take time to fully understand and look holistically at your customer experience and end user engagement with your products and services? Are they customizing their approach to business objectives rather than providing an off-the-shelf solution that doesn’t fit your needs? Do they understand that customer experience management needs to continuously evolve so not to mistake what was cool yesterday as table stakes of today? Does your outsourcing provider understand your linkage between your CEM objectives and your revenue-impacting business goals like reduced churn rates and increased ARPU? And if they do, is it reflected in the SLAs that you have mutually established?

If you’re still not sure of the value of having an engaged customer, ask Apple or Virgin or Costco. Once you make the change, you’ll never look back—as you experience the positive impact to your brand and profitability.

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