Online self-service: Improving the bottom line and pleasing customers

The steep increase in customer churn, slowing market growth, vicious price competition and anemic uptake of new data services make things tough enough. Add in the demands of increasingly sophisticated customers plus the rapidly rising costs of customer care, and service providers are scrambling for solutions. In response, many are making online self-service technologies a priority to better meet customer's service needs and dramatically reduce service costs at the same time. Some approaches are proving to be more effective than others and service providers are seeing varying levels of success as a result. This article discusses the key factors for success in online self-service and details the significant benefits--for organizations and their customers--when properly deployed.

A crisis in customer care

Customer service is a large and growing expense for companies around the world. In both business-to-consumer and business-to-business environments, product and service offerings are proliferating and increasingly complex; this is driving the frequency and length of costly customer interactions. The numbers are staggering:  

• Customer service interactions are increasing as much as 30% year over year, according to Giga Information Group

• Ninety-two percent of interactions still go through call centers, and each incident costs between $7 and $10, according to Gartner

• Annual customer turnover, or churn, can be as high as 20% to 35% as seen in wireless communications

• Some 30% to 50% of business-to-business invoices have exceptions or disputes requiring human interaction and delaying the payment process

• Forty percent of customers who send an electronic contact to an organization also contact the company through another channel, such as telephone, about the same issue

• In a recent Gartner survey, 68% of customers stated that they had left a service provider because they were upset with the poor treatment they had received.

Many leading service providers are trying to address this multitude of issues by deploying online self-service solutions. The aim is to reduce customer support costs while also increasing convenience and efficiency. Additionally, business customers increasingly favor service providers that empower them to control their information and processes on their own terms. This saves the customer from having to go through intermediaries for common activities such as ordering, paying, configuring services and downloading key information, simplifying the customer's own processes and encouraging greater loyalty to the service provider.

Current approaches to self-service and their inherent limitations

The most common approaches to online self-service thus far have been to leverage existing technology investments in customer relationship management (CRM), multichannel service and interactive voice response (IVR) solutions. In addition, many service providers have developed their own homegrown systems with highly tailored functionality for their customers.

Figure 1: Self-service solutions

The promise of CRM solutions was to create a single view of the customer across the entire organization, thereby empowering employees to make smarter decisions by understanding the full customer context. While some companies are realizing benefits from these investments, studies have shown that as many as 70% of CRM projects fail to meet expectations. One of the primary reasons for this is that CRM systems typically cannot access the detailed customer billing and account data that is required to answer the 60% to 80% of customer service calls that are account-related. This severely limits an organization's ability to extend their CRM systems to resolve the most common customer issues online.

Another popular approach to self-service has been multichannel service. These software solutions promise to transform the traditional call center into a "contact center" by integrating customer interactions across multiple channels--phone, e-mail, chat and Web self-service. Customers can choose whichever channel they prefer, with the integrated approach increasing consistency across channels. In addition, the service provider can reduce support costs by shifting some of the support burden to supposedly more cost-effective channels. This approach, too, has largely failed to live up to its claims, with most implementations limited to a single channel. One of the main challenges is that introducing alternative channels often increases, not decreases, interactions, complexity and costs. For example, with email, customers generally do not include enough information for their issue to be resolved, requiring multiple contacts per incident. As with CRM systems, multi-channel solutions typically do not have the ability to tap into and provide detailed customer billing and account information across the channels. Without access to the account data, CSRs and customers cannot adequately resolve the most frequent customer inquiries leading to frustration and churn.

While IVR tends to be very effective for simple informational requests, it fails to meet most customer self-service needs. As a result, many customers get frustrated working through the IVR phone menus and cancel out to a live customer service representative the first opportunity they get. 

Most service providers have chosen to develop their own online self-service systems. These 'first-generation' systems provide limited functionality that meets some customer needs. However, over time, these systems quickly become difficult to maintain and evolve. As adoption of the self-service system grows, scalability and reliability become significant issues and total cost of ownership increases dramatically. Additionally, the ability to deliver timely new features is constantly challenged by internal budget and resource constraints.  

A more customer-centric approach to self-service

Customer self-service (CSS) is a new approach to the problem--one that is based on what tasks customers want to accomplish when they interact with your company. By giving customers direct control over these tasks, CSS empowers them to perform many of the functions that normally go through a call center or e-mail, whether it's finding information or executing transactions. As detailed transaction (billing) information tends to be the "driver" to visit the Web site, CSS combines electronic presentment and payment (EPP), order management, knowledge management, personalization and application integration technologies to create an integrated, natural starting point for customers to address the bulk of their service issues. 

A service provider's contact center provides the key to unlocking the potential business benefits of self-service. Contact center statistics provide critical insight into which issues generate the most inquiries from customers and drive the associated costs. An analysis of the contact center statistics in most service providers shows that the vast majority--often 60% to 80%--of customer service issues relate to a customer's bill and account. These inquiries range from simple requests such as accessing account information or performing common administrative tasks to more complex processes such as dispute resolution. For this reason, an effective self-service solution must provide direct access to detailed billing and account information often housed in disparate legacy systems.

The self-service needs of most customers are similar. These include the ability for the customer to:

• Manage their accounts--e.g., update profiles, configure account features, review invoices or statements

• Execute transactions--e.g., open/close accounts, order products/services, execute payments

• Conduct research--e.g., compare plans, investigate problems, analyze activity

• Interact with the vendor--e.g., initiate disputes, report problems, escalate issues, receive alerts, view promotions

CSS complements and leverages existing investments in e-billing, CRM, eService and data management technologies. It affords a quick time to market and addresses specific business needs and returning tangible value in several areas:

 

BENEFIT	HOW ACHIEVED	ROI FACTS
Reduced support costs	Deflects issues before higher costs are incurred	Forrester Research estimates per incident costs as follows: Phone support session: $33; E-mail: $9.99; Chat: $7.80; Self-service: $1.17. 60% to 80% of support incidences are account-related1.
Reduced churn	Creates stronger relationship and increases switching costs	Advanced self-service features like reverse call look-up or corporate hierarchy setup deepen customer relationships.  A major wireless carrier has found that its annual churn rate is dramatically lower for online registered subscribers: 2% vs. 25+%.
Increased customer satisfaction	Answers higher percentage of inquiries by integrating account data with other sources	The faster customers resolve issues, the less likely they are to switch and the more likely they are to recommend service providers to others2. Only 32% of customers with unresolved issues would recommend mobile carriers to others vs. 77% of customers whose issues were resolved on first contact.
Reduced processing costs	Avoids printing and mailing costs	Consumer bills: $.80/paper bill vs. $.35/e-bill3 Business bills: $5/paper bill vs. $2.50/e-bill4 One edocs customer reports a savings of $150,000 per quarter in decreased cost of fulfilling reprint requests alone $10 to process manual payment vs. $3 to process electronic payment5
Improved payment processing	Automates business processes	With online delivery, review, approval and payment, DSO can be reduced by 2 to 10 days6 Manual payment processing from business customers can have a 30% to 50% exception rate (i.e. payments applied to the wrong accounts or in the wrong amounts)7
Enhanced marketing effectiveness	Uses information on customer's stated interests and actual account history to better target messages	"Better deal from another service provider" was the reason most often cited for switching wireless service providers8 Rate plan analysis is a key time to catch users with targeted messages and promotions, through the low-cost online marketing channel
Fast deployment	Accelerates time to market with sophisticated visual development environment and flexible data integration that leverages existing backend systems	Allows above benefits to accrue sooner
1 edocs compilation and analysis of customer call center data 2 Telephia/Harris Interactive study, June 2001 3 Reducing Costs Driving Consumer E-Billing Initiatives, Gartner Group, March 28, 2002 4 Biller Perspective: Reducing Interaction Costs With E-Billing, Gartner Group, May 23, 2002 5 Biller Perspective: Reducing Interaction Costs With E-Billing, Gartner Group, May 23, 2002 6 The Total Economic Impact of EIPP and EBPP, Giga Group, July 30, 2002 7 edocs customer data 8 2002 Mobile User Survey, Yankee Group, June 2002

 

Unlike many other technology investments that improve internal operations but provide little for the customer, CSS solutions provide tangible benefits to both consumer and business customers, including:

• A convenient starting point for common tasks, such as accessing account information, analyzing statements, investigating problems and paying bills

• Intelligent integrated escalation to assisted service if customers cannot resolve issues themselves. This avoids frustrating dead ends for customers

• Any-time access, day or night, putting the control in the hands of the customer

• Confidence they will get their issue resolved. This avoids the uncertainty of other support channels--long phone queues, inconsistent experience with different support reps, and delayed or incomplete responses from e-mail channels

• Empowerment to make better calling plan decisions through activity or usage analysis, categorization and reporting

• Reduced processing costs associated with complex transactions by enabling reporting and analysis, initiating appropriate workflows, handling disputes and automating payment. For example, payment of a $4000 bill is often held up over a $300 dispute. With advanced capabilities like those in CSS, the $300 dispute can be isolated, the bill automatically re-calculated and payment approved and made.

• Better visibility into business operations--usage analysis, payment flow and process, problem status, etc.

• Reduced dependence on the availability of a key account manager or a knowledgeable customer service representative for routine questions and activities

Figure 2: Telco manager's dashboard

Key success factors in customer self-service

An effective self-service approach starts with the customer's point of view. The CSS platform is a natural evolution of the company's e-billing platform and organizes information and integrates relevant systems so that all the resources are collected in one place. This ensures that the CSS solution will be the natural starting point for a customer's support needs. This in turn maximizes the benefits for the customer and the service provider alike. To be successful, customer self-service solutions must completely meet the contextual and usability needs of users and continue to evolve as those needs change. The requirements for success break down into four key areas:

1. Access to billing and account data--Interactive access to detailed account data is required to answer the most common questions and is the key driver to the website. By extending these features to the site, it becomes the first place to go for answers.

2. Customer-driven functionality and design based on actual Top 10 inquiries--The most successful customer self-service implementations provide easy-to-understand capabilities to address customers' most common service needs, not merely expose internal systems to customer access. Research shows, that for most service providers, these inquires are billing and account related.

3. Managed transition between self-service and assisted-service--If the self-service channel is to become the preferred starting point, customers need to have confidence that they will be able to escalate to assisted service if their questions are not answered. At the same time, this escalation needs to be managed carefully to avoid unintended support costs.

4. Integration with key systems and processes--As part of an overall service strategy, the customer self-service solution should be integrated with related systems for consistent information across channels. CSRs and marketers should be trained to reinforce the use of the CSS solution in appropriate customer communications.

Effective self-service meets the needs of service providers as well as their business and consumer customers. Customers gain ready access to information and capabilities that empower them to take control of their service needs and the convenience of the applications reduce the cost of doing business. For service providers that deploy customer self-service solutions, the cost savings are real and clearly quantifiable. Reduced support and processing costs lead to streamlined operations and increased business efficiency. Through a phased, quick deployment, organizations can begin capturing significant returns today and lay the groundwork for sustained and profitable customer relationships in the future.

Will Robinson is the Industry Solution Executive for Telecommunications at edocs Inc. He can be reached at wrobinson@edocs.com.

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