Embracing the touch points

The telecommunications industry has a higher churn rate than most other industries, according to business intelligence company SAS. And it says the cost of recruiting new customers is 15 times more than the cost of retaining those they already have.

One would think that with such a contradiction, service providers would be scrambling to keep their customers happy and throwing money at solutions that help with retention. And one would be right; they are. They just haven't gotten the results they expected.

Research firm IDC said $36.5 billion will be spent on customer relationship management (CRM) systems and services this year. Yet, according to multiple sources, customer satisfaction is headed toward an all-time low.

“Any way we look at it we see customer satisfaction going down,” said Kirk Parsons, senior director of wireless services at J.D. Power & Associates.

The American Customer Satisfaction Index said the level of service early last year saw its largest decline since 1997.

And according to Michael DeSanto, vice president of Walker Information, that's not the half of it. DeSanto said satisfied customers will still churn for good reasons. Besides, he said, “There is zero correlation between customer satisfaction and financial performance. That's why we shifted our research from customer [satisfaction] to customer loyalty.”

But whether it's satisfaction or loyalty service providers need to instill in their customers, they have to find better ways of doing so. One method they have been experimenting with over the last couple of years is Web-based self-care. You've seen it. You've used it. You know it's been spotty at best.

Web-based self-care, or customer self-management, comes with several channel options, including voice-enabled interactive voice response systems, e-mail, Web chat and short message services. So far, they have been in support of simple services, such as e-mail, setting up personalized Web pages for broadband access or online bill payment and presentment.

Spotty results won't do as the services being supported through these channels — video streaming, IPTV and conferencing — become more complex. That's a problem.

“Right now services such as IPTV are eye candy; they're mostly hype,” Parsons said. “But they're complicated, and when they become real, they will have to be delivered and supported satisfactorily.”

Neither the average customer service representative (CSR) nor current customer care systems are ready to handle supporting complex services satisfactorily. Parsons said there's a lot of kickback from consumers when using new services that they either don't know how to use or that simply don't work right. The kickback is compounded when the customer becomes frustrated using the prescribed online channel to solve their problem.

But not all efforts at providing alternative customer care channels have failed. Most early results show the opposite. Parsons said companies such as Verizon and T-Mobile have led in this area and have been best at having correct account information, processing contacts efficiently and solving problems quickly.

“Web-enabled carriers do well [with customer satisfaction] in general, but trying to solve all problems through that channel doesn't work for complicated services; it's very limited,” Parsons said.

That's why on the technical interface side of this equation companies have offered several channels, including traditional call centers. However, another set of issues faces the CSR handling a customer request no matter what channel the customer is using.

First, they often lack the training needed to gain the technical command of new complex services in order to explain and support them. “Service providers have a gargantuan task to help customer service reps learn enough about the new technology,” Parsons said.

Second, the systems today are not capable of presenting a CSR with the same relevant data across each support channel. This issue will have to be resolved if these secondary but less costly channels are to take on a bigger role.

As Scott Radcliffe, domain principal of the customer management practice at SAS, said, “A 360-degree view of the customer means squat if you can't get it across all channels.”

Although it's up to service providers to solve the training — and perhaps compensation problem — for CSRs, vendors are trying to solve the problem of delivering — through any and all service channels — consistent, real-time and historical data about a customer.

Parsons said customer self-management tools aren't available yet. “Making it easier for customers to tailor their own services on the fly and solve their own problems is great, but how do you get there?” he asked. “I haven't seen it.”

Cincinnati-based billing and customer care provider Convergys is trying to get there.

“We are doing it by combining customer care street smarts with technology,” said Jeffrey Gordon, senior vice president of advanced development and new markets for Convergys.

In meaningful terms, that means Convergys makes use of CRM, but does not make it the central focus. It analyzes customer data, but not to the point of being too inundated to act. It takes systems that are geared toward sales and gears it for customer service, where CSRs spend 90% of their time.

Gordon gave a presentation last month at TelecomNext on achieving customer centricity through customer care solutions and practices that go beyond billing and CRM. He identified gaps in current systems and processes that prevent service providers from achieving maximum customer value. And he revealed the progress being made on development the company is making in the area of customer service management.

Convergys is working on solutions that will provide consistent customer information across channels and display it in such a way that CSRs will become both more effective and efficient, up to 40% in some cases.

In February, Convergys introduced an upgrade to its Infinys convergent billing solution that it says links the worlds of CRM and business support systems (BSS). Its new customer service management application helps CSRs more efficiently and effectively handle customer inquiries by bringing customer order and billing information directly to the primary screens they use in the course of a customer contact.

Convergys has the advantage of trying out its new technology on its own service reps, which provide outsourced customer care for several industries. It manages more than 54,000 CSRs, who in turn handle about 1.7 million customer interactions per day.

The company is using this environment to develop two new products that will be part of its CSM platform and go a long way toward solving some of the consistency issues across customer care channels.

“The number one thing you need is a monitoring mechanism that can test the health of any particular contact,” Gordon said. Convergys' Agent Voice Assist (AVA) is such a mechanism.

Just as supervisors randomly listen in on calls into the service center, AVA will “listen” to an electronic contact between the CSR and the customer. The application is a learning algorithm that focuses on key typed words and does a text-version of speech recognition and recognizes reasonable speech from speech (or text) that indicates a customer is getting frustrated or dissatisfied.

The AVA system got a head start by using a history of recorded calls to identify key words. As new services are deployed, a knowledge base develops that Convergys turns into a repository.

Until now, service providers have had to scroll through endless pages of online communiqués to determine the quality of a customer contact. AVA will eventually automate the identification of a contact that needs to be taken over by someone else or sent to another channel. And using session initiation protocol, AVA can better manage the transfer of a contact between channels.

AVA will be available on a limited basis this year and will be generally available in 2007.

The other product in development, and in limited availability this quarter, is the Life Time Value Optimizer (LTVO.) This is a real-time engine for driving sales and service and for saving customers teetering on the edge of churn.

LTVO uses CRM data and data collected from other sources within the network and back office, but instead of taking its cue directly from these systems, it employs centralized policy management, multichannel context-sensitive interactions, integrated closed loop learning and other methods to synthesize the data before presenting it to a CSR.

“For the best utilization of channels, you really need to know the customer, and you need to know that some channels are better than others for them,” Convergys' Gordon said. “The trick is not to emulate traditional, static-care solutions. You have to be proactive with your CRM data.”

You also have to be careful, J.D. Powers and Associates's Parsons said. “There are right and wrong ways to do this. You want to give power to the CSR, but you want to make sure they aren't upselling something the customer doesn't want or need.”

You also have to be careful which type of customer you are dealing with on any given transaction. Some enterprise customers, said Walker's DeSanto, “have a large propensity for hand-holding.”

Aberdeen Group said in 2003 that the satisfaction level of CRM implementations used for service and support garnered a score of only 2.54 out of five. Gordon said that hasn't changed much and that “surprisingly few companies can supply the same information across channels today.”

Partly to blame are business policies that aren't uniformly deployed or centrally managed. Also to blame are batch-based analytics that provide neither real-time awareness of the customer nor the context of their relationship with the service provider.

However, C-level executives “who don't believe you can simultaneously meet the needs of customers and shareholders” are also to blame Gordon said. “They need to see the light.”

A Convergys white paper put the issue in the simplest terms and under a bright light. “By basing [carriers'] activities, offerings, services and products on the customer's needs, rather than on the requirements of internal processes and systems, they will be in a better position to build lasting and profitable customer relationships.”