Are You Proactive or Reactive in Your Approach to Service?

Guest Blog Post | January 09, 2015

The following is a guest blog post by John Goodman, Vice Chairman of Customer Care Measurement and Consulting

Many companies exclusively focus their resources on reducing the cost of response to customer problems and inquiries, and really miss out on the bigger “customer experience” picture. Focusing on cost alone is exactly the least cost-effective approach to service for two reasons.

  • Waiting for the customer to have the problem and deciding to approach you – often at an inopportune time and providing you with a partial picture of their issue – is inefficient, ineffective and costly.
  • Most of the customers who have a problem choose to not even contact you, leading to an average of a 20 percent decline in their loyalty.

The Payoff of Becoming Proactive

1) Prevent problems by educating customers on how to avoid a problem and equip them with the right self-service tools. Doing so:

  • Eliminates problems that lead to unnecessary service expense.
  • Eliminates damage to loyalty, revenue and word of mouth when a problem occurs but the customer does not complain – usually a company never hears about the majority of problems but damage is done.
  • Eliminates rework within the company and warranty expense because one third of problems are due to customer error that can be prevented via better up-front education.

And with the right online self-service tools, customers themselves can take the first steps to getting answers to their questions without even having to pick up the phone, thereby avoiding more costly service channels. Remember, when it comes to channel preference, 58% of consumers turn to a company’s website first to find answers. So be proactive and give customers what they want.

2) Lower the cost of response

  • It is usually one-third as expensive to proactively address a problem than to react to a customer-initiated complaint because you collect the information needed before the contact starts.
  • Proactive contacts can be initiated at non-peak periods, reducing peaks, allowing better quality, and more leisurely discussions with an emphasis on education and emotional connection.

Strategies for Being Proactive and Preventive

1) Practice aggressive education during the onboarding or product delivery process. Welcome packages can be effective but you must take into account customers’ short attention spans. A single quick-start page that highlights the three top mistakes is effective. One insurance company found that a tip sheet reduced mistakes by 30 percent. Another insurance company used a welcome letter that, in bold print, highlighted exclusions that customers usually missed. While the sales department hated the letter, the customers often said, “I want that coverage, can I buy a rider?”- i.e. can “I give you more money”?

2) Make your website helpful to customers (not just prospects) since the majority of customers go to the web first when they have questions. How is your website oriented – toward marketing or toward your current customers? Most website home pages consist of 80 percent marketing content when 80 percent of visitors are current customers with an issue who are looking for help. In many cases, the website home page content is exactly backwards from what it should be.

Here are some tips to incorporate into your website’s Home page:

  • A virtual agent or intelligent virtual assistant (ideally personalized by an avatar or character) that can interpret natural language inquiries, understand intent, and provide instant answers to customers is a very proactive step you can take to enhance the overall customer experience. Copa Airlines has found that its virtual agent now handles 50 percent of the queries directed to the website, dramatically reducing resources needed to service emails and phone calls.
  • Five top “dynamically generated” frequently asked questions or FAQs (that truly do represent the top questions asked by customers online and to the contact center last week) with embedded links to short videos that are fun to watch.
  • A highly visible link (top of the page in big print) to the website map that is an index to prevalent questions.
  • Short videos that are fun and highlight tips on top mistakes made (Zipcar has short educational videos that are mini-dramas while effectively educating customers.)
  • Also, new research at Cornell University suggests that interaction with a cartoon character that makes “eye contact” with the customer may create trust and emotional connection. If such characters are effectively driven by AI, they may soon become as effective as phone reps in moving service from transaction to systematic connection. Stay tuned as this area is further researched.

3) Become even more proactive by anticipating problems and warning the customer just in time. Your internal systems often know when the customer will have an unpleasant surprise, a late payment charge, a high bill or a missed appointment. Your systems should initiate an automated contact to the customer warning them of the impending unpleasant surprise or at least be intelligent enough to know the reason why a customer is calling (e.g. if a customer receives a very high cell phone bill on Tuesday, you can be sure his call to your company on Wednesday is about that bill). This function can dramatically change the cost and tenor of any contact. For instance, Southern California Edison (SCE) used “Smart Meter Day” to identify customers who may receive a high bill. When SCE sent emails to 30,000 customers warning of the impending high bill, the resulting customer calls were reduced both in number and talk time while satisfaction and sign-ups for conservation programs rose significantly. A virtual agent presence on a company’s website can further help with call and email deflections, and additionally provide insight into the raw voice of the customer gained from the questions customers are asking.

What about social media? Many commentators say that social media is the next big service channel. I disagree. My research suggests that while about 30 percent of consumers use review websites, a much smaller percentage post to websites and less than ten percent of consumers complain socially. Even then, consumers usually “go social” when the traditional phone, email and chat channels have been tried and failed to meet their customer service needs. See my article on “Do not go overboard on social media.”

Getting Started

  • Analyze your current contact center workload as well as website search failures.
  • Get your CFO’s buy-in by quantifying the overall cost of preventable problems. The first cost is the cost of handling the preventable calls. The second cost is the damage to the loyalty of those customers who encounter the problem but do not call. Often this second cost is ten times the out of pocket cost.
  • Enhance your website and implement dynamically generated FAQs, Website Map and web self-service/instant answers functionality via a virtual agent. How effective are your website’s customer self-service tools? [24] provides this Free 30 Minute Assessment for you to find out.
  • Be available via all channels to cater to all types of customers. While social media should be monitored and responded to, do not treat it as a major channel for complaints and customer support. If you get significant volume, it indicates that your traditional channels (like your website) have failed.
  • Become proactive by creating multi-channel welcome packages with emphasis on video and short online versions.

John Goodman is Vice Chairman of Customer Care Measurement and Consulting and has authored Customer Experience 3.0 and Strategic Customer Service, both published by AMACOM. He can be reached at [email protected] and followed on Twitter at jgoodman888.