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Creating a More Empathetic CX by Connecting Data Across Support Touchpoints

Presented at Activate Customer Service 2021. Brands, customers and the service agents who support them are having to shift the way they do business. In an age of stay-at-home commerce, digital experiences are at the forefront of the customer experience. Therefore, despite shrinking marketing and sales budgets, brands continue to increase their customer service investments. In this keynote, you’ll learn why empathy must guide data and technology decisions. Customers seek to self-serve more than ever before, but often face downright frustrating results – which then cascade to the customer support agent interaction. By investing in technology platforms that enable better self service and agent effectiveness through data connectivity, brands can deliver on the promise of providing a personal and connected experience.

Kate Leggett, Forrester VP & Principal Analyst


Kate Leggett: So welcome to ACTIVATE and welcome to my session about creating more empathetic customer experiences by connecting data across touchpoints. I’m Kate Leggett. I’m a VP and Principal Analyst here at Forrester. So I wanted to start off by talking about how the pandemic has devastated our customers and how it’s affected industries in different ways. Wind back to the first days of the pandemic, and at that point we saw demand for customer service skyrocket. I think about all the retailers who struggled with ballooning volumes of inquiries about product availability or contactless pickup, a shipment safety.

You think about travel and hospitality who ended up having to field questions about cancellations, loyalty programs or perhaps even COVID-19 procedures on flights. And as the pandemic progressed, customers were impacted by the pandemic. They were either laid off or sick and they started needing help counseling like mortgage adjustments perhaps payment assistance, financial counseling. They had questions about tax deferrals, stimulus checks, government loans, and volumes of inquiries peaked and dropped depending on changes in government regulations as the pandemic went off.

And so what happened was as that customer service became the lifeline for many of your customers, agents were on the front lines. They had to understand how the pandemic had impacted customers’ livelihood, and their health and agents had to understand each customer’s unique situation and then work with them to do the right thing for them. And at the same time, we saw companies slashing their marketing and their sales teams. And as companies shifted away from acquiring new customers, they focused more on post-sale engagement activities trying to manage and grow their engagement and value of their existing customers.

So what we saw is that customer service organizations actually became more strategically important to a company’s overall revenue as last year progressed.

So diving into business priorities for customer service organizations, what we wanted to see is how business priorities have changed before the pandemic and after the pandemic. So before the pandemic, customer service organizations priorities were all about growing revenue and delivering better customer experiences because great customer experiences, it’s a proven method of being able to increase top line revenue.

But after the pandemic, what we saw was that every company was under cost optimization pressures. So reducing costs had jumped by four percentage point, but in second and third place, again, was increasing customer experience and improving brand differentiation because, again, good customer experiences and brand differentiations are proven methods of being able to keep and grow your existing customers and optimizing costs is not across purposes to being able to provide great experiences. So why do we care so much about great experiences? Because great experiences are good for business. It has a quantitative impact to top line revenue. Great experiences keep your customers satisfied and loyal. And a customer who ends up having or are satisfied with the experience that they have in interacting what the company is more likely to keep their business with that company. They’re also more likely to buy additional products, services from that company, increasing their lifetime value. And a customer who’s satisfied with the experience that they get when interacting with a company becomes an advocate and they’re more likely to recommend the company to their network, to their professional network or to their network of friends which ends up driving second order revenues.

And these three dimensions of loyalty like you see on the screen here have a quantitative impact to top line revenue. And at Forrester, actually, we go a step further and we quantify the impact of great experiences on top line revenue. So how do we do this? We measure the customer experience that hundreds and hundreds of companies that we organize into dozens of industries deliver. And then what we do is we calculate the top line revenue impact that these companies could garner if they deliver just a point better of customer experience than what they do today. And these are the figures that you’re actually seeing in the right hand on the screen. And I know it’s an eye chart, but what we’ve done is we’ve created these financial models that show, if you increase your customer experience by just a score in every industry that we have data on, we showed that there is a quantitative impact to top line revenue.

And we have these financial models for over 40 different industries. And we validate these financial models with case studies of companies who have gone through transformation efforts. And the takeaway is again in every industry that we have data on – improving the customer experience has an impact to a company’s top line revenue. So it’s ultimately, that’s why we care about delivering great customer experience.

So what do customers expect when interacting with a company? They expect easy experiences. They want to be able to reach in over the touchpoint channel of their choice. Be able to get connected to an answer, to a customer service agent, to a worker to be able to get an easy answer to their question, to get value without difficulty. They want to be effectively supported. They want an answer in full context of their actions that is personalized to who they are and their value to their organization. And they wanna walk away at the end of the day, having interacted with the company feeling good about having done business, having been treated in an empathetic way where an agent understands their particular situation and is able to do the right thing for them. So customer service, it’s not only for post-purchase engagement, it actually plays a role at every stage of a customer’s journey.

And at Forrester, we think about the customer’s journey into six abroad phases. It doesn’t mean that a customer goes through these phases in a linear way. All it means is that a customer journey can be divided into six broad phases. So the six phases are the discover and explore phase. These are typically what you would think of a marketing phase, the buy phase, and then the post-sale phases of being onboarded, learning how to use the product, learning how to get full value out of your purchase. And then the traditional customer service phase of ask. And then post-sale engagement where the customer deepens their relationship with a company that they’re doing business with. And customer service plays an important role during each of these six phases. For example, during the discover phase, marketers can use customer service content to increase awareness of their products and services or to be able to proactively engage with the customer based on their behavior.

During the explore phase customer service agents can, again help explain to a buyer features, functions out of a product, warranty information which increases the confidence that the buyer is making the right purchase. During the buy phase think about it, a filling out of complex loan application or mortgage application, customer service agents can proactively engage with a customer, helping fill out these complex forms, being able to increase the success of their application. In the use phase again, customer service agents can help to inform customers on how to set up, how to properly onboard it, push the right training to a customer for them to be able to get full value out of their purchase. And the ask and engage phase. These are what we, again, traditionally think about a classic customer service activities.

So again, the takeaway on this slide is that customers expect these easy, effective, empathetic experiences along their journey. And that customer service plays a role at every stage in the customer’s journey. So what are the channels that customers use to engage with companies? We know that for straightforward questions, straightforward interactions, customers are gravitating to digital channels and self-service channels. Your website interaction with a chat bot, as well as interaction with digital channels like chat, like messaging, like email. Again because self-service and digital channels provide a quick and easy way, effective way to be able to connect with an answer or with an agent without having to pick up the phone and navigate an IVR, wait in queue to be ultimately connected to an agent.

So what you’re seeing on the screen here is data from Dimension Data’s NTT’s Benchmarking Report from 2020. And what we see is that, for example, 31% of customers use self-service for general customer service, 53% use other self-service channels for identification, verification, and 51% use self-service channels for simple order management. And again, if self-service is done well, it values a customer’s time providing that easy, effective engagement.

But what we see for the harder questions, if there’s a complexity and the customers ask or if a customer is highly emotional, they may be anxious. For example, think about a customer whose health claim was denied or they may be angry, they got hit with a surcharge on their bill. At that point, the phone channel or an in-person a channel provides the best way of a customer to connect with the company and to be able to explain their problem and get a resolution to their answer. So again, customers use self-service and digital channels for the straightforward issues but they turn to the phone channel again for the more complex inquiries, especially if these inquiries also have an emotional component for example, in a dispute resolution.

But what we find is that most companies aren’t able to provide experiences in the way that customers expect to be engaged and served. Customers again, they want their time to be valued. They want to start an interaction on one channel continue it on another, without having to repeat all that they’ve already communicated to an agent or to the company. They don’t wanna have to restart the conversation every time they interact with a new agent. They want agents as well to know who they are, and to be able to give them an answer in context of their journey.

But what we find is, again, most customer service organizations can’t do this because their tech ecosystem is fractured. Each communication channel typically gets deployed in a silo, disconnected from one another. And again, here’s some data on the screen from NTT’s Benchmarking Report from 2020. And here we see that 40% of organizations say that connecting contact channels it’s not practical. 21% say it’s too difficult. 32% say that they haven’t considered a strategy to manage a customer’s journey. So again, most companies have a long way to go to being able to support a customer seamlessly across channels and touchpoints.

And as well agents, agents have a hard time being able to deliver experiences in line with customer’s expectations because their desktop is too complicated. About a couple of years ago, I walked into a major telco, and the IT manager handed me this diagram of their agent ecosystem. And told me that agents typically use over a dozen applications during the course of their work day, these applications aren’t connected up. And so what happens is that agents can’t follow standardized processes across applications. They have to cut and paste data from one application to another. And this incurs errors and their tech ecosystem is so complicated that typically it takes about nine months for an agent to get fully trained up. However, agents get so frustrated at the complexity of their tool set that they tend to turn over after about six months. And what it means is that the customer who is interacting with the agent never gets a fully trained up agent. And this agent who is not fully trained up is struggling. It heads down struggling with their tool set instead of listening to the conversation at heart.

So here’s some data that shows how agents typically spend their time. Thirty-five percent of their time they’re searching for information from an ullage space or a CRM or another system, 15% of their time they tend to spend on performing repetitive manual tasks like cutting and pasting information from one application to another. Ten percent of their time, they’re spending reaching out to a subject matter expert or to an engineer, QA person or product lead for help. And again, your agents are spending their time in these heads down activities performing repetitive manual tasks that doesn’t allow them to listen to the conversation at hand and be able to deliver that quality of service that your customers expect that keeps them loyal to your brand.

But again, we know that customers want easy, effective interactions. Here’s some data, again from NTT or Dimension Data’s Benchmarking Report from 2020 where the study asked “What are the factors that impact customer experience for agent-led interactions? And again, you see ease of resolution tops the charts. You’ll also see that customers want to be effectively supported. They want the right answer in context of their journey and they want this delivered in an empathetic way where agents have to have the right product knowledge, the right attitude and be empowered to do the right thing for that customer who again, has been devastated by the pandemic where their health and livelihood may have been impacted.

And right under the fold, just below the box that I have highlighted on the screen here, what we also see is that customers are willing to wait if an agent has the right knowledge, the right attitude and is able to be empowered to do the right thing for the customer. So, we know that great customer experiences have an impact to a company’s top line revenue and great customer experiences rest on great employee experiences where employees, your agents, your frontline workers have to be supported, empowered with the right tools, the right technologies to allow them to be highly productive, to facilitate them on work that matters, on the most strategic customers, on the most severe cases, and allow them to connect both internally and externally, again, to do the right thing for the customer.

So again, you want to deliver great customer experiences and to do so, you have to empower your agents with modern tools and technologies to allow them to work on work that matters. And because customer service has become so important in the last year where companies again have changed, have focused more on customer nurture efforts to be able to retain and grow their existing customer base. What we saw is that customer service technologies actually top the list of software priority, software investments for 2021. They come before sales and marketing technology investments even commerce technology investments. But what you see as well is that front office technology investments have really jumped between 2019 and 2020, again because it’s being able to support customers along their journey.

So what actually are customer service organizations investing in? And what we see is that top software priority investments are a direct reflection on how consumers change their behavior during the pandemic. What we saw last year, that is that engagement moved to self-service and digital channels, for example Forrester found that 14% of U.S. adults, for example paid bills online for the first time, 14% of U.S. adults banked online for the first time ever, 13% had a telehealth appointment, 11% used a digital payment method for the first time ever. And so what we see is that the top software priorities are first of all modernizing existing customer service technologies, upgrading, replacing, consolidating legacy business applications, increasing the use of the cloud to allow customer service technologies to be used by agents wherever those agents are as work moved, as agents moved home, they had to be supported with the right technologies again, to allow them to deliver service from their home offices.

We see again, and that because consumers have gravitated to the digital and self-service touchpoints, investing in digital experience technologies is one of the top five priorities for customer service organizations. And then it’s all about personalization, best understanding your customers being able to do the right thing for them. So again, improving the use of data analytics technologies to be able to understand customers and even creating that single view of the customer across channels and touchpoints is a top of mind for customer service decision makers this year. And again, these technologies come together to best support the agent, to be able for an agent to deliver the quality of service that customers expect, where an agent can focus on the customer, on the conversation at hand, be able to understand the customer’s issues and their emotional state, and in the background be supported by modern agent desktop technologies that’s able to proactively push the right knowledge to them in the flow of a process where they can collaborate, where agents can collaborate with other agents with subject matter experts to do the right thing for the customers, where agents are aided with for example, policy automation, process guidance to be able to handhold them through predefined workflows and be able to service, for example, indicators that help the agent best understand for example, the emotional state of a customer.

And all of these technologies help power a modern agent desktop to allow the agent to deliver the quality of service that customers expect. And what we see as well is that these technologies affect the work and the way that your agents want to work. And we’re seeing the generational shifts in the agent workforce. You look around and half of your workforce at this point in time is comprised of millennials of those between 25 to 35 years of age, and gen Zs are hot on their heels. These are the new workers just entering the workforce. And what is important to know is that these two generations are digital natives. They have grown up using technologies to help them do their work. They’re more apt to collaborate, they want to be able to access information in the flow of their work. And they expect efficiency in there when they interact with other workers and with their customers. And they want to be engaged in complex work. And even if it means they want to be able to integrate many sources of information, they want to collaborate with peers and they want to have an impact to the customer. And these generations are the ones who are embracing modern customer service technologies that allow them to do their best work and make an impact to the customer.

So what does all this mean? First of all, realize like great agent and customer experiences quantitatively impact top line revenue. Again, if you’re able to deliver great experiences, your customers will stay with you longer. They will buy more from you, and they will recommend you to their professional networks or to their friends. And these three dimensions of loyalty have a quantitative impact to top line revenue. Your customers, they want their time to be valued. They want easy, effective interactions. They want empathetic interactions with a full understanding of who they are and interactions delivered in context of their actions. They are gravitating to self-service and digital channels because these channels provide these experiences that help keep them satisfied and loyal to your brand. But remember that the harder inquiries, the ones that are more complicated are the ones that perhaps have an emotional component to them tend to be routed to the phone channel. And they’re escalated to customer service agents where agents need an understanding of the customer, their journey and they need a modern technologies to help empower them to solve the harder work and best relates to their customer. Companies know the value of great customer service and they’re increasing their investment and their spent on customer service technologies. And thank you, thank you for your time. Thank you for listening to me.

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