MOST STOP M^KWG^HtM PICK

MOST
STOP M^KWG^HtM PICK
UP THE PHON
HERE’S A SCENARIO MOST OF US HAVE EXPERIENCED AT ONE TIME OR ANOTHER:
YOU ARRIVE AT THE AIRPORT AND SEE A CUSTOMER SERVICE AGENT STANDING
THERE, YET YOU STILL HEAD STRAIGHT FOR THE SELF SERVE KIOSK TO CHANGE
YOUR SEAT, PERHAPS REQUEST AN UPGRADE, AND PRINT YOUR BOARDING PASS.
OR HOW ABOUT THIS ONE: YOU STAND IN LINE AT THE BANK TO USE THE ATM BUT
KNOW FULL WELL THERE’S A TELLER INSIDE THE BANK WHO’S READY TO HELP YOU.
It turns out that most customers don’t just ¡ike self-service—surprisingly often, we go out
of our way to self-serve. How customers want to be served, and how they want to engage with
companies, has changed considerably in the past decade.
The problem is that most service strategies haven’t followed suit, and this is hurting companies
not just once but twice, through increased operating costs and decreased customer loyalty.
There are a variety of reasons why self-service has become so appealing to customers. It’s
efficient—the kiosk is simply faster than the ticketing agent. Social norms have shifted to the
point where it’s not cool to have to speak to some customer-service agent when you could just
as easily use your smartphone. It’s almost embarrassing to be seen in line at the airport nowadays,
isn’t it? Why would anyone want to get in line with all those travel rookies?
BY MATTHEW DIXON, NICK TOMAN, AND RICK DELISI
12 THE CONFERENCE BOARD REVIEW
MATTHEW DIXON is an executive director, NICK TOMAN is a senior research director, and RiCK DELISI is a senior director of advisory services in the
Sales & Service Practice of CEB (formerly known as Corporate Executive Board). From The Effortless Experience: Conquering the New Battleground for
Cusíomer/.oya/íy (Portfolio). ®2013
But if you ask the average executive how customers want
to interact with his company, almost without fail he will tell
you his customers generally prefer to call. Service leaders are
almost hardwired to think this way, and it’s really not hard
to understand why. Live phone service represents the most
significant operational cost in their organizations. It’s the
most visible channel that companies oversee—the subject of
many YouTube montages and customer letters threatening to
end their relationship with a company. And it’s the channel
on which most service leaders cut their teeth as they came up
through the ranks in their own careers.
This mismatch between how customers want to be served
and how executives think they want to be served is actually
masking one of the biggest and most insidious drivers of
high customer effort. It’s called channel switching—when a
customer initially attempts to resolve an issue through selfservice
only to have to also pick up the phone and call—and
it’s plaguing the customer experience in a way few service
leaders fully understand or appreciate. In fact, channel switching
happens in the majority of service interaction—more than
most companies would ever imagine. And each time a customer
switches channels, it has a significant negative impact on
customer loyalty.
GETTING THEM TO STAY
There’s no disputing t:hat this problem ought to be in every
company’s spotlight, but ironically, it’s not. This is in part
because most companies tend to take a myopic approach to capturing
the customer experience. While just about all companies
are good to excellent at tracking a customer’s usage of any one
channel, few companies have systems capable of tracking the
experience across multiple service channels. Companies tend
to think of their customers as “Web customers” or “phone
customers,” not as customers whose resolution journeys
actually cross multiple channel boundaries. And so it’s no
wonder most companies aren’t even aware that channel
switching is happening.
If you ask nearly any business leader or manager
what her company’s biggest challenge is regarding
self-service, invariably you’ll hear some version
of “getting our customers to go to self-service.”
Service leaders know the potential cost savings
all too well. “Our call volume is too high. If
we could just get more customers to use our
self-service channels, we’d save a ton of
money… so how can we do that?”
But what these leaders don’t realize
is that a sizable majority of the
live phone calls their service reps are taking every day
are from customers who already tried to self-serve. In
fact, on average, nearly 58 percent of a company’s
inbound call volume comes from customers
who first were on the company’s website but,
for some reason or another, still ended
up calling the contact center. What’s
more, over a third of customers
who are on the phone with a
company’s service reps at any
one moment are also on
that company’s website
at the same time.
What about the customer experience? Just how painful is
channel switching? Customers who attempt to self-serve but
are forced to pick up the phone are 10 percent more disloyal than
customers who were able to resolve their issue in their channel
of first choice. Each seemingly minor switch has real impact.
That massive group—the 58 percent of customers who are
forced to switch from Web to phone—fall into the “lose-lose”
scenario: They cost companies more to serve and end up being
less loyal as a result. As one CFO exclaimed when he saw this
data, “Let me get this straight. You’re saying we’re paying for our
customers to be disloyal to us?” In a manner of speaking, yes.
The challenge is not in getting today’s customer to try
self-service. The challenge lies in getting today’s customer
to avoid channel switching from self-service to a live phone
call—and in doing so, avoiding the cost and disloyalty that
comes with it. Put simply, the self-service battle isn’t about
getting customers to go—it’s about getting them to stay.
T
o help shed more light on this shift in channel preferences
and the prevalence of channel switching, we
surveyed more than twenty thousand customers during
the course of three different studies, spanning both
B2C and B2B interactions. These represented all major industries
and a wide variety of customers from around the globe.
We asked about their experiences: Which service channels did
they use? In what order did they visit those channels? Was their
issue resolved or not? How easy or difficult was the interaction?
We also sought to understand more about channel preferences:
How much value do customers really place in the different
service channels they use? What we really wanted to determine
was the value placed on live versus self-service channels.
COMPANIES LOVE THE PHONE
So just how important is the Internet in the average company’s
service strategy? The preponderant answer is, “Not
as important as live phone service.” On average, service
leaders believe that customers prefer phone service two and
a half times than more online self-service—mainly because
companies believe their customers want some sort of
personal relationship with them.
So just how far into the future will it be before customer
preference shifts toward self-service? The vast majority of service
leaders believe this is at least several years away, if not
more. So it wasn’t terribly surprising that only a third of the
companies we spoke with had recently taken on a self-service
project of any kind. It just isn’t a priority for many companies.
The thought that customers are frequently switching channels
from Web to phone isn’t even remotely on the radar screen.
In our conversations with service leaders, we encountered
several “hard-wired” assumptions that colored their perception
of self-service:
• Customers want to self-serve only for easy issues—for
instance, checking balances, viewing the status of an
order, or making a payment. But when issues are more
complex or urgent, customers are comfortable only with
live phone service.
• Only the millennial generation (people in their teens and
20s) has a strong desire to use self-service; older generations
simply don’t. In other words, the tipping point when
more people prefer self-service over live service is potentially
at ¡east ten years away.
• It costs a lot of money to really improve the self-service
offering. Current service websites are ill-equipped to help
customers self-serve, and so significant capital investment,
well beyond current levels, would be required to make selfservice
work for most customers.
As one executive vented to us, “The self-service opportunity
is like the sword in the stone.” The cost savings are clear, but
the limitations of self-service are simply too great and the
timing just not quite right. His belief is that neither he nor his
customers are ready to capture that upside just yet. He is far
from alone. Most service leaders express similar frustration. As
a result, their strategy is to better manage the phone channel
and devote relatively little attention to improving self-service.
THE TIPPING POINT IS ALREADY HERE
Contrary to what most executives believe, the three assumptions
shown above are simply not true. They are myths that
need to be busted.
The reality is customers already value the Internet as much
as the phone, if not more. In fact, customers see just as much
value in self-service as they do in phone interactions, a finding
that largely holds true in both B2C and B2B interactions.
This is nowhere near what executives expected—a 2.5-to-l
margin in favor of phone service.
Phone and self-service preferences are ships passing in the
night: The desire to use self-service is increasing very rapidly,
while the preference for picking up the phone is decreasing
at the same rate. The day of that tipping point isn’t ten years
away—it’s already here.
U THE CONFERENCE BOARD REVIEW
Some customers don’t even feel like they’re making a choice
between calling a company or using the Web to self-serve.
Calling is literally not even part of their, thought process.
Ask any college student which pizzeria they phoned to order a
pizza for a party, and they’ll probably look at you like you had
three heads. “You don’t call someone to order a pizza—you
just go online and order it. Why would you call someone?”
We are in the era of self-service first.
What about the harder issues? Recall the initial assumption—that
customers had confidence in self-service for only
the really simple issues like checking their balance or order
status. If that were the case, you would expect customers
to be indifferent about the channels they use. To test that
assumption, we dug more deeply into our data and isolated
scenarios where customers had these more difficult and
complex issues. While preferences did swing back slightly in
favor of phone service, the difference was nowhere nearly as
pronounced as most service leaders had expected. Even in situations
that are not routine, customers consider self-service
as their first option far more than most of us ever thought.
Naturally, there are instances when an issue is so complex
that it demands speaking with a live rep, but as it turns out,
those instances are pretty rare.
Consider this scenario. It’s late in the evening, and you
notice that your child is starting to develop a slight rash and
has a fever. Few would dispute that your child’s health isn’t
high-stakes. Now, of course you could phone your pediatrician
or an on-duty nurse. You could also visit a twenty-four-hour
clinic or even go to the emergency room. But increasingly, what
do most parents do in this situation? We turn to an online
resource such as WebMD. We trust these resources—and our
own ability to make an informed interpretation of what these
online resources are telling us—in ways that we didn’t only
five or ten years ago.
Customers really do trust online self-service. Many people
are now just as confident self-serving as they are talking to
a service rep. Self-service also places the customer in control,
particularly when information that is confidential or potentially
embarrassing might be exchanged. So the well-ingrained
mindset that the phone is far and away the most valued option
in critical service situations is no longer true—or at least not
nearly as true as we once believed.
What role does age play in service preferences? Recall the
other assumption—that the preference for self-service was
strong only within younger demographics. Naturally, you’d have
to think that there would be some differences in channel preferences
by age. There’s little doubt that older customers have less
of a predisposition toward technology, not having grown up with
smartphones, PCs, and the Internet. You’d expect that fact to
be reflected in the way they want to interact with companies.
And while that’s definitely true to some extent, it’s nowhere near
what any of us would have guessed. There are plenty of folks
in their 60s, even their 70s, who prefer going online first when
they have a problem or a question. The balance even among older
age groups in favor of phone service is far closer to 60:40,
not the 90:10 or 80:20 ratio many of us would have guessed.
So even customers who are the last to adopt self-service are
much further along than most of us would have imagined.
The age of 51, we learned, is where preference tips from one
side to the other. That’s a far cry from what most companies
think. The comfort and confidence that baby boomers are
showing in using the Internet for service transactions seem
tcbreview.com • FALL 2013 15
MANY WAYS CAN CUSTOMERS REACH YOU?
Executives commonly believe that customers want
more choices in how they interact with a company.
Companies provide a near-endless stream of choices
online: proactive Web chat, click-to-chat, knowledge
bases, step-by-step guides, email, click-to-call,
interactive or virtual service centers, online support
communities, and so on. More is always better, righf
A full 80 percent of companies we surveyed reported
recently adding new self service options to existing
channels, or adding new channels entirely. Most
companies view all of that choice as a good thing. But
this turns out to be an erroneous assumption, one that
unnecessarily drives up expenses and undermines loyalty.
Consider that the average customer-service website
has between twenty-five and fifty potential choices for
a customer to make before even starting the resolution
process (FAQs, phone options, chat options, options
within options]. And for most companies, this number
continues to grow.
With all the choices available for customers to resolve
a given issue, how could you possibly expect anyone to
make the right (lowest-effort) choice based on the issue
or problem they’re experiencing? Some kinds of issues
are very fast and easy to resolve through Web self-service.
Some issues are so complex that they require live
interaction with a customer-service rep in order to be
resolved with the lowest effort possible. Wo one channel
is best for all issue types. But the vast majority of companies
simply leave it up to the customer to choose his own
adventure, believing that customers prefer more choice
over a lower-effort experience.
Low-effort service organizations opt for guiding customers
in self-service interactions instead of allowing
choice. MasterCard has one of the best guided resolution
sites that we’ve seen to date. MasterCard’s customersupport
website is built for decision simplicity. Instead
of offering an overwhelming number of choices, it offers
a limited number of choices, with a couple of them
presented more prominently. Their support site operates
like a “virtual concierge”: Based on what you tell it,
you are guided to the lowest-effort pathway. Using this
new interface, MasterCard has seen a marked reduction
in customer effort, including a 30 percent decrease
in email volume. Additionally, MasterCard reports a
significant shift in the mix of simple versus complex
interactions handled via phone, indicating that fewer
customers are actually channel switching. The net outcome
is that customers who need live rep attention are
getting it, and the customers who want to self-serve are
easily able to finish online.
For customers, when it comes to how information is
presented online, simplicity matters a lot. Most customers
who channel-switch do so because they become confused
or lose confidence. It’s not that the website fails
them, or that it isn’t capable of answering their question.
Surely that happens, but not as frequently as a customer
getting lost in the language or layout of a company’s
service website.
Can you get all of the channel switchers to stick to
self-service just by simplifying the website? Probably
not. But we believe that getting two in ten customers
to avoid channel-switching is an easily attainable goal.
Of course, capital investment in a slicker interface and
greater functionality could put a far greater dent in this
number. But “two in ten” is a worthy and realistic first
step and can be achieved primarily through simplification
of the website. For a company with a million annual
phone calls and an average cost per call of $8, even this
would result in annual cost savings of roughly $56^,000.
And those two in ten customers will end up less disloyal,
because they’ve had a lower-effort experience.
-M.D., N.T., and R.D.
16 THE CONFERENCE BOARD HKMK«
to be constantly increasing. Indeed, this age demographic has
accounted for some of the most explosive growth in online
usage. Facebook, for instance, has reported that users over
65 years of age represent its most significant growth segment
over the past few years.
Here’s a sobering thought related to just how off-base most
companies are: What executives initially told us, the 2.5-to-l
margin, turns out to actually reflect the service preferences
of at least one segment of customers. That segment? Customers
who are 77 years old and above. That’s a far cry from most
companies’ target customer demographic.
It’s not that companies had no idea that the preference for
Web usage is shifting. Rather, it’s that this shift is happening
far more quickly than any of us could have predicted.
SO WHY ARE PHONES STILL RINGING?
This shift in customer preferences is a fairly recent phenomenon.
Nearly 67 percent of customers told us that that even
five years ago, they primarily relied on the phone for service.
Compare that to only 29 percent of customers making the
same claim today. It’s a remarkable shift that’s caught many
companies flat-footed. But if the only bad news here is that
most service leaders were drastically off the mark, well, that’s
not so bad, right? Customers want to self-serve. The shifts
most companies were expecting to see in five, ten, or even
fifteen years have already occurred.
It only stands that call volume should be dropping like a
rock. But it hasn’t. We didn’t find this to be the case for a
single company in our ongoing analysis. While phone volume
is decreasing, it’s dropping more like a feather than a rock.
(In fact, for most companies it’s declined by only 4 to 5 percent
over the past few years.) The customer remarks captured in
our survey help explain what’s really going on. Some of the
more telling customer comments we received:
“I always feel like I have to call—not that I want to call, but
I have to call. It’s hard to think of other companies where I
always have to call. Their sites make sense to me.”
“Your website told me to call. If I wanted to call, I would have.”
“Your agents are very nice, and I always have good experiences
when I talk to them. I just don’t always want to have to
talk to them.”
Take a minute and imagine yourself manning the phone
lines, talking to a customer about a service issue. You come to
learn that this customer was just on your website and could
have self-served, but for whatever reason she still ended up
picking up the phone and calling. How would you feel about
spending valuable time (hers and the company’s) having a live
interaction with a customer who not only wanted to self-serve
but actually tried to?
The first step you need to take is assessing the main reasons
customers have to channel switch. While you could assess your
channel-switching opportunity by combing through CRM,
website, and phone-trunk data. Fidelity Investments takes a
much more straightforward route to accomplishing the same
thing. Fidelity’s contact-center reps are armed with a simple
question tree they use when a customer calls. Here’s how it
works: Customers are initially asked whether they tried to use
self-service. For those who answer yes to this question, they
are asked what happened—why did they have to call? Was it a
technical issue? Was something confusing? Did they lose their
way on the website? These are the channel switchers, telling
Fidelity exactly why they had to switch. To get this data alone
makes the practice worthwhile.
However, Fidelity takes it a couple of steps further. Customers
who didn’t try to self-serve are asked if they were aware the
functionality existed (in situations where it, in fact, does). And
when situations for which the functionality doesn’t yet exist
for their issue, customers are instead asked if they would feel
comfortable attempting to self-serve for that issue should the
option become available. The whole exercise is really a basic
market-research question that helps the company know where
to make future self-service investments. Fidelity reps present
it to customers as a learning exercise that the company is conducting
to help customers. Positioning the questions as a way
to learn from the customers is the reason so many customers
offer their input.
Additionally, customers feel that they are truly being listened
to when they speak with a Fidelity rep, versus a survey,
about their online interaction. It’s a really clever approach,
because they capture great information about channel switching
and also get valuable information on how customer
preferences are evolving plus a sense of how aware customers
are of self-service options.
One of the first executives with whom we shared this data
and research had this reaction: “We think of our customers
as either ‘phone callers’ or ‘Web users,’ but what we’re finally
beginning to realize is that we actually need to think of them
as both.” It’s a simple, perhaps obvious point, but very few
companies think this way about their customers.
Companies need to shift their focus from getting customers
to try self-service to getting customers to stay. Ten years
ago, self-service was about educating customers about the
existence of the company’s website and building their confidence
that they could use self-service to resolve their issues.
In fact, in 2005 our team wrote a study on this very topic,
entitled “Achieving Breakout Use of Self-Service.” That study
now feels like ancient history. That era has already passed us
by. So don’t fight it. They’re a small (and shrinking) minority
of customers. The channel switchers are where you’ll find the
win-win—a lower cost to serve for you, and lower effort for
the customer. And best of all, there are still plenty of opportunities
to get this right. •
tcbreview.com » FALL 2013 17
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Executive Summary (Due Week Nine)

Do not upload here. Bring a printed copy to class.

EXECUTIVE SUMMARY

Business professionals are inundated with communication, ranging from electronic forms, like the endless information available for consumption on the web, email and text messages, to the more formal workplace communication of presentations, memos and reports. To reduce the information overload and increase retention, an executive summary summarizes key points to prepare the reader for upcoming, longer and more in-depth information.

Your Task

Using the Walsh Library databases, find the following article in Ebsco Business Source Elite:

Authors: Dixon, Toman & Delisi

Year: 2013

Title: Why Your Customers Don’t Want to Talk to You

Publication: The Conference Board Review

Summarize the article. In the first paragraph, give specifics about the article (authors, title, year, topic) and the business purpose (relevance of information to your company). In the body, use headings and bullets to organize the information. End by explaining which main ideas your business can consider using; include a short statement such as: I would like to discuss this with you on Tuesday after the department meeting . . .

Cite all facts with in-text citations to avoid plagiarism. Use at least one direct quote. List the source on a Reference page (including the volume, issue and page).

FORMAT

Use 12-point Calibri font, block style and one-inch margins. The summary should be two pages. Include headings.

CRITERIA FOR EVALUATION

Assignments will be assessed with the Written Deliverables rubric with attention to these areas:

-Responsive to the audience’s subject knowledge, attitudes, interests and values, as well as the purpose and occasion.

-Employs format specifications detailed in the “Your Task” section of this assignment description.

-Incorporates effective language for the audience, purpose and situation.

-Utilizes the appropriate organizational pattern for the message’s purpose.

-Reflects professional communication standards including tone, research, APA documentation in-text and in a reference page, grammar and overall writing standards.

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