Customer Experience Management: Don't Just Measure, Measure What Matters

Customer Experience Management

The old management adage says “You can’t manage what you don’t measure,”–i.e., if you don’t track performance, how can you improve?

When it comes to customer experience, traditional contact center operational metrics simply are not sufficient to tell the whole story. Instead, it’s imperative to measure what really matters, which is any activity that impacts the customer experience.

Related article: Maximize Customer Lifetime Value by Improving all 360 Degrees of a Customer’s Experience

With so many variables in today’s hyperconnected enterprises, it’s important to align customer experience-specific metrics with your business objectives so you can effectively target improvement activities, and avoid missing important signs of needed improvement.

Take customer lifetime value (CLV) as an example. To truly understand CLV is to know that every part of the business influences customer experience and, ultimately, the value of that customer to your business–from strategic planning at the highest levels, to marketing, sales, operations and customer service. That’s a lot of ground to cover if you’re trying to measure performance.

To simplify CLV, focus on its  four core elements: revenue, cost of support, the length of the customer relationship and customer acquisition cost:

  • For revenue, use annual revenue times gross margin on a per-customer or average customer basis.
  • For costs, use the per-customer or average customer cost of support for the year.
  • For customer relationship, use the number of years that an average customer does business with you.

For customer acquisition cost, use total acquisition costs divided by the number of new customers acquired.

The Customer Lifetime Value Equation:

Customer Lifetime Value equation

What key performance indicators should you measure to understand those elements? Strategic KPIs like retention rates, margin-per-sale, Net Promoter Scores® and referral rates are all pretty straightforward indicators of revenue performance. Other important indicators include cost indicators like customer service interactions, average handle time, first-contact resolution, the mix of self-service vs. agent-assisted interactions, and the like.

Successful companies also know that cost-related metrics, like first-contact resolution or contacts per event also impact the top line because these factors affect customer retention. A business can use CLV “math” to test how a combination of factors would affect Customer Lifetime Value. Two simple examples are:

  • A proposed policy change would reduce support costs, raising Customer Lifetime Value. How much loss in customer retention would wipe out the savings?
  • An investment in service and support should reduce customer effort and therefore increase retention. How much does retention need to increase to justify the project?

It’s imperative that all employees understand CLV, their own personal relationship to it, and how their actions either help nurture and support CLV or chip away at it and tear it down. That’s what really matters, so it really must be measured. And because no successful company is static, it must be measured consistently and regularly.

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Robin Foster

This blog entry was a guest post, written by Robin Harris Foster.

Robin is the Practice Leader for ROI Analysis at Avaya. As the Practice Leader, she is responsible for setting the standards and methodology for analysis of a broad range of the Avaya solution portfolio, including Contact Center/Customer Experience Management and Unified Communications and Collaboration. She also develops the tools used by Avaya associates and business partners when cost justifying Avaya solutions and engages directly with account teams and customers to address sales opportunities.

Robin has more than 20 years of experience in Contact Center, in a career spanning both Bell Laboratories (AT&T and Lucent) and Sales (Avaya) and was one of the primary co-inventors of the Business Advocate software available exclusively from Avaya. She holds 28 US Patents related to contact center operations, primarily in the domain of predictive and adaptive algorithms to align operations with business goals for performance and cost optimization.

Robin has a BS in Mechanical Engineering and a Masters of Engineering in Systems Engineering from the School of Engineering and Applied Sciences at the University of Virginia.

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Finally… A Contact Center for the Digital Era

Imagine interacting with a company—any company—via your preferred method whenever you want, whether making a phone call, using online chat, sending an SMS, or messaging via Facebook. And, you end up having exactly the experience you were expecting. No not another bad experience. Rather an exceptionally pleasant and good experience, that surprisingly takes less time than you originally anticipated. Sounds too good to be true, doesn’t it?

The reality is that traditional business communications have failed to keep pace with consumer-focused technological devices. As a result, customers’ expectations—while very high—are rarely met when interacting with a business. Customers know what a good technology experience looks like, sounds like. The simplicity, built-in intelligence and sophistication of today’s devices and apps have taught customers that it’s not difficult to have a simple and tailored experience. It’s not difficult to teach a computer to know who you are, what you prefer, what you like to listen to, watch, read, how you like to interact. If it’s not difficult, then why are customer experiences with companies so predictably bad?

It’s time to break the mold. It’s time to start a new customer experience wave that makes customers happy about doing business with a company, excited that a company values their time and loyalty. Let’s give companies the freedom to be innovative, proactive, independent and capable of operating in real time to meet the demands and needs of their customers and agents without fail.

Unlike their traditional predecessors, today’s technological systems and capabilities have finally caught up with digital customer expectations. We have arrived at a point in time where the digital brain of a machine and the reasoning mind of a human are aligned closer than ever. Look at IBM Watson, Amazon Alexa.

Now, all that’s needed is similar thinking and innovation applied to business communications. What’s needed is the re-invention of the contact center for the digital era.

Enter Avaya Oceana™

Oceana is a departure from traditional business communications, just as the smart device was a departure from the basic, voice-only flip phone. This is a contact center for the digital era. Companies today don’t want to risk losing customers as a result of a bad experience. They can’t afford it. Companies want a single solution with best-in-class flexibility that gives them the ability to:

  • Drive adoption of self-service channels by seamlessly linking these into the contact center to deliver an omnichannel multi-touch experience.
  • Make agents more efficient and more effective by enabling them to handle multiple parallel interactions using an integrated multi-media desktop.
  • Reduce call times through utilizing contextual knowledge of prior and in-progress interactions to streamline customer interactions.
  • Drive higher customer satisfaction / NPS by tailoring the engagement experience to address their business’s unique/specific customer needs.
  • Rapidly optimize and continuously improve how they engage with their customers by leveraging their system’s flexibility, openness and integration capabilities.

In turn, customers get the experiences they know modern-day technology is capable of providing. The sophisticated yet simple and intelligent experiences they have grown accustomed to having with their smart devices, tablets, laptops, digital televisions and other smart appliances. This is Oceana.

Avaya Is the Innovative Leader for the Digital Era

When we made the decision and accepted the challenge to lead the industry in re-inventing the contact center, we did not enter into this without careful thought and consideration … of everything. Leaving no stone unturned, we diligently looked at what our customers and our competitors’ customers are working with today. We uncovered more cobbled together, Frankenstein-esque systems than I ever thought existed. The complexity of processes and user experiences that companies unintentionally created by not keeping up with technology upgrades was amazing. Holding on to these older technologies today when all of these digital capabilities are available is similar to keeping a shelf full of CDs for your music. Eventually you realize that making the choice to go digital can transform your world for the better.

What we also learned was that if we were going to re-invent the contact center for the digital era, we had to think differently because digital technology and digital customers require different thinking. We challenged each other daily to think differently. That’s been the biggest challenge all along for companies struggling through digital transformations. But as Avaya learned with our own transformation, once you make the hard decisions, start thinking differently and get to the other side of the transformation, a whole new world of opportunity becomes available to you.

As Oscar Goldman used to say during a time when human-to-machine technology was something only Hollywood could dream up, “Gentlemen, we can rebuild him. We have the technology.” The truth is we finally do have the technology. We can rebuild the contact center. This is no longer a futuristic endeavor, this is now. In fact, let me rephrase that: we have rebuilt the contact center.

This is Oceana. This is the contact center for the digital era. This is the start of something new, the start of something big.

3 Predictions about The Future of Customer Experience

Sometimes I know what the fictional Rip Van Winkle must have felt like when he woke up from his 20-year slumber. It seems like only yesterday that we in the communications world were marveling at the benefits of integrating voice and data. Now it’s all about the multi-touch customer experience and mobile everything. The speed at which communications in general—and customer engagement specifically—are advancing is nothing short of astonishing.

This prompted some thinking around what the next few years might bring. So we gathered insights from a variety of Avaya customers, visionaries within our own organization, and industry analysts to piece together a picture of what the future of customer experience will be in, for example, 2025. A few key themes emerged:

The nature of service will change. In the future, we won’t be talking about a device or media type. It will be all about what smarter consumers expect as outcomes—it starts with WHAT they want to do, followed by HOW they want to take action. It’s all about a customer being able to initiate contact in any number of ways and seamlessly move from one action to the next, in pursuit of resolution, knowing that a business will instantly know who they are, what they purchased (or anticipate what they want to purchase), what previous interactions they’ve had, what the outcomes of those interactions were, and then respond or, better yet, proactively address their needs. Everything is integrated at the point of interaction for the particular desired outcome at that moment.

And, it’s not just smarter consumers. Because the customer of tomorrow has done their own research, attempted to fix their own issues, etc. they require smarter, better equipped and, frankly, happier customer service agents and experts. To meet customers’ increasing expectations for fast, effortless and personal service, employees need to be empowered, be more knowledgeable, have the right tools, and—this is a bit subtler—better motivation. Increasingly, employees expect better work-life balance, more flexible scheduling, the latitude to work from home and the freedom to use their own devices. All of this—on both the consumer and agent side of the equation—means having seamless, adaptable, integrated, and responsive contact center infrastructure and applications. Organizations will be required to have an even smarter enterprise.

Extreme analytics will power customer experience. What is Extreme Analytics? It is analytics driven by context, supported by workflow automation, working with machine learning, and feeding artificial intelligence, just as a start. These are what will be needed to drive highly customized personal experiences. Natural language processing with analytics running in the background will make consumers feel that they are receiving a unique personalized experience, even though they may talk voice-to-voice or face-to-face with anyone from the company. No matter what means—digital or otherwise—the customer uses to initiate contact, the technology will be in place to translate, interpret, understand behaviors, anticipates needs, even if it’s a first contact between the customer and the business. If a customer chooses to visit a store or other location in person, there are still means by which—using GPS, geo-targeting, Internet of Things and other technologies—a highly personalized experience can be sculpted in real time. It will no longer be a digital interface alone. It will be about enabling interaction and personalization no matter where a customer wants to conduct business.

Loyalty is dead. As the post-digital world unfolds, the only loyalty customers will have is to whoever can make it easiest for them to do what they need to do. It will no longer be cognizant or mindful loyalty. Instead—whether it’s retail, banking, cab service, travel, prescription drugs, whatever—tomorrow’s consumers will certainly derive some level of comfort from knowing they’ve interacted with a business before, but that won’t be enough to keep them coming back. The next company that comes along and makes it faster, easier and (maybe, but maybe not) cheaper will get their business.

Here, extreme analytics come into play again. Driving in-the-moment loyalty will require customer segmentation that goes far beyond age groups and other demographics and customer profiles. It will include behavior analysis and an up-to-the-minute understanding of what a customer is doing (or anticipating next) so their experience can be personalized. It doesn’t matter that I fit into a certain age bracket or that I am a platinum customer of this financial institution or of that hotel chain. I have different “care abouts,” and a company needs to know those about me so they can create “anticipatory engagement.” The company anticipates what a customer will need, perhaps even from adjacent industry analysis, which drives knowledge of next best action, and drives proactive outreach—product and service offers that meet an expectation that is only now materializing.

Are these themes the things dreams are made of? Absolutely not. Consumer expectations are already headed in the direction suggested above, as are the technologies that are beginning to enable those capabilities. It’s only a matter of time, the future is now.

Curious to hear more about how we envision the Future of Customer Experience? How are customer expectations changing in your business? I’d love to hear from you.

Transform the Customer Experience with an Intelligent Contact Center

The evolving demands of digital-savvy customers have a deep impact on the contact center. In today’s highly connected society, customers are relying on other people around them to find information to solve issues. They consult online resources, form online communities, and look to endorsements from total strangers to form opinions on products and services. While these channels provide customers with the information they need, the contact center remains a predominant channel for customers to seek support when they truly need something done.

Despite playing such a crucial role in customer engagement, contact centers don’t always get the attention they deserve. Customer experience today is often discussed in a marketing or branding context—through the events and promotions driven by marketing as well as spaces and packages defined by branding. In reality, the last mile that makes or breaks the customer experience lies in the contact center. More importantly, most unhappy customers will simply give up after failed attempts at getting through to a contact center or an unhappy experience speaking with an uninformed customer service agent.

The age of social has promoted the behavior of instant gratification. Customers today want an always available service and they want their calls answered quickly, by an informed representative who can help solve their issues. With so many devices on their hands, and so many channels to engage with brands, customers also expect agents to know the history of their past interaction, regardless of whether it is an email, a phone call, or a visit to a branch or store. Most customers also understand that there may be periods of high service calls, but they expect to have alternatives, in the form of call backs or self-service options. In short, the contact center of today must be demand based and software driven.

All of this points to a future contact center that must be a lot more integrated to the business, intelligent in anticipating and sieving out customer needs, and channeling the right customer to the right platform to shorten call queues. Avaya has a full suite of award-winning customer experience solutions that help businesses transform their contact center in the era of digital.

We have been working with our customers across the Asia Pacific to provide cost-effective, integrated, personalized customer experiences with our world-class contact center and unified communications technologies and services.

Recently, Frost & Sullivan put the spotlight on Avaya’s focus on innovation and supporting our customers’ business needs in enabling an omnichannel approach to customer service and experience with a slew of awards at Frost & Sullivan Asia Pacific Best Practices Awards 2016.

We were named leader in 5 categories including:

  • Asia Pacific Inbound Contact Routing Systems Market Share Leadership Award
  • Indonesia Contact Centre Market Share Leadership Award
  • Philippines Contact Centre Applications Vendor of the Year
  • Southeast Asia Contact Centre Applications Vendor of the Year
  • Thailand Contact Centre Applications Vendor of the Year

The Awards spotlight our focus in providing a seamless, omnichannel customer engagement platform that enable our customers to achieve their business objectives.

The way in which we use contact centers today is changing. Technology has essentially given it a facelift and elevated its importance in the customer relationship journey. From the realms of large businesses, where contact centers are meant to handle the highest number of calls at the lowest cost, contact center technology today is sought after for the intelligence it can provide. This can be in the form of client-drive routing, automation, tracking responsiveness, call routing, screen pop-ups, workforce collaboration, speech analysis—the list goes on.

As technology continues to advance, expect more features powering the call center, perhaps even robots that can literally access all the information customers need at their fingertips.