Customer Lifetime Value: An Imperative in the Digital Era

For years, smart businesses have operated under the mantra “the customer is always right.” In an article earlier this year, I wrote about research that showed companies are increasingly taking customer experience management seriously, with many reporting higher profits because of it.

Today, let’s examine the link between customer experience management and financial performance. What tangible factors do companies measure to understand the lifetime value of their customers, and how does focusing strategically on customer lifetime value positively affect the bottom line?

Avaya recently commissioned a research study that found 47 percent of companies say measuring customer lifetime value (CLV) was an essential part of their business strategy. More importantly, those strategic users of CLV significantly outperform non-strategic users. The companies that focus on customer lifetime value significantly outperform those that don’t, in key metrics like customer satisfaction, retention and advocacy.

Measure the impact of customer engagement on your business, with the Customer Lifetime Value Calculator

Consumers have more power today than ever before. They have more channels to choose from at all points along the customer journey. They have their pick of places they can go to for help in making purchasing decisions. They have a louder voice through social media. They make a lot of buying decisions outside of the selling organization’s reach.

With the power to get information at the click of a button, customers are far more demanding of companies. They expect answers, and service, quickly. In many cases, the rate at which consumer expectations are growing is outstripping the service levels companies can deliver with legacy customer service technology.

This is the inflection point where strategic customer lifetime value intersects with the capabilities and importance of contact centers. Companies that focus on strategic lifetime value and use their contact centers as a focal point for customer experience will enjoy a strong competitive advantage over those that don’t.

The equation is simple: If your customer’s experience is good, they’re more satisfied, more likely to become brand advocates and–importantly–more likely to return and spend more money with your company. That requires you to understand who your customers are, what they need, what they already have and what they have looked at in the past week, month, or longer. That information will give you a better chance of tailoring your offer to them, personalized to their specific needs.

By focusing on the elements that make up customer lifetime value, you’ll do a better job of managing revenue, cost and resources–all resulting in higher profitability. Importantly, you’ll retain customers longer–the topic of my next article–and find the value you receive from those customers increases rapidly as you interact with them over time.

Does your company consider customer lifetime value a strategic imperative? Should they? I’d love to hear from you.

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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.

User-Defined Engagement is in Avaya’s DNA

User-defined engagement is our new mantra at Avaya. We dream it, innovate for it, develop it, live it. It is in our DNA. With more than 300,000 customers worldwide utilizing Avaya communications software, services and applications, we understand engagement better than most. We also know that in this new consumer-driven digital world, the customer should be the one to define their own digital experiences.

In this new Avaya video, I talk about what we mean by user-defined engagement and how we have transformed our portfolio to be able to innovate for today’s digital customer experience.

User-defined engagement is the new ideal for any software company to embrace. It’s about listening to the customer first, before we develop a solution. It’s a mind shift for any development organization, but an important shift to make. A one-size-fits-all approach with a few customizable pieces and parts is no longer acceptable. Customers are the users of the solution. They know better than anyone what problems the solution needs to solve.

At Avaya, we understand that “going digital” requires not only a commitment to user-defined engagement but also a commitment to an all-software development platform. Digital transformation requires us to continue to evolve and simplify our portfolio of solutions and services to prioritize the quality, speed, accuracy and security of every experience when engaging with or within an enterprise. We are seeing a melding of customer and team engagement solutions, which makes sense. After all, your employees might not all be your specific customers but they are someone’s customers. Likewise, many of your customers are likely someone else’s employees. Both groups expect to be able to use similar solutions that enable similar experiences with your enterprise.

With this commonality in mind, we are building all of our customer and team engagement solutions on the same platform, Avaya Breeze™. A middleware component, Breeze pulls together applications and acts as a developer platform for building new, turnkey applications. In fact, Breeze is our developer platform of choice inside Avaya. Everything we do for customer and team engagement applications and services is now based on Breeze, which brings me to the Avaya Oceana™ solution.

Finally, a true omnichannel customer experience solution for the digital age. Avaya Oceana is the only all-inclusive experience platform for today’s digital enterprise. Built with employees, agents, and customers in mind, Oceana represents the convergence of the contact center with the enterprise. With historical and real-time analytics, Oceana provides that full contextual experience across all channels, enabling the enterprise to be smarter, employees more productive, and customers simply happier.

Never before in the history of customer and team engagement has technology been so advanced, yet so simple to use. At Avaya, we like to say that we engineer out the complexity so the user experience is simple and intuitive. We are at a point when the enterprise and the contact center equally have the ability to exceed customer and employee expectations, while enabling new and innovative engagement opportunities for improved business outcomes. Oceana is the one solution that can make it all happen…easily.