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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Using AI in Contact Centers to Create Better Customer Engagement

I’ve been through quite a few technology trends in my career, and to say Artificial Intelligence (AI) is one of the hottest may be an understatement. If you have customers that are 55 and under you need a customer experience plan to address digital channel preferences and AI in contact centers now, before it’s too late.

Avaya recently announced Avaya Ava™, our cloud AI solution that supports your customers who use social media, chat and messaging channels to engage with you. To address the communication preferences of your customers, Ava interacts with social and messaging platforms by automating digital interactions through chat bot and Natural Language Processing (NLP) with sentiment analysis—in 34 languages! And Ava provides seamless hand off of the customer experience, with full context of the interaction, to an agent when and if one is required.

Why the Time for Avaya Ava is Now

To put things in perspective, if you do a quick search you can find that there are over five billion mobile device users globally, sending 22 billion text messages and over 60 billion social network messages per day. This makes it no surprise that Dimension Data found the 55 and under crowd prefers to engage with organizations through digital channels like social media, mobile applications and web chat. In fact, I’m often hearing stories about someone’s parent or grandparent over 55 who prefers to text rather than talk.

The real question is how do you serve your customers who are living on those mobile devices? The answer: Start with AI.

But why is AI so hot? Why start there? Because it eliminates the need for human interaction by adding intelligent automation? Or maybe it’s the ability to reduce siloed experiences? These are definitely true, but only part of the equation. AI is such a big deal because it also has significant potential to help drive revenue, reduce costs and increase CSAT. Everybody wins! And that is why you see market research predicting a CAGR of nearly 60% in the global AI market by 2025.

AI is Not All the Same—What You Should Look For

With all of the excitement around AI, it’s no doubt there’s a bit of “bandwagon jumping” going on. Imagine that I am a new customer of a large insurance company, and I tweet about frustrations with recent billing issues I am having. This could go one of two ways: Good or BAD.

Let’s say that this insurance company has a bot and social mining that recognized me as a frustrated customer. After an initial exchange with the bot it was determined that a live agent was needed, so after a lengthy hold, a voice connection is established with the agent. But the agent has no context explaining who I am and why we have been connected. How do you think this ends? Likely with a great opportunity for the competition.

Now, let’s look at how this scenario but be improved with a truly intelligent AI solution—one like Avaya Ava. My tweet and frustration sentiment is detected by the AI application and I am recognized as a relatively new customer, so it is known that I am in a critical phase for retention. I receive a response from the company’s bot, who understands who I am. We engage in a “conversation” to gather some additional details and validations for security purposes. Since it is determined that I already have a relationship with Jeff, the representative who set my account up, the bot sends me a link that connects me directly to Jeff. Jeff has all my information—the complete context of my interaction—and my billing issue is resolved in a matter of minutes. Happy customer! Retained customer!

This not-uncommon scenario highlights the need for a truly valuable AI solution—one that has the potential of delivering the business results you need—to meet a set of core capabilities:

  • Natural Language Processing (NLP) to understand written language
  • Machine Learning which “observes” human interactions learning to provide relevant, meaningful automated responses
  • Sentiment Analysis to assess emotion or attitude of a customer, either positive or negative, and assign a qualitative score to guide proper treatment
  • Chat bot for real-time automated services leveraging the aforementioned capabilities to be effective

What You Need to Know About Contact Center Automation

So, if you implement an AI solution with all of these capabilities you can completely automate your contact center, right? Well, not quite–at least not yet. Rather, you should look at AI to “humanize” the automated customer experience. Having a machine (bot) interact with me and understand my intent is leaps and bounds a better experience than what an IVR can offer, but the live agent experience is still paramount.

An AI solution should be fully integrated into the rest of your customer experience solution as part of the complete customer journey–one that allows the full context of an interaction to be visible to a live agent. This way, the agent becomes an extension of the automated experience, and in turn creates improved CSAT. And because the automated experience is always available with real-time and intelligent responses, you will be better aligned to your customers’ engagement preferences. This in turn will help drive down cost with increased self service and accelerate revenue opportunities due to a more personalized and “intelligent” experience.

We generated a lot of buzz about AI when we introduced Ava at our partner and customer conference last month. People are seeing the potential to build enviable customer experiences by better connecting with customers through social and messaging channels and by journey mapping customer interactions.

At Avaya we take a consultative approach to helping our customers meet their business objectives. To help you with AI for contact centers, we offer a Professional Services Discovery Workshop. Contact us to learn more.

News & Solutions at ENGAGE 2018 Show Avaya is Back in the Fight!

Now back from last week’s Avaya ENGAGE 2018, our annual customer and partner event, we’re finding the energy of the conference continues to drive the cadence at Avaya. What a show! In my last blog I wrote about taking time for a bit of introspection—thoughts echoed by our CEO Jim Chirico during his ENGAGE keynote. One of his points really resonated with me: how you get up off the mat. All of us face challenges everyday—most of them are manageable but occasionally an event comes along that can really take the wind out of your sails. Jim pointed out that while we all get knocked down from time to time, what really matters is how you get up. How you carry yourself and how you get ready for the next challenge.

In 2018 Avaya is back up. We’ve got our gloves on and we’ve come out swinging! ENGAGE 2018 was a great opportunity for us to thank our customers and partners for their outstanding support over the past year and give them a taste of the new Avaya: poised, fit, and ready to win.

Our commitment to win was reflected in a number of key announcements from last week, but the headliner was the acquisition of Spoken Communications, a leading innovator in the Contact Center as a Service (CCaaS) market. The Spoken platform is based on the Avaya Aura® Platform and Avaya Aura® Call Center Elite, making it a perfect architecture for both Avaya omnichannel offerings, such as Avaya Oceana®, and its Unified Communications as a Service solution. But Spoken brings much more than a proven xCaaS capability to Avaya—the really exciting news is Spoken’s transformative real-time customer experience management applications built on conversational artificial intelligence (AI). A true innovator in AI, Spoken will be accelerating our “Think Avaya, Think Cloud” strategy with solutions that not only provide a clear path for customer migration, but offer improved efficiency, drive more intelligent responses, and gain deeper insight into customer sentiment and experience.

And there was more news at Avaya ENGAGE on the AI front: Avaya introduced Avaya AvaTM , a cloud, messaging-agnostic solution that offers new AI capabilities for social messaging integration and automation of digital interactions. An evolution from our Ava technologies offered for over eight years, Avaya AvaTM delivers AI 2.0 architecture including natural language processing and machine learning. And innovative analytics enables effortless customer engagement through social media and messaging platforms.

Last year we introduced the Avaya Oceana® Solution—our omnichannel context-driven contact center solution. Now we are thrilled to bring the Workspaces environment to our existing customers later this year. This modern agent desktop will take advantage of key elements such as context and customer journey and be made available to our existing customer base, enabling them to transform their CXs.

Avaya also unveiled compelling enhancements to its signature unified communications user experience, Avaya Equinox®. These include:

  • Enhancements to Avaya Equinox Meetings Online, a cloud-based meeting and conferencing service that can be deployed with or without an Avaya infrastructure. The economical, pay-as-you-go cloud model offers the same capabilities as an on-premises deployment, making it easy to take a hybrid approach and mix and match between the two.
  • The new Avaya Equinox Attendant, which enhances customer service and brings the power of unified communications to front-desk operators. We will extend Avaya Equinox to the IP Office platform—providing a single UC platform for all our customers.

Devices remain a key part of Avaya’s strategy to deliver a unique UC Experience Everywhere. Avaya has shipped over 100M phones to date and currently ships almost 10,000 new devices every day. For 2018, Avaya is expanding customer options for UC devices like never before. The Avaya Experience has evolved to be more modern, connected and personalized, and tailored to vertical specific needs such as hospitality and retail. Key additions include:

  • Launching Avaya’s new Essential Experience portfolio of industry leading phones for a state-of-the-art user experience that includes Bluetooth and WiFi connectivity.
  • Extending the Avaya Vantage Experience to include support for IP Office.
  • Announcing the new Avaya CU-360 Collaboration Unit, which provides easy set up and collaboration in huddle room spaces.

Providing our customers a bridge to the future is a key focus for Avaya this year—and this goal will drive a great deal of our activity. To start, Avaya has launched a number of new promotions:

  • Loyalty2gether: This exciting and bold offer provides all our loyal Communication Server 1000 customers with a path forward to either IP Office or Avaya Aura with full support for the surrounding applications like customer contact and messaging. It’s an opportunity to reinvent what communications, customer experience, and collaboration can mean to your business and to do so with an unprecedented level of experience and investment protection.
  • Oceana NOW: This program focuses on helping organizations evolve and transform their CXs.
  • Automate CC NOW: Through the use of automation capabilities, Avaya is helping organizations modernize for less.

These programs are a prime example of our focus to ensure no customer gets left behind.

ENGAGE 2018 was a very busy week of announcements, meetings and demonstrations, and the energy and enthusiasm of our customers kept us going and underlined our confidence that Avaya is back and ready to do battle. Continue to watch for updates and details on Avaya.com and let us know how the new Avaya can support your plans in 2018.

A Closer Look at MiFID II Recording Requirements

The Markets in Financial Instruments Directive II (MiFID II)—arguably the greatest reform to hit Europe’s financial industry—is finally in effect as of January 3, 2018. This EU legislation serves as a much-needed upgrade from the original MiFID, enacted in 2004, and addresses key issues that resulted from the 2008 global financial crisis.

The directive requires all national governments in the EU to adopt certain laws, which they are free to do in their own way should the resulting effect be the same. Financial services institutions—specifically investment firms, credit institutions and trading venues—are subject to MiFID II, including companies that are headquartered outside of the EU but do business there (for a more thorough overview, see this blog by industry analyst Sheila McGee-Smith).

Recording Regulations: Raising the Bar

Perhaps the greatest impact of MiFID II is the law’s tighter recording regulations. Under the 2004 MiFID directive, there was no mandatory requirement to record communications involving client orders. To ensure fairer, safer and more efficient financial markets, MiFID II now requires firms to record communications (both phone and electronic) for the following investment services:

  • Reception and transmission of orders
  • Execution of orders on behalf of clients
  • Dealing on own account (takes place when a firm puts its own trading books at risk)

The specific customer interactions that are required to be recorded in relation to investment services include:

  • Receipts of client orders
  • Transmissions of orders (both where the investment firm transmits and executes the order)
  • Conclusions of transactions when executing orders on behalf of clients
  • Conclusions of transactions when dealing on own account, regardless of whether a client is involved in the transaction

Important note: MiFID II covers all communications relating to activities intended to result in the conclusion of a transaction or the provision of client order services, even if they do not result in a financial transaction.

Communication of orders placed through channels other than voice—postal mail, faxes, emails, SMS, face-to-face conversations recorded using written minutes—must be stored in a durable medium.

Keep in mind a few rules that apply to this ‘durable medium’:

  • Records must be able to be replayed or copied
  • Records must be retained in a format that does not allow the original to be altered or deleted
  • Firms are required to ensure the quality, accuracy and completeness of all phone records and electronic communications
  • Records must be kept for a minimum of 5 years and, if requested by the National Competent Authority in a specific country, up to 7 years
  • Clients must be notified in advance of recording
  • Records must cover communications made with, sent from or received by equipment provided or permitted by the investment firm (privately-owned equipment used by employees or contractors is not prohibited)

Ensuring Compliancy with MiFID II Recording Regulations

If your business is involved in financial services in any way—even if it’s not your main focus (i.e. credit institutions performing investment activities, branches of third country firms)—you’ll need to investigate to understand whether this new legislation will affect you and, if so, what you need to do to comply.

We recommend a thorough review of compliance across all channels (including back office processes) to determine if they meet the new regulations. If not, you’ll need to deploy a workforce optimization (WFO) solution to demonstrate that policies, procedures and management oversight of the new recording and monitoring rules are in place. Here’s what you’ll need to consider in a WFO solution:

  • Continuous recording: This goes for all inbound and outbound voice and other electronic communications based on business rules. You need a WFO solution that will capture, search and retrieve calls, offer encryption for secure storage, and offer pause and resume capabilities.
  • Desktop screen capture: This is an undetectable back-end process that records desktop screen activity during each customer interaction. Supervisors and managers can use this both in the contact center and back office to view customer interactions from beginning to end via synchronized screen and call recordings.
  • Quality management monitoring: Identify and capture areas of non-compliance, while measuring how well employees are delivering services that align with customer experience expectations.
  • eLearning and coaching tools: Bring employees fully up to speed on regulatory changes and any new requirements, as well as correct any non-compliance behaviors.
  • Voice analytics: Proactively identify, measure and isolate areas of non-compliance by mining intelligence from large volumes of recorded calls.
  • Workforce management: Schedule employee compliance training while ensuring you have enough support personnel with the right skills to serve customers.

The greatest threat to reputability, revenue and customer experience is the thought that your technology is “good enough” to meet current needs. Your ability to innovate and grow are hinged on technology that meets the next-gen needs of today, tomorrow and beyond—something that only 24% of companies say their workforce optimization and recording systems achieve.

To complete a thorough review of your current MiFID II processes, connect with Avaya. For a deeper dive into MiFID II (including a few WFO features not mentioned above) download the white paper MiFID II: What Does it Mean for Your Organization?