Who owns the customer experience anyway?
Over the past number of years, the customer experience (otherwise known as “CX”) has become a profession unto itself. Roles like Chief Customer Officer, Customer Experience Director, Manager, Customer Success have been popping up. You can also obtain a CCXP (Certified Customer Experience Professional) certification, which recognizes professional credentials and expertise in this area. Companies are looking at customer insight, customer journey mapping, CSAT, customer acquisition, data analytics, culture and brand. Each of these activities are components of a dynamic ecosystem within an organization. While the roles may vary widely in their level of accountability, breadth across the organization, or channels (web, store, mobile, call center, etc.), they aim to improve the client experience in some way. Often, responsibility for the “CX” is tucked under marketing, as things like NPS/CSAT and data analytics often are. Evolved organizations have been able to foster a CX culture where each and every employee feels accountability for it.
Increasingly, brands understand the importance of the customer. CEOs understand that while product development is important, the combined customer experience is their competitive edge. Think of Amazon. They offer the same brands as other companies and the price isn’t always better. They understand the needs of customers who want to buy something knowing it will be delivered within a matter of days (often within the same day) with an (almost) “no questions asked” procedure to easily return products that don’t meet your satisfaction.
It seems like customers have a voice louder than ever before. For Leaders in the call center industry, the “sell” cross functionally on the importance of the customer is easier than in past years. Successful contact center leaders are leveraging their interactions with customers as an important touch point across the customer life cycle. This provides opportunities to contribute to customer loyalty. What follows is a repositioning of the call center… not just as a cost center but as a contributor to revenue.
Many organizations do not have roles that include CX, or responsibility is distributed across multiple roles within the broader organization. Or maybe, the company wants to develop a CX strategy but sales, new product launches, etc. take precedence with the intention to make CX a strategic priority sometime in the future. What can the call center do to improve the customer experience while demonstrating how it can contribute to company revenue?
First, let me tell you a story…
What we can learn from problems:
I love the Nordstrom shopping experience. Yes, it is a beautiful store with a variety of products and accessible price points. But it’s more than that. While it is relatively new to Canada Nordstrom has won me as a loyal customer. Hiring in the retail workforce space is tough but they seem to be able to hire and train staff that are able to carry out their brand promise. I can think of a time I wanted to try on a pair of boots. The sales rep returned with them as well as 5 other similar style boots in my size. The rep anticipated my needs. It was terrific and unexpected.
While we can have a great experience on the buying side, we’ve all bought something only to discover it is on sale a few weeks later. Some stores will credit you the difference, but you have to bring the product back unworn, tags on with receipt etc. I recently had this painful experience with a coveted brand. I had to fully return and then buy back the product at the newer price but, even then, not until after the sales rep spoke to her manager.
In another example with a similar issue, my experience at Nordstrom was entirely different. The sales rep credited my account for the difference on the spot even though I didn’t have the previously purchased merchandise with me. Since I was registered in their loyalty program, the sales rep pulled up my purchase with my cell phone number and, just like that, my credit card was adjusted on the spot. No pulling out my credit card and signing a receipt. I didn’t have to convince the staff that they have a weak store policy or suggest how they can improve it. I didn’t need to bring the item back with the receipt and go through the whole rigmarole! I was delighted. I saved some money and they made it easy. Needless to say, I am loyal to Nordstrom. I trust them to have my back. They knew I was a high value customer based on my previous purchases and treated me accordingly.
There is a key lesson here; one that you have surely heard before. Numerous studies have shown that how you solve a problem with a client impacts loyalty more than if that client didn’t have a problem to begin with. This is a much better way to view customer complaints, right?
We also need to be reminded that high CSAT or NPS scores does not mean high loyalty. Bain & Company found that there was no correlation between CSAT or NPS and customer retention. Great scores alone aren’t enough!
What role can the call center play in improving the customer experience?
Call centers have the privilege of interacting with clients each and every day. Because of this, we in the industry have front row seats to what makes customers tick…or get ticked off! In addition to answering calls quickly with good call quality and all the other things we do every day, we can broaden our focus to include customer retention and improve both the client experience and revenue. Bain & Company reports that increasing customer retention rates by 5% increases profits by 25% to 95%. Why? There are a number of reasons, but studies have shown that loyal customers purchase more often and spend more. The better customer retention is, the more customers you have to generate revenue and upsell to.
Four steps to Improving Customer Retention:
#1 Identify the customer retention or “churn rate”:
Churn rate tells you the number of customers that have stopped doing business with you in a given period of time. Typically, it is tracked and reported monthly and annually. If this number is not already reported in your organization, the calculation is as follows:
Churn Rate = (Number of Customers at Start of Period – Number of Customers at End of Period) / Number of Customers at Start of Period
Depending on the product or service provided, Retention Rate can also be considered. It is simply the inverse of churn (100 minus churn rate). I have used both in different organizations for different reasons. While churn is more commonly used, looking at customer retention rate can provide a more positive perspective, for example, if you are providing retention performance results to each sales rep.
Whichever you chose, this number can be used to set performance goals and reduce customer churn on a monthly basis but it will take time. Recognize that customer churn is a lagging indicator. It provides insight after the fact. In order to improve it, things have to change before the customer decides not to return.
#2 Track reasons why customers cancel their product or service:
This is easiest to do if you are offering a product or service that is ‘subscription’ based (i.e., where customers need to contact you to advise you that they no longer want to do business with your company). This is a golden opportunity to track the reason for dissatisfaction or cancellation within your customer database or CRM. If that is not available, develop a tracking sheet in excel. This of course means training the call center staff to use the tool consistently. Training all staff, especially in a large center can take time or may not be feasible. Rather than wait until you can find the time to train everyone, begin training 1 or 2 Team Leaders and their agents. In addition to taking calls, they can track issues causing customer complaints. This group can participate in identifying the root cause of the issues and recommend solutions. So, not only do you get great customer intel, but you can engage your employees in helping solve customer issues and improve customer retention.
#3 Identify main causes of customer churn:
The next key step is to categorize the reasons why customers have cancelled on a monthly basis and quantify the main drivers. This will likely produce a list of 5 or 10 issues that make up a large percentage of the total with several other one off issues. After review of the results, prioritize the issues in order 1 to 10. The reality is that you are not likely to fix all of them at once. Keep in mind that just because the number is biggest doesn’t mean it should be the highest priority to fix.
#4 Develop proactive solutions to fix problems to reduce churn:
Each of the main drivers for customer churn will require a different solution. In some cases, it might mean working with IT to resolve a chronic technical issue on your ecommerce site. In others, a process might need to be improved or a common issue could be avoided simply by communicating it to customers in advance. No doubt, many of these resolutions will require working cross-departmentally. This will be easier for the quicker fix issues. In other cases, resolving the issue is systemic and will take more time. Customer journey mapping can reveal surprising opportunities that will reduce costs, increase revenue and improve the customer experience. A triple win and worth the effort!
I haven’t touched on key pieces such as enhanced training and empowerment of staff. Providing front-line employees some latitude to make decisions in the best interest of the customer and their situation can be powerful. I recently heard of a company that was so committed to improving the client experience that they gave their employees up to $1000 to make it right on the spot. No need for approvals.
The call center is a critical touchpoint for customers and can be leveraged to improve the customer experience. By identifying and addressing the issues causing customer churn, not only will customers be happier, but you can retain revenue while increasing revenue over time.
Doing the 4 steps above is just the starting point. There is much more that can be done in the operation to reduce customer churn. Call center retention programs become good ones with continuous effort and will evolve over time.
Follow Taylor Reach on Twitter at @Taylor_Reach.
To find out more about how Taylor Reach can help your company with your customer experience strategy, CLICK HERE to schedule a free consultation.
Keep in mind that just because the number is biggest doesn’t mean it should be the highest priority to fix.