From September 2009 Resource

Customized Service

Whether dealing with the retired, less technically proficient Silent Generation, the rapidly-approaching-retirement Baby Boomers, the MTV Generation X, or the up-and-coming Generation Y (the "Millennials"), there is a consistent need for personalized service delivered in a convenient and timely manner.

By Steve Discher, Senior Vice President
Robert E. Nolan Company

This decade, and possibly the next, could well be described by future historians as the era of customer sovereignty. Or perhaps it would be more accurately depicted as the era of customer rebellion or revolt. Customers are demanding more immediacy and transparency in their interactions with customer service. And it goes without saying that they want to deal with knowledgeable professionals who can answer their questions at the point of contact.

Consumers increasingly expect 24/7 electronic access to financial service providers—just like they already receive from utility companies, airlines, and so forth. At the same time, consumers continue to value their agent-based personal service relationships, and as a result, the best agents are thriving. Complicating matters are the growing cultural and language diversity and expanding international presence, both of which intensify the considerations for serving certain market segments. Taken altogether, these complexities present the industry with a challenge: how does a company meet the demands of an increasingly diverse and demanding customer base?

There should be no doubt about the critical importance of the shift in the financial services industry from product- or channel-centric business models to customer-centric ones. Whether dealing with the retired, less technically proficient Silent Generation, the rapidly-approaching-retirement Baby Boomers, the MTV Generation X, or the up-and-coming Generation Y (the "Millennials"), there is a consistent need for personalized service delivered in a convenient and timely manner. And, depending on the markets served, these services might have to be offered in multiple languages.

There is a melding of operations around customized, customer-centric flexibility occurring in the marketplace. Choice is the buzzword of consumers as we approach a new age of complexity paired with demands for individualized solutions. The company that is able to master customized options (shifting from the current mass-market product chassis to a new, componentized one) will find itself in demand by consumers representing the full spectrum of generations and cultures.

A recent report from London-based market analyst Datamonitor indicates that financial services companies are being forced to rethink their technology strategies due to heightened competition and better-informed, more-demanding customers. The report concludes that in order to remain competitive and profitable, companies must expand beyond the typical core competencies (for example, risk management) and focus instead on customer management. The goal is to identify and grow the profitable customers and minimize the resources spent on the less profitable.

Thus, focusing on the customer and maximizing customer value will also require a strategic change in the way companies look at metrics. While traditional process metrics are necessary for identifying and making operational improvements, a cultural transformation and a new measurement paradigm that focuses on what is truly important to the customer is essential in maximizing the value of each customer interaction.

The financial services industry is witnessing the emergence of a wide disparity in the nature of its consumers, with discrete market niches that each have their own values and interests. Tremendous opportunity can be found there for companies willing to recognize and serve market diversity. Knowing who the customer is and what they expect has never been more important than it is now. Companies can wait no longer to redefine their service strategy and to invest in the people, processes, and technology that meet the demands of true customer-centricity.

Today, running a successful customer service operation is much more than just meeting basic targets such as single-dimension satisfaction ratings, cost savings, and efficiency—it is all about positive customer experiences and strong customer engagement. Customer-centricity is now the name of the game. While we can’t lose sight of efficiency and effectiveness, operational decisions must be made with the customer experience as the top priority.

Technology significantly influences how customers feel about service. Not service-center technology, mind you… although that is critical to the equation, too. The technologies in question are cell phones, PDAs, laptops, e-mail, voicemail, GPS systems, even iPods. These ubiquitous and rapidly-evolving technologies enable instant access to information, products, and services 24 hours a day, seven days a week. We live in an age of instant gratification: is it any wonder that financial services customers have the same expectations for customer service interactions?

Thanks to these expectations and the resulting pressures, customer interactions have changed drastically. In the past, paper documents arrived in mail rooms and triggered activity throughout the customer service value chain. Typically, this value chain was disjointed and the processes cumbersome, inefficient, and costly. Fortunately, the inefficiency was hidden from the customer.

Today, service models are shifting to an integrated use of communication channels and service resources. Paper has been replaced with images and work objects, and call centers are evolving into full-service contact centers. These contact centers bring together print, electronic, and voice communications in an integrated, customer-centric processing environment. The new value chain, when executed effectively, streamlines customer access, shortens delivery cycles, and improves overall customer satisfaction.

This evolution, while a long time coming, has accelerated rapidly in the last few years. During the 1990s, many companies began to offer self-service options via the Internet. More often than not, this "self-service" pushed work to customers and was nothing more than access to static forms that were ultimately processed like any other piece of paper coming in the door. Today, however, the innovators in our industry have moved to blended work baskets that include e-mails, images, paper, phone calls, text messages, chat sessions and, in some cases, Web-based video conferencing.

Technology Differentiators

Customer service executives are now using customer-facing technologies as differentiators. Some examples:

*Voice over Internet Protocol (VoIP): VoIP is now mainstream technology that does more than just offer bandwidth and maintenance efficiencies. VoIP allows service organizations to seamlessly integrate multimedia applications into their service offerings. It also facilitates the linking of multiple service centers into more efficient virtual centers.

*nteractive Voice Response (IVR): Traditional touchtone IVRs are being replaced with systems that feature both touchtone and intelligent voice response with speech recognition. Properly implemented systems allow centers to flatten traditional IVR menus and make the interaction more personal and less awkward.

*Virtual Queuing: These tools allow callers to request a callback without losing their place in line. While there have been mixed reviews about these tools, acceptance and customer satisfaction will continue to improve as they become more mainstream and customers get used to them.

* E-mail: Although customer e-mail has traditionally been handled in the service center, more and more centers are now treating e-mail like telephone calls. These centers are establishing response time standards and are notifying the customer as to when to expect a full response.

 

* Web-Enabled Chat and Text: Chat is still in the early stages of integration into the service center. However, as Gen X and Gen Y become a larger portion of the customer base, chats will continue to grow in popularity. Enlightened service centers are establishing service standards for chats similar to calls (X% in Y seconds). Some companies are also leveraging Web collaboration tools (page-pushing, co-browsing, form-sharing, channel escalation, etc.) to enhance chat sessions. Institutional use of text messaging is emerging as yet another communications tool, and it will continue to expand in the near term.

 

Successful companies are integrating these evolving technologies with processes that accommodate multiple inputs at various entry points along the way. At the same time, industry leaders are keeping the human touch as a core element of service strategy—no matter how much consumers rely on technology, they still want the ability to connect with a live human. And they want this access instantly and without having to start over. If a customer is online doing an account transaction at 4:30 in the morning and decides to talk to a Customer Service Representative (CSR), they expect a knowledgeable CSR to be available.

This new service environment presents some significant staffing implications. As technology enables faster and more content-rich service, internal processes must be fully integrated and transparent to the customer. This means CSRs must be more knowledgeable and available when the customer is ready. The burgeoning complexity of resource management requires new management philosophies, tools, and techniques. Becoming truly customer-centric requires up-to-date management practices, infrastructure, and leadership that places the highest priority on delivering truly satisfying service.

NOTE: The Robert E. Nolan Company is a management consulting firm specializing in the insurance industry. Nolan helps insurers improve service, quality, productivity, and costs through strategy, process innovation, and information technology. For more information, visit www.renolan.com.

Contact Resource at resource@loma.org