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Focusing Your Organization on Customer Satisfaction 

Focusing Your Organization on Customer Satisfaction

Focusing Your Organization on Customer Satisfaction

Customer Experience Management turns satisfaction metrics into actionable knowledge, driving revenues and profit.

By Donna Fluss
Customer Interface Magazine

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The contact center is the heart and soul of an enterprise. It is the focal point of customer interactions, represents the enterprise to its customers and is the “voice” of the customer to the enterprise. Yet, for most of the past 25-plus years, contact centers have been considered only necessary evil – one that has rarely generated measurable revenue.

Today, contact centers are increasingly viewed as an essential component of the customer life cycle. Sales, marketing and operational areas are grudgingly turning to the call and contact center to gain a better understanding of customer needs, wants and concerns. Call and contact centers need better tools to capture and deliver relevant customer information on a timely basis to appropriate areas of the enterprise in order to produce measurable improvements in customer satisfaction, loyalty and revenue.

Customer experience management is one strategy that is becoming increasingly important to enterprises as they seek to capture and transform customer interactions from call and contact centers into actionable information.

What is CEM?

Customer experience management extends and leverages information gathered in the contact center to enterprise decision makers, senior management, and sales and marketing organizations. This information can be used to increase revenue, improve customer satisfaction and loyalty, identify trends and customer concerns, and improve risk management.

“CEM enables a multidimensional view of the customer and their interactions and experiences with an enterprise,” explains Lisa Hager-Duncan, an analyst with Gartner.

As an example, if Firestone had applied CEM, it might have more quickly grasped the extent of its tire problem from customer complaints and not only saved millions of dollars, but likely also some lives. Although this is an extreme example, it emphasizes the importance of sharing information collected in the contact center with corporate decision makers.

Another example of how CEM benefits not only a call center, but also an entire enterprise’s bottom line, is in the area of risk management. Absa is the largest bank in South Africa, with assets of over 213 billion rand. In support of its customer-centric banking strategy, Absa has significantly reduced internal and external fraud by creating and applying a CEM strategy. Absa’s electronic banking division, Absa Direct, had no fraud losses over the first five months of 2002. Absa achieved these results using a combination of basic logging equipment, manual processes, timely cooperation between business units and “gut instinct.”

According to Debbie Gregory, manager of risk for Absa, “creating a CEM strategy, where risk management leverages contact center information, has prevented criminal activity and losses for Absa. But for us to continue to succeed, we need to stay a few steps ahead of the criminals.”

CEM Tools

Technology makes it easier to implement a CEM strategy, and facilitates operational improvements and increased revenue. CEM applications must identify the “right” calls or inquiries (whether e-mails, chat sessions or Web self-service sessions) and make these communications available to the right manager on a timely basis (of course, enterprises need a method to define the meaning of “right”).

CEM technology makes it easy for the appropriate managers to review and/or listen to customer reactions to a specific operational issue, product, or marketing campaign. CEM applications employ a variety of technologies to capture relevant customer interactions, including CTI, audio mining capabilities, voice analysis (to identify emotion), speech recognition, speech-to-text, natural language recognition, and key word and key phrase recognition. CEM applications also need online reporting and analytics capabilities that make the collected information immediately actionable.

CEM’s Origins

CEM got its start in 2000 in the call center quality management market, which was formed as a result of the convergence of call center logging/recording and quality assurance technologies. QA applications are used to monitor and evaluate how well call center agents adhere to the practices and policies of a contact center. Logging equipment records and archives raw customer interactions. Before the marketplace convergence, the primary logging and recording vendors were Dictaphone, Eyretel, Nice Systems, Thales Group (formerly Racal), Verint (formerly Comverse InfoSys) and the quality assurance vendors were eTalk (formerly Teknekron), and Witness Systems.

The converged offerings concentrated on several high-level capabilities:

  • 100 percent logging/recording,
  • CTI integration,
  • Multi-channel functionality.
  • QA assessment, reporting and analytical tools, and
  • Simultaneous voice and data capture,

The classic quality assurance vendors were the first to popularize the CEM concept, but it is slowly finding its way to other categories, including eLearning vendors, performance management vendors and consultants.

Three quality management vendors have emphasized the CEM concept in their marketing messages: Eyretel, Nice, and Verint. Eyretel and Nice have both introduced CEM products to the market. eTalk and Witness Systems are not marketing CEM but are emphasizing the value of analytics, which is a component of CEM.

The CEM Value Proposition

When implemented properly, classic QA simultaneously improves service quality, customer satisfaction and departmental productivity. Savings from classic QA take four forms:

Increase in first call resolution rates. Customers expect their inquiries to be resolved during the first call. In informational service environments (e.g., “what’s my account balance?”), best practice is to resolve 80 percent to 95 percent of inquiries during the first contact. In more transactional environments (e.g., “please remove a charge from my statement”), best practice is to resolve 60 percent to 80 percent of inquiries during the first contact. When inquiries are resolved at first contact, customer satisfaction increases and expenses are reduced because customers do not need to call back to follow up and other departments do not become involved in the resolution process.

Increase efficiency of customer service representatives, managers, supervisors and QA specialists. Tools that automate the handling of agent monitoring and the coaching process make supervisors, QA specialists and managers more productive. For example, technology that replaces manual handling of QA evaluations significantly increases productivity and standardization.

Reduce average call handling time. By analyzing how service agents manage the call handling process, changes can be made to reduce the amount of time spent on each call, while improving customer satisfaction. It is essential to evaluate both voice and data processing to have a complete view of the call handling process.

Reduce agent attrition. Service representatives want feedback so that they can improve their job performance and overall compensation. Studies have shown that job satisfaction is tied to feedback. Also, people who are happy doing their job provide better service, which increases overall customer satisfaction.

CEM extends to the enterprise at large and benefits can come from many areas of the company. The value of CEM to operations, risk management and sales and marketing is reflected below.

Deflect customer inquiries with proactive problem resolution. Often, a service organization identifies an operational problem that is stimulating customer inquiries, such as a systemic miscalculation on credit card statements. Using CEM tools to identify and deliver these inquiries directly to the appropriate decision makers allows an enterprise to react quickly and fix the problem before more customers are affected.

Decrease inquiries by providing feedback to marketing. By capturing and analyzing customer inquiries about marketing campaigns on a timely basis, patterns can be identified and problems fixed early on in a promotion or even in the test phase. This will save marketing dollars and reduce customer complaints and attrition.

Increase sales closure rates for marketing campaigns. Listening to customer input and promptly applying it can improve the response rates to marketing or sales campaigns. Increasing the closure rate for a campaign by as little as 1 percent can represent significant revenue for an enterprise. Today, a typical marketing campaign yields a 2 percent to 3 percent response rate; this means that 97 to 98 percent of all sales and marketing dollars are wasted. Customers are not shy about sharing their thoughts about programs and often communicate ideas that could enhance marketing campaigns and increase response rates. CEM provides tools that automatically capture and deliver this input to the marketing organization so that it can act to increase customer satisfaction, revenue and loyalty.

Reduce customer attrition. Ill-conceived marketing campaigns, poorly targeted and communicated sales promotions, or inaccurate billing statements anger and frustrate customers. Today, consumers view most products and services as virtually interchangeable. Service is sometimes the only differentiator; good service retains customers and bad service turns customers away. CEM tools reduce customer attrition by identifying areas of customer dissatisfaction and preventing enterprises from annoying and ultimately alienating customers.

Another area that can realize quick and significant benefits from CEM is risk management. CEM tools, in conjunction with fraud prevention techniques and software, can be used to promptly identify and prevent losses.


Classic QA generally pays for itself in six months or less. For classic QA to be effective, enterprises need to have a good monitoring form and process and an effective coaching program.

The ROI from CEM can be realized even more quickly than from classic QA. If a CEM application improves the response rates from a marketing campaign by as little as 1 percent and decreases complaint calls regarding a new sales promotion by only 1 percent, the application will pay for itself in less than one month. (This assumes that the CEM application costs $250,000 and has ongoing expenses of approximately $95,000/year).

The largest impediments to achieving the goals of CEM are internal politics and the typically strained relationship between sales, marketing and customer service. By sharing real customer experiences, CEM can help bridge the gap that divides these operating areas. Common misunderstandings between sales, marketing and customer service can be avoided by establishing shared goals for increasing revenue and retaining customers.

CEM in Action

Jennifer Goodman, senior manager of customer care at Earthlink, has set up a networked quality-monitoring environment for her 5,700 users on Nice Systems technology. Goodman is applying a CEM strategy to help differentiate Earthlink from the rest of the ISPs in the market place.

The ISP market, like the telecom, cellular (mobile) phones, and Internet publishing industries, has a great deal of customer churn, much of which could be prevented with more proactive service and tools that identify at-risk customers. Working with Nice Systems, Goodman developed a CEM strategy and implemented technologies that allow her to recognize emotion in 6 percent of her callers. (Emotion is measured by evaluating the voice pitch and rate of speech of every caller.)

“It’s important to identify customers expressing emotion, as it’s generally a good indication of anger and confusion and these customers are at risk of attriting,” says Goodman. Once emotion is detected in a call, Earthlink applies analytics to determine the reason for the customer’s unhappiness and summarizes this information in reports for the CEO. With 5.6 million customers, reducing churn by as little as 1 percent represents significant revenue for Earthlink.

Putting CEM to Work

Call centers represent the voice of customers to an enterprise but having tools that capture, identify, analyze and report on relevant issues is critical. CEM can be used to identify customers at risk of attriting and reduce customer churn, track operational issues, improve marketing campaigns, increase sales closure rates, spot new trends, gain an understanding of customer needs and wants, and obtain data about competitors. Here are some recommended uses for CEM:

Identifying new products and services. Customers are not shy about asking; enterprises need to be better at listening to and understanding what customers want.

Capturing up-sell and cross-sell opportunities. Busy and harassed customer service representatives frequently miss (or choose to ignore) up-sell and cross-sell opportunities. By identifying calls where certain phrases are spoken, customers who are interested in product enhancements, upgrades, or alternatives can be contacted and sold what they are asking for.

Better segmenting product offerings. Capturing and analyzing customer responses to different marketing campaigns enables organizations to do a much better job of matching offers to specific customer segments.

Assessing which marketing campaigns are most effective and the reasons for their success. Defining and understanding success is essential for repeating it.

Identifying operational problems so that they can be fixed quickly. Operational issues generally impact large groups of customers. By noting problems early on, enterprises can promptly correct them, minimize the negative impact of the problem and reduce the volume of complaint calls. Reducing complaint transactions has a positive impact on CSRs and improves agent retention.

Gaining a better understanding of customer reactions to competition. Direct input about competitors is very different from and much more valuable than input collected during focus groups. Competitive information collected from customer inquiries is timelier and more relevant, enabling enterprises to initiate campaigns to counter competitors’ offers.

Reducing customer churn. Customers often communicate their displeasure and give enterprises an opportunity to address their concerns before they close their account or turn off a service. But too often, CSRs are handcuffed by outdated policies or the inability to leave their seat and simply have to apologize to the customer instead of taking action. Identifying at-risk customers enables enterprises to reach out and address their concerns before they are lost.

Empowering CSRs. Frequently, CSRs are frustrated when company policies and procedures disappoint and/or anger customers. Having technology that can capture and reflect these issues in reports is essential to give CSRs the ability to take ownership of customer problems.

Customer Experience Management helps close the gap between sales, marketing, customer service and the rest of an organization in a manner that the Customer Relationship Management movement has not yet been able to do. It is a practical concept whose time has come.

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