Attempts to reduce cost of customer contact by enforcing use of alternative contact channels backfire.

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Research by Ember Services identifies pitfalls in organisations’ channel switching strategies.

Organisations that try to save money by forcing customers to use lower-cost channels and restricting their access to the telephone risk customer defection and routinely fail to achieve their cost saving targets. So concludes new research conducted by customer management consultancy Ember Services on behalf of Sword Ciboodle. In contrast, organisations that offer multiple channels and allow customers to use them as they wish are experiencing significant cost savings and enhanced levels of customer satisfaction.
The research, carried out among directors of more than 30 leading organisations that have adopted alternative channels, cites the following as top performers:

  • National Rail Enquiries, which has seen customer enquiries grow by 343% over nine years yet still achieved a fourfold reduction in operating cost by migrating 80% of all contacts to the web.
  • Since co-locating its online and contact centre teams, Surrey County Council has grown the percentage of enquires handled online from 85% to 94% and reduced its average cost per enquiry by 38%.
  • HomeDepot, which estimates that it has deflected 15 million potential telephone calls and helped solve 8,500 customer problems via Twitter.
  • Carphone Wharehouse, whose YouTube ‘how to’ guides have received more than 6 million hits since their introduction in 2009, averting calls to the contact centre.

“None of these companies have abandoned the telephone channel or restricted its availability,” says Ember’s founder and Director, Mike Havard,” instead they have identified those tasks customers are happy to complete by other means and encouraged them to do so. Customers are happy to use alternative channels, but expect to do so on their own terms. “Companies that restrict customer choice will suffer their disapproval.”
The research report offers the following advice for organisations planning multi-channel strategies:

  • Customers’ channel preferences are multiple, not singular and will change on a day-to-day basis according to their situation and the task they wish to complete. Companies must offer multiple platform choices and make sure they are simultaneously available and linked, so that the customer experience is seamless across all channels.
  • Customers will embrace alternative channels if they see benefit for them as well as the provider. Instead of forcing customers to use lower-cost channels by restricting their options, companies must analyse the drivers of ‘expensive’ phone-based or in-store interactions and deflect them by offering pro-active information via other channels. This has the dual benefit of reducing an organisation’s operating costs and boosting its service reputation.
  • Customers will typically revert to the telephone for complex or emotionally charged enquiries. Therefore, companies must maintain a sustainable body of agents, invest appropriately to develop their skills and provide them with information and insight that will help them serve customers better. This includes providing a single view of the customer’s interaction history across all channels, so that the service offered is ‘joined up’ and informed.

“The most important lesson to come out of this research is that offering customers true channel choice can provide a reliable route to simultaneous cost reduction and customer value enhancement,” says Mitch Lieberman, Market Strategy Director with Sword Ciboodle. “The top performing businesses are not dictating their customers’ channel options, rather they are encouraging the use of lower cost channels only when there is mutual benefit. In this way they are finding the multi-channel ‘win-wins’; where their desire to reduce cost meets their customers’ willingness to interact differently. Investment in a multi-channel strategy is a clear benefit to both customers and businesses, leading to reduced transaction costs, improved reputation increased customer satisfaction and greater customer loyalty.”
Download the Ember  Multi-channel, Multi-choice white paper here.