Most prefer doing business online, so stop making them pick up the phone.
By Matthew Dixon, Nick Toman, and Rick DeLisi
Here's a scenario most of us have experienced at one time or another: You arrive at the airport and see a customer-service agent standing there, yet you still head straight for the self-serve kiosk to change your seat, perhaps request an upgrade, and print your boarding pass. Or how about this one: You stand in line at the bank to use the ATM but know full well there's a teller inside the bank who's ready to help you.
It turns out that most customers don't just like self-service—surprisingly often, we go out of our way to self-serve. How customers want to be served, and how they want to engage with companies, has changed considerably in the past decade.
The problem is that most service strategies haven't followed suit, and this is hurting companies not just once but twice, through increased operating costs and decreased customer loyalty.
The reality is customers already value the Internet as much as the phone, if not more.
There are a variety of reasons why self-service has become so appealing to customers. It's efficient—the kiosk is simply faster than the ticketing agent. Social norms have shifted to the point where it's not cool to have to speak to some customer-service agent when you could just as easily use your smartphone. It's almost embarrassing to be seen in line at the airport nowadays, isn't it? Why would anyone want to get in line with all those travel rookies?
But if you ask the average executive how customers want to interact with his company, almost without fail he will tell you his customers generally prefer to call. Service leaders are almost hardwired to think this way, and it's really not hard to understand why. Live phone service represents the most significant operational cost in their organizations. It's the most visible channel that companies oversee—the subject of many YouTube montages and customer letters threatening to end their relationship with a company. And it's the channel on which most service leaders cut their teeth as they came up through the ranks in their own careers.
This mismatch between how customers want to be served and how executives think they want to be served is actually masking one of the biggest and most insidious drivers of high customer effort. It's called channel switching—when a customer initially attempts to resolve an issue through self-service only to have to also pick up the phone and call—and it's plaguing the customer experience in a way few service leaders fully understand or appreciate. In fact, channel switching happens in the majority of service interaction—more than most companies would ever imagine. And each time a customer switches channels, it has a significant negative impact on customer loyalty.
Getting Them to Stay
There's no disputing that this problem ought to be in every company's spotlight, but ironically, it's not. This is in part because most companies tend to take a myopic approach to capturing the customer experience. While just about all companies are good to excellent at tracking a customer's usage of any one channel, few companies have systems capable of tracking the experience across multiple service channels. Companies tend to think of their customers as “Web customers” or “phone customers,” not as customers whose resolution journeys actually cross multiple channel boundaries. And so it's no wonder most companies aren't even aware that channel switching is happening.
If you ask nearly any business leader or manager what her company's biggest challenge is regarding self-service, invariably you'll hear some version of “getting our customers to go to self-service.” Service leaders know the potential cost savings all too well. “Our call volume is too high. If we could just get more customers to use our self-service channels, we'd save a ton of money . . . so how can we do that?”
But what these leaders don't realize is that a sizable majority of the live phone calls their service reps are taking every day are from customers who already tried to self-serve. In fact, on average, nearly 58 percent of a company's inbound call volume comes from customers who first were on the company's website but, for some reason or another, still ended up calling the contact center. What's more, over a third of customers who are on the phone with a company's service reps at any one moment are also on that company's website at the same time.
What about the customer experience? Just how painful is channel switching? Customers who attempt to self-serve but are forced to pick up the phone are 10 percent more disloyal than customers who were able to resolve their issue in their channel of first choice. Each seemingly minor switch has real impact.
That massive group—the 58 percent of customers who are forced to switch from Web to phone—fall into the “lose-lose” scenario: They cost companies more to serve and end up being less loyal as a result. As one CFO exclaimed when he saw this data, “Let me get this straight. You're saying we're paying for our customers to be disloyal to us?” In a manner of speaking, yes.
The challenge is not in getting today's customer to try self-service. The challenge lies in getting today's customer to avoid channel switching from self-service to a live phone call—and in doing so, avoiding the cost and disloyalty that comes with it. Put simply, the self-service battle isn't about getting customers to go—it's about getting them to stay.
To help shed more light on this shift in channel preferences and the prevalence of channel switching, we surveyed more than twenty thousand customers during the course of three different studies, spanning both B2C and B2B interactions. These represented all major industries and a wide variety of customers from around the globe.
We asked about their experiences: Which service channels did they use? In what order did they visit those channels? Was their issue resolved or not? How easy or difficult was the interaction?
We also sought to understand more about channel preferences: How much value do customers really place in the different service channels they use? What we really wanted to determine was the value placed on live versus self-service channels.
Companies Love the Phone
So just how important is the Internet in the average company's service strategy? The preponderant answer is, “Not as important as live phone service.” On average, service leaders believe that customers prefer phone service two and a half times than more online self-service—mainly because companies believe their customers want some sort of personal relationship with them.
So just how far into the future will it be before customer preference shifts toward self-service? The vast majority of service leaders believe this is at least several years away, if not more. So it wasn't terribly surprising that only a third of the companies we spoke with had recently taken on a self-service project of any kind. It just isn't a priority for many companies. The thought that customers are frequently switching channels from Web to phone isn't even remotely on the radar screen. In our conversations with service leaders, we encountered several “hard-wired” assumptions that colored their perception of self-service:
- Customers want to self-serve only for easy issues—for instance, checking balances, viewing the status of an order, or making a payment. But when issues are more complex or urgent, customers are comfortable only with live phone service.
- Only the millennial generation (people in their teens and 20s) has a strong desire to use self-service; older generations simply don't. In other words, the tipping point when more people prefer self-service over live service is potentially at least ten years away.
- It costs a lot of money to really improve the self-service offering. Current service websites are ill-equipped to help customers self-serve, and so significant capital investment, well beyond current levels, would be required to make self-service work for most customers.
As one executive vented to us, “The self-service opportunity is like the sword in the stone.” The cost savings are clear, but the limitations of self-service are simply too great and the timing just not quite right. His belief is that neither he nor his customers are ready to capture that upside just yet. He is far from alone. Most service leaders express similar frustration. As a result, their strategy is to better manage the phone channel and devote relatively little attention to improving self-service.
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