Killing 2 birds with one stone � why cost reduction within customer service doesn't mean decreased customer satisfaction

 I often meet with clients who want to kill two birds with one stone; reduce customer service costs, whilst also increasing customer satisfaction. Many technology-centric CRM programs of the past did not share these aims. They attempted to design solutions inside-out from the company's perspective, rather than from the customer's perspective. In many cases these programs tried to control the customer; for example defining the channels that the organisation made available for customer service requests. In a drive to reduce customer service costs, expensive human interactions were blocked from the customer by customer service numbers hidden away on a little known web page, multi-level IVRs, voice self-service solutions, chat-bots and lists of online FAQs. In the main these solutions were designed to benefit the company, keeping customers away from call centre agents and therefore reducing costs but not necessarily improving customer satisfaction.

The communications revolution of the last few years has meant that companies can no longer control their customers. Customers now control which channel or device they use, which social network they turn to, which sources of information they trust and chose to mash together. The communications & connectivity changes present a threat to many organisations used to an ingrained mindset of command & control, but there is also an opportunity for customer service organisations to leverage the technology changes to drive win / win outcomes, namely reducing customer service costs whilst improving customer satisfaction. Below  are four examples of some of the tactics different organisations have deployed to help achieve these dual aims:

1. The best service is no service - Bill Price, former VP Customer Service for Amazon famously described his outlook on customer service in his job interview with Jeff Bezos, saying: "Well, the best service is no service. You hire me, and I'm going to try and help reduce the need for customers to have to contact Amazon for service. Why should they? They order things online. Things should work out fine, right?" (See full Customer Think's interview with Bill Price here). Amazon designs for no service. This starts by thinking about the jobs customers are trying to do when they interact with Amazon and working out how they can help customers achieve their outcomes online. Clearly achieving this stretches far beyond thinking about the online experience; the processes that enable the desired outcomes of customers stretch far into the organisation and it's eco-system of suppliers.

2. Pro-actively identify problems, fix them at source and update all channels - building on the Amazon example above, many organisations are now setting up command centres to stay connected to the pulse of the customer, attempting to spot trouble brewing and then proactively take action; firstly to update all channels letting customers know that there is a problem and what they are doing to fix it and secondly to fix the problem at source. Dell, for example have pioneered the use of a Social Media Command Centre to try and spot topics that matter to customers as soon as they bubble up on the social web (described in my post on improving social media monitoring). A leading US cable TV company has a swat team concept where they bring together a cross-functional team to investigate opportunities or threats fast and act appropriately e.g. launching an outbound communications campaign or fixing a network problem at source.

3. Leverage peer to peer as a support channel - I've written previously about the GiffGaff case study. Around 90% of GiffGaff's customer service happens within their community forum.  GiffGaff customers fix each other's problems on the forum, suggest new product ideas, recommend the service to their friends and even build smartphone apps for the community. The average response time within the onion support forum 24x7 is under 3 minutes. Furthermore, Telefonica Group who own GiffGaff estimate that their customer service model costs 4 times less than the traditional contact centre-centric model, yet their NPS score is 75 - way above the industry average (note GiffGaff publish their customer satisfaction scores here). 

4. Integrate your community  forum across the social web - BT do a great job of integrating their community forum across their various social channels. Their online community brings together their YouTube channel (for customer support videos), their Twitter stream, their ideas page etc. They have also integrated their forum to their Facebook page to maximise the reuse of content and allow customers to choose the channel of choice.

One thing to bear in mind if you are attempting to replicate some of the tactics above is that simply deploying the tactics alone may well not produce your desired outcomes. In other words, simply creating a community forum does will not turn you into a GiffGaff. There are many examples where forums have actually increased customer service costs and created additional calls for the call centre to deal with. Fundamentally, the success of deploying the tactics above relies on the adoption of a service dominant mindset. To understand more about Service Dominant Logic, a topic first described some 7 years ago by  Steve Vargo read this great post by Graham Hill or take a look at this presentation by Wim Rampen. 


Service dominant logic aims to broaden the traditional goods-dominant logic, placing service provision rather than goods as the basis for economic exchange. With a service dominant mindset the customer is always a co-creator of value therefore we design from the customer's perspective recognising that value is created through usage not at the point of transaction. With a service dominant mindset the tactics above are far more likely to be able to deliver the dual aims of reduced service costs and increased customer satisfaction.

Gaming the system in social media care

Social Media customer care seems to be a pretty hot topic at the moment. Many clients I work with either have, or are talking about, setting up a capability to monitor what people are saying about them on social networks and respond. At the moment, most customers seem pleasantly surprised to find that organizations are listening to their problems and taking pro-active steps to fix their problems (check out my experience with Virgin Media). But are we training customers to believe that in order to get their best service they should shout loudly and angrily at their friends on social networking sites? Are we encouraging customers to game the system, building up their social �klout� as a currency to leverage against customer service organizations?


On the whole most people are pretty honest and will not go to the efforts described to game the system. But to me the question gets to the heart of how strong your CRM foundation is, whether you view a customer�s social activities in isolation from everything else and whether your culture and organizational structure aligns to fixing customer problems quickly and transparently.


Take the organization that sets up a social media customer care operation completely disconnected from the rest of the customer-facing business. Without any customer data or insight the temptation would be to prioritize service given to customers who light the biggest fires. Customers who shout the loudest and who have the largest number of Twitter followers & social �klout� (neither of which necessarily bear any value whatsoever to customer lifetime value). In this scenario it�s easy to see that if the reward mechanisms make it worthwhile, a small number of customers will learn that to get better service (or perhaps compensation) they should build up their followers and complain vocally and repeatedly. The disconnected organization will simply keep fire-fighting and rewarding that behavior.


With a strong CRM foundation and an integrated approach however, we could see a different scenario. Firstly connecting a customer�s social activities to their CRM profile allows us to view the customer�s history, value and segmentation. We can therefore apply appropriate business roles to deal with the customer within the context of their profile and the interaction. We stand a better chance of knowing whether the angry customer shouting at their friends on social networking sites is in fact a loyalty customer with a genuine problem who needs help, or a serial social gamer trying to cheat the system.


The CRM foundation also covers people and organizational aspects. In particular the shift from inside-out to outside-in. Gaming the system can be prevented though effective and transparent handling of complaints, only possible with the right organizational set-up and culture. This is a lesson that United Airlines seemed to learn after their United Breaks Guitars episode. Following the high profile PR disaster United saw many customers trying to create copycat viral videos and blogs complaining about service issues. They seem (at least from the outside) to have adopted a policy of jumping on these sparks quickly and try and be transparent in acknowledging their mistakes and trying to do what they can to fix the problem.


Customers themselves can also help prevent gaming the system. An empowered community like GiffGaff�s can encourage self-moderation i.e. customers not only fixing each other�s problems but also calling out trouble makers from the community. One of the early mantras of the Internet was that �no one knows you�re a dog�. This is perhaps no longer valid as Google today displays your history online for everyone in the community to see. If this is a topic that interests you I suggest you read Michael Wu�s Building the Community Platform blog and check out this great post by Mark Tamis on �incentivizing community participation�.


I suspect that social customers gaming the system will be an emerging pain point for organizations setting up social media customer care operations. These organizations can make their lives much easier by building a strong community and by building on a strong CRM foundation. What do you think?

Amazing customer service from Flightcentre!

I thought that I had written my last post of 2010. I thought that by this time I would be in New Zealand on my honeymoon. Sadly the weather, airports and airlines have conspired against me and, like 1m other travellers hoping to get away for Christmas, I�ve been stuck in London for the last few days waiting for a rescheduled flight.

Having spent nearly 15 years working with Marketing, Sales and Customer Service organisations I�ve seen my fair share of good and bad customer experiences. A crisis is often the best way to stress test a customer-facing organisation; it can shake Customer Service to its core. It would be easy to write a post describing how over the last few days I�ve seen many examples of customer service organisations being totally unprepared for a crisis and delivering appalling service to their customers, but I wanted to take a moment to describe one of the best customer experiences I think I�ve seen.

I�ve always said that its people that make the difference within Customer Service. Sure you can buy expensive technology (and that can help) but if your people are not motivated to help customers then your investment is probably wasted (see my previous post �Software doesn�t build relationships; people do�). People certainly made the difference in the recent chaos at Heathrow. Let me take a step back and explain how Flightcentre dealt with the crisis.

I had booked my flight with Flightcentre nearly 12 months ago and had been looking forward to going on honeymoon and catching up with old friends in New Zealand. The fact that I had booked at a high street travel agent at all (rather than direct online) had originally surprised me. But Flightcentre had been able to get me a much better deal than I could find myself online and Dave Lister, the manager at Flightcentre in Richmond had personally visited some of the destinations I was planning to go to and had made some great recommendations on hotels and restaurants.

Fast forward 12 months and on Saturday evening I arrived at Heathrow to find what could only be described as total chaos. A sudden, heavy snowfall had brought the airport to a complete standstill and unsurprisingly I received a text message from my airline telling me that my flight was cancelled. Within 60 SECONDS of receiving that news my phone rang - It was Dave from Flight Centre. He remembered that I was off on honeymoon and phoned me out of office hours to check if I needed any help re-booking my flights. I was shocked. It would have been so easy for the travel agent to simply pass the buck on to the airline and ask me to deal with the airline direct.

In the end we couldn�t find anything to re-book on Saturday night so Dave and his colleague Jois Christie came into their Richmond office on Sunday morning (their day off!) to help us (and of course their other customers) find alternative flights. In the end they spent around 2 hours with us working through different options until we found a flight that (I hope!) leaves tomorrow. Their knowledge, customer focus and passion for helping their customers was truly outstanding. I certainly won�t be booking my travel anywhere else in the future and I hope Flightcentre recognise what great people they have!

My learning from this - you only get moments of customer delight within Customer Service when people make the effort to go the extra mile.

Disclaimer and disclosure: Flightcentre have no idea that I write a blog on customer-centricty. They have not paid or incentivised me in any way to write this post and have not contributed anything to the content.

GiffGaff � a case study of customers in control

It�s relatively easy these days to find point examples of social CRM in action across marketing, sales or customer service; but few organisations have a holistic Social CRM strategy in place. Paul Greenberg recently wrote a case study on Proctor & Gamble, who seem to come the closest (despite not calling what they do �Social CRM�).

One of the best case studies I�ve come across is a UK-based Mobile Virtual Network Operator (MVNO) called GiffGaff. I was lucky enough to recently meet some of their staff who talked me through the business model.

The GiffGaff story is one of David vs. Goliath. GiffGaff are part of the Telefonica Group. They rent their mobile network from O2 and sell pre-pay SIM cards and actively compete against the traditional Telco companies. Unlike most mobile operators with large fire-fighting call centres, GiffGaff have just 14 employees and no call centre. They challenged the traditional MVNO model by handing control over to their customers. Here�s how:

Product co-creation - right from set-up GiffGaff engaged their target market in 2 way dialogue, asking potential customers and early adopters to decide on how best to structure their tariffs. Similar to Dell IdeaStorm, GiffGaff have continued their Ideas page and at the point of writing they have implemented 112 ideas direct from their community.

Community support � the GiffGaff community is perhaps best shown within customer service. All of GiffGaff�s customer service is online. They pro-actively push information out to their notice boards page e.g. service issues. They publish customer-generated tips and tricks and FAQs. They also make extensive use of their community forum for peer to peer support (supported by intervention and moderation by GiffGaff employees when required).The community has radically cut customer support costs compared to the traditional contact centre-centric model. GiffGaff estimated that if O2 could replicate the model with just 25% of their customers participating, they could save c�20m per year.

Payback Scheme - Perhaps the most innovative aspect of the community forum is that users are incentivised to participate through the use of a payback scheme. The payback scheme rewards GiffGaff members for helping GiffGaff out with Kudos points which can either be redeemed for pre-pay credit, or donated to charity (of course a charity of the community�s choice!).

Social Marketing � GiffGaff�s above the line marketing is minimal for a Telco company. Instead they prefer their customers to spread the word on their behalf. Again they use Kudos points as an incentive - customer�s get 50 points each time they e-mail a friend or 500 points for each SIM card they send to a friend that is activated (where 1 point = 1p). That�s not a bad cost of acquisition and advocacy generates 25% of new customer connections.

GiffGaff�s results so far have been impressive and pretty interesting:

• 50% of customer questions are answered via the community (as opposed to online self service or GiffGaff employee moderation).
• The average response time for any question posted in the forum (24x7) is under 3 minutes and 95% of all questions are answered within an hour. I suspect most Telco call centre customers would still be navigating an IVR after 3 minutes, let along speaking to an agent or having their problem resolved!
• GiffGaff�s NPS score is 75 - way above the industry average and approaching that of Google or Apple. They publish their customer satisfaction scores here.
• GiffGaff have found that the traditional 90-9-1 model of participation (See Michael Wu�s blog for an explanation) has changed with their rewards system. They estimate that they have a  1-25-74 model i.e. a much higher percentage of occasional forum users.
• GiffGaff found that their top ten super-users spend an average of 9.5 hours per day on the community site. Some super users have gone to extreme lengths to support GiffGaff; stepping in to quash negative complaints and building their own status badges for the forum. GiffGaff�s customers even built them an iPhone app.
• Because of the exceptional levels of support within the community, GiffGaff have also found that some users have started to donate their points back to the super-users who have helped out most within the forum.

Now clearly as a start-up, GiffGaff have some unique advantages. They do not have an existing large and diverse customer base or existing investments in call centres. They can afford to target a very specific niche of customers who are happy for their relationship to be conducted entirely online. However, that�s certainly not to say that traditional contact centre-centric companies cannot learn anything from the GiffGaff model.

Disclaimed and disclosure: I have no affiliation with GiffGaff, either as a customer or as a client. They have not paid me for writing this article (or given me kudos points!).

What's driving Social CRM - opportunity or fear?

Most clients that I have discussed Social CRM with so far have fallen into one of two camps: those motivated by the opportunity presented by Social CRM and those motivated by their fear of the social customer. Let me say from the outset that I recognise that this is quite a crude split, that there are grey areas in between, and that over time it's certainly possible for a client to move from one camp towards another; but for the moment let me explain my thinking.

First, a reminder that Social CRM is "the company's response to the customer's control of the conversation" (Paul Greenberg "Time to put a stake in the ground on Social CRM"). Those driven by the opportunity of Social CRM see customer control of the conversation as a positive thing as it provides knowledge, insight and engagement that they might otherwise have missed.  If we take a Consumer Goods company as an example, most have long been separated (and as a result frustrated) from their end consumers by retailers. For Consumer Goods companies Social CRM represents a unique opportunity to engage, listen, capture and respond to the direct and authentic voice of the consumer. Consumer Products companies can leverage Social CRM to build deeper relationships with the end users of their products, create new products (or re-design old ones) based on direct community feedback, adjust promotions or test new markets based on real consumer insight.

Those motivated by fear of the customer's new found control of the conversation, on the other hand, think quite differently. These are organisations whose relationship with their customers is typically defined by negative moments of truth. Take a water utility, for example. Now I have no desire to have any sort of interaction with my water utility other than when I sign up, when I leave, or if something goes wrong in between. My relationship with my water utility is defined purely by how easy it is for me to set up or close my account, the cost of my bill, how many things go wrong and how well they are dealt with. If things do go wrong (for example, if my bill is incorrect, my water pressure is low, or if sewage is pumped into my street) them my relationship with my water company is determined by how well they deal with that negative moment of truth. If my water utility can't fix the problem in a manner I deem to be appropriate, through the channel of my choice, then the chances are that I will eventually turn to social channels to vent my frustration. I will tweet, I will blog, I will write negative reviews etc. If my negative sentiment resonates with others, then it will gain viral momentum, causing embarrassment and potentially lost customers. If you think about many of the headline-grabbing Social failures like United breaks guitars, Eurostar's Twitter storm, or BT's YouTube complaint; many have been driven by an inability to spot and deal with a negative moment of truth. Hence for some organisations, their primary driver for Social CRM (at least in the first instance) is simply to be able to better listen and respond to angry customers; putting out sparks and flames before they become fires.

Currently most commentary on Social CRM is directed towards the opportunity camp. I don't dispute that, or the logic that goes with it - the opportunity camp is where the excitement happens; where organisations can become truly customer-centric / customer-driven. But the opportunity camp is not necessarily an easy starting point for all organisations; improving customer service to quench flames of discontent is far more tangible for some. Over time I suspect companies starting in either camp will evolve their thinking and usage of Social CRM. Those who start by trying to listen and respond out of fear for the social customer may find an opportunity to better understand their customers (their desired outcomes and their value creation processes). This insight in turn may lead them to spot new opportunities for product or service enhancement.

What's your view?

#VirginMedia - a customer�s perspective on Twitter service

Let me say from the outset that this is not a "Virgin Media lies Virgin Media sucks" post. I am a relatively happy Virgin Media customer and on balance I would recommend them to a friend; but my last customer service experience with them was mixed. I've chosen to case study the experience for precisely that reason. It's incredibly hard to create a good cross-channel, joined up customer service experience and get things right every time. Even the best companies struggle. Most organisations do some things well and some things badly. They are siloed, they fire-fight and they have done little more than dabble in social media. The purpose of this post is not to criticise Virgin Media, it's to highlight learning's from my recent dealing with them.

My experience with Virgin Media started when my broadband and cable TV went down. After 24 hours I called Virgin Media's help line. I hit their IVR, navigated the menu options to the technical support line, but just as I reached the end of the menu path my call was disconnected. I tried a further 4 times but was disconnected each time having spent around 4 minutes per call. Frustrated, I called again but this time I pressed random numbers on the IVR and I got through to an agent. The agent apologised and explained that there was maintenance going on in my area. He couldn't tell me when the maintenance would end but he offered to credit my account �10. Happy enough I hung up, but 24 hours later I still had no broadband. I used my iphone to check on Virgin Media's web site to see if there was a service update online but I couldn't find anything so I tweeted "#virginmedia broadband now down for 48 hrs. Disconnected from call centre IVR 5 times... #fail". To be honest I didn't expect a response to the tweet but within an hour I got a response. We exchanged messages and @virginmedia advised me that the maintenance affecting my broadband would continue for another 2 days; not great but at least I now had an answer. Sure enough, 2 days later my broadband was switched back on (co-incidentally, on the same day I received a marketing offer through my letterbox to sign up as a new customer to Virgin Media (!) I�ll leave Marketing, Sales and Service integration for another post!).

What do I take from this customer service experience?

The best service is no service

I don't know if the maintenance on my broadband was planned or unplanned. Either way, Virgin Media could have prevented my call. They could have written, e-mailed or sent me an SMS to let me know that maintenance was planned in my area before the event. Once a problem occurred, they could have identified accounts from the affected area and put a message onto their IVR or web site advising customers who called that they were currently experiencing problems that would be resolved in 72 hours and that they would be crediting �10 to all affected accounts. In some industries, consumer-to-consumer is becoming the best way to prevent service calls, with customer�s turning to support forums to fix their problems.

Multi-channel is dead; the challenge is cross channel

My experience with Virgin Media highlights the challenge that many organisations now face. I started my interaction in one channel (phone), shifted to another (online) and then another (Twitter). Customer's will increasingly look to switch channels at their convenience and expect to pick up processes where they left off. This challenge will only get tougher with the increasing emergence of social channels beyond the organisation�s formal control.

Customers don't mind self-service until it breaks

I have no problem with IVR technology per se, until it fails. I expect most customers feel the same. We now accept service automation but it has to be easy to use, crisis-proof and integrated into back up options. When Virgin Media's IVR failed, my call was disconnected; I couldn't navigate home and in the end I had to fool the IVR by selecting random options just so that I could speak to someone.

Technology doesn't build relationships; people do

When I eventually managed to speak to someone at Virgin Media they were both understanding and helpful. They didn't appear to be reading from a canned script, the agent seemed to be empowered to credit my account on the spot.

Expectations management should be ingrained across customer service

When the agent told me that maintenance was going on in my area he didn�t tell me how long it would continue, probably costing Virgin Media an unnecessary contact. My friend and colleague Reg Price nails this one. In his book Reliability Rules: How Promises Management Can Build Your Company Culture, Bid Your Brand, and Build Your Bottom Line, Reg lays out a comprehensive framework for setting and managing customer's expectations. 

Twitter is really starting to be a viable service channel and listening works

Virgin Media surprised me by listening to Twitter and offering to help. That unexpected surprise off-set the failings of some of their other channels which I think shows that Twitter is starting to become (at least in customers� eyes) a viable service channel, however, I doubt this honeymoon period will last. Soon customers will expect organisations to adopt service channels that met their needs, whether that is Twitter or whatever social platform comes next.

Solid foundations

Perhaps above all, my experience with Virgin Media illustrates the importance of solid foundations for customer service. I admire Virgin Media for being an early adopter of Twitter for customer service, but, for me Twitter was a final resort, all other channels having failed.

Disclaimed and disclosure: I have never worked for or with Virgin Media. My only dealings with them have been as a customer.