Predicts 2012: CRM Customer Service and Support Staggers into the Posthuman Age

Customer service excellence is key to differentiating any business, but the drive to reduce costs still undermines customer trust. New analytical tools, improved linkages among social CRM processes, increased automation and lower-cost cloud solutions hold the greatest promise for improvements.

Radical levels of customer self-service, which account for an average of 75% of all customer interactions, threaten to undermine the customer's affinity for brand. Meanwhile, a greater focus on individualized service, powered by analytical systems that understand the customer's likely intent, is helping the service process. Thrown into the mix are two trends still in their early stages: peer-to-peer customer support and customer service via mobile devices like the iPad. Managing the pace of CRM customer service process change and technology change will require discipline and data across interaction channels.

• The creation and support of peer-to-peer communities requires employees from the customer service and support organization to participate. This generates much-needed new positions for advancement in the group.
• Customer support communities fail for myriad reasons, primarily lack of long-term mutual benefits, followed by administration and lack of moderation.
• Virtual assistants (VAs) play a strong role in improving customer service, yet organizations should seek ways to adapt them in sales, education and training applications.
• Chief marketing officers (CMOs) increasingly emphasize the importance of customer experience metrics, bringing marketing and customer service measurements closer than ever.
• Marketing is likely to fund initiatives that are jointly developed, executed, managed and measured by marketing and customer service. This will put marketing in a lead position to drive retention and loyalty strategies through customer service, improving alignment between the two departments.

• Vice presidents of customer service and support should work with IT and the marketing department on best practices for working with communities, as marketing is usually at the vanguard of crowdsourcing and social media.
• Prepare to exploit the power of the smartphone as another Web customer service experience for customers by carefully polling and surveying customer preferences.
• The head of customer support should maintain very precise statistics on key performance indicators (KPIs) for the service organization and how they are shifting due to self-service and process improvement. Use the savings to push dynamic and personalized offers for the customer. As to social, be sure to measure involvement and benefits.

By 2014, organizations integrating communities into customer support will realize cost reductions ranging from 10% to 50%.

By 2014, customer fallout will drive down customer satisfaction in 70% of organizations that shift customer support to communities.

By 2015, 50% of online customer self-service search activities will be via a VA for at least 1,500 large enterprises.

By 2015, the marketing budget allocated to retaining customers and increasing loyalty through customer service will more than double.

Through 2015, the dominant themes in CSS will be collaborative customer service processes, application migration to the cloud and support of mobile consumers.

The four most critical new issues for customer service organizations in 2012 will be:

• How to harmonize customer service processes that sometimes happen with a human support agent, sometimes through self-service and sometimes by peer-to-peer community networks.
• Understanding the implications of extending customer service to mobile devices such as the iPad and smartphones.
• Learning to build successful business cases for onboarding analytics and decision support software with customer service agents, and providing support for marketing efforts during inbound customer service.
• Building competencies in integrating collaborative or social CRM into ongoing customer service workflows.

In this research, we define the research area covered and the scope of the predictions, highlight interesting trends, provide high-level analyses of the predictions, if applicable, offer a context for the predictions and explain coverage gaps, if applicable.

Strategic Planning Assumption: By 2014, organizations integrating communities into customer support will realize cost reductions ranging from 10% to 50%.

Analysis By: Michael Maoz

Key Findings:

The cost savings are principally through deflection of calls to the community, where the costs are less than 5% of the cost of a technical support agent. During 2012, three industries will realize the biggest successes (up to 50% savings on a per-case basis) with communities that solve customer support issues: B2B software, consumer electronics and telecommunications service providers. Laggards (under 5% savings) will not get involved in 2012. These will be health insurance, government and banking. The U.S. and parts of western Europe will lead the trend, with sharply reduced success over the next four years, as the concepts mature.

Market Implications:

For all the market attention given to social CRM, fewer than 5% of large enterprises globally have begun a pilot project to test the concept of peer-to-peer support. The initial findings, however, indicate that these businesses have lowered the cost of customer support, but that marketing and product developments are helped as well. Specifically:

• The creation and support of peer-to-peer communities require employees from the customer service and support organization to participate. This generates new positions for advancement in the group, and early indications are that this is a morale booster, and is seen as a career track.
• Radical savings in the B2B software field are in the range of 75% per case deflected through resolution in the community. This phenomenon will spur greater interest from other industries hoping to achieve similar results.
• Software vendors in the CRM space have largely failed to deliver compelling solutions for this area. A raft of niche vendors has filled the gap, resulting in a need to integrate community support software with the case management system. This raises issues of continuity, as 75% of the best of these niche vendors will be acquired over the next 36 months. It also creates the need to define business rules between two or more systems.

Recommendations:

• B2B software, consumer electronics and telecommunications service providers globally should begin a pilot project in peer-to-peer support in 2012, or risk falling behind in service standards.
• Customer support executives should study this trend closely, including budgeting, staffing and the establishment of business metrics that could be impacted by peer-to-peer support communities.
• The next wave, beginning in 2013, will be consumer goods, retail, higher education, charities and membership organizations.

Strategic Planning Assumption: By 2014, customer fallout will drive down customer satisfaction in 70% of organizations that shift customer support to communities.

Analysis By: Jenny Sussin and Carol Rozwell

Key Findings:

Many organizations are employing communities as a platform for customer support. While there are examples of organizations experiencing moderate to great success in call deflection and increased first-contact resolution (FCR) cost savings, there are also unsuccessful community deployments. These unsuccessful deployments happen when the organization thinks that if it creates community self-help sites, customers will come. Similarly, these deployments tend to be plagued by the perception that peer-to-peer communities require no administration or moderation.

Market Implications:

There are several severe implications for organizations that think they can shift support from agents to customer support communities.

• If an organization has conducted a resource action based on the belief that customer support communities would bear the burden on a percentage of incoming support requests, it will be short staffed. The results are:
• Lower FCR, as customers reach out through other channels, again overwhelming customer service representatives (CSRs).
• Customers become frustrated, lowering satisfaction.
• As always, if there are no major product/service differentiators, customers will leave for competitors if they become dissatisfied with customer service and support.
• The amplification of positive and negative feedback, thanks to the rise in popularity of social networking, will be detrimental to an organization's brand value.
• Gartner predicts that by year-end 2012, more than 50% of dissatisfied U.S. consumers will post about the dissatisfaction on a public social network, up from 25% in 2011.

Recommendations:

• Recognize and plan for the administration and moderation required to maintain a customer support community. Certain roles will need to be assigned: one community owner per community platform and multiple community moderators, depending on the level of community activity, to monitor for foul language and encourage participation.
• Customer service organizations must work cohesively with the marketing organization to ensure proper branding of the community, communication of the community's existence and promotion of community value.
• Measure the overall health of the community and its activity, rather than just membership.
• Be ready for the community to fail. Communities are not ideal for all organizations, nor are they always the best channel for high-priority customers to communicate with the organization. If a community is deployed and ends up not being the best customer support option for your organization, let it go and innovate elsewhere.

Strategic Planning Assumption: By 2015, 50% of online customer self-service search activities will be via a VA for at least 1,500 large enterprises.

Analysis By: Johan Jacobs

Key Findings:

Over 1,500 organizations worldwide are in various stages of production with VAs. The results range from profound cost savings (5% reduction in service costs) and increased customer loyalty (2% to 8%) to simply the entertainment of having a robotic presence on a website. But the number of organizations adding this capability is growing by 20% per year, especially in travel, consumer goods, telecommunications and banking. A challenge is that computer-generated characters have limited ability to maintain an interesting dialogue with users; they need a well-structured and extensive knowledge management engine to become efficient, self-service productivity tools.

The Apple Siri deployment with the launch of the iPhone 4S will boost customer exposure and the future adoption of this technology.

Market Implications:

VAs will lead to further downsizing of customer service centers. We expect greater numbers of acquisitions as large enterprise application vendors buy up the existing pool of vendors. New skill sets will be required to refine the capabilities of the VA. VAs are seeing adoption in sales and in education and training applications. End-user acceptance of VAs is becoming less of a challenge than it was a few years ago.

Recommendations:

• Effective use of a VA can divert customer interactions away from an expensive phone channel to a less expensive, self-service channel.
• The use of a VA that is voice-enabled can assist in creating an interesting interaction for a nontraditional audience.

Strategic Planning Assumption: By 2015, the marketing budget allocated to retaining customers and increasing loyalty through customer service will more than double.

Analysis By: Kimberly Collins and Jenny Sussin

Key Findings:

As organizations attempt to get social, it is ever prevalent that marketing departments spearhead social media based initiatives on their behalf. In marketing's continued effort to protect and evolve the organization's brand through social media, the department increasingly engages in two-way communication, something historically abnormal for that department, but the norm for customer service.

Market Implications:

This prediction brings about a redefinition of the marketing role to include a component of what has traditionally been considered customer service. Marketing and customer service departments will have to work in cohesion within an organization to successfully deliver on both strategies. Marketing is likely to fund initiatives that are jointly developed, executed, managed and measured by marketing and customer service. This will put marketing in a lead position to drive retention and loyalty strategies through customer service, improving the alignment between the two departments. Marketing and customer service will also both be looking for a communication-based skill set when hiring new head count or sourcing internal staff.

Recommendations:

• Clients must make a connection between the marketing and customer service departments. Gartner recommends identifying a cross-team lead within the marketing department, and tasking this employee with leading a joint initiative with a customer service director.
• Customer service departments must assert their role in the coming joint customer-based initiatives as to not be overtaken by the marketing department. Customer service should remain focused on pre-existent loyalty and retention measures to lead the joint effort toward tangible ROI.
• The processes that drive customer retention and loyalty should be identified across the organization with the roles of participants in marketing and customer service well-defined. One to three KPIs should be identified for each process, with accountability across both organizations and all participants in the process.

Strategic Planning Assumption: Through 2015, the dominant themes in CSS will be collaborative customer service processes, application migration to the cloud and support of mobile consumers.

Analysis By: Michael Maoz

Key Findings:

In any given 12-month period, Gartner receives an average of 1,600 inquiries from clients worldwide specifically focused on improving customer service processes and technologies. A look at the topics singled out for specific examination confirms that collaborative service processes, cloud computing delivery models, and supporting an increasingly mobile consumer are top of mind.

Market Implications:

There continues to be a lack of coherent focus from top corporate and government executives regarding the game-changing nature of collaborative processes. The dramatic cost savings, in addition to the crucial issue of fostering customer trust, will warrant C-level attention throughout 2012. We reiterate our position that interaction channels have exploded in number in the past few years, from direct- and phone-based to the corporate website and across a growing selection of mobile devices and social media. To keep pace, the scope of functionality included in CSS applications has expanded. It is time to build an iPad app competency. Continuing merger and acquisition activity challenges organizations to adapt to a changing supplier landscape. This has led organizations to have difficulties managing and planning for an increasingly complex CSS solution portfolio.

Recommendations:

• Work with IT to develop an iPad app competency. New technologies enable organizations to rethink their CSS processes.
• Use new delivery models such as cloud computing and mobile for extending and receiving customer service processes and applications.
• Employ proper planning and management to keep up with emerging business needs.
• Carefully read the four key pieces of recently published research listed below.

In response to your requests, we are taking a look back at some key predictions from previous years. We have intentionally selected predictions from opposite ends of the scale – one where we were wholly or largely on target, as well as one we missed.

On Target: 2011 Prediction – By 2013, 80% of businesses will suffer a revenue loss from not supporting Web-based customer service on mobile devices.

With the number of general mobile devices and tablets having already surpassed the number of laptop and PC users, we are well on track for the number of smartphone and tablet users to surpass the number of laptop and PC users by 2013. Rich mobile applications (RMAs) provide powerful new business opportunities for enterprises to interact with employees and customers to provide a rich user experience that leverages mobile device features such as telephony, cameras, accelerometers, browsers, and GPSs and location-based services. Organizations that provide enterprise RMAs for customers, partners and employees to connect with enterprise applications for self-service and customer-service-related activities are on track to see an increase in employee efficiencies, as traditional applications, i.e., leave or payment approval, can be reached more easily from outside the enterprise. These enterprises will also see a reduction in call volume, where customers can browse a trouble ticket to find the latest status, or self-service via mobile browsers for information and services.

Missed: 2011 Prediction – By 2014, 10% of the problems currently solved by CSRs will be resolved or influenced by endorsed customer communities.

We underestimated the impact and definition of "endorsed" customer communities. The percentage of problems solved that were influenced by a customer community was not 10% of the total by 2014, but double that – up to 20% – by 2014. We also believe the impact on corporate productivity could be 0.2%. The increasing crowdsourcing of customer service in some industries such as hardware and software manufacturing, consumer electronics and travel is already yielding a rate of 30% to 50% of problems resolved via community involvement. Therefore, we are revising upward our projections by 100%, though this depends greatly on the industry and service model.