Archive for August, 2011

Personalization pays off

by Brian Moore on August 26, 2011 in Brian Moore, Call Centers, Wireless/Telcom with 3 Comments
personalization_pays

Since all of us are consumers, at one time or another we’ve had to communicate with the companies with whom we do business about some opportunity or issue in our relationship.

Our satisfaction with that interaction often has as much to do with how, when or where the communication took place as it does with what was said.

We are most likely to feel valued as customers when the communication is to our liking in all these dimensions; in other words when we feel the companies we do business with treat us as individuals.

On the other hand, profit-driven companies who service customers numbering in the millions or even 10’s of millions typically think about customers in much broader terms. While we often talk about providing "1 to 1" service, in reality customers are more often dealt with as part of large segments aligned around some aspect of their prior or expected behavior such as potential value, loyalty or credit risk.

Given this tension between an enterprise’s need to carefully manage their costs and a customer’s preference for personalized service, it’s no wonder our popular culture has produced numerous examples of the individual’s fight against anonymity:

  • Facebook & Twitter's popularity is driven in part by our often unfulfilled need to be recognized by others as a unique individual.
  • Robert DeNiro channeled everyone's inner "nobody" in the film Taxi Driver when his character Travis Bickle angrily asked "Are you talking to me?!?!"
  • Finally (and you may hate me for putting this tune in your head) Bob Seger and his Silver Bullet Band railed against it in their hit song “I Feel Like a Number”.

If these and other expressions of desire for personal acknowledgement represent a universal human need, doesn't it make sense for companies to make sure all the messages we send to customers communicate appreciation of their unique individual attributes?

Or at very least, shouldn't we at least call customers by their name?

In my next blog, I'll share a case study illustrating the tremendous impact one Varolii client found in that simple act, after which no one could accuse them of treating their customers "like a number".

In the meantime, tell me about your favorite expressions of individuality in popular culture. Just enter a comment below...consider it part of your own fight against anonymity!

Banks Report Fewer Accounts Past Due - Why This Is Not Necessarily Good News

by Brian Moore on August 18, 2011 in 2011, Banks/Finance, Brian Moore, Mortgage with 5 Comments
credit_card

TransUnion reported this week that in the second quarter of 2011 the number of US credit card accounts that are seriously delinquent (>90 days past due) dropped to its lowest level in 17 years. This continues a trend that began six quarters ago, bringing the rate down to 0.6%, nearly 40% lower than it was this time last year.

So why is nobody smiling?

If you're a consumer, you've probably got concerns about the economy and your job, and as a result you are reducing your spending with both cash and credit to save for the forecasted rainy day. After all, it’s a lot easier to keep a smaller credit card account up to date, but this does not necessarily mean you are happy doing so.

If you are a card issuer, the lower delinquencies translate to lower future loan losses, which is a good thing. But when it comes as a result of customers reducing their borrowing, it means lower income from interest and puts increased pressure on bank operations (like collections) to do things more efficiently. So you are not happy.

And if you happen to also be a mortgage lender, the news is even worse. In contrast to the improving trend in credit card delinquency, the number of past due mortgages continues to climb. According to Lender Processing Services, the number of mortgages over 30 days past due has increased by 3% in the past two months. This means mortgage servicers have even more work to do as they implement the aggressive outreach to delinquent borrowers mandated by Fannie & Freddie's revised servicing guidelines.

No wonder everyone is grumpy. For me, that's strong motivation to take a look at operational strategies and tactics and adapt them to these new dynamics:

  • Consumers should take advantage of their reduced debt loads to improve their credit scores by paying every bill on time. If you've not already done so, get enrolled in your creditors auto-debit programs so you never miss a due date. And if your credit is already excellent, think about re-financing your mortgage at the lowest interest rates in modern history.
  • Credit card issuers should be sure to leverage their customer's increased awareness of their credit standing by treating delinquent accounts early in their aging, before it is reported past due to the bureaus. When you do, be sure to mention the positive  impact prompt payment can have on credit scores to incent the customer to pay today.
  • With the increased workload required by the GSEs, mortgage servicers must automate their customer outreach, using digital interactions such as interactive voice messages, SMS text and email to lead customers into profitable action. Even if the outcome is forbearance or loss mitigation rather than payment, it’s better than allowing the delinquent borrower to hide from the obligation and delay the inevitable day of reckoning.

JD Powers to Mortgage Servicers - "What we got here is...failure to communicate"

by Brian Moore on August 11, 2011 in 2011, Brian Moore, Call Centers, Mortgage, Varolii News with No comments

Why are servicer’s satisfaction scores so low in JD Powers most recent survey?

Some of the dissatisfaction is a result of the negative press arising from the housing market meltdown, the robo-signing mess and the subsequent efforts by state AG's, the US Treasury, HFA, HUD and others to punish anyone with "Mortgage" in their name. With so many regulators swinging their billy clubs like prison guards at a recalcitrant inmate, many servicers might even be willing to change places with Cool Hand Luke if given the chance.

But the survey also points out  that servicers with higher satisfaction scores communicate better with borrowers throughout the mortgage life cycle.

To improve their satisfaction scores, David Lo, J.D. Power and Associates' director of financial services says servicers should:

  • Educate borrowers on how their escrow account works, especially if there is going to be an increase in monthly payments.
  • Clearly communicate fees for late payment, paying on the web or by phone, document retrieval - anything that is going to cost the borrower.
  • Use multiple communication channels, not just mail. The more channels you use, the more likely the borrower will get your message.

Welcome calls, payment reminders, refi & loan modification status updates and past due notices are all opportunities to influence borrower behavior and attitude. Servicers should review their communication strategy to make sure each touchpoint keeps the borrower well informed.

Doing this may not make their house worth what it was four years ago, but it will make them happier with the process of buying, selling or just keeping their home.

 

How do you measure customer experience?

by Mary Cook on August 10, 2011 in 2011, Call Centers, Mary Cook with No comments
measure

A friend of mine emailed me a few weeks ago with one question: “Mary, how do you measure customer experience?” My friend is a six-sigma black belt call center executive. Therefore, I naturally took this question as not only a challenge, but as an opportunity to provide him with an answer he could actually use. So…where does one start when wanting to measure their customer experience?

First, Start by Reviewing Your Current State

First, you need to understand your current customer experience situation – both externally and internally. More often than not, companies focus on external customer experience. This said, there is a correlation between internal, employee loyalty and satisfaction, and external customer experience satisfaction.

Next, Focus on External Measurement

You must measure and benchmark your customer focus on the activities that drive customer satisfaction and retention. These benchmark results are important to understand in order to determine which strategy is best suited for your company to deliver the best customer value both internally and externally. If there is weakness in the entire customer focus aspect, a complete customer experience management reengineering program may be necessary.

Then, Pay Attention to Your Internal Measurement

One of the most important aspects in customer experience management is creating an empowered workforce of employees who are committed to your customer and believe in your company. They need to be able to make a direct connection to how they contribute to customer value and satisfaction.

How Do We Measure It? Measurement Methodologies

Here are some of the top methodologies utilized to measure customer experience:

Quality Customer Experience Metric

No matter what methodology you use, remember to focus on the quality of your customer experience metrics, as well.

  • Credibility: How widely accepted is the measure? Does it have a good track record of results?
  • Reliability: Is it a consistent standard that can be applied across the customer lifecycle and multiple channels?
  • Precision: Is it specific enough to provide insight? Does it use multiple related questions to deliver greater accuracy and insight?
  • Accuracy: Is the measurement right? Is it representative of the entire customer base, or just an outspoken minority?
  • Actionability: Does it provide any insight into what can be done to encourage customers to be loyal and to purchase? Does it prioritize improvements according to biggest impacts?
  • Ability to Predict: Can it project the future behaviors of the customer based on their satisfaction?

In conclusion, you want to be able to leverage your customer experience metrics into superior business performance. These value metrics should enable you to identify competitive performance gaps on those factors that are critical to quality from a market perspective (CTQs, in Six Sigma jargon…). The nature of those gaps, whether positive or negative, will point you to the specific product (service), people, or process issues that you can improve to realize or sustain a competitive advantage.

You can read my complete research on this topic for free, including more in depth explanations around the measurement methodologies on the Contact Center Associations’ website. And don’t forget about the ROI behind customer experience. Forrester recently produced a study that showed, for example in financial services, that a small increase in customer experience could have an impact of more than $200M from reduced churn, word of mouth referrals, and increased purchases.

Bill Shock - SMS alerts are not enough

by Brian Moore on August 1, 2011 in 2011, Brian Moore, Varolii News, Wireless/Telcom with 2 Comments
bill shock

 

Are mobile service providers ready to comply with the FCC's proposed bill shock rules?

From my perspective, the answer is "yes, but..."

Before I explain what that "but" means, lets briefly define bill shock. Better yet, lets have the FCC do it:

As mobile devices have become more and more complex, consumers have had to navigate more complex plans, choices, and bills. The complexity and confusion put them at increasing risk for “bill shock,” a sudden, unexpected increase in their mobile bill from one month to the next.

Given their mandate as protector of the consumer, the FCC has seized on this issue and proposed a set of rules that would require the service providers warn subscribers when their usage is on pace to exceed their plan's allowance.

While the mobile carriers wait for the commission to issue their final edict and implementation date, most are already taking steps to make bill shock less of an issue. They are implementing high usage notifications via SMS and email messages. They are enabling subscribers to check their usage at any time through a variety of channels. For smartphone users, they are even offering applications the subscriber can use to set their own rules for data usage and roaming to limit their exposure to plan overages.

For the sophisticated mobile user, these overlapping capabilities would seem to be more than enough to keep them from getting shocked by a bill that far exceeds their expectations (and not in a good way).

But what about the "least sophisticated user" the regulators typically reference when writing their rules? They may not understand that watching a minute of streaming video consumes six times as much data as downloading an average picture. Or that roaming outside their carrier's service area (or heaven forbid, outside the country) can put their usage charges into hyperdrive. They may have purchased their phone from a Radio Shack or Costco where the sales rep went over all the cool features of their new smartphone, but did not mention the need to monitor usage.

For these folks, carriers need to take some extra steps. After the sale, they need to educate the subscriber about their billing plan. About data usage for various applications. About tools available to manage their account. And after all this, if they find a subscriber is still on pace for an overage and a shocking bill, they need to call them.

This call does not need to be a major expense or a significant staffing challenge. Cloud-service providers like Varolii can deliver interactive voice messages for about a dime that will cut through all the clutter of texts, tweets and Facebook updates and let the mobile user know they are about to touch the third rail of mobile service - exceeding their plan minutes - giving them the option of either moderating their usage or speaking to a representative to discuss plan alternatives.

The FCC is going to require bill shock alerts, no if's, and's or but's. The carriers who go the extra step and offer a more complete usage management service to their subscribers will prove themselves not only ready, but willing and able to take business from their competitors.