Many organizations have traditionally seen cost-cutting and customer satisfaction improvements as two diametrically opposed objectives. You can either launch an initiative to cut customer service costs, the thinking goes, or strengthen the customer experience. And when companies do try to achieve both goals, they don’t usually succeed. The classic example is implementing an interactive voice response system to cut call center costs but ending up frustrating customers who want to talk with a live person. Another is forcing customers to use your Web self-service capabilities instead of offering it as a choice.  

Others have noted this phenomena, including Laurence Buchanan at CapGemini. As he notes in his blog, many technology-centric CRM programs attempt to design solutions inside-out from the company’s perspective, rather than from the customer’s perspective. In many cases, these programs tried to define the channels that the organization made available for customer service requests, because it would work well for the company.

However, I’m seeing anecdotal evidence of companies that are not only achieving a balance between the two goals of cost-cutting and improving the customer experience; they are achieving both objectives in one shot. It’s all a matter of taking the right approach. Based on what I’ve seen, these three themes emerge.

Technology is the great enabler — but …

The first theme is that self-service cannot be the only channel offered to customers for getting service. Many organizations are looking to Web knowledge base (FAQ, how-to documents, etc), IVR systems, virtual chat agent, and other technology-enabled self-service capabilities to cut costs. However, these investments need to be planned from the customer’s perspective.  In other words, what value does it have for the customer?

The issue is that you can’t “make” customers use these new service offerings – they need to be offered as one of many choices. While many customers will naturally adopt and even prefer self-service offerings if they’re useful and convenient, others will still prefer to speak directly to a service representative. By providing self-service as another service channel and making it clear that customers have an array of options from which to choose, you strengthen the customer experience while cutting costs at the same time.

A great example of a company that offers customers an array of choices is Synopsys, Inc., the $1.38 billion supplier of electronic design automation software. Its customer support strategy accommodates the various channels that customers use to get service.  For instance, it offers customer education tools, such as videos and courses, as well as an online customer portal, which is currently used by over 30,000 customers to download software, upload test cases and initiate and check on service requests.

The second theme is to invest in the types of technologies that are really catching on among your customers and promise the greatest cost-cutting value to you.  An example is online customer communities, which enable peer-to-peer support.  Given that customers are already gathering to communicate with each other, why not invest to support and legitimize it and leverage the community to work for you.   A second example is using videos on YouTube to distribute knowledge.  It has been proven that a short 5 minute video can explain a complex procedure much more effectively than a well-written 20 page paper.  By investing in these technologies, you are deflecting many potential calls from your expensive contact center.

The third theme is using technologies to bring the entire organization into delivering customer service.  In a typical organization, the customer service group is the frontline in answering customer questions and solving customer problem.  However, the customer service group usually cannot address all the questions and issues they received.   Expertise located outside of the group is usually required to solve these problems.  And locating the right expertise and passing on these requests take time and effort without the proper tools such as CRM, presence, collaboration, and search.  So, investing in these technologies enables the entire organization to work together to deliver exceptional customer service.   And the added benefit is that these investments will also drive down cost.

So Do the math on ROI, both yours and your customers’.

Every investment needs to be accompanied by an ROI calculation, however,  ROI in this case is not just your internal savings but is also the value gained by your customers. IVR systems might cut labor costs, but if used improperly, they send customers into an endless loop, and the math will turn against you. ROI calculations need to consider the cost of fixing the problems caused by frustrated customers and possibly losing the customer altogether.

According to Ani Bhutkar, Group Director of Applications at Synopsys, Synopsys used ROI as its guideline throughout its customer experience initiative, to determine which features to deploy, as well as when to deploy them.   To move forward, all ideas and processes must also deliver real benefits to customers.     In other words, the financial return was the guiding light, but the end customer must also benefit. 

Are you taking a new tack to delight customers while also cutting service costs?  Please share your story or tips with us.