Achieving Rapid ROI Through Customer Service Automation

Executive Summary   What is ROI?   Cost Reductions: The Hard Numbers   Cost Reductions: The Soft Numbers   Increases In Revenue  The Total Cost of a Customer Service Solution Generating a Rapid ROI IOS/Support: Customer Service Automation with a Rapid ROI  Conclusion

Executive Summary

One of the largest obstacles facing all Customer Service Automation initiatives today is the ability to generate a Return on Investment, or ROI.  Due to past failures in the Customer Service Automation market and the tightening of the economy, it is imperative to find a Customer Service Automation application that will not only bring an eventual ROI, but a rapid ROI. Businesses no longer have years to wait for an IT initiative to pay off.  This pressure places an extreme burden on organizations that are responsible for defining and using a Customer Service Automation solution.  To help address these issues, this paper defines the key criteria to consider when assessing a new solution for Customer Service Automation in terms of ROI.

This paper walks you through the various elements of ROI in regards to Customer Service Automation. It discusses the ways in which ROI can be defined and where the potential pitfalls are in Customer Service Automation initiatives. Finally, this paper proposes a potential solution to these problems in the form of IOS/Support.  IOS/Support is a web-based customer service and support application that allows businesses to effectively manage all aspects of the customer relationship.  With IOS/Support, your business can achieve rapid ROI by reducing costs and increasing your loyal customer base at a cost-competitive rate.

What is ROI?
 
By now everyone has developed their own definition of ROI, or Return on Investment. ROI is fairly basic - what is my company’s return on an investment. This is a simple concept to understand if you think in terms of stocks or other investments with a fixed value.  When ROI refers to Customer Service Automation, however, the situation quickly becomes vague since we are dealing with people. People are not easy to judge or measure. While it is difficult to exactly measure ROI, we can make some approximations.

Below is the basic equation for ROI:

This equation states that a company's ROI is equivalent to the Cost Reductions realized by implementing a Customer Service solution plus the corresponding Increases in Revenue. This is divided by the Total Cost of the Customer Service Solution. To fully understand the benefits you must first look at each term.

Cost Reductions: The Hard Numbers
 
In today's business environment the three main channels a customer uses to communicate are: Phone, E-mail, and the Web. Unfortunately, none of these channels are free. Each channel has a cost associated with labor, time or other resources. 

Below are industry estimates for the major channels of customer service interaction:

Every major Customer Service Automation application comes with a Self-Service Portal. A Self-Service Portal is an integrated application that seamlessly blends into your website and provides easy to update FAQ's and a Knowledge Base. This allows customers to quickly find answers to their questions as well as intuitive ways to submit questions to a customer service department via the website.

Each Self-Service portal has the same mission: to provide an easy to use and effective way for customers to get answers to their questions. From the company's point of view, this is ideal since customers can get information without the costly use of employee labor and internal resources.

Industry estimates on the savings derived from using a Self-Service portal are:

After applying some typical industry numbers in terms of the number of service requests handled by phone and via e-mail you can see some typical daily costs associated with providing customer service:

Once we apply a Self-Service portal, and incorporate the typical reduction in service requests handled by a customer service team, you can see how the quickly the cost savings add up:

These numbers represent the savings potential of a well-conceived Self-Service Portal. While these numbers may not precisely match the number of service requests you handle in a given day, the idea remains the same. As long as you have a customer service department, you will be able to achieve cost savings with a Self-Service portal.

Finally, simply implementing any solution will not work. To be successful, you must take your customers needs into account and also insure that the Self-Service Portal can be upgraded and monitored in real-time.

Cost Reductions: The Soft Numbers
 

While it is straightforward to measure the cost savings of a Self-Service Portal, the other cost-saving aspects of a Customer Service Automation application are harder to measure. These can generally be labeled as the Increase in Productivity and the Increase in Efficiency. Generally, the efficiency and productivity improvements are hard to measure across various industries because many of the business variables are dissimilar.

This includes the number of users, business use of the application, types of service offered, and the pre-existing level of service provided. Regardless of the difficulty in assessing these variables, it is easy to see where cost reductions can be achieved due to the increased efficiency and productivity of a customer service team. 

Increasing Productivity and Efficiency

Customer Service Automation applications are designed to automate the customer service process. By its very nature, automation should provide increased productivity and efficiency because manual processes are done automatically. For instance, customer service requests can now be routed automatically to the appropriate representative where previously they were transferred manually.

Below is an example of tasks automated by a Customer Service Automation application:

• Handling and Integration of phone, e-mail, and web requests

• Routing of service requests

• Updating of the Self-Service portal

• Production of reports

• E-mail notifications

• Creation of an up-to-date knowledge base

The above automations will improve the customer experience since they result in the following benefits:

• Decreased process time

• Elimination of costly or unnecessary steps

• Decreased human error

• Consistent customer service offerings

Provided the application you implement is easy enough for your customer service team to use, your customer service team will be more productive and efficient.

Increases In Revenue

Customer Service Automation applications are designed to provide better service to customers. There are many ways these applications provide a higher level of customer service.

These include:

• Providing a powerful and easy to use Self-Service portal

• Improved response times to customers questions

• Improved accuracy and utility of customer service responses

• Better management of difficult customer service issues

• Increased service representative effectiveness

• Report summaries highlighting weaknesses in the customer service processes

If implemented using these criteria, enterprise-class Customer Service Automation applications will allow businesses to provide a higher level of customer service.

As technology narrows the differentiators between products and services, customer service is becoming a key selling point. Consider two companies providing similar products or services at roughly the same price. If one offers a higher level of customer service, it is highly likely that company will have a larger market share. This is because the higher level of customer service will result in a higher percentage of satisfied customers. And satisfied customers are the key to a company's long-term success.

A recent industry survey showed that 80% of satisfied customers are likely to repurchase, while only 54% customers who are dissatisfied or neutral are likely to repurchase. Thus a more satisfied customer results in repeat business. The Gartner Group estimates that 66% of the customers who defect to a competitor do so because of poor service.  In addition, Gartner estimates that it costs 10 times as much to replace customers as it does to retain them. It is essential that a business retains its customer base.

As satisfied customers continue to repurchase from a business while receiving a high level of customer service, they will eventually become loyal customers. Loyal customers provide a continual growing stream of revenues, positive word-of-mouth advertising, valuable reference accounts, and are less sensitive to price fluctuations. A report by Success Profiles found that loyal customers are 6 times more likely to repurchase than satisfied ones. Customer Marketing expert Jay Curry notes that 20% of customers account for 80% of revenues. Therefore, it is imperative for a successful business to grow customers from first time purchasers to loyal customers.

The Total Cost of a Customer Service Solution
 
Unlike out-of-the-box software programs, the total cost of a Customer Service Automation application is not just the purchase price. Customer Service Automation applications can easily have costs tripled when external costs are included. These external costs include: 

3rd-party Consultants and System Integrators - Consultants and System Integrators are hired to advise a company when a Customer Service Automation project grows too big and complex for internal staff to handle. As the complexity and size of the application grows, more consultants and integrators are needed. With per hour consultation rates ranging from $150-$300/hr, consulting fees can raise the overall cost of an application three times, four times or even five times the original cost of the application.

Implementation- Customer Service Automation applications can take from 1 month to 1 year to implement based on the complexity of the application. Most businesses cannot afford to take one year to be functioning. As implementation time grows, the ROI decreases. Implementation delays can also consume internal IT resources. These delays incur additional costs from using internal IT resources and may result in the potential loss of future and current customers due to low service.

Customization - Customer Service Automation applications range from client-server applications to flexible web-based solutions. Since many of these applications do not provide all the features needed for your specific business process, it is crucial that they have the ability to be customized or configured. This includes the ability to make simple changes to fields, forms, or reports. It is also necessary to have the ability to rapidly configure and customize the application in both the pre and post-implementation stages. Prior to implementation, the application should be configured to the company’s requirements. Then as company grows the application must be flexible to accommodate new requirements.

Support – After implementation, there will be support and maintenance costs needed to maintain any application.  Most software suppliers offer varying levels of customer support. It is important to find a software supplier who provides affordable, personal, and attentive customer support; your Customer Service, Marketing, Sales, IT and Executive Management will all depend on the application.

Maintenance - All Customer Service Automation applications require some level of maintenance. The required IT resources for maintenance depend on the complexity and type of application. For instance, client/server applications require the most IT resources because software needs to be maintained on a central server and on each client workstation. Web-based applications require less maintenance because they are only located on a central server. There is no software installed on a desktop PC. The least maintenance-intensive application is the Application Service Provider (ASP) approach. With ASP, the software is stored at either the software vendor’s servers or on a third party's servers. In this arrangement, no internal IT staff is required because the ASP manages the servers and databases.

To accurately determine the cost of a Customer Service Solution, it is necessary to include consultant, system integrator, customization, support and maintenance costs.

Generating a Rapid ROI
 
Including the above factors, we can reconsider how to achieve rapid ROI with a Customer Service Automation application:

To achieve a rapid ROI, applications must have a Self-Service portal and other features necessary to achieve productivity improvements and increased efficiency while increasing the loyal customer base. In addition, it must have a low purchase price while minimizing costs for customization, maintenance, support, implementation, consultants and system integration.

The goal for all companies implementing a Customer Service Automation application should be to achieve rapid ROI. Some questions one should ask when analyzing Customer Service Automation applications are:

• Does it have a Self-Service portal?

• Does it automate handling of service requests, report generation, e-mail notifications, and the maintenance of a knowledge base?

• Is the application easy to use?

• Is it web-based or is it client/server?

• Will I be able to configure and customize the application without 3rd-party consultants  and system integrators?

• Will it be easy to implement?

• Does the software vendor offer attentive and personalized customer support?

• Will it be difficult to maintain the application so that it runs smoothly?

When you consider the answers to these questions and the potential savings from a Self-Service portal, it will become apparent if the application will provide your business with a rapid ROI.

IOS/Support: Customer Service Automation with a Rapid ROI
 
IOS/Support is a completely customizable, Web-based Customer Service Automation application designed specifically for the small to mid-sized market. With IOS/Support your business can maximize customer acquisition, retention and growth without expensive software installation, customization or hosting hassles.. With IOS/Support, your business can achieve rapid ROI by reducing costs and increasing your loyal customer base at a cost-competitive rate.

Reduced Costs - IOS/Support is a feature-rich, enterprise class Customer Service Automation application. By utilizing its base features such as the Self-Service Portal, the Admin tool, or the real-time Custom Report Generator, your business can save money, improve efficiency, and increase the productivity of your Customer Service team.

IOS/Support Features:

• A Self-Service Portal designed to seamlessly integrate with your website

• Easy updates of the Self-Service Portal

• Phone, Web, and E-mail service request integration

• Configurable service request routing rules that route all requests to the appropriate agent based on the customer, product, service, time, geography, issue, priority, or any other variable that you choose

• Real-time reports on every aspect of your business' customer service offering with our Custom Report Generator

• E-mail notifications that will keep employees current

• A dynamic knowledge base that is accessible to service representatives and customers

• Admin tool to configure the application forms, fields, to reports

Increasing Loyal Customer Base - With IOS/Support your business will be able to provide customers with accurate, up-to-date, and helpful answers to their service questions through your website, over the phone, and via e-mail. As your business' customer service level grows, so will customer satisfaction. And satisfied customers translate into more loyal customers and eventually a larger revenue and profit stream.

A Lower Total Cost of Ownership - IOS/Support is designed to be easy to install, easy to administer, easy to use and backed by the responsive team at Atalvo Systems. What does this mean to your business?

Easy to Install: IOS/Support is entirely web-based. All you need is a server and you are ready to go. No third party applications are needed. Atalvo Systems also offers ASP hosting to run the application on our own servers. Either way, IOS/Support can be configured and installed in a matter of hours or days - not months or years.

Easy to Administer: IOS/Support is designed to be customizable and configurable without costly 3rd-party consultants and system integrators.

Easy to Use: IOS/Support is designed with the user in mind. Because it is so configurable, IOS/Support can be adapted to each business and each user’s individual needs.

Backed by a Responsive Team: IOS provides timely technical support, training and customization. 

Conclusion

With IOS/Support you will be able to have a customer service automation application with rapid implementation, low maintenance, high quality customer support, and easy customization without the use of 3rd party consultants and System Integrators. Combine the low total cost of ownership with increased revenues and lower costs and it is clear that IOS/Support will provide your business with a rapid ROI.