Integrating front-end customer service processes for product and technical support with middle-office and back-end service fulfillment operations can provide actionable insights across the entire customer journey. By operationalizing these insights, companies can create proactive, effortless, and seamless customer interactions that delight customers with immediate transactions and increase demand for their products and services.
Optimizing service support is critical to sustain profits and growth
Manufacturers of high technology products are under pressure from rapidly evolving market conditions and changing customer expectations. Increasing competition, entry of new products and the need for accelerating technology innovation shrinks the opportunity to earn profits by pushing up research, development and marketing costs while making products obsolete faster than ever. In this environment, growth hinges on consistently exceeding the expectations of demanding customers across all touch-points in their journey. Transforming service support can address these twin objectives of growth and profitability for high tech organizations as the fragmented processes and reliance on supplier and fulfillment networks to design, manufacture and service products often results in inadequate coordination leading to leakages, higher costs and suboptimal customer outcomes.
Heightened customer service expectations impact retention
Intense competition between technology companies to offer easy access to information, new ways of communicating, and revolutionary distribution channels and digital technologies has resulted in new benchmarks being set in efficiency and quality of customer experience delivery. Organizations that cannot meet these high expectations risk losing customers. In our experience this can lead to customer satisfaction scores (CSAT) falling by 5%–15% resulting in reduced repeat purchases from existing customers by as much as 35%.
Service inefficiencies hinder cost and customer experience
Less than 1 in 5 high-tech companies have integrated front-end communication with the customer across channels. Inadequate information sharing and coordination with downstream activities like field-service creates more headaches for customers. Multiple calls—e.g., 1.3 average service calls per service event—immediately increase field-service costs by 30%, create delays, and drive down key customer metrics such as first time resolution (FTR), turnaround time (TAT), and CSAT. Furthermore, more effective remote monitoring and diagnostics can avoid many field-service calls, reducing the best-in-class threshold and lowering costs.
High product returns result in higher costs and unrealized aftermarket value
While return policies have become more customer-friendly to fuel brand loyalty, the “no trouble found” (NTF) rate of returned products is already estimated to be over 75% for consumer electronics goods. Product returns can account for as high as 8% of sales, while organizations spend an additional 5%-6% of sales on managing returns. In industries such as high tech, products should be quickly recycled or re-manufactured to realize the highest returns. Indeed, by some estimates high tech products lose 5%-7% value per week between initial return date and their return to the market.
Original equipment manufacturers (OEMs) lose “out of warranty” revenue to authorized service centers (ASCs)
By treating out-of-warranty services as a low priority, many companies allow customers to slip away to ASCs, forfeiting not only a captive revenue stream but opportunities for customer interaction. OEMs today get only 25% of all out-of-warranty repair revenues. Integrating all customer interactions—customer-facing, middle-office, and back-end—is key to both locking in customer loyalty and creating an efficient and profitable service organization. High tech organizations must focus on creating insights across the customer journey to enable proactive, effortless, and seamless customer interactions.
Solving the service support challenge
Proactive service relationship management and revenue growth
Forward-thinking organizations today are enacting proactive, relationship-based solutions via communication channels preferred by the customer. Methods like multisource customer profiling analytics help customize service sales and delivery based on risk/scoring, loyalty, and customer lifetime value analysis. This enables organizations to design outreach programs, introduce new features, and resolve service issues. A recent study found that companies focused on customer experience outperformed the S&P 500 Index by 27%. Investing in getting the service fundamentals right enables companies to drive service-to-sales revenue and shows OEMs the most efficient and cost-effective paths for leading customers to get to the right solution.
Leveraging Web 2.0 in service support
Customers today expect interaction via proactive chat, click-to-talk, SMS, web-based self-help, and social media. High tech organizations need to establish omnichannel contact centers that support these channels and can move customer transactions between channels and departments. Migrating inbound customer calls and social media out-cries to self-help tools delivered through chat, web, and mobile requires technology solutions that are effective, effortless to find, and easy to understand and deploy. Incorporating advanced web analytics enables these channels to provide insight into product pain points, underperformance, and customer perceptions, which can be utilized in continuous improvement feedback to stay in front of developing trends.
Eliminating silos in the service support processes
Siloed customer contact and service fulfillment processes have traditionally led to poorly integrated services delivery, longer turnaround times, and diminished customer satisfaction. Today, however, advanced digital technologies like cloud and integrated master data management can enable insight from multiple platforms, allowing information to be correlated without losing content or context. Integrating front-end customer-facing, middle-office, and back-end service fulfillment operations across fragmented process, data and technology that supports can be time consuming, complex and disruptive, requiring significant change management. Leading service support organizations are leveraging a Lean DigitalSM approach – a combination of design thinking, advanced digital technologies and Lean principles. Agile technology solutions like Systems of EngagementTM that layer on top of legacy systems and processes help drive quality and efficiency between functional siloes without needing large scale and costly change effort by:
- Customer support: Having a complete map of all of the points a product has already touched along the service spectrum required less effort from the customer and enables the contact center agent to see the big picture and make good decisions that align with your customer strategy.
- Service fulfillment: Using a combination of customer history, knowledge management, remote diagnostics and customer to product analytics can enable your organization to supply your field support with the right resolution for the customer’s complaint when walking into the initial visit.
- Spare parts management: Spare parts management is a challenge especially when there are parts with higher than expected failure rates which lead to both increasing product replacement costs, and decreasing customer satisfaction due to inefficient replacement programs. A successful spare parts management system needs to be agile and responsive, enabled by analytical models to accept real-time and near-real-time data from various platforms, and quickly provide the correct responses to what-if scenarios, so that the organization can make the optimal decisions to correctly support the service strategy. Irrespective of the stocking strategy, successful parts management must collect all the data quickly, understand what is happening and what the trends are indicating and putting countermeasures in place to keep the process stable.
- Warranty management: It is important to view a customer’s whole journey to create and enforce warranty policies that protect your organization from fraud, while being fair to honest customers with legitimate issues. Eliminating siloes and enabling better end-to-end visibility will not only help your service organization decipher your many valued customers from the fraudulent few, but it will open doors to new revenue streams and proactive service relationship management, enabling high tech organizations to drive extended warranties and pro-active services like battery replacement programs, remote system cleanup services, and trade-in programs.
- Product return management: Over 67% of returned products are returned without any defects found; customer remorse, primarily, accounts for the remaining third. For companies, there are two prongs to any effective return strategy. First, analytics-driven knowledge management enables intelligence derived from screening and repair operations to create better-informed agents who can ask product-specific questions and accurately validate, or invalidate, returns. Second, there must be processes and tools in place capable of predicting what will be returned; of understanding how to retain the highest net value of each product, where it is, and the condition it is in; and of moving it to the point of redistribution in the most efficient way. This is only possible by integrating front-end, middle-office, and back-end data streams through agile Systems of EngagementTM coupled with the incredible power of cloud computing.
Continuous improvement – the backbone of effective service organizations
Excellent customer experience is embedded in organizational culture as much as it is operationalized in processes. Lean Six Sigma provides tools and guidelines for identifying barriers to outcomes and methodically improving a process until it is best in class. Deploying Lean DigitalSM solutions means reimagining end-to-end processes and data streams, and integrating these to maximize the value of digital solutions such as knowledge management systems, analytics tools, and mobile apps. Delays in such deployments typically result in customer frustration, increasing defections and operating costs.
Connecting the dots - Analytics plays a vital role
Digitally driven Control Towers, which integrate data streams and use embedded analytics and multi-channel visual management, allow leaders to control their business’s data, drive necessary actions, measure outcomes, and keep stakeholders aligned on KPIs. Analytics — ranging from sentiment to multi-source customer profiling, feedback/failure, return propensity, logistics, inventory, and more — can also enable organizations to engage in targeted interventions.
Integrating processes and data streams, embedding analytics and digital solutions, and leveraging Lean Six Sigma in the service of enhanced customer experience increases revenues from customer retention while lowering cost to serve and improving market share and organizational agility.
Customer experience is core to the business goals and strategy of manufacturers and retailers and it is critical for organizations to candidly assess where they are in the journey, in order to both survive, and then thrive. Often companies have difficulties in assessing and transforming their strategies and operations without help. Outside expertise and perspective of the entire services value chain, including customer contact center, service fulfillment, parts management, warranties, and product returns, can identify deficiencies, align priorities, and implement solutions to unlock potential in a rationalized and well-orchestrated phased roadmap approach.