Analyst Perspectives

Our benchmark research into next-generation customer engagement shows that companies use, on average, seven channels of communication to engage customers. It also finds that supporting multiple channels leads to several challenges for organizations, chiefly difficulty of integrating systems (49%), channels managed as silos (47%) and inconsistent responses across channels (33%). Today’s customers have little sympathy for such problems – they quickly lose patience, and customer satisfaction levels fall. This problem in customer satisfaction will likely intensify. In our research, organizations reported that they expect volumes of interactions to increase on all channels and more digital channels such as text messaging, chat, mobile apps and video. In addition, to resolve more interactions at the first point of contact, organizations are using more employees in back-office groups such as finance, HR and operations.

More broadly, the research emphasizes that many organizations are trying to catch up or keep up with perceived customer expectations. In practice, however, companies’ priorities are more inward-looking. The change most often ranked first (by 19% of organizations) is to deploy collaboration systems to improve internal communications. Collaboration tools enable business units to work together, which in theory enables companies to resolve more interactions at the first attempt, but only if all employees involved have access to the same information. The other top choices more directly address channels most commonly used by customers: redesigning the customer portal, deploying a mobile business application or a mobile customer service application for smartphones or tablets, and deploying social media for customer service, all of which impact customer engagement.

Among the six key technology trends Ventana Research tracks that enable business innovation, three out of five participants in this research said that analytics and mobile technology are most critical in their efforts to improve customer engagement. Regarding analytics, organizations reported that they most often (61%) consider adopting conventional types such as business intelligence or data analytics. However, the two next-most-often considered analytics are newer: social media analytics and cross-channel analytics, each chosen by more than two-fifths of organizations. One-third of organizations said they would consider adopting predictive analytics; fewer named other advanced analytics systems such as text (15%), speech (21%) and the agent desktop (29%).

Another innovative technology is cloud computing, but the research shows most organizations prefer to access customer engagement systems by installing them inside the organization. One in three organizations reported no preference for deployment, which likely indicates an open mind on the evolving issue of whether to migrate to the cloud. Non-IT respondents indicated less reluctance to using cloud-based systems.

The research suggests a disconnect between the customer-related metrics organizations use and those they identified as needing improvement. Currently three of the four metrics that most companies apply to assess the success of customer engagement are operational: average call-handling time, agent quality scores and the cost to serve a customer; the other, first-contact res­o­lu­tion, does concern business out­comes, but even that measure looks inward. Fewer than one-fourth of companies use metrics that reflect customer behavior, such as custo­mer effort scores, net promoter scores and customer wallet share.

The customer-related metrics that most participants said they seek to improve are externally focused: customer satisfac­tion, customer retention and the num­ber of new customers. Customer wallet share, net promoter scores and customer effort scores, in that order, ranked last. However, we believe that use of these next-generation measures helps improve the other measures currently ranked as more important.

Our research repeatedly shows that customer engagement and improving the customer experience are business imperatives. Furthermore, this research suggests that organizations are reluctant to make the people, process and information changes required to deliver on these objectives. While some companies are adopting innovative technology, many are lagging. Change is not easy, and it doesn’t come without costs. However, if businesses don’t adapt, they run the risk of being overtaken by new entrants in their markets. Thus we recommend that organizations focus more on their customers, determine their customers’ expectations and make the changes that will enable the business to keep up.

Regards,

Richard Snow

VP & Research Director, Customer Engagement

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