eGain is touting a new report from Forrester Consulting and my friend Ian Jacobs purporting to show that omnichannel customer service is “stagnant or worse” when it comes to delivering service that customers need and want. Ian does good work and I am in agreement with him on this but I have trouble with some conclusions, specifically the implication that the problem can be solved with more software.
Now, I am a proud software bigot but I am also fond of the saying, “If you take your car to Midas you’re going to get a muffler.” Yes, I know this is an exaggeration but that’s where the humor comes from. It says that there is a danger in thinking you are being objective when you aren’t and when you are in fact pre-judging a situation.
In this case the prejudging comes in two flavors. First, it assumes that the technology users have identified the important moments of truth that drive customers to seek service in the first place. Nothing could be further from the truth. Customers everywhere are unhappy with service.
According to Accenture’s Global Consumer Pulse Research study (found in an eGain press release), 64% of customers switched their business to another provider due to poor service last year, up 26% over the same survey in 2010. Importantly this created a $6.2 trillion dollar switching economy. How serious is that? There are exactly three areas or countries on the planet with GDPs in excess of $6 trillion, the EU, the United States, and China. Importantly, the switching economy provides no value, when a switch is complete you have a status quo situation. So think of that money as simply evaporated.
Second, it presumes that better alignment of disparate digital channels is what’s needed for the fix. Now, I am a fan of eGain and I think they offer some good omnichannel support but it’s clear to me, at least, that the channel—i.e. delivery mechanism for service—is not the problem. If you take Accenture’s numbers seriously then you realize that the problem exists across key markets around the world. Technology is not solving this problem. But it could.
The missing ingredient based on my research is understanding customer moments of truth. My research into customer sentiment shows that customers get most upset and do indeed churn when a vendor’s service processes fall apart. Repeatedly. Now, some of this can be blamed on poor or old software systems that simply break. But a very large proportion of customer complaints go deeper. Simply put many vendors are just missing important customer moments of truth, times when customers expect their vendor to come through with an appropriate recognition of a problem and a solution. Too often the vendors are not even aware of the problem.
If I could reduce my learnings to one idea it would be this: customers strenuously object when vendors act tone deaf. Wouldn’t you?
So in my view a solution has two parts. First, it is certainly good to be able to jump into a channel, any channel, with a customer to provide service. The idea of responding in whatever channel a customer uses to initiate contact makes all the sense in the world. But once you are there, you have to perform so the second part is for vendors to capture and understand customer moments of truth based on their product lines and customer demographics. Vendors have to be locked and loaded with solutions to known or high probability problems and for less obvious problems they have to provide a sure and streamlined path to a person who can help them, regardless of channel. Journey mapping is an important part of this too.
I am fond of quoting a short article from Harvard Business Review’s website titled “Stop Trying to Delight Your Customers,” by Matthew Dixon, Karen Freemen, and Nicholas Toman. Their thesis, which I agree with, is that customers want competent and efficient solutions to their problems so that they can get on with their lives. This sounds like being in moments of truth to me. They don’t need to be delighted and the quest for delight is a rabbit hole down which we pour too many resources with poor results.
To get to competent and efficient solutions, it helps to plan in advance and perhaps offer ready made solutions (aka best practices), to the extent possible, that can be pushed or pulled through multiple channels rather than relying on outdated hunt and peck self-service.
To get to that point you need to ask your customers about their needs. You can do this passively through machine learning systems or actively through communities. But either way we need to become more proactive about service. We can leverage the powerful omnichannel technologies now on offer, but first we need to catch up by devising better ways to service. Otherwise we’re just applying new technology to old processes and expecting different results. No one’s ever done that, right?
TechCrunch is running a story saying that Altimeter Group, the analyst firm founded by Charlene Li in 2008 after leaving Forrester, has been bought for an undisclosed amount of cash or stock or whatever. It was undisclosed after all. The acquiring company, Prophet a consulting firm, is focused on marketing, design, and brand strategy.
Seems like Altimeter, as an analyst firm, was already into that kind of stuff using its research to advise customers and now, the two companies together will hopefully have more oomph. I wish them all well but have to wonder what the back story is.
An acquisition like this suggests to me that there’s a relative over supply of analyst firms out there. Perhaps we’re in an analyst bubble where the top few firms are garnering most of the opportunity. That would mirror the economy as a whole, more or less. But while the marketplace is still exploding with new ideas and product categories, there is less that’s net new and made from whole cloth and therefore the top firms have the ability to cover new wrinkles.
Cloud computing, SaaS, and before that hosting, were so different that they presented a break with the established data center paradigm and they legitimately required analysis from a different perspective. But today’s innovations seem more like line extensions, businesses are building on top of the cloud-front office-platform- social-mobile-analytic infrastructure rather than inventing new frameworks.
This has made it hard to be a scrappy mid-size analyst firm with staff, overhead, payroll, and rent issues to deal with. Medium and emerging businesses often try to get the attention of the largest analyst firms hoping a placement in an authoritative report will provide some measure of market clout. At the same time, end users are loath to pay for analyst advice preferring to read what the bigger firms put out as sponsored research thus leaving less work for the smaller analyst firms.
Solo practitioners without some of the overhead of the mid-size firms are able to make a living by being opportunistic but there are indications that the field is also crowded. To net it out, the deal for Altimeter is not surprising—other smaller analyst firms have taken the same path. It is more of an indication of where we are in a cycle and it may be a sign of things to come.
Forrester ninja, Kate Leggett, surveys the waterfront and comes up with fifteen tips for customer service trends in 2013. Leggett’s blog post is full of statistics that should make you think. About what? Well, the trend that’s moving service to an agile, proactive and reactive response mechanism for one. A lot rests on the use of advanced analytics and a rethink of what the service center is all about. It’s no longer just about fixing something that broke or went wrong and that is how you build lasting relationships. Check it out.