Keys To Customer Satisfaction

BAKERSTRATEGY GROUP

Keys to Customer SatisfactionDemonstrating the effectiveness of the help desk in supporting the organization’s goals

HDI Grand Rapids Chapter – Grand Rapids, MI

November 09, 2005

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Presentation

November 9, 2005 Page 1

BAKERSTRATEGY GROUP

Keys to Customer Satisfaction

Demonstrating the effectiveness of the help desk in supporting the organization’s goals

Presentation

I. A Look at the Concept of Total Customer Value 2

II. A Review Three Examples 4– A single online support call– A residential service company– A home services company

III. Three Companies that Provide Customer Satisfaction Measurement 16How TDS Metrocom can increase its customer base

Chapter Page

Section Page


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Presentation1. A Look at the Concept of Total Customer Value

Using a simple framework to think through a business strategy, a company can ensure that all facets of the business have a voice in shaping that strategy

The BakerStrategy Framework


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Presentation1. A Look at the Concept of Total Customer Value

Total Customer Value involves the complete impact the customer has on the business across the company and over time

Customer Value


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Presentation2. A Review Three Examples

Situation: My email suddenly stopped working; chatted with help desk to get it fixed. They have no idea that I plan to leave, and this interaction provides few clues

Example #1 – An Online Support Call

Goblat interaction on Monday, October 24, 2005

Thank you for contacting Globat Support. A support agent will assist you

shortly. You are number 1 in the queue. Your wait time will be

approximately 0 minute(s) and 36 seconds

Thank you for contacting Globat Chat Support. You are now chatting with

Technical Specialist 'Javielle'

Javielle: Welcome to GLOBAT Live Chat Support! How may I assist you

today?

David: Please fix my email

Javielle: can you try accessing webmail.globat.com instead?

Javielle: this is Atmail

David: ? I tried the Atmail but messages are not there. People who send

me emails get an error message.

. . .

Javielle: your email account has reached 1000

Javielle: you have reached the quota

David: Nobody told me!

+ Short Wait Time

- Disjointed Dialogue

- No Sympathy


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Looking at the transcript you can see how awkward the call was for the customer

Example #1 – Online Support Call

- Painful SolutionDavid: Please delete all emails for me. I have them on my system.

Javielle: just check on the boxes beside each email then click delete

David: one by one?

Javielle: okay, let me do that for you

Javielle: can you give me the last-4 digit of your credit card?

Javielle: the one you are using with us

David: I don't know which one I'm using.

David: 3978?

David: 4451?

Javielle: you are using mastercard

David: 8457?

Javielle: nope

David: I've gotten rid of that one 2 months ago.

David: can you use some other form of verification?

Javielle: okay

Javielle: how about your email address and phone number?

David: [email protected]

David: 734-996-2337

David: 734-355-8232

Javielle: it should be @comcast.net

David: [email protected]?

- Inflexible Systems

+ Willing to Help


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Reading the text, you can see that the customer is considering leaving


- Misses the Point

Javielle: I will just delete those in TRASH now and have your settings so that

the deleted items on inbox will no longer go to TRASH

David: Great! Thank you for fixing things! I appreciate the quick help. Please tell

someone, though, that I don't appreciate maxing out on my email without some

form of notice. It looks terrible for clients who try to email me things, not to

mention that it makes doing business impossible.

Javielle: I am sorry about this. However, the information regarding email quota

is on our FAQS.

David: Why don't you have a way of notifying cusotmers that we've reached the

quota?!

Javielle: I believe there would be no way for this because if you have reached

1000 already, then the notification email will not get through at all

David: So, rather than letting me know I have a problem, you just let me find out

the hard way.

David: If I want more proactive service, do you recommend that I have my site

hosted someplace else?

Javielle: I am really sorry for the inconvenience that this has brought you. And I

appreciate your patience with us.

David: You've been helpful - thank you so much for your help! You fixed my

problem right away. Take care.

Javielle: You are very welcome and have a great day!

- Inflexible Systems

+ Great Soft Skills


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Acceptable Wait Time YesTake Ownership of Situation YesAcceptable Call Length YesFirst Call Resolution YesProvide Reason for Problem YesEnsure Situation Won’t be Repeated Yes

Agent Friendliness 7Ease of communicating with agent 7Agent knowledge 8Satisfaction with outcome 9Satisfaction overall with Globat 5Perception of Globat after this call 6Likelihood to remain as a customer 1Likelihood to recommend to others 3


Metric Performance

Internally Focused

Externally Focused


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When the customer leaves, the total revenue lost be at least $3,000 over the next 5 years


# of Sites

4Signed Recommends

Annual Revenue

$600 $600 $600 $600 $600 $3,000

$225 $225 $225 $225 $225 $1,125

$300 $300 $300 $300 $300 $1,500

$75 $75 $75 $75 $75 $375

3Additional Sites

1BakerStrategy

2006 2007 2008 2009 2010

Total

Revenue

Total 8

Note: To be more precise we would normally factor in probabilities of staying with Globat decreasing each year. We would also discount the future dollars into present terms. On the other hand, we might also factor in growth of usage with Globat as the customer becomes a more advanced user of the Globat services. For our simple example, we ignore these aspects of calculating Customer Value


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For a subsidiary of a Fortune 500 company that measured customer satisfaction and loyalty, a key initiative to improve bottom-branch performance was stepping up customer service calls

Example #2 – Service Company

77

75

65 6566

68

60

62

64

66

68

70

72

74

76

78

80

Win

ter 2

002

Sprin

g 20

03

Fall 2

003

Top Branches

Bottom Branches

New Branches

Customer Satisfaction Index by Top and Bottom Branches

(-2)

(+2)

High

Medium

Low

Top

Bottom

AA

BB

CC


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One year later, the actual renewal rates were compared to Intended Loyalty and showed that Intended Loyalty is a good proxy for actual renewal behavior


- 10 -HDI 11-09-05

CSIIntended

Loyalty

Actual

Renewal

Top

Branches77 80 82%

Bottom

Branches66 74 76%

Company

Overall71 77 78%

Year 1 Year 2


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Further analysis revealed the relationship curve between self-reported Intended Loyalty and the probability of actual contract renewal for different customer types


10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 10 20 30 40 50 60 70 80 90 100

Self-Reported Intended Loyalty

Es

tim

ate

d R

en

ew

al P

rob

ab

ilit

y

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 10 20 30 40 50 60 70 80 90 100

Self-Reported Intended Loyalty

Es

tim

ate

d R

en

ew

al P

rob

ab

ilit

y


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Based on the calculated relationship between customer satisfaction (CSI) and Intended Loyalty, revenue and profit estimates were tied to increases and decreases in customer satisfaction


71.6 82.4% $71

88.1% $13

2003

CSI

Estimated

Customer

Base

5-Yr. NPV

(in millions)

72

64

2,600,000

645,000

$14.2

$2.6

Revenue Profit (20%)

Company Overall

Segment A

Segment B

Segment B1

Segment B2

w/ CSI ΔCurrent

Retention

Rate

81.2%

87.3%

71.1% $4775 1,200,000 $9.468.7%

90.9% $2465 1,400,000 $4.890.4%

91.3% $1169 755,000 $2.290.8%


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By comparing willingness to recommend one year and actual recommendations through the year, we were able to assign a probability of recommending based on the response


0%

10%

20%

30%

40%

50%

60%

0 10 20 30 40 50 60 70 80 90 100

Self-Reported Willingness to Recommend

Es

tim

ate

d R

ec

om

me

nd

Pro

ba

bilit

y


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Through applying a few simple assumptions, additional revenue expected through customer recommendations can be conservatively estimated.


Assumptions:

- Assumes $300 annual revenue for each service type. We recognize that revenue varies considerable by segment as well as

by customer. However, this assumption makes this analysis simple, as well as adjusts slightly for one-time revenue gains not

considered in the annual revenue amount.

- 5-Yr. NPV discount rate of 7%

- 5-Yr. NPV only to new customers from contract renewal in the first year. Other customers added in years 1-4 would be

additional revenue and profit.

Today 72 37.4% $27

5-Point

CSI Increase77 41.6% $30

Incremental

Increase5 4.2% $3

CSI

Likelihood

To

Recom.

% that

Will

Recom.

New Cust.

(2.6 mil.

cust. base)

Rev. in Millions

($300/cust.)

72.4

77.6

5.3

97,240

108,160

10,920

$80

$89

$9

Annual 5-Yr. NPV

Profit in Millions

(20% of Rev.)

Annual 5-Yr. NPV

$5.4

$6.0

$0.6

$16

$18

$2


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This home services company was able to measure the impact their Service Center had on overall customer satisfaction and, ultimately, company financials

Example #3 – Home Services Company

Service

Center

Recommend

CSI

Service Offering

Service Delivery

Problem

Resolution*

Renew

Use

69

89

76

79

Contractor

Interaction

89

I

III

II

IV

V

89

80

78

74

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Presentation




What about measuring customer satisfaction just with the help desk?


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Presentation3. Three Companies that Provide Customer Satisfaction Measurement

The following ratings are based on my impressions of four solutions being offered today.

Example Support Call


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CFI Group specializes in applying advanced statistical analysis to customer survey data.

Companies: CFI Group


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This is how CFI Group’s default model is structured for its CallSat program.

Companies: CFI Group

How does this call center

compare to others?

Satisfaction DriversSatisfaction Drivers SatisfactionSatisfaction OutcomesOutcomes

What is your perception of

this agency now as a result

of this call experience?

Automated System

Agent Interaction

Call Outcome

• Time to wait for agent

• Friendliness

• Understanding your problem

• Ease of communicating with agent

• Knowledge

• Satisfaction with outcome

• Issue resolved?

Customer Satisfaction Index

• Overall satisfaction

• Satisfaction v. expectations

• Satisfaction v. ideal

screeners • 1st Call?screeners • 1st Call?


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Customer Relationships Metrics’ CATs program emphasizes accurate survey data.

Companies: Customer Relationship Metrics

Scientifically Mandated Quality Control Workflow

Download

data

Transcribe and

Analyze

Customer Comments

Data cleansing, comment

coding, CSR assignment

errors detected,

all errors CORRECTED

Customer Driver

Analysis

Produce

Report Cards for

all levels

You review reports

with the highest

confidence

Baker Strategy Group | 2232 S. Main St. #173 | Ann Arbor MI 48103 | +1 888 BAKER-13 | [email protected]| www.bakerstrategy.com

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Keys To Customer Satisfaction