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White Paper

Comprehensive Customer and enterprise solutions ©2010 teletech holdings, inc. - all rights reserved.

the role of analytics in Customer management

EVERY CUSTOMER-CENTRIC ORGANIZATION SEES A WIDE VARIETY OF

INTERACTIONS in its customer support operations – from the routine to the relationship-

changing. Support staff manage everything from routine interactions to crucial, ‘tipping-point’

conversations that shape the future of an account. In addressing this diverse challenge,

successful organizations understand that the foundation of the customer experience lies in

meeting expectations – not policies, scripts, and rules. Offering a ‘one-size-fits-all’ service model

is guaranteed only to underperform many customers’ expectations and overperform others,

often at a significant cost to the organization. Not only do expectations vary from customer to

customer, but from one interaction to the next for a single customer. A customer who is today

in a hurry to resolve an issue may evaluate an interaction by the speed with which it is handled.

Tomorrow that same customer, with a less urgent request, may place more value on an agent’s

listening skills, professionalism, or diligence.

While every customer interaction is unique – just

as every customer is unique – interactions can be

analyzed along two convenient, logical dimensions:

complexity and impact. Complexity, just as the

name implies, refers to the degree to which an

interaction can fork into many potential service

areas based on the customer’s needs. An account

balance request has very low complexity; a technical

support call has very high complexity. Customers

tend to value human interaction, and the ability to

tap particular areas of expertise, as the complexity

of an interaction increases. They tend to value speed

and convenience of access as the complexity of an

interaction decreases.

Impact measures the importance of an interaction

to the customer’s long-term loyalty and retention. All well-executed interactions make a positive

impact; all poorly-executed interactions make a negative impact. What differs is the scale of

the impact. When a customer has difficulty getting an account balance, or making a routine

change to their account, the impact is negative – but small. When a customer has a larger-scale

problem – an incorrect bill becomes a chore to correct, or a support issue is routed too many

times without adequate resolution – the impact is considerable. When positive impacts add

COMplExITY

IMp

AC

T

IVR/WEBSelf-Service

Process Optimization

Insourced Agent Speech/Expert BPO Provider

2Comprehensive Customer and enterprise solutions ©2010 teletech holdings, inc. - all rights reserved.

the role of analytics in Customer managementWhite Paper

up, customer loyalty increases, and it becomes more difficult for competitors to acquire them.

When negative impacts add up, the opposite happens. As a result, in order to achieve peak

performance in managing customer contacts, interactions should be grouped into zones by

impact and complexity.

The first logical grouping is low-complexity, low-impact interactions. These are account

inquiries, address changes, and other basic exchanges of information that prioritize speed and

convenience over personal touch. Most of these interactions are handled either via IVR or Web

self-service, and for good reason: doing so both pleases the customer, in terms of ease of

access, and drives the cost to serve down dramatically.

At the upper end of the spectrum, another logical grouping encompasses interactions that

exhibit high complexity, high impact, or both. These interactions hold significant implications for

a company’s customer satisfaction. Handled correctly, they’re a source of enduring customer

loyalty and increased long-term value. Mishandled, they’re a source of dissatisfaction, churn, and

expensive retention activity. That’s why so many organizations either keep these interactions in-

house, or outsource them only to a specialized Business process outsourcing (BPO) partner.

It’s often a surprise to organizations just beginning to study the economics of their customer

management system that neither of these interaction ‘zones’ is usually a significant source

of expense. The low-complexity/low-impact zone generally sees enormous numbers of

customer interactions, but each one is handled at very low cost to the organization. Meanwhile,

interactions in the high-complexity/high-impact zone are costly, but are small enough in number

that the overall cost impact is minimal. The mathematics of both interaction types – high-volume/

low-cost and low-volume/high-cost – make them easy to manage and budget for.

Apart from these two zones, however, the answer is not so simple. Between them lies a

large volume of customer interactions that do not fit the definition of either of the others. The

complexity of these interactions, and their potential impact on organizational performance, are

too high to leave in the realm of self-service; they generally require support staff involvement.

But neither do these recurring customer interactions require specialized in-house expertise. The

primary challenge of this realm of customer interactions is the economics of servicing them. The

volume of interactions times the cost to serve each one usually makes this the most expensive

type of customer touchpoint for many firms. Add in the need to consider alternative interaction

channels – such as chat, SMS, and email – and designing and deploying solutions for this layer

becomes increasingly complex. That’s why most organizations see this as an area of margin

opportunity – a process optimization layer that’s ripe for workflow efficiency improvement.

The decision as to whether to outsource a particular type of interaction is generally made easier

by mapping its position within these zones. But defining the perimeters between them is more

difficult than it might initially appear. While it’s often simple to group together easily-defined

interactions, separating an account balance request from an upselling opportunity, or a routine

service conversation from a ‘tipping point,’ is a delicate process. Unfortunately, too many firms

try to do so without really ‘seeing’ their interaction stream – without understanding, from a

quantitative perspective, how customers interact with the company, what their motivations and

needs are, and how each such interaction can be optimized for peak efficiency and performance.

3Comprehensive Customer and enterprise solutions ©2010 teletech holdings, inc. - all rights reserved.

the role of analytics in Customer managementWhite Paper

The complexity and impact of a customer interaction cannot be determined by viewing simple

operational reports. Quantifying the nature of a customer interaction requires insight into the

customer’s reason for calling, the representative’s actions, the call outcome and the customer’s

reactions. Typically this data is extracted from disparate sources and needs to be linked

together in order to provide actionable analysis. Useful sources include switch data, customer

records, H/R data, voice segments from recorded calls, customer surveys, and more. While

each of these on their own provide visibility into the customer interaction (and overall customer

experience), the real value comes from linking them together into one centralized database that

can be analyzed holistically.

Interaction analytics blends existing satisfaction research with operational analytics to create a

coordinated plan for measuring and improving the customer experience. An effective program

should combine customer satisfaction surveys, a leading-edge analytics toolset, and speech

analytics to provide a data-driven approach to evaluating an organization’s performance-

topotential in delivering the best possible customer experience.

Ultimately, the ability to construct and analyze a 360 degree view of the customer experience

enables you to define an optimal treatment strategy for each unique type of customer interaction.

Where a transaction can be optimized through a business partner, the knowledge you’ve

gained about the success criteria for each interaction will allow you to design stronger service

agreements with business process outsources.

TeleTech offers clients both the analytic tools and the demonstrated expertise to bring customer

interaction management to peak efficiency. TeleTech’s Professional Services team is equipped

with the right solutions for your business needs – making it possible to map your customer

interactions by complexity and impact, and then route those interactions to precisely the right

channel, associate, and geographic location to achieve peak performance. At TeleTech, we’ve

built decades of experience in interaction analysis into the software tools, operating processes,

and workflow systems we deploy for our clients – and it shows in their engagement results.

We’ve helped companies around the world optimize their customer interaction management

systems and maximize the value of their customer accounts.

ContaCt teleteCh:

solutions@teletech.com

1.800.TELETECH or

+1.303.397.8100 (outside the U.S.)

www.teletech.com