At a Glance
Although telecom companies have adopted customer
self-service as a short-term, cost-cutting measure, research shows that there
are big advantages to a more strategic approach. Moreover, our research can
help guide your own self-service strategies.
The Timing Couldn't be Better
Build It and They Will Come
Self-service Is Attractive to Consumers
Online Customers More Likely to Transact
Customers Can Be Motivated to Increase Use Posted: June 28, 2004
Delivering high-quality customer service has always been a
major challenge for local, long distance and wireless telecom service
providers. In response, telecom companies have continually looked for
innovative ways to better reach and serve their large and diverse customer
base. Their search might be over.
Customer self-service is emerging in the telecom space as a
key capability that can position companies for dramatic performance
improvements—from both a cost and customer-experience perspective.
The Timing Couldn't be Better Customer self-service is emerging as a viable addition to
the arsenal of customer contact capabilities at just the right time for service
providers. Quality customer service challenges in the sector have reached an all-time high. Consider the following:
- Service providers in the United States alone
spend hundreds of millions of dollars on customer service—customer contact
activities in the average telephone company now account for approximately
one-quarter of a company's total costs. These costs, which typically have been
rising at a faster rate than overall revenues, make it difficult for providers
to generate profits, even in good economic times.
- Customers are growing less satisfied with the quality of customer service they receive from service providers, despite the large service investment. As a
result, customer loyalty is eroding and "churn" is at an all-time
high.
- A myriad of environmental and structural threats have
magnified the impact of customer-service shortcomings on the bottom line. These
include an overall drop in demand for communications services, intensifying
price wars and declining average revenue per customer (ARPU) in the wireless
sector. The pending threat of voice-over IP certainly will impact revenues even
more for wireline providers.
With the increasing demands for higher business
performance, service providers must take bold steps to build capabilities that
will improve their customer-service operations. Customer self-service
solutions, particularly automated telephone response and Web-based
applications, can provide just such capabilities.
Build It and They Will Come
Despite the growing demand for self-service from their
customers, many service providers are simply not prepared. Most do not
understand how customers perceive self-service, or the conditions under which
customers would embrace it. Without this information, it's difficult to move
forward with a self-service strategy.
Accenture recently conducted in-depth research that will
help service providers determine the appropriate course of action in the area
of self-service. As part of this research, Accenture conducted random surveys
of two distinct populations. One group comprised 1,200 individuals who
are regular users of the Internet ("online customers"). The other group
surveyed was composed of 400 individuals who are "offline customers," spending
very little, or no time online.
The survey results indicate there is strong demand for
self-service—both the online and Interactive Voice Response variety—among
telecom customers. Several findings are particularly relevant in helping
providers define their strategic approach to self-service:
Self-service is attractive
to consumers. A number of self-service features are
attractive to consumers. Most prominent of these is quick and convenient access
to information and assistance. Nearly 90 percent of online customers and
one-third of offline customers prefer self-service because it gives them quick,
24-hour access to their service providers. Online customers also like the speed
of access and the sheer breadth of information available on the Internet. These
findings can guide companies in developing those self-service features that
will appeal to the largest number of customers.
Online customers are more
likely to conduct transactions via self-service. Online
customers are much more likely to conduct transactions—as opposed to simply
gathering information—via self-service than offline customers. An overwhelming
majority of online customers use the Web to purchase products, pay bills and
conduct banking. The offline group is much more likely to use telephone
self-service for other activities, such as checking account balances or, order
status or obtaining directions, information related to hours of operation, or
answers to specific questions. Companies should think about structuring their
self-service capabilities to satisfy these distinct user groups.
Customers can be motivated to
increase their use of self-service. The survey identified
several ways that companies can drive more inquiries and transactions through
their website and automated telephone systems. These included incentives—such
as money (via a discounted monthly bill or product) or an improved customer
experience—and better communications about the value and availability of
self-service options.
Most self-service attempts among service providers to date
have been implemented as reactive, short-term responses to cost pressures. From
a strategic standpoint, it is critical that executives begin to think
proactively about self-service and the advantages it brings.
In addition to reducing customer-care costs, a good
self-service solution can boost marketing effectiveness, as well as customer
satisfaction and retention. It can free customer-service representatives from
tedious, low-value work (such as handling billing inquiries or address changes)
so they can focus on selling and value-adding interactions. And, it can provide
numerous opportunities to increase revenue through cross-selling and
up-selling. Given these benefits, coupled with customers' readiness for
self-service features, being a self-service "bystander" is no longer an option.
About the Authors: Lynn McMahon,
partner-Communications & High Tech, is the managing partner of Accenture's
Murray Hill Innovation Center. Stuart Taylor, associate partner-Communications
& High Tech, focuses on helping communications companies improve the
efficiency and effectiveness of their customer relationship management
capabilities.
Next Month: We will present additional
research insights that service providers can use to better understand the
operational and technological changes necessary to achieve the self-service
vision.
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