Act with Certainty

The ForeSee blog for CX professionals and the Voice of Customer community.

The Challenges of Channel Competition

Should customer satisfaction still be important to companies that are the only game in town (or even the main game in town) such as a utility, telecom, cable company, or wireless provider? If consumers have no choice or very little choice, is it necessary to measure the customer experience? What’s the point, right? They will be your customers no matter how you treat them.

The point is that a company – all companies – can improve financially even if they own their market. Understanding the customer experience can prioritize improvements that will matter to customers in ways that can save costs on unnecessary changes.  But if you’re running a quasi-monopoly or even a true monopoly, measuring the customer experience will also help you distinguish which channels of engagement are providing the best experience for customers and how to encourage customers to use more cost-efficient channels. In the end, you will discover that not all channels are created equal (nor should they be).

IThe Challenges of Channel Competitiont basically comes down to channel competition for customer support, often essentially contact centers vs. online services (though many companies also have in-person service and sales offices). Here are two very important questions:

One, what is better for the company? Online is usually more cost effective for the company (and more convenient for the customer) compared to traditional channels such as contact centers and branch offices.

And two, what are the customers’ preferences? In some ways, we’ve become an anonymous generation where a lot of people WANT to go online and use the self-service option to conduct their business. Most people don’t want to pick up the phone if it can be handled easily online; they don’t want to uproot and go to a store or office location.

So it comes down to improving the experience so the customer chooses the channel that is best for the company and best for them—usually, but not always, the website. This kind of “right-channeling” can result in huge cost savings and improve customers’ likelihood to return to the site, renew service agreements, and recommend your site or company or both to other people. And if they don’t want the self-service, they won’t use it. You don’t force them to, and you don’t eliminate the contact center entirely.

The average phone call to a contact center ranges from $6-12 (and in some industries as much a $50/call), and online self-service costs a company less than $1 (and in some cases as little as $.10 per customer)…do the math…that adds up to some pretty impressive savings.

We’ve always been proud proponents of letting the numbers speak for themselves (imagine that). So here is an example from one of our clients, a large utility company:

According to our data, almost 70% of this utility’s dissatisfied users are NOT likely to use the site as their primary resource, and more than 50% are NOT likely to return to the site. That’s a large percentage of customers that chose to go to the site with certain expectation, didn’t like what they found, and aren’t going to do it again. That means they will turn to a more expensive channel such as contact center.

On the flip side, when customers are satisfied, we get an entirely different story. Of this same company’s highly satisfied customers, more than 90% are more likely to use the website as a primary resource; almost 100% are likely to return to the site; and nearly 95% are likely to recommend. These behaviors translate to reduced costs and increased loyalty.

In the end, it’s about providing an experience that is a win for the customer (or business in a B2B environment). That in turn results in a win for your company.



About the Author

As a pioneer in customer experience analytics, ForeSee delivers superior technology and proven methodology to connect the customer experience to the bottom line. The result is better business for companies and a better experience for consumers.

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