Will the Big 6 Still be Around in 2020?

In my last blog I talked about the value of reviewing your customer service strategy with a focus on encouraging customer retention. My own industry focus is utilities and these issues are playing out in the UK utilities sector in a very interesting way at present.

At present, the big six utilities control 92% of the UK market, but analysts predict that this will reduce to under 70% within the next five years, meaning that the smaller challenger brands in the utilities market will share about a third of the market. A combination of reduced energy use by customers, the reduced market size, and lower profit margins could mean that the big 6 see profits drop at least 40% over the same period.

Citigroup analysts believe that not all of the big 6 will be able to operate profitably in this changed environment. Their prediction is that some of the big players will just sell their customers to a rival firm and exit the market. It is easy to believe that this is possible, although hard to contemplate which of the big brands might not be around by 2020.

The price comparison site GoCompare.com said in a report last September that when they help customers to switch utility seven out of ten customers are choosing the smaller suppliers – not the big six.

Price is usually the main factor when a customer is considering which utility to use, but customer service is in an important second place according to the GoCompare data. This means that the utility firms not only need to offer great prices, but great service too. And this is not just about achieving growth targets – there is a real suggestion that if these companies do not improve the way they manage customers then some well-known brands may not see the end of this decade.

Utility customers are quite familiar with the use of multichannel service, though one look at Twitter or Facebook shows that they are usually just hopping around channels making complaints. If a utility could really wow it’s customers with an omnichannel strategy that knits together all the various social networks with chat and voice and email to create a seamless way to interact with the brand then they can not only retain existing customers, but attract many more from their rivals.

What do you think of the analyst predictions? Leave a comment here or get in touch via my LinkedIn.

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Customers are defining how they contact you – work with them

This blog is by Stephen Pryce, director of business development at City Park Technologies.

One of the most important changes to the customer service market in recent years is that it is now the customer that is firmly in control. The customer defines the channel they want to use for their question or enquiry.

Only a few years ago brands would offer a phone number or email and expect that to be the gateway to their customer service team, but the mobile Internet and social networking has turned this upside down. However there are still many companies with a disconnect between the channels they offer to customers and how the customers want to communicate.

Let’s consider the car insurance market as an example. 100% of the companies I looked at offer an email address. 98% of them are present on social networks too. However, only 38% of them offer a click-to-chat option. Why only a third offering a chat option?

Chat is becoming an enormously popular channel for customers now, in particular there are many younger customers who have a strong preference to use chat over a call. If you force these customers to call then will they bother? You might miss out on valuable sales or cross-selling opportunities because you are not offering an important channel that many customers find useful.

What’s even more interesting is that chat is a lower cost service option. If it is cheaper to provide a chat option and many customers are starting to use it as a first choice channel then why are more companies not offering this option?

Live chat is a great way to help customers in real-time and once companies start using chat on a click-to-chat basis it is also possible to explore options such as proactive chat. This allows your agents to pop up and offer help when the customer is engaged in particular behaviour on your web site… searching the FAQ pages for example.

For more information on Click to chat just click here or leave a comment here if you have any further thoughts on the subject. Feel free to get in touch with me via my LinkedIn.

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What Kind of Customer Service Do You Prefer?

For the past few years I have been blogging about how far and how fast customer service has changed. A decade ago companies would give you a phone number to call and an email (if you were lucky) and these were your only choices if you wanted help. Now there is online chat, the various social networks, and review forums – to name just a few new help channels.

The big difference for the brands is that they have much less control over the way that customers get in touch. Instead of just setting up a contact centre that monitors the phone line and email they now need to be more actively monitoring the social web. Who has mentioned us on Twitter? Is someone talking about our products on Facebook? Has someone left a bad review on Tripadvisor? Has someone published a blog about us on WordPress?

For the customer this is great. The ability to express an opinion and to find what others think ensures that customers have a lot more information about products before they ever make a purchase. But because these channels are constantly evolving, the brands need to be endlessly scanning the social web. The consequence now if they don’t is that customers – and their friends – will just assume they are being ignored.

After all, can you imagine complaining about your bank today in 2015, perhaps by tweeting your frustration and then getting no response at all? It’s an enormous failure of basic etiquette, a bit like people who still write emails in upper case without realising that most people now accept this to mean THAT YOU ARE SHOUTING!

A recent study of customer behaviour published by PwC found some interesting results. They talked to 1,000 consumers about how they like to get in touch with brands and it is not as clear-cut as you might expect – that is if you are following all these rapid changes in the way customers interact with companies.

The only type of industry where digital-only communications were preferred to the traditional call to a contact centre – or a blend – is retail where 32% of those customers questioned only use digital channels. In fact the majority of customers (84%) still prefer to get help by talking to a real person on the phone, but almost half (47%) have used a combination of digital and traditional channels – so around half of customers are now very comfortable switching around to different channels to get help as and when – and how – it suits them.
There are two interesting points worth making, both from my own observations of the brands that I work with and also this new data from PwC:

  1. When people want a problem fixed quickly, they prefer to be talking with a real person so the voice call is never going to completely be replaced by channels such as social networks or review sites.
  2. The fastest growing channels where customers are gradually moving are the social networks. They are still coming from a small base, but are increasing rapidly.

I don’t believe that we are close to what the experts call a ‘digital inflection point’ just yet – meaning that the majority of customers would prefer to talk to brands on digital channels as a first choice. This is partly because of demographics, there is a large section of society that still prefers to talk to a real person now rather than firing off a tweet and hoping it gets answered within a couple of hours. However it is also because of that immediacy – when you need help you usually want it right now so regardless of customer age or digital knowledge, to resolve issues quickly it is often faster to just call.

Some channels like online chat can blend the digital approach with immediacy and I believe this is where the next wave of growth will be for many brands, finding ways to help customers faster and using channels that people actually want to use.

In the meantime though, customer service is an exciting industry to be involved in. The demand for voice calls is still growing and yet all these other channels are being thrown into the mix. It is more complex than ever to get it right, but that just increases the challenge and makes it more fun!

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The Value of Keeping the Customers You Already Have

Everyone knows instinctively that it is cheaper to keep the customers you have than to invest resource in finding new customers. According to the Harvard Business Review it is five to twenty-five times more expensive to attract new customers than to just create loyalty in your existing ones – the exact difference depends on the industry you are in.

Whether you are measuring the rate of customer churn or customer retention, the strategic message is clear. Whatever you invest in keeping your customers on board is worth much more than the same amount spent on advertising or marketing with a view to attracting new customers.

But retention is a big problem, where do you start?

Every business is different, but there is one aspect that is shared across all industries and types of business – the customer service function. Customer service is the coalface; this is usually the only part of your business where customers will directly interface so it is critical to ensure that it works well for two important reasons:

  1. Ensuring you serve customers well creates a favourable impression of your brand. By helping your customers efficiently whenever they need your help or advice, rather than making their life difficult, you create a great platform for loyalty to grow.
  2. Customer expectations of service have changed in recent years. Customers now expect a more interactive relationship with brands. They will ask questions across many channels, including social networks, and expect prompt answers, but importantly this engagement creates the impressions of a relationship – this encourages people to remain loyal.

Retaining customers requires the right strategy and investment in the areas of your business where you can make a difference. Ensuring the interaction between the brand and customer is as smooth as possible is the first place you need to examine if customer retention is a problem in your business.

What do you think about customer retention and how it can be improved? Leave a comment here or get in touch via my LinkedIn.

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Fixed and Mobile convergence: Tech supporting business of all sizes

 The dividing line between the use of Fixed and Mobile telecoms is becoming increasingly blurred. This has been seen for a long time in large enterprises, but it is clear that the SME market is following – creating huge potential.

Consider some of the following points:

  • A taxi firm that can now set up without needing a fixed cab-office – all calls are routed through the switchboard to drivers, and when you combine that with Apps like Uber and Halo – it is a real game changer.
  • Emergency services where there can always be someone on call as the system will move from fixed to mobile depending on who is available with no need for anyone to be based at a fixed residence.
  • Sales – last minute orders to suppliers from a retailer or manufacturer are not missed as there is always someone available whether by fixed or mobile to answer the call, place the order, and retain a happy account.

I can vouch for the last example. I was organising a party recently and needed to make a last minute change to the order. It was Saturday evening and I was expecting to leave a voicemail on the landline. To my surprise the supplier picked up took the amendment, processed it on Sunday, and my order came through flawlessly on time. He told me that he uses a new business service that ensures he can pick up the message regardless of what number is used. Genius!

These are just some examples of the opportunity that the SME sector offers, and it is no wonder that the quad-play market is starting to heat up. Companies such as Virgin Media, Vodafone, BT, and O2 continue to enhance their converged capabilities knowing that this type of service can be a real game-changer for a business wishing to improve its own service and performance.

Customers have higher and higher expectations so this is great news and removes the risk of being in trouble with your entire family for ordering the wrong type of fairy cakes!

Please leave a comment here or tweet me on @simondillsworth.

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BPO can work smarter, not cheaper

Phil Fersht’s ‘Horses for Sources’ blog is a great antidote to most consultant and analyst reports with an irreverence that means it must be the only blog about outsourcing where you will regularly laugh at the articles – and the comments.

I saw a recent article title ‘Work smarter, not cheaper’ that explored the talent agenda across the entire BPO industry. One of the main findings of the HfS research was that knowledge and skills related to automation are becoming increasingly important.

This is a view I echo. In fact, looking at the research results published by HfS I would make three immediate observations:

  • There is a requirement for increased skills in the wider BPO industry as supplier companies perform many more complex tasks. What has really changed is the nature of how a company is structured. Outsourcing used to be a very defined process where a process was lifted out and dropped into the supplier with everything defined rigidly and labour arbitrage was often the driver. Now the way suppliers work with clients features much more flexibility – it’s far more collegiate and like a genuine partnership. Often you can be inside an office and not know whom the client pays and whom the supplier pays.
  • Automation is changing many parts of the BPO sector, not least customer service where customers are often expressing a desire to just do things themselves at their own pace.
  • The complexity in many BPO services today means that outsourcing is not really optional – it has become essential. This is certainly true for any brand wanting to offer great customer service. Handling the way that customer expectations are changing all the time – such as multichannel support – is really a job for experts who are only focused on making this work better.

Automation is a really interesting area within the customer service environment. In many cases customers who need help with a product or service don’t call an official number or email a specific address, they just ask questions on social networks. However, if a customer asks a specific question about a product they are more likely to do that using a search engine than on a company website so another entire area of work is ensuring that answers pop up in search engines like Google.

Dell is a company that does this well. They create video content that answers almost every possible question about their products and upload them to YouTube, creating an enormous library of Q&A product videos. These videos are viewed millions of times, which really does prove that their customers often Google a question then get the answer from a video rather than going direct to the customer service team.

BPO is working smarter today. I can see all around in my own area of the industry that people starting out as customer service agents have real career choices – and interesting choices. The skills they are developing can lead them into sales, marketing, and research – any part of the business where knowledge of customer behaviour is important.

BPO is changing fast, but as HfS suggests, the changes are making this business a more exciting place to be.

What do you think are the main drivers of change in BPO today? Leave a comment here or tweet me on @matt_sims1.



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Superfast broadband – all over the UK

The UK general election campaign is now underway and one government promise, slipped out quietly a couple of weeks ago during the Budget, may have passed you by. The promise is to accelerate the rate at which superfast broadband is rolled out across the UK, the intention being to ensure that almost every home in the country can access Internet at speeds of at least 100Mbps by 2017.

I don’t think this promise will have any effect on the election this year, especially as there is a new promise, but no new money to make it happen. People react to tangible results rather than promises. When the public sees that UK infrastructure has taken a quantum leap then they might grudgingly thank the politicians who made it possible, but right now it is too soon to tell. In any case most members of the public perceive improved broadband speeds as being the responsibility of the ISPs, not Westminster mandarins.

But I’m not sure if there is enough time to hit these targets in just two years. The county councils echo my view across the UK. Almost half (45%) of all councils in the UK do not believe that the target of superfast broadband by 2017 can be achieved.

For many city-dwellers fast broadband is just accepted as natural. Conversation with friends will often focus on how long it takes to download a movie or whether there are any problems streaming Netflix and Spotify at the same time. But in the rural communities, where speed increases will be enormous, being able to interact fully with the Internet opens many opportunities for job creation and improving jobs that are already located outside of the cities.

It is only a few years since the UK government was talking about a 2Mbps national target so at least the targets are becoming more ambitious, but it will be a missed opportunity if we don’t see how vital this is for the wider UK economy and let the rollout schedule slip – again.

BDUK Cheshire Runcorn Widnes6


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