How To Reduce Customer Service Costs

9min read -

Are you struggling to reduce customer service costs while maintaining an optimal level of satisfaction? You are not alone because the challenge is huge. Especially since, as Forrester points out, it's not the operational side that contributes most to costs, but the impact of poor customer service on your business. Consumers expect a lot from you, but at the same time, your resources are limited. Reducing costs is THE major challenge for brands' customer services. 

Bottom line:

  • The digitalization of customer relations has taken a 3-year leap forward, driven by COVID-19.
  • New customer service strategies have emerged, notably the conversational approach via messaging.
  • Messaging by greatly enriching the digital customer experience of brands brings satisfaction and many avenues for optimization. Cost reduction is not at the expense of the customer experience.

Reducing Customer Service Costs Is a Headache

To start, let's look at some numbers on customer service and customer experience: 

- A 10% improvement in customer experience score can translate into more than a billion dollar increase in revenue. 

- If your company spends $6 on online ads to get a click, and on average, one in a hundred clicks results in a customer service question, each pending customer service question costs you $600.

- 72% of consumers say they switch to a competing brand after one bad experience with a brand.

How do you combine customer service optimization with a great customer experience? Are the two even compatible? 

Are you confused? Don't panic. We'll explain how improving your digital customer experience through messaging will save you money in the short and long term. 

The Digitalization of Customer Service, an Opportunity To Reduce Costs

With a 15% jump in French e-commerce by 2020, the digitalization of sales is a reality. The same is true for customer service. According to McKinsey, the digitization of customer relations has made a 3-year leap forward under the effect of COVID-19.

Yet, many companies think that digitizing a customer service department means substituting technology for human advisors. However, the reality is different. 

Digitizing customer service does not substitute it increases:

  • Opportunities to reduce costs 
  • Opportunities to generate value

The digital transformation of customer service is a highly strategic issue at the heart of brands' roadmaps. The ones that succeed in this paradigm shift are those that master the balance between automating customer service with AI and the ability to interact online with a human if necessary. In short, the brands that will take the turn to augmented intelligence

What does this mean in concrete terms for brands reducing costs in care? More and more companies are deploying messaging solutions on their sites, meaning they are giving consumers the possibility to interact as they would by messaging with their loved ones. This channel allows them to save money and increase productivity. In doing so, they optimize their post-sales strategy and achieve impressive results in terms of CSAT.  

How To Reduce Customer Service Costs With Messaging? 

In the context of digital transformation and metamorphosis of working conditions linked to the health crisis, messaging has become an increasingly important part of customer service strategies over the last two years. Why is this happening? 

1.Messaging, More Efficient Than Email and Phone

Traditional customer service channels, i.e. email and phone, create friction: 

  • Slow handling time
  • Long average resolution time 
  • Limited availability: business hours
  • Creation of queues
  • Consultant stress related to phone conversations
  • Low efficiency: low value-added requests on which the brand spends time and loses money

In terms of costs, a chat conversation costs on average $7-8. A phone conversation costs $12, almost twice as much as messaging

For all these reasons, traditional contact channels are no longer delivering the experience consumers expect while becoming the most expensive channels to process. In short, on many levels, phone and email are destroying value.

2. Messaging Makes Customer Service Omnichannel and Scalable 

A conversational strategy integrating messaging in its most successful dimensions, i.e. ticking all the criteria identified by our experts such as scalability or omnicanality (don't hesitate to evaluate your conversational maturity here), is the key to optimized customer service. 

Indeed, when messaging is mentioned we, often think of live chat and chatbots, i.e. conversations that customers have with advisors or virtual agents via chat windows on websites. However, messaging covers a significantly wider range of synchronous and asynchronous contact points. For example, iAdvize's conversational platform allows brands to deploy :

  • 4th generation chat
  • SMS
  • In-app chat
  • WhatsApp
  • Facebook Messenger
  • Apple Business Chat
  • Video chat

This omnichannel capability, coupled with the Call to Messaging feature, allows customer service to distribute requests across the customer's preferred communication channels and reduce calls and emails to focus on the most effective channels in terms of productivity. Unlike historical channels, messaging allows multiple conversations to be taken care of simultaneously. On average, agents handle two conversations simultaneously on a conversational platform, and this figure can go up to six. 

Let's take an example: Ms. M, a Super Son customer, wants to contact Super Son's customer service department because she has just received some headphones that she can't get to work. She dials the dedicated Super Son customer service number, greeted by a voice server that either asks her to wait on the phone for an indefinite period of time or invites her to chat on a messaging channel. Mrs. M chooses the Call to Messaging option because she doesn't want to wait on the phone and sends her request in one minute via WhatsApp (which she uses every day). The answer arrives 10 minutes later, an easy conversation follows with an answer to her request. The ticket is then closed in a few minutes, and above all, she didn't waste any time!

Thanks to asynchronous channels, activity is smoothed, and queues are reduced on the customer service side. On the customer's side, the quality of the service experienced is not impacted, and on the contrary, there is an improvement in customer satisfaction. 

3. When Quality of the Customer Experience Rhymes With Cost Reduction

By reducing the friction associated with traditional customer service channels, messaging improves the experience and builds consumer loyalty.

  • 32% of consumers find the phone a frustrating channel (ESCDA study)
  • Due to lack of availability, a customer will take an average of 3.4X to reach customer service in 2020 (BVA study)
  • Your current and future customers, Millennials and Gen Zers prefer digital conversations. 68% of consumers prefer to shop at a store that offers convenient and comfortable communication channels.

In detail, many messaging features can improve the customer experience.

Example 1: Automation 

Conversation automation allows brands to immediately take care of customers without mobilizing experts, via chatbots, virtual agents configured by brands that automatically respond to customers. Indeed, by listing the most common intentions of visitors to its website, a brand can pre-record answers to recurring questions and guide effectively without having to use a qualified respondent at the time. Chatbots offer customer service help on a large scale while reducing costs. They can : 

  • Answer autonomously 24/7 to the most recurrent and relevant questions
  • Be regularly updated with the latest information that the brand wants to give to customers
  • Handle a very high volume of questions daily

One of our clients, TUI, handled five times more requests during the peak of the Covid19 crisis thanks to the deployment of a chatbot. Discover this use case here. 

Chatbots, therefore, absorb volumes but also develop self-service. Beyond lightening the workload for customer service, customers are satisfied and happy to come back to shop more. Indeed, 73% of consumers say they prefer self-service.

In addition, the adoption of intelligent chatbots is becoming more widespread. Find out how chatbots with conversational AI work and their advantages here. 

Finally, the Artificial Intelligence present in messaging solutions like iAdvize's analyzes conversation history in real-time to gather crucial customer information to optimize costs

All customer interactions in call centers need to be leveraged. It's a knowledge bank of customer sentiment, product issues, competitive information, and operational inefficiencies that can be used to deliver better service quality.

-Kate Leggett, Vice President, and Principal Analyst at Forrester, a world-renowned expert on customer service

However, messaging is based on insights that allow us to improve customer care. The iAdvize platform's conversational console can highlight recurring words and expressions that can reveal bottlenecks and ways to improve customer service

Example 2: Asynchronous Messaging

The asynchronous messaging function allows for better management of the occupation rate of experts. It also brings comfort to consumers. Indeed, asynchronous messaging means that the customer service can send a request by message and receive a response later when an expert is available. This fluidity and simplicity compete with email, which also can be processed in a delayed manner but is much more cumbersome in tone and usage than messaging. 

Example 3: Expertise 

Unlike traditional customer service channels, messaging offers a diverse panel of respondents: decision tree chatbot, intelligent chatbot, brand advisors, in-store salespeople, and passionate experts in the case of iAdvize, the ibbü experts. These respondents are sourced for brands and available 24/7 to support consumers. Although deployed in pre-sales, ibbü experts have a substantial impact on customer service. They do this by reducing customer service requests through their personalized support. See how a major European retailer saved €752,000 in customer service costs over three years with ibbü in this Forrester study

Example 4: Tools To Respond Faster and Better

Other possibilities linked to messaging that facilitate the life of experts and optimize their tasks: co-browsing, which allows the expert to accompany the prospect in his navigation on the site, and mirroring, allowing the agent to see in real-time the screen of the consumer and thus help him in his situation. These functionalities enable them to assist the customer in complex navigation situations and reassure him. 

4. Reduce Costs by Retaining Talent Through Messaging

It's high time to seriously address the myth of humans being replaced by computers. Will the customer services of the future only be composed of bots? Absolutely not, since a bot is only intelligent if a human can give it a minimum of reasoning. The role of the Bot Master is essential to an effective messaging strategy. 

In fact, messaging is even a lever for internal team satisfaction. The experience is improved from the customer's point of view and the consultant's point of view. A phenomenon of virtuous symmetry that Angélique Gérard, Customer Relations Director of the Iliad Free Group, detailed on the Conversation media, whose interview you can watch here

In France, the turnover of call centers (16% on average) is at the heart of cost control issues. The jobs of advisors are difficult because most of the requests they deal with concern problems encountered by consumers. A negative dimension is amplified by the emotional cost of the telephone which confronts customers who have lost their patience (often because of the wait before the conversation...). Messaging is calmer than the telephone as it does not engage in direct conversation except in the case of chat to video. It allows the advisor to take the time to think, answer properly and is more conducive to internal collaboration. In short, messaging represents a real opportunity to retain employees. Several clients have even told us that their employees ask to be part of the teams that handle digital conversations, and in some cases, this change results in a promotion. 

In addition to lowering turnover, what is the direct consequence of this satisfaction among consultants? The increase in customer service productivity. We have observed an increase in productivity of 35% when emails are reduced in their entirety and 20% when calls are reduced by 50%. 

Digitizing customer service takes time, but this transformation is essential to reduce costs while putting the customer experience at the heart of the brand strategy. More and more brands are adopting conversational customer service around the world. That makes building a roadmap for the transition to messaging critical. 

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