8675 RA Omni Channel Experience

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Omni-Channel Customer Care

Empowered Customers Demand a Seamless Experience

October 2013

Omer Minkara


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This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research andrepresent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

October 2013

Omni-Channel Customer Care: Empowered

Customers Demand a Seamless Experience

Customers are no longer confined to a single channel or device to engagebusinesses. Todays customer journey might start in one channel (e.g., web)and proceed through numerous other ones (e.g., social media, email, andphone). Furthermore, these conversations can take place across numerousmodes of interaction (e.g., in-store / person, smartphone, and tablet) whereeach modality has its own characteristics (e.g., mobile device operatingsystems and screen sizes). Findings from Aberdeens March 2013Next-Generation Customer Experience Managementresearch shows that the ability

to deliver a seamless / consistent experience across multiple channels anddevices (a concept referred to as omni-channel) is a top challengeimpacting customer experience management (CEM) programs in bothB2B (business-to-business) and B2C (business-to-consumer) organizations.

This Aberdeen report will outline the business value of deploying an omni-channel CEM (see sidebar for definition) strategy designed to addresschanging buyer needs. It will also highlight several best practices that helptop performing organizations differentiate themselves through achieving 89%customer retention rate while growing their annual company revenue by9.5% year-over-year.

The Business Value of Omni-Channel CareOmni-channel customers are not only a reality for B2C organizations suchas retail and hospitality firms, but also a key factor impacting CEM programsof B2B businesses. Similar to an airline traveler who might use differentdevices and channels to interact with travel firms, a B2B industrialequipment manufacturer seeking information on shipping services providerscan use multiple modalities (e.g., in-person, laptop, or smartphone) toengage logistics firms over phone, email, or web prior to the purchase oftheir services to transport its goods. In other words, omni-channelcustomer interactions apply to both B2B andB2C organizations requiringthese firms to be laser-focused on addressing client expectations ofreceiving a consistent experience regardless of the interaction channel ordevice. Findings illustrated in Figure 1 below illustrate the year-over-yearperformance outcomes omni-channel CEM program users enjoy, comparedto peers with asynchronous customer engagement efforts.

Analyst Insight

Aberdeens Insights provide theanalysts perspective on theresearch as drawn from anaggregated view of researchsurveys, interviews, anddata analysis.

Definition: Omni-channelCustomer Experience

For the purposes of thisresearch, Aberdeen uses theterms omni-channel CEM andomni-channel customer careinterchangeably to define

strategic customer careinitiatives designed to deliverseamlesscustomer experiencesacross multiple channels (e.g.,phone, social media, web,mobile, and email) and devices(in-store, laptop, and smartphone). The end goal of theseprograms is to ensure that thecontext and experience fromeach channel and device carriesover to the next touch-pointsto ensure consistency ofconversations via multipletouch-points.
http://www.aberdeen.com/Aberdeen-Library/7092/RA-customer-experience-management.aspxhttp://www.aberdeen.com/Aberdeen-Library/7092/RA-customer-experience-management.aspxhttp://www.aberdeen.com/Aberdeen-Library/7092/RA-customer-experience-management.aspxhttp://www.aberdeen.com/Aberdeen-Library/7092/RA-customer-experience-management.aspxhttp://www.aberdeen.com/Aberdeen-Library/7092/RA-customer-experience-management.aspxhttp://www.aberdeen.com/Aberdeen-Library/7092/RA-customer-experience-management.aspx


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Omni-channel Customer Care: Empowered Customers Demand a SeamlessExperiencePage 2

2013 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897

Figure 1: Year-over-year Performance Changes

6.5%

6.1%

3.4%3.4%

1.0%

-0.7%-2%

0%

2%

4%

6%

8%

Customer retention Average profit margin percustomer

Customer lifetime value

Year-over-yearpercentchan

ge

n=305

Companies with omni-channel CEM programs

All Others

Source: Aberdeen Group, May 2013

As depicted above, businesses that adopt an omni-channel CEM strategy faroutpace their peers that lack this strategy. They achieve 91% greater year-over-year increase (6.5% vs. 3.4%) client retention rates, compared tobusinesses that fail to incorporate omni-channel as a key customerengagement strategy. Furthermore, they also enjoy superior financial resultsin key measures such as customer profitability and customer lifetime value

see sidebar.

The above benefits validate that delivering seamless messages via multipletouch-points helps companies reduce customer confusion and effort akey factor in improving customer satisfaction and retention. Using

interaction data to maintain the context of omni-channel interactions alsohelps businesses with crucial insights to tailor product and service offeringsto address the specific needs of each client, ultimately leading into increasesin customer profitability.

While adopting an omni-channel CEM strategy is a step in the rightdirection towards delighting empowered customers, findings on Best-in-Class (see sidebar for definition) firms performance validates that thebenefits of omni-channel CEM programs extend beyond the performanceresults in the above figure. Aberdeen Group used four key performanceindicators (KPIs) to assess organizational performance in engagingcustomers in a seamless manner across multiple channels and modalities.Table 1 below illustrates the Best-in-Class results across these four keymeasures, in comparison to businesses falling behind the top performers.

Metrics Definition

For the purposes of thisresearch, Aberdeen makes the

following definitions forperformance metrics:

Average profit marginper customer: Thedifference between revenueaccumulated from aparticular customer and thecost of serving the samecustomer during a specifictime frame (year).

Customer lifetime value:The total profit accumulated

by serving a customerthroughout the time they dobusiness with theorganization. Discounting toreflect thetime value ofmoneyprovides a moreaccurate measure of thismetric.

Aberdeen Methodology

The Aberdeen maturity class is

comprised of three groups ofsurvey respondents. Classifiedby their self-reportedperformance across several keymetrics, each respondent fallsinto one of three categories:

Best-in-Class: Top 20% ofrespondents based onperformance

Industry Average:Middle50% of respondents basedon performance

Laggard: Bottom 30% ofrespondents based onperformance

Sometimes we refer to a fourthcategory, All Others,which isIndustry Average and Laggardcombined.
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Table 1: Top Performers Earn Best-in-Class Status

Definition of

Maturity ClassMean Class Performance

Best-in-Class:

Top 20%

of aggregateperformance scorers

89% customer retention rate

9.5% average year-over-year improvement in annualcompany revenue

8.5% average year-over-year improvement in firstcontact resolution rates

7.5% average year-over-year improvement (decrease)in average cost per customer contact

All Others:

Bottom 80%of aggregate

performance scorers

33% customer retention rate

3.4% average year-over-year improvement in annualcompany revenue

1.6% average year-over-year improvement in first

contact resolution rates0.2% average year-over-year improvement (decrease)

in average cost per customer contact

Source: Aberdeen Group, June 2013

As depicted above, Best-in-Class firms outperform All Others across anumber of KPIs. Their success in improving first contact resolution rates isdemonstrative of the ability to detect andaddress customer needsseamlessly within a single interaction. This interaction doesnt necessarilyneed to be within one channel, but may span multiple channels or devicesuntil the customers needs are resolved. Research shows that topperformers achieve an 89% customer retention rate while their peers retain

33% of their clients due to poor and inconsistent interactions. Theseperformance outcomes ultimately translate into financial benefits where theBest-in-Class enjoy drastic improvements in increasing their annual companyrevenue and reducing their customer care costs measures regularly usedby the C-suite (e.g., CEO, CFO, and CSO) to assess organizationalperformance.

In the next section, well observe the activities that help top performersdifferentiate themselves across numerous KPIs.

Building Blocks of Success in Omni-Channel CEM

Aberdeen data indicates that top performing firms use a series of capabilities

that help them preserve the context of an interaction through multipletouch-points. Providing employees with the skills, knowledge, andtechnology tools needed to use customer data for an effective omni-channelCEM program is one of the main pillars of the Best-in-Class success story.Customer behavior and preferences change rapidly. Use of data captured onomni-channel conversations enables companies to have a holistic view oftheir customers interaction history a capability that allows businesses todeliver a consistent message and experience regardless of the channels,devices, and employees involved in managing particular aspects of the


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customer journey. As illustrated in Figure 2 below, top performers are 29%more likely (85% vs. 66%) than their peers to regularly train their customercare representatives to empower them with the knowledge needed toeffectively use customer data and ensure consistency of messages deliveredvia numerous touch-points.

Figure 2: Key Differentiators for Omni-Channel CEM

85%

77% 77%

66%

48%

42%

30%

50%

70%

90%

Regular training of agents onhandling omni-channel

interactions

Customer contact data isretained across multiple

touch-points

Agent technology skills usedto route customers

Percent of respondents, n=305

Best-in-Class All Others


Another capability deployed by Best-in-Class firms is matching the rightcustomer with the right employee (e.g., contact center agent) who has theskills and experience to handle the precise needs of each client anactivity that might require the involvement of different employees acrossdifferent phases of the customer journey. The Best-in-Class are 83% morelikely (77% vs. 42%) than All Others to assess the technology skills of each

member of the customer care team to execute this strategy. For example,an organization using social media, web, live chat, email, and phone as partof their customer interaction mix would screen employees individual skillsin interacting with clients across each one of these channels and incorporatethe findings within employee profiles. When a customer interacts with thebusiness, this capability helps organizations ensure that employees involvedat each touch-point are the ones that have the right technology skills toprovide a seamless experience through utilizing data on the customersprior interactions with the business.

As noted in conjunction with the two strategies observed above, customerdata is the key ingredient that helps businesses ensure delivering a seamless

experience regardless of channel or mode of interaction, whether it is via asmartphone, tablet, or in-person. Aberdeen research shows that topperformers are 60% more likely (77% vs. 48%) than their peers to utilizecustomer data to maintain the context (e.g., information and experience) ofprior interactions across future ones that might take place across otherchannels or through different modalities. This helps companies provide theirbuyers with a single brand image and experience regardless of the individualcomponents involved through the process. Findings from Aberdeens March2013Next-Generation CEMstudy sheds further light on the value of this
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strategy: Best-in-Class organizations (see sidebar for details) within thisstudy are far more likely to leverage customer behavioral data capturedacross different channels and devices (omni-channel) to personalize theirfuture interactions. This supports their ability to accomplish theperformance results demonstrated in the sidebar.

Findings depicted in Figure 3 below illustrate several other activities theBest-in-Class use to successfully utilize customer data as part of their omni-channel CEM efforts. One of these activities is tracking customer interactiondata to identify if a client used different channels or modalities to seekresolution of the same issue. Identifying such repeat customer contact helpsbusinesses identify the weaknesses in their omni-channel efforts that resultin delivering fragmented and sub-par customer care. The Best-in-Class are60% more likely (69% vs. 43%) than their peers to have this processdesigned to identify the weaknesses that might result in deliveringasynchronous messages across different customer touch-points. The findings

from this process are invaluable in helping businesses improve continuouslytheir client messaging activities.

Figure 3: Key Differentiators for Omni-Channel CEM (continued)

77%

69%

62%

41% 43%

36%

20%

40%

60%

80%

Conduct cost / benefitanalysis of omni-channel

programs

Isolate topics associatedwith repeat contact

Measure the impact of eachcustomer interaction on

CEM resultsPercent of respondents, n=305

Best-in-Class All Others


Another important use case of customer data is in assessing theorganizational performance in CEM programs. As depicted in Figure 3above, Aberdeen research shows that Best-in-Class firms measure theperformance of their omni-channel CEM programs through both financial

and operational metrics. While 77% of these organizations have a formalprocess to evaluate the cost and benefit of their customer engagementefforts, only 41% of All Others have this process in place. Establishing thiscapability requires companies to adopt a holistic view of their customerinteractions. As discussed in Aberdeens March 2012 research,The ROI ofBest-in-Class CEM Programs,there are numerous ways to identify the costand benefit impact of each customer interaction. Mapping the customer

journey across all the client touch-points and utilizing analytical tools (seesidebar) to identify how each specific interaction influenced customer

Maturity Class Definitions

The following Key PerformanceIndicators (KPIs) were used todetermine the Best-in-Class forthe Next-Generation CEMreport:

Current customer retentionrate Best-in-Class: 88% vs.Laggards: 35%

Year-over-year improvementin annual company revenue Best-in-Class: 23.0% vs.Laggards: -4.6%

Year-over-year improvement(decrease) in response time

to customer inquiries Best-in-Class: 16.3% vs.Laggards: 2.2%

Technology Adoption

Research shows that companieswith omni-channel CEMprograms are twice more likely(48% vs. 24%) to deploycustomer analytics tools tosupport their CEM efforts,compared to those whereomni-channel is not a key partof client engagement activities.
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behavior helps companies gather crucial insights on the revenue and costimpact of each sales, marketing, and service program. Best-in-Class firms are72% more likely than All Others (62% vs. 36%) to complement their cost /benefit assessment of CEM programs with additional measures such as firstcontact resolution and customer satisfaction to ensure establishingfinancially sound andcustomer-friendly omni-channel programs.

Key Takeaways

Customers today are empowered: they arent confined to a single channelor device to interact with businesses. Indeed, findings from AberdeensNext-Generation CEMstudy indicate that 65% of businesses use at least sixtouch-points to engage with their clients. Managing customer needs acrossall these touch-points in a synchronous way is no easy endeavor. This iswhere omni-channel CEM efforts come in they help companies establisha coordinated strategy that ensures delivering a seamless experience to the

same customer regardless of the number devices or channels they use toengage with the business by retaining the context of each prior interactionwithin the following ones.

Findings outlined within this report show that while deploying an omni-channel CEM strategy is a step in the right direction to meet the needs ofempowered customers, companies need to deploy Best-in-Class practicesto reap maximum rewards from these efforts. Aberdeen recommends thatorganizations carefully assess the differentiating capabilities highlightedwithin this document in conjunction with the recommendations providedbelow to enjoy Best-in-Class results in retaining more clients, increasingrevenue, and reducing costs:

Ensure that your employees have the knowledge, skills, andtechnology tools needed to handle customer interactions in aseamless way. Utilize customer data to direct each customer to theright channel andemployee equipped to handle the specific needs.

Integrate disparate customer data repositories to empoweremployees with the right and consistent information needed todeliver seamless client interactions.

Regularly measure the impact of each activity taking place across thecustomer journey to identify their cost and benefit for the businessas well as role in addressing customer expectations acrossnumerous touch-points. Map all the customer touch-points and

identify the most relevant performance metrics to effectively deploythis activity.
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For more information on this or other research topics, please visitwww.aberdeen.com.

Related Research

Speech Analytics: Making Effective Useof Voice in a Multi-Channel World;September 2013

Social Customer Care: Secrets to Build aWinning Strategy;August 2013

Bringing Customer Service intoMarketing: Empowered Customers Make

Service Excellence an Imperative;July2013

Contact Center Optimization: Use Datato Deliver Superior Customer Care;July2013

Workforce Optimization in the ContactCenter: Secrets to Improve AgentPerformance;June 2013

The Rising Financial Impact of CustomerService;May 2013

Next-Generation Customer ExperienceManagement;March 2013

Multi-Channel Contact Center :Establishing the Tie Between Mobile andthe Customer Experience;March 2013

The Hidden ROI of a Cloud-based ContactCenter;January 2013

Multi-Channel Contact Center : DelightCustomers Where They Live;November2012

Author: Omer Minkara, Senior Research Analyst, Contact Center & CustomerExperience Management ([email protected]),LinkedIn,Twitter

For more than two decades, Aberdeens research has been helping corporations worldwide become Best-in-Class.Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provideorganizations with the facts that matter the facts that enable companies to get ahead and drive results. Thats why

our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% ofthe Technology 500.

As a Harte-Hanks Company, Aberdeens research provides insight and analysis to the Harte-Hanks community oflocal, regional, national and international marketing executives. Combined, we help our customers leverage the powerof insight to deliver innovative multichannel marketing programs that drive business-changing results. For additionalinformation, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call(800) 456-9748 or go to http://www.harte-hanks.com.

This document is the result of primary research performed by Aberdeen Group. Aberdeen Groups methodologiesprovide for objective fact-based research and represent the best analysis available at the time of publication. Unlessotherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not bereproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by

Aberdeen Group, Inc. (2013a)
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