Challenger energy brands need to punch above their weight

Challenger energy brands need to punch above their weight in customer service to make their growth stick.

In the past three years, energy companies other than the big six of British Gas, EDF Energy, npower, E.ON UK, Scottish Power, and SSE have grown their share of the market more than nine-fold, from less than 1 per cent in 2012 to 8.7 per cent today. These fledgling challengers have seen an influx of customers in a space of time that most businesses could only dream of.

However, there is a risk that this could prove a mixed blessing if overwhelmed management systems lead to poor customer service, prompting the new intake to leave just as fast as they arrived.

Inevitably, avoiding this situation will require investment, but there are definite rights and wrongs when going about this and ways to make any expenditure go as far as possible to improve customers’ experience.

As if the rapid growth of these businesses didn’t present challenge enough, it is compounded by the fact that consumers are now more demanding than ever in terms of the ways in which they expect to be able to communicate with their energy suppliers. They want to be able to interact with their suppliers on the web, via desktops and mobiles, as well as by phone or email. Moreover, customers also expect to receive a consistent response regardless of which channel, or combination of channels, they wish to use. Solidly delivering this level of service in a rapidly growing business presents a real management challenge, not only in terms of getting the IT systems right, but also avoiding silos from forming that prevent effective sharing of information across different departments.

Thankfully, setting these systems up in-house is no longer the only option for these challenger energy companies, and the range of hosted customer-management services that are available, either to wholly outsource or to supplement the process, have proliferated in recent years. As well as avoiding significant upfront investment at a time of great change in a business, this type of service also allows users to tap into well-established infrastructures, managed by teams with a great deal of experience running customer communication programmes. At a time when the management needs to be wholly focussed on the commercial and operational sides of their business, this could be an especially wise choice.

If you want to read more about the challenge faced by the newer entrants to the energy markets and the hosted customer management services that are available to help, download our recent white paper: The Power to Compete.

Compliant interaction and emotional appeal

In my previous blog post, I spoke about the emotional advantage the South African workforce offers to offshore operations. In this post I’d like to discuss the value and compliance aspects of outsourcing to South Africa. With a workforce that is culturally aligned, engaged and emotionally connected, South Africa provides the perfect platform on which to build value from compliant interactions.

Compliant interactions can be defined as those exchanges with customers that deliver the value an organisation seeks. This value could lie in customer experience metrics, first time resolution rates or cost efficiency. Those interactions that don’t deliver against business objectives can be categorised as non-compliant, which often do more than add no value. They have the potential to detract from the value added by compliant interactions. By adopting a focus on compliant transactions, the dynamic of your offshore decision making changes dramatically. On comparing the cost per compliant interaction, we found South Africa to be 12.5% lower than offshoring locations in Asia, lowering true cost and making South Africa’s value return significantly higher.

This focus on compliant interaction is what sets some organisations apart from others. This results in an uncompromising focus on quality, delivering on business objectives and putting the customer at the heart of all contact. The ability to measure interaction compliance with accuracy becomes particularly important in an outsourced relationship. A simple and straightforward contracting model based on payment per compliant interaction is what works best in this scenario.

This approach demands maturity from both client and outsourced solution provider, and we’ve witnessed dramatic improvements in business performance based on our work with clients on exactly this payment model, without compromise.

South Africa: the emotional advantage

South Africa has grown its outsourcing business by 87% since 2010. The industry contributes 5.6bn Rand (£308m) to the country’s economy and employs over two hundred thousand people. This rapid growth has caused the world, certainly the outsourcing sector, to sit up and take notice. South Africa was recognised as the World’s Best Outsourcing Location by the National Outsourcing Association in 2012 and won the Offshore Destination of the Year award in 2013, awarded by the European Outsourcing Association (source).

So what gives South Africa its leading edge in offshore customer management capabilities? 370 thousand English speaking individuals enter the South African workforce every year. Well educated, empathetic and passionate, South Africa’s workforce presents a fluency in English that other offshore markets have failed to match. A strong cultural affinity is another advantage, along with an alignment in infrastructure since South Africa’s financial models are based on the UK’s.

Its competitive advantage doesn’t lie in time zone, cost and quality alone, but in the combination of all these critical factors with the added benefit of emotional intelligence. The South African workforce possesses a natural empathy and a high emotional quotient that is critical in customer contact management, when agents are called upon to manage their emotions and in turn, those of others as part of their job. Emotionally alert, educated, empathetic and aware of the necessities like compliance, this defines South Africa’s advantage in outsourcing.

In my next blog, I’ll discuss the true value of Webhelp’s ‘Compliant Interaction’ pricing model and how the South African operating environment provides the perfect marriage of two apparently opposing concepts - the hard and the soft.

Web chat: adding value

Today, 31% of organisations use web chat to support customer service and 30% use it to support sales (source). We know that web chat is a valuable customer communication channel. It has the highest levels of customer satisfaction- 73% compared to 61% for email and 44% for phone (source). However, as previously highlighted by Webhelp UK’s Solutions Director Dave Pattman, it shouldn’t be viewed as the quick and easy solution to all customer service challenges. The repercussions of improper implementation mustn't be ignored. 25% of shoppers resent intrusive chat invitations and they could end up feeling alienated (source), an outcome entirely counterproductive to optimising the customer experience.

Our client, one of UK’s leading entertainment providers, describes web chat as ‘bringing human beings into our digital channels’. This is essentially how web chat works best, in adding value without disruption. Through our work with pioneering web chat implementations we’ve identified 7 key steps in the implementation of a successful web chat strategy, as detailed in our white paper Time to Chat: Capturing the value of next generation web chat

  1. Be strategic - identify when a web chat invitation will add value
  2. Be pragmatic - evolve your web chat strategies based on testing, impact on customer journey and user behaviour
  3. Be realistic - understand the true cost of web chat by realistic agent goals without harming the customer experience
  4. Be personal - link next best action strategies to web chat to enable powerful personalisation capability
  5. Be focused - find your success criteria, evaluate success and continue to evolve
  6. Be digital first - stay in channel and define the role of web chat in omni-channel strategies
  7. Be smart - find the right agents, focus on empowering them with excellent product knowledge and optimise the digital customer journey

Web chat is breathing new life into customer experience innovation as well as right shoring strategies. Offshore markets are financially attractive, overcoming the long-standing challenge of accent and delivering new levels of cost efficiency. Web chat has the power to transform the way organisations and customers interact and I personally find the future very promising!


Big Data: Personalisation for Profit

McKinsey estimates that a retailer using big data to the full has the potential to increase its operating margin by more than 60%.

In previous blog posts and articles, we have discussed the three steps involved in maximising the advantage created by big data analytics in customer experience management. The first two - capturing customer data and predicting customer behaviour have already been highlighted. The next, and very important, step is to act upon customer data at every touch point, across all contact channels.

  • Work out, for example, the best upsell offer to present to a client. This can be done with some basic maths. The simple way is to multiply potential revenue by propensity to buy, again explained in this white paper.
  • Real time decision making. The ability to change course during the interaction based on new information from the customer. With the advantage of a decision making engine helping tailor offers to customers both online and off, the resulting customer experience is more personal and profitable.
  • Closing the loop - monitoring performance. Even the smartest decision making engines can predict behaviour based on behaviour patterns. Be aware of circumstances, any changes that may affect your customers’ behaviour. These changes could be internal - unhelpful information on your website, or external - a new compelling offer from a competitor.
  • Closing the loop - voice of the customer. The use of analytics allows us to hear the voice of the customer and respond to it. From sentiment to satisfaction, we have the information that helps us understand the nature of every interaction and whether or not they meet business as well as customer standards. The important aspect is to remember to act upon the information, improving every customer interaction that occurs.

Big data has the power to transform businesses, to bring together technology, customer management and marketing departments in creating personal, relevant and real-time customer relationships. To deliver on this promise, there also needs to be a company-wide commitment to use the intelligence big data analytics delivers to drive customer-focused change.


Glasgow’s language advantage

David has previously discussed the significance of language capability in operational consolidation strategies. Evaluating language needs based on demand and scalability helps organisations with an international customer base gain the first foothold towards delivering exceptional customer experience. A simple matrix depicting language requirements helps decide where optimum locations will be, as explained in this paper. Generally, you’re looking for a city with a large multinational population, a majority of which are young, driven fresh graduates ready to make an impression in professional services.

Glasgow, for example, has a population of just over half a million – around 11% of the Scottish total. Its three universities – Glasgow, Strathclyde and Caledonian – generate a wealth of language skills and attract foreign students keen to work in the BPO industry both during and after their studies. The city, largest in Scotland, has 190,000 foreign nationals in residence with valuable language skills and its universities create 3,200 language graduates a year.

Through our own operations in the heart of Glasgow, we have realised the city’s potential to become a leading language centre in global customer experience management for small to medium scale projects. The recent exposure gained as host city of the 2014 Commonwealth Games has brought Glasgow back into the global spotlight as a social, educational and business hub. And last but not least, we know how important people are in the customer experience industry, and it is no coincidence that People Make Glasgow!

Get in touch on LinkedIn if you want to discuss Glasgow’s global opportunity further.

The message, not the medium

The face of customer engagement is constantly changing. Although traditional forms of communication still play a predominant role in conversations between companies and their customers, they cannot be offered in isolation.

People now expect to be able to contact companies through multiple channels; switching between them at their convenience. And, while many businesses have developed new channels in response to customer demand, many still fall short of delivering effective customer support through them.

Our recent survey results found

  • Just 15% of the UK’s leading companies responded to tweets from customers
  • Nearly nine in ten (88%) of customers said they had been frustrated by inconsistent information across channels

More than anything, while companies are offering more and more customer communication channels, many are failing to take advantage of their potential by focusing too much on the medium, and not the message.

It’s no longer enough to just provide more channels, these channels have to offer an effortless stream of communication – the ‘omni-channel’. The end result is a smooth and more satisfying customer experience which, for companies, can convert into sales, repeat business and loyalty. Done well, it can also improve efficiency and deliver significant cost savings.

Operational consolidation and language capability

For many organisations, consolidating their contact centre operations is a first step towards transformation of their customer engagement capability. The objective of consolidation must be to achieve a consistent global operation that follows a set of common processes. It must share common technology, be managed by a united team to meet business-wide objectives and report its performance against those objectives in a comprehensive reporting structure. It must respond to rapidly changing customer demands.

For most multi-national organisations, language presents the most significant barrier to consolidation. Let’s imagine, for the moment, that you are a global business serving, let’s say, forty or more countries around the world with diverse language requirements. You want to consolidate and you want to do so in locations that will give you both longevity and cost efficiency. Where do you go?

By contracting with an OSP that has true international reach, it becomes possible to transfer much of the risk associated with consolidation. Outsourcing commits you to no physical infrastructure or employment contracts, you are free to move as global situations change and, in the context of a mature and strategic outsourcing partnership, you can expect your OSP to keep your location options open.

However agile your OSP is, sourcing multiple languages in only a handful of global locations is a considerable challenge. Creating a matrix of language scalability and requirement helps decide optimum locations and narrow down your OSP choice based on language capability in combination with other key factors like demand optimisation, omni-channel capability, and delivering actionable insight from customer data.

More on consolidation and language capability in this white paper.

Customer experience optimisation in insurance

Every industry battles its fair share of challenges while optimising their customers’ experiences – across channels and product/service portfolios. The insurance sector is one where customer churn is high and defecting to competition is becoming increasingly commonplace. The rise of online comparison services combined with the very nature of insurance policies puts customers at higher risk where most relationships are up for review and renewal every 12 months.

How can insurers ensure they are picked at the end of those 12 months, every time? The key lies in using an omni-channel approach to deliver clear, consistent and compelling messages that customers want to engage with, guiding them down a well-structured and easily navigable journey.

This sounds ideal in theory, but the truth is insurers find the concept difficult to operationalise. We’ve recently published an insight article on customer engagement in the insurance sector which explores customer motives during the review and deliberation process before shifting to another insurance provider. Studies find that customers who feel engaged by their insurers are less likely to defect and are willing to accept an 8-15% price differential before jumping ship. The overall feedback to this has been positive, with most industry professionals agreeing to the need for a strong engagement strategy in their customer experience approach. We’ve also heard back from senior industry professionals who still feel that price is the singular, most important factor in determining customer loyalty in the insurance sector, and that engagement is a good-to-have. We would argue that while price is certainly important, as mentioned in our article, engagement is more than a value-add. It is essential for several reasons:

  1. Understanding customer needs – communication that forms the basis of engagement also transfers valuable information back to the insurer and helps deliver the service customers expect.
  2. Predicting customer behaviour – regular engagement does more than build a 360 degree view of customer needs, it can also predict future customer behaviour through big data mining and analytics.
  3. Reducing operational cost – the ideal approach in engaging customers is via a cross-channel approach depending on their preference and need. We’ve published a white paper on the advantages of operationalising omni-channel strategies and here’s link to a quick guide if you’re interested in reading further.

The truth is, customer engagement is one of the pillars on which the insurance customer experience needs to be modelled and not an additional aspect of customer service. Insurers need to evolve and adapt their attitude towards customers. Price alone can no longer be thought of as the hook, line and sinker, customers need more from their insurers, they need engagement as part of a positive customer experience, each time every time.

Our latest white paper Insure Against Loss examines in detail the opportunities in the insurance sector. In this paper we will explore how delivering an exceptional customer experience can increase customer engagement levels and reduce customer churn.

What comes first, the big data or the experience?

David Turner Chief Executive Officer at Webhelp UK - Customer Experience Innovators

Over the last 30 years face-to-face interactions have reduced, new channels have emerged and the once simple task of knowing your customer and meeting their needs has become more difficult. Or has it? In this multi-channel age, do you know your customers better?

There’s been a lot of hype recently about big data. That hype might easily lead you to believe three things; firstly that big data is new, secondly that it’s the answer to any problem you might face and, lastly, that it is very complicated and difficult to apply.

‘Data’ isn’t new, but its escalation into ‘big data’, fuelled by the rise of mobile devices and social media, and the seemingly limitless wealth of information they generate, is substantively different. Many business people find themselves wondering where to start.

Our starting point is the customer and our premise is that big data can be used to target products and services precisely and deliver an exceptional, profitable customer experience across any channel.

When your goal is to deliver excellent customer experiences by showing customers that you know them and that you’re listening and responding consistently and enthusiastically to their needs, I believe there are three capabilities a company must develop:

  • First, they need to capture and analyse data to understand their customers.
  • Then they need to use data science techniques to spot changes in a customer’s behaviour or needs and decide what to do next.
  • Then they need to be able to design and deploy a consistent set of actions that will meet the customer’s needs over whichever interaction channel they choose.

Do you really know your customers better now or can you not see the customers for the data?

White paper: Big data analytics & the creation of profitable, personal customer relationships
Have a question or comment? Get in touch with David on LinkedIn