Using Live Customer Service Exclusively Is Costing You Millions

Using Live Customer Service Exclusively Is Costing You Millions

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Continuity businesses focused on customer retention or customer lifetime value (CLV) are making a BIG change.

Many of these businesses are testing automated systems in front of their live customer service agents. They now know that personalized, status-based automated interactions always make them more money, make their customers happier and always decrease complaints and chargebacks.

Personalized, Status-Based Automated Interactions Improve Profitability

In the course of testing over 19 million customers, 550 brands and 100 merchants and performing more than 2,300 unique customer service optimization tests involving all those customers, we’ve learned a hard and fast rule.

A customer service strategy that deploys split-testing within a status-based, personalized automated interactions first – but also allows for a live customer service option – always beats a live customer service option when comparing apples-to-apples offers.

That’s 2,300 tests with the same outcome.
2,300 – 0. Winning. Every. Time.

Automated interactions which are personalized and based on a customers’ status, will always do five things:

  • Increase revenue per customer
  • Increase customer satisfaction
  • Lower customer service costs
  • Lower refunds
  • Lower chargebacks

For typical health and beauty continuity customers, we see a CLV lift of over $6 per average customer net of the RevGuard cost. Combine that with a typical 23% decrease in chargebacks, and a 31.2% decrease in refunds and you quickly realize how valuable personalized, status-based automated interactions can be, compared to live customer service representative (CSR) interactions.

Why Some Automated Interactions Fail

When you see criticism of automated interaction systems, it usually stems from poor design.

The primary reason for poor performance is that the interactions are:

  • too lengthy – too many options and a long path
  • not personalized – options that are not applicable to the caller’s intent
  • no escape – intentionally difficult to reach a live agent when desired

Clunky systems, with too many choices, can be extremely frustrating for customers. Have you ever been frustrated waiting five minutes on hold only to be re-pitched on a product or service you no longer want – by a live customer service representative (CSR)?

75%+ of customers choose our automated environment over speaking with a live customer service agent.

Statistically, more than 75% of customers choose our automated environment (IVR, Web, Email) over speaking with a live CSR, when they are given the choice at the beginning of their customer service interaction.

Why 75% of Customers Choose Our System Over a Live CSR

To understand this caller behavior, it’s important to understand the psychology of your customers when they’re calling to cancel or to request a refund.

Most customers have a feeling of anxiety and have their defenses up because they know the agent is going to try and talk them out of canceling and might even try and sell them something. Some fear the call might take 15-30 minutes if they need to speak with multiple people to accomplish their cancellation.

Personalized, automated customer interaction systems can reduce anxiety in customers when dealing with customer service issues.

Within an automated environment, the feeling of anxiousness is reduced, and the customer is pleased to know they will be able to complete their action quickly and on their own terms.  Creating this environment significantly increases the likelihood of a save sale acceptance or other ideal outcome for the advertiser.

What is Personalized, Status-based Automation and How Does It Work?

The key to a personalized, status-based automated system is integration into a business customer’s customer relationship management (CRM) platform and access to a customer’s characteristics (not credit card), info and status.

Typically, when a customer calls, emails or web interacts with a personalized, status-based system, the system queries the customer record – automatically, based on inbound phone number in the case of IVR – and their status and immediately personalize the message:

“Hello, John Smith”

This is Personalized and confirms to the customer that we know exactly who he is.  The confirmation happens in less than 1 ½ seconds.

The system then affirms their status:

“You signed up for our free trial on May 1, 2016”

And then provides them with options they can choose, directly related to their status.

“If you want to cancel your trial, press 1”

After “1” is pressed…

“You have the option to keep the trial product and not return it for 50% off the normal billing price. Press 1 if you want to do that.”

This is just one of several tests we run during trial periods for customers.

Customer presses 1.

“Thank you!  A confirmation email is being sent to you now.  Goodbye.”

Total time is typically less than 35 seconds.  About 1/3rd of the typical hold time for live customer service and about 1/8th the time of a typical live customer service call.  In total, about 1/10th the time of a live CSR call.

The Benefits of Personalized, Status-based Interactions Over Live Customer Service

Happy customers. Quick and efficient handling. One of the biggest complaints we hear regarding live call center interactions is the wait time. An automated system can cut that time by 90% (hold time plus live call time), leading to a much more pleasant customer service experience.

But more importantly, more and more people don’t want to talk to a human – as our tests show.

Most customers want to quickly do self-service on their own and move on to the next thing in their life.

More Money. When customers contact a continuity merchant and want to cancel they have primary motivation (cancellation) and secondary motivation (request a refund).

If you satisfy the primary motivation quickly and conveniently, they often no longer feel the impetus for the secondary motivation.

That is why refunds go down but chargebacks also go down, typically 23%! The holy grail for continuity merchants: less refunds and less chargebacks!

Even More Money. When customers get a fast, personalized, status-based interaction they are more likely to select upsell, cross-sell or save options.

Live Customer Service Has a Role, But It’s at The Back of The Line

Will some customers want live customer service? Absolutely.

Some people still use Blackberries or landlines, but it’s a shrinking demographic.

As consumers’ technical aptitude rises and the desire for self service speed becomes more of an expectation, live customer service or old-style, multiple-button, long navigation IVR’s are needed less and less.

As Forrester research says, “Customers (end users) … are increasingly turning to self-service as the easiest path to service resolution.”

Of course, regardless of the process you use – having high quality customer service agents is extremely important for good customer experiences.

Automated Only? No! A Customer Should Always Have a Choice to Speak with a Live CSR

There are companies that do not allow live CSR interactions – as a general rule, we advise strongly against this.

Live CSR interactions can be an important backstop for some customers and, as mentioned earlier, an important first option for about 25% of customers.

Going 100% automated without an option to “zero” out to live customer service -which also includes prominent displaying and usage of 800 numbers on web, email and chat channels –  can lead to a disastrous customer service experience.

We’ve found that the right mix is a combination where the personalized, status-based interaction happens first – but customers can hit “0” if they prefer to talk to live agents at any time.

This allows for customers with customer service exceptions, or demographic preferences – older customers i.e.; 70+, prefer live agents more than younger customers –  to talk to live CSR’s.

But be wise about this.  Track why they are “zeroing out” and then segment that group of customers with a fast, status-based option in the automated system to make their experience more targeted and self-service on the front end.

Call Centers Are Collapsing as a % of Customer Service Interactions

Personalized, status-based communication with IVR, web, email, chat, text and social media is the major trend in customer service.

Why?

Because a growing segment of customers prefer it and don’t have the time or inclination to park on their phone in a hold queue or with a live customer service agent for the next 10 minutes of their life.

Some outsourcing customer call centers tell their clients that the clients’ customers only want to talk to live agents.

As a CEO of a large call center once told me, “We are in the warm body business.  We sell warm bodies.  Of course we’re going to tell customers they only need warm bodies!”

In the same way it would be foolish to have 100% automation with no live CSR option, it is equally foolish – and expensive in the form of higher chargebacks, refunds and lower revenues – to use customer service exclusively.

Simple Mathematics

A merchant signing up 1,000 merchants a day, at $6/customer revenue lost, winds up losing nearly $2.2 million in revenue per year by using a “just live customer service” strategy.

$2.2 million lost – just by the numbers. Combine that with poor customer service interactions leading to bad reviews and poor word-of-mouth and you’re looking at lower profit and higher costs to acquire new customers.

At RevGuard, we test every single interaction.

We compare the choices customers make, when using our personalized, automated automated system, vs our clients’ live CSR, and our automated solution comes out more profitable – 100% of the time.

Found this interesting? Contact us for a guided tour and a free assessment of your specific customer service operations. We will show you the areas within your business where RevGuard will have the greatest impact in CLV and chargebacks.Let us show you the financial impact of our technology by testing side by side your call center – all with no financial obligation or a long-term commitment.

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