© TAP August 8, 2006 The Impact of Self-Service on Customer Loyalty SpeechTEK by John Goodman, Vice Chairman

© TARP Agenda  Key Questions:  What are the key benefits of customer self-serve?  What are the downsides?  How do you decide which transactions to allocate to self serve  How do you measure the impact  Who is TARP?  Customer behavior, expectations, and preferences  Quantifying the impact  Key actions to make voice driven self-service effective

© TARP About TARP  Founded in 1971—35 years delivering dramatic impact  USA’s customer service (instigated 800#s)  Malcolm Baldrige (influence criteria; TARP has a Senior/Alumni examiner on staff )  Assisted 5 Baldrige Winners and 43 Fortune 100 Companies  Initiated concept of “word of mouth” (TARP/Coca-Cola 1978 Study) and “word of mouse” (eCare and Click & Mortar studies 1999)  Offices in Wash., D.C. and London  Optimization of cross-channel experience  Industry leader in customer experience measurement and management  Deliver insightful and actionable financial impact and tracking

© TARP The Key Issue  YOU CAN’T SAVE YOURSELF INTO PROSPERITY!  ONLY SAVE MONEY WHEN YOU CAN’T MAKE MORE MONEY!

© TARP Benefits of Self-Service  Lower cost due to no need for personal interaction  Broader hours of support at low cost  Is attractive to certain segments (e.g. antisocial “New Yorkers”)  Does provide opportunity to position human support as a higher priced option  Clearer characterization of customer perspective and desires if you offer self-logging of issues and desired response time

© TARP Why Transaction Surveys Don’t Tell The Whole Story And Can Actually Mislead Too Specific Too General Relationship survey Issue-based survey Transactions Survey “My most serious problem is…” “I would like you to….” Could you modify the policy by doing x…? “You delighted me by breaking the rules…”

© TARP Identifying Issues Inappropriate for Self Service Differentiate between basic transactions and more complex issues Identifies risk and opportunity associated with issue by type of customer Quantifies non- complaint rate Identify opportunities to delight customers

© TARP Limitations of Self-Service  Precludes leveraging transaction  Limited opportunity to “connect” with customer  Limited opportunity to cross-sell or up sell  Limited opportunity to delight  Little opportunity to explain policies  Little opportunity to gather additional data  Pre-supposes that customer will decide when to get service – misses idea of proactive communication  Harder to understand motivation for customer actions

© TARP Key is to segment transactions and customers  Leverage opportunities  Delight, educate, up-sell using empowered reps  Spend time with those segments that want it  Spend time with influencers  Efficiently handle those transactions that have no upside  Simple transactions  Segments that don’t want a social experience  Segments with no future payoff

© TARP Barriers to Using the Web and Voice Self Service  One unsuccessful attempt confirms all of the above  Not as personal, but human-like interaction  Implied actions  Measure whether tried website and why left website  Better communication on what voice or Web process can do  Rotating education on no more than two items at a time  Education while waiting, even for 15 seconds “I won’t be able to do what I want to do. “I won’t be able to find the answer I need easily.” “If I have a problem, I’ll have to call a live person anyway.”

© TARP Customer Behaviors Impacting The Bottom Line

© TARP Key Factors Driving Satisfaction  No Unpleasant Surprises  If Trouble Encountered  Accessibility☺  Taking Ownership☺  Apology  Clear Explanation☺ – critical: based on customer current perspective  Timeliness☺  Courtesy  Keeping Promises☺  Handle on First Contact

© TARP Causes of Customer Dissatisfaction - Products and services don’t meet expectations -Marketing miscommunication - System fails - Units fail to coordinate - Fails to follow policy The majority of dissatisfaction is not caused by employee errors or attitude. Customer 20%-30% Company 40%-60% Employee 20% - Wrong expectations - Customer error -Fails to follow policy -Attitude - Products and services don’t meet expectations - Marketing miscommunication - Broken processes

© TARP Personal Interaction has 20 Times More Impact than Advertising and Sponsorships (Retail Finance Customers) How many of those told took action on your referral? 1 out of 4 !!!

© TARP Impact of Delightful Experience on Top-Box Loyalty by Type of Action

© TARP Problems Raise Sensitivity to Price % Dissatisfied with price or fees Percent of customers dissatisfied with price rises with number of problems.

© TARP Calculating The Impact of Customer Experience on Revenue

© TARP Impact of Having a Problem With Voice System or Dissatisfaction With Overall Transaction  Voice system did not understand me – 14-48% impact on willingness to recommend  Hitting voic when you have an immediate issue causes 17% damage to loyalty  Average problem has 20% impact on loyalty or willingness to recommend  Complaint rates about technology are low but often a cause of escalation

© TARP Why Do We Care? Response Impacts Loyalty Satisfaction and Loyalty drops significantly if the customer is not very satisfied with the response received Source: TARP’s 2005 e-care study

© TARP = = = = xxx = 3,500 15,313 30,625 78, ,188 Total Customers At Risk 350,000 Customers with Problems 25% Dissatisfied 70% Not Repurchasing 45% Not Repurchasing 40% Satisfied 5% Not Repurchasing 50% Do Not Complain 50% Complain 35% Mollified 25% Not Repurchasing Market Opportunity Calculation of Revenue Lost from Customers with Problems

© TARP Why Do We Care? Response Impacts Word of Mouth/Mouse Source: TARP’s 2005 e-care study

© TARP Preferred Contact Method Preferred contact methodWebsite Telephone- Customer Service Representative Telephone- Automated Response SystemIn person General company information64%18%9%1% To ask questions about a product/service/promotion27%38%25%1%4% To give a compliment on product/service23%49%12%0%4% To complain/comment about a product service19%44%26%0%4% Check status or make changes to account46%22%16%1%3% Technical Support23%24%37%1%3% Purchase product/service33%16%21%1%18% Start/activate service/account33%15%26%1%10% Stop/deactivate service account33%16%28%1%8% Which communications method(s) do you prefer when contacting us for each of the following reasons? (from 7442 web users) Source: TARP’s 2005 e-care study

© TARP Recommendations

© TARP Support Phone Matrix Print Key Word Options Where You Print the Phone Number

© TARP Measure Effectiveness by Type of Transaction by Channel Transaction which is biggest opportunity for improvement Misuse of resources to intensively measure this transaction

© TARP Be proactive, flexible, and human-like  Identify transactions which can be leveraged and encourage contact rather than self-service  Identify customers and customer segments that want self- service and DON’T want self service  Always provide options!  Use simple English and test with idiots  Always provide immediate link to live rep using multiple channels  Humanize self-service as much as possible  Measure the impact by issue and channel to verify

© TARP Summary  DO IT RIGHT OR DON’T DO IT!  FOR PAPERS AND ARTICLES:  or

© TARP