Feature
In my previous article, I began with a look at the “Virtual Community”: Companies have begun to extend customer service functions into the external online communities and forums that they sponsor. However, “Community” isn’t just one destination…an overall Virtual Community can come into play for providing customer service “anywhere, anytime.” In this article, I explore why the customer experience should be the real focus of customer service in the Virtual Community, and the benefits for customers and companies that arise from customer service communities.
Focusing on the Customer Experience: A Competitive Advantage
The number one imperative for working with Community venues for customer service activities is to understand that the Customer Experience with the company is the real focus. Most customer service initiatives and practices have been pointed toward increasing agent and process efficiencies, while reducing costs, which benefits the company in the short term while offering limited benefits to customers. Changing the imperative to the Customer Experience does much more to lead companies to real customer relationship management and retention, as well as nurturing customer success, in a more scalable fashion.
The emerging view is to create a customer experience strategy focused on the business success of the customer. By being a vehicle for the customer’s success, companies expect to:
- Extend the life of the customer;
- Develop a proactive advocate for their products and services;
- Extract usable value from the customer’s experience that can be repurposed;
- Reduce transactional support costs by developing more educated users;
- Increase the value of the customer through additional product and service revenue.
There is considerable evidence pointing to the success of this approach. A study by Booz Allen found that customer-centric organizations outperformed their industry peers 2:1 in revenue growth and generated profit margins five to 10 percent above their competitors. However, to deliver these results, organizations have to walk their talk. If a company wants to evolve from pushing product to delivering customer advocacy-level value, a shift in thinking and attitude is required.
The Customer Experience is only as good as what a company offers for its customer focus: customer-centric processes, reliable quality products, partnerships with customers for customer benefit. The entire company is responsible for positive customer experiences. The entire company can only provide effective customer focus if the internal company culture maps directly to the success and satisfaction of its customers. Again, the Virtual Community that benefits customers transcends delineations internal and external to the company. A major challenge for companies is to provide a consistent customer experience throughout the Virtual Community.
Bi-Directional Value of the Virtual Community
The Virtual Community of interactions with customers provides many ways to enhance and grow positive customer experiences on a continuous basis. These interactions can be quite subtle and frequently can’t be easily measured using metrics that tie to company goals. For example, through the Virtual Community, new customer advocates arise bringing influence from their individual social networks. Tracking such influence is complex and, at times, elusive. However, significant new business for the company may result.
Dion Hinchcliffe writes extensively on the “Social Business” examining both technology and human implications, as in Social Business and Next-Generation CIOs - The Business Models:
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Customer engagement on a whole new level. Leading enterprises are now finding that holding customers at arm’s length out of concern for cost is no longer necessary. Better customer service, higher satisfaction levels, and better retention are possible by employing techniques and platforms such as social CRM, online communities, and social media marketing that are especially high value. For example, financial services leader Intuit has been offering co-created customer support via Live Community to millions of customers for years, driving down costs and supporting customers much better than traditional non-social methods.
An article on DestinationCRM details the benefits identified by Dr. Natalie Petouhoff in her Forrester study, The ROI of Customer Service Communities:
While Petouhoff says she expected cost savings, the rise in product ideation was a surprise. In the study, she writes that customer service departments are rarely responsible for product ideation, but the nature of leaving commentary in the online community lends itself well to the process -- and can lead to other benefits.
“You wouldn't think ‘customer service’ when we went down this path," she says. "But because the ideas are in the community, interdepartmental collaboration can take place with them. As a result, customer service has an opportunity to step up to the plate and be an extremely valuable executive player."
In the study, Petouhoff notes several benefits that positively impact company customer service operations. Customers share the “win” from these benefits:
- increase in first-contact resolution
- boost in relevant Web-site content
Two more benefits listed in the Petouhoff study stand out as very important for customers: the already-mentioned new idea co-creation, and this one: improved customer retention and customer lifetime value. If customers are sticking around, it usually means that they are finding what they need and that they are satisfied well enough to continue dealing with the company. It likely means that customer frustrations have been reduced and confidence in the company has grown. Taking improved customer relationships one step further, communities for customer service help customers become more successful with the company’s products and services.
Conclusion
Often in the Virtual Community, problems, questions and requests are resolved faster and more accurately for the customer, by fellow customers, company employees, SMEs and other community participants. When active on the Virtual Community, companies should be attuned to what each customer needs, and then take the appropriate action, which might be proactive, responsive or passive. Many times listening to and understanding the customer is the best “action.” The next step is to translate that understanding into a significant component of the strategy and direction of the company to further meet customer needs and sustain competitiveness.
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