Hear Tony Medrano’s Benchmark CallTalk Podcast Recording

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We had a great time speaking with host Bruce Belfiore right before the holidays about how to turn your contact center into a profit center. Hear the episode by clicking on the link below.

BenchmarkPortal’s CallTalk™

Featuring Tony Medrano, CEO of RapportBoost Aired 12/21/18

With host Bruce Belfiore [email protected]

Welcome back to CallTalk everyone… 

Bruce:

Contact centers are under increasing pressure to become profit centers and leverage new channels of engaging customers. Live chat is growing in use–especially among millennial customers–and chat communications can be optimized using machine learning in order to improve engagement, reduce cost and grow sales.

…And that’s why we wanted to talk more about “Turning Your Contact Center into a Profit Center by Leveraging Chat,” and we have brought in an expert on the topic for you, Tony Medrano, CEO of RapportBoost.  Welcome to the show, Tony.

Tony:

Thanks for having me, Bruce. I’ve seen and helped a lot of contact centers transition to profit centers with chat, and I’m excited to be here to discuss in more detail.

Bruce:

In general, there are two ways to increase profitably for a contact center, either increase sales or cut costs. Do you have a preference?

Tony:

Absolutely. I prefer to focus first on sales opportunities because there is often low hanging fruit, and because sales is more fun.

Believe it or not, revenue growth is often under-utilized as a potential driver of contact center profitability. Some contact center leaders believe that sales opportunities need to be sacrificed in order to provide the best customer experience.

However, in many circumstances, sales opportunities do not need to be sacrificed. Generally, customers who are listened to and are guided through a more efficient journey are more likely to buy. Leaders—using technology–can uncover sales opportunities without having their agents be “sales-y.” This can be a big lever.

In working with multiple brands and types of contact centers, our data science team has discovered that the outcomes of a very large percentage of chat conversations can be changed. In short, sales opportunities exist in normal conversations, but they need to be identified and acted upon. This is the crux of “Conversational Commerce,” and it applies to chat as well as voice. Machine learning can be used to help agents identify and act upon many of these otherwise overlooked opportunities to grow revenue.

Specifically, better chat conversations can drive changes in order size 55% of the time, and change a “no-sale” to a “sale” 64% of the time. That can deliver hundreds of thousands of dollars per year in increased sales — PER AGENT.

Of course, chat can also be leveraged to drive down contact center costs, and we also discuss how to reduce costs with chat. But, there are big easy sales opportunities in every contact center.

Bruce:

What is driving an increase in innovation around chat? What trends are you seeing in the market, Tony?

Tony:

Customer preferences, cost, technology, and agent training are driving a lot of recent chat innovation.

In a 2018 Customer Care report, McKinsey highlighted these four drivers and came to the conclusion that human agents will be more important than ever to contact centers.

Let me briefly discuss the four drivers surfaced by McKinsey:

  1. Changing customer preferences:
    1. The internet has made it easier for customers to defect and quickly choose another brand. They are less loyal and more impatient than ever. Some demographic groups (like millennials) prefer chat as a medium of communication. Contact centers need to evolve to meet customers where the customers want to be, or some percentage of those customers will go elsewhere. In a hyper-competitive market, it’s risky to ignore growing groups of customers.
    2. Some use-cases naturally favor certain types of engagement. For example, during complex inquiries, 38% of customers prefer to be connected to a live agent right away compared to only 16% that prefer live agents during routine inquiries. Often times, consumers engage with a brand while they are at work, or in a quiet environment–like a library or office–where a phone call is difficult. Sometimes, synchronicity is paramount—a consumer prefers a real-time response vs. waiting a day for an email or return call.
    3. For most brands, these trends have increased the importance of responding right away to customer and prospective customer inquiries or risk losing them to competitors. A sale may be missed or won based on response time.
  2. New opportunities for cost reduction
    1. Generally, brands can service customers with live chat for only about 40% of the cost of servicing them by phone.
    2. Deflecting more calls to chat can be an effective way to reduce costs. IF chat is done right. However, doing chat wrong can increase costs, frustrate customers, and destroy brand equity.
    3. Contact center agents can usually handle 2-4 chats concurrently, and organizations can better manage peaks in demand with chat and other digital channels than they can by phone.
  3. Technology provides leverage
    1. Technology can be leveraged to help contact center leaders better understand chat conversations and make decisions based on both their brand guidelines and what drives successful chat outcomes like sales, renewals, upsells, and customer satisfaction.
  4. Agent Training is becoming even more critical
    1. The skills of contact center agents need to be updated constantly. New technologies and communication channels are always being incorporated. Agent turnover, onboarding, training, and re-training of agents are where contact center leaders spend much of their valuable time.
    2. I’ve seen agents worried about being replaced by technology, while others welcome the assistance that “augmented intelligence” can provide.
    3. Jenny Craig is one such brand that leveraged “augmented intelligence” to drive contact center profitability by helping their agents have better conversations. This led to not only to a 67% Year-over-Year increase in contact center revenue, but happier agents and happier customers. Who doesn’t love a great, efficient conversation!

Bruce:

What other changes in customer preferences are creating opportunities for contact center innovation and profitability?

Tony:

Customers expect faster responses and are less loyal to brands. Customers expect faster response times than ever in email and MUCH faster in live chat.

A 2018 Forrester report states that email is still the most common channel for customer support. But, in a related survey, 41% of customers preferred live chat compared to 32% who preferred telephone, and 23% who preferred email.

The average first response time for chat is about 47 seconds, but it’s hours for email. It’s important to understand how customer expectations are different in different channels.

Instead of viewing consumer impatience and decreasing brand loyalty as obstacles, innovative contact center leaders see opportunities. Specifically, if customers can be quickly engaged in an efficient conversation by having their needs addressed while an agent is building trust, they are more likely to buy.

Fast, skilled agents can steal customers from the competition. Slow, less skilled ones lose even faster.

Bruce:

Why is chat different than voice or email as a channel of communication with customers and why should contact centers use different metrics for each channel?

Tony:

Profit-focused contact centers are updating their metrics in 2 key areas:

  1. Increasing focus on “value” metrics like “customer lifetime value” or “renewal rate” instead of generic “time” metrics like “handle time.”
    1. In order to have agents aligned with senior leadership, agents should be measured by what matters to the business. Some call center metrics are outdated and designed around analog telephone conversations and staffing.
  2. Match the metrics with the channel.
    1. As mentioned, customer expectations for response time are drastically different in chat than in email. Measure according to customer expectations in the channel and avoid one size fits all metrics. These often mask successes and failures. For example, a subscription software company that came to us for help because they were losing customers, realized that their goal of a 15 minute response time applied to both chat and email messages, instead of training agents to respond within seconds to a chat message while allowing them a few hours to respond to email messages.
    2. One of the biggest—and easiest to correct—mistakes we see with contact centers new to chat is that they have the same agent take calls, take chats and respond to emails. Chat has its own cadence—immediate. Across the board, our clients see huge gains when they dedicate a group of agents to chat.
    3. Chat also has its own language. This language is very different from voice or email conversations. Chat is full of abbreviations and informality and lacks the tone and volume present in voice communications. Chat messages should be shorter than email messages and encourage a back-and-forth conversation vs. paragraphs of text. Remember, the customer is first, and they chose to engage with you via chat for a reason. Listen to their preferences and adapt.
    4. One of the benefits of chat conversations is that they can be mined for trends and perfected, especially when pre-written templates can be used. Contact centers using chat can also perfect their “conversational metrics” and see immediate gains in sales, renewals and upsells almost overnight.

Bruce:

What do you mean by “perfect their conversational metrics” and why is this important?

Tony:

Certain elements of chat conversations are more important than others. Human leadership often guesses wrong because chat is new.

For example, by analyzing the chat conversations of Jenny Craig, we found that the level of “formality” was a huge driver of chat sales—which was a subscription to a meal and diet plan.

Jenny Craig’s agents believed that being less formal in chat would be a good way to engage millennials. Makes sense, right? Should they go with their gut?

On the other hand, Jenny Craig’s leadership was skeptical and conservative. They were unsure if using a bunch of LOL’s, contractions and smiley-faces was right for their 40-year-old brand.

We used machine learning to mine the unstructured data in Jenny Craig’s chat conversations and predict the optimal level of formality for them. Each brand is VERY different. And chat is very different from email or voice.

In the case of Jenny Craig, it turned out that agents’ gut instincts were wrong. Jenny Craig’s chat conversations were formal, AND machine learning determined that they would close more sales if they were even more formal.

Over 1,000 attributes of Jenny Craig’s chat conversations were mined. Attributes like empathy, persuasion, reassurance, and timing were put together in a unique “chat conversation recipe” for their brand.

Jenny Craig implemented this recipe, focused on their “conversational metrics” chat sales shot up overnight.

Bruce:

It sounds like there is a science to chat conversations?

Tony:

Absolutely. Conversations matter. Elements of digital conversations can be dissected, analyzed and optimized. Think of a chat conversation like a landing page or an email message, but real-time and between 2 parties. The customer journey through a chat conversation should be mapped and optimized, objectively and quantitively.

Then agents can be trained using the objective, scientific results of the analysis. This means contact centers can better prioritize training and match their efforts on what drives chat outcomes. Time is precious. Focus on what matters, and what matters is different for each brand.

What is the right level of empathy?

What questions drive the biggest orders?

What product description drives the most renewals?

How informal or verbose should agents be?

What matters most?

Everyone has an opinion. But, machine learning can uncover the precise answer and help agents. Agents also enjoy objective coaching a lot more than coaching based on management’s opinions.

Understanding the science behind your brand’s conversations with customers helps agents build trust and be more human by listening better.

We have found that brands that look at conversations scientifically have happier agents, happier customers, and drive huge increases in profitability.

Bruce:

How is “agent training” a key driver of contact center performance?

Tony:

Once a brand determines what is driving successful outcomes of its chat conversations, agents should be trained on these conversational metrics.

Each brand is different, and each contact center trains their agents differently. Jenny Craig discovered 10 main drivers of chat success. (like formality, empathy, etc.)

Agents were trained to “chat within the guidelines,” and message templates were updated to reflect the scientific recommendations.

Agents are your brand ambassadors, and helping them do their jobs better makes them happier. Engaged agents drive contact center performance across the board. As the 2018 McKinsey research concluded: “large investments will be required to improve the skills of customer care workers” and “high end customized experiences will require companies to innovate.”

Humans will be even more important than ever to contact center operations, AND human-to-human interactions can be augmented with technology.

Bruce:

How does the use of augmented intelligence transform contact center culture?

Tony:

Great question! People drive culture and helping people become more successful at their jobs drives employee satisfaction.

The best contact center cultures we’ve seen are those that involve their agents in the business outcomes. They cheerlead successful chats and agent performance by displaying the “conversational metrics” and openly stack rank agents to create fun competition. This helps even the worst performers improve dramatically.

Terms like “augmented intelligence” can seem daunting, but here it is used to help the agents engage more deeply with customers.

Bruce:

You mentioned earlier that consumers power is increasing; what do consumers think of chatbots?

Tony:

It depends on the situation. Chatbots are great in certain situations and terrible in others.

In many contact centers, agents are burdened with simple, repetitive tasks, like resetting passwords, checking balances and responding to basic questions. This takes time and hurts both agent job satisfaction and customer satisfaction. This is a great situation for a chatbot.

A chatbot is a computer program that attempts to simulate human conversation. Chatbots can be auditory or text-based, with text-based chatbots becoming increasingly popular for companies with web-based sales and support.

The customer service chatbot is a unique subset of the chatbot ecosystem. Its purpose is not to sound human, or make small talk— rather, it is to lead customers to knowledge efficiently. Customer service chatbots do not need to learn how to actually chat with a sophisticated level of comprehension; they just need to make the customer inquiry process more efficient.

Using chatbots in a sales situation is different. More trust is required, and the goal is mutual agreement; not simple knowledge discovery. It’s difficult for a human customer to build rapport and trust with a chatbot in a sales scenario.

Also, customer channel preferences shift during more complex inquiries or when there is more money at stake. Complex inquiries and sales opportunities should be quickly and efficiently routed to a live agent.

The levels of empathy, humor and situational awareness required to educate, listen and successfully sell a high-value service or product requires humans to lead the conversation.

However, human agents can be augmented with technology. Profits soar, and everyone wins: agents, management and most importantly, customers.

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David Oates

About David Oates

David Oates is a 20-year marketing and public relations veteran who holds extensive experience in developing as well as executing successful and measurable programs for a wide range of agency, high tech, corporate and government organizations. He is an accredited public relations (APR) expert affiliated with the Public Relations Society of America, and serves as the Chairman of the Board of Advisors for Operation Homefront, California as well as on the Board of Directors for Rotary Club of San Diego. David has worked with Tony since 2001 in numerous capacities such as a non profit Board supporting veterans. He received his MBA from San Diego State University’s Executive Program in 2004 and his bachelors of arts from the University of Maryland in 1991. David was named among the 2009 “40 under 40” list of top professionals by the San Diego Metropolitan.