From digital lifestyle to digital lifeblood:The increasing value of technology that worksKurt M. Hogan

Communications & High Tech

The growing market for improving technology interactions with your customers

The dimensions of this potential market opportunity are growing rapidly. Every day, the tech user community is becoming more dependent on digital devices, not just as the foundation of their lifestyles as consumers, but increasingly, as a key element to maintaining their businesses and the productivity of their employees. As technology-dependent businesses proliferate around the globe, users’ personal needs (e.g., entertainment and home management) have become interwoven with their business needs (e.g., their communications, operational and emergency requirements).

Usage of intelligent computing devices such as the personal computer (PC) and smartphone has become part of the fabric of our daily lives, both personally and

Until now, the complexity of this marketplace need has deterred many providers from fully addressing it—including the providers who depend on technology for their own customer interactions. Several considerations can help providers transcend these challenges and take advantage of the opportunity.

professionally. Accenture research shows, for example, that Web-enabled mobile phone ownership has more than tripled in two years, and mobile phones have replaced computers as consumers’ most important technology. Also, as Figure 1 indicates, consumers are engaged in an increasingly wide range of technology-based activities.1

Meanwhile, with the seemingly daily improvement and proliferation of new devices and new ways to interact with technology, the digital ecosystem is rapidly evolving. For example, smartphones have broken into the top five most frequently used technologies, as shown in Figure 2.2

Consumers realize this, which may explain some recent Accenture market research data which brings into question a presumption at the heart of the traditional business model for service providers and electronics companies: that companies must subsidize in-home service—beginning with configuration, set-up and

1 The Increasing Value of Technology that Works

As consumers become ever more reliant on technology as a means to live, work and play, they increasingly need that technology to work well, and to work when they need it to work.

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Figure 1: Which of the following activities do you do in a typical week? How much time do you spend?

Figure 2: Most frequently used technologies

management—simply as a cost of doing business. Instead, Accenture’s research suggests that consumers, at “the right time,” are willing to pay to have “the right provider” remove some of the technological complexity of the digital home from their lives.

Even dating back to 2006, consumers in an Accenture Digital Home Survey indicated their willingness to pay for premium services including items like in-home installation and remote monitoring services. Since then, while the market has yet to fully mature, consumer need has only expanded. One unavoidable inference is that the opportunity to provide these technology services hinges upon offering services to customers on their terms, on their schedule and in a way that is natural for the provider.

Potential opportunity for an array of providers

Given the wide array of different technologies and providers currently interacting with customers today, there are many sectors from which new technology services could emerge. Among those best positioned today are providers who have existing, trusted interactions and depend on those interactions as a way to communicate with customers. Topping the list of providers who fit that description are service providers and OEMs (not counting retailers, who already aggressively position these types of services at point of sale). Whether it be the broadband provider whose users rely upon the PC as a gateway to its service, or the OEM who provides warranty supports for a device in the home, both have periodic, trusted touchpoints with the customer today, and both have motivations to improve the customer’s experience, including:

Technology service should be provided in a way that is convenient for the end user.

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• Establishingabasisforwhichto upsell and cross-sell;

• Improvingcustomersatisfaction; and

• Reducingcustomerturnover, or churn.

Reinforcingtheriskofignoringthe role of technology services, an Accenture 2009 customer satisfaction study shows that approximately two-thirds of consumers switched one or more providers during the past year. Globally, the study found that customer service, not price, was the number-one reason for switching

providers.3 The state of the underlying technology no doubt plays a role in the customer perception of service quality; and when the quality is not what customers expect, they have shown an inclination to vote with their feet.

Challenges to improving and monetizing technology services

There is no doubt that providing and monetizing new technology services—in a way that meets the expectations of today’s growing market of intensive technology users—is a complicated proposal. It involves dealing with complexities in several discrete but related areas: the marketplace environment, the breadth of services required, highly demanding customer expectations, and a lack of definition from customers regarding who they expect to provide the service.

A complex marketplace environment

Tech users’ technology landscape is becoming ever more complex, with a large number of options at their disposal. As consumer electronics players emerge and innovate, leading providers will continually compete by introducing technologies that range from fully open systems to fully proprietary systems and every flavor in between. Today, very popular vertically integrated devices within a product family co-exist with standalone technologies, with the user left to sort out how they work together. In the absence of collective standardization, consumers are making individual decisions regarding the technologies that deliver value for their needs. This trend is resulting in highly differentiated, ever-evolving versions of a digital “home” or “ecosystem,” with evolving permutations. We can expect this trend to continue, with no single “silver bullet” support technology to “rule them all.” Standalone support technology or agent training becomes dated as soon as the next new device is deployed. In short, serving the needs of the “digital ecosystem” really means interacting effectively with thousands of different

technical configurations – each of which is changing frequently.

Lack of clarity regarding market positioning

In surveys, technology users have pointed first to two categories of company—electronics providers and communications services providers—as places where they would initially look for help with their technology issues. Yet while service providers are well positioned from the standpoint of experience, it is not yet clear where consumers will ultimately turn. Likely, they will instead gravitate to a supplier who is perceived as most efficiently meeting their needs—a standard that today appears to favor retailers. The lack of one clear and consistent preference in this space, however, represents an opportunity for new services to be introduced to tech users by other types of providers.

One thing is clear: Tech users know they want to work with someone they trust; so quality and the ability to work on the terms of the user are critical factors that will drive the ultimate leaders in this space.

The breadth of services required

There is also a growing recognition that the increasing complexity of technology ecosystems, coupled with consumers’ demands for broad-based problem-solving, will lead to added costs for the provider, and could potentially lead to added dissatisfaction for the customer—unless it is handled reliably. This breadth of technology requirements poses challenges for any given enterprise seeking to address this market.

In fact, due to the rapid rate at which new applications are being developed and new devices deployed, it is very difficult for most enterprises to maintain the comprehensive technology platform and network of professionals that would be required to support such a service capability in a cost-effective manner. In simple point

of fact, developing and maintaining such a technology platform and a workforce of skilled technologists is not the core competency of most enterprises. As a result, many have looked to outsourcing as an attractive option, but have struggled with verifying that an outsourced solution is a cohesive part of existing operational touchpoints experienced by end customers.

Highly demanding customer expectations

Enterprises’ concerns over the required breadth of the technology services customers expect are justified. Users are increasingly demanding several service dimensions including:

• Quality: The recognition on the part of the service provider that the consumer’s individual technology ecosystem is highly personal to them, that it represents a considerable investment, and that it contains highly personalized content that is of importance.

• Flexibility: The service provider’s ability to provide breadth of coverage embracing the problems that customers are most likely to encounter.

• Simplicity: The ability to keep the user’s technology “up and running” without great deals of personal effort by the end user.

In summary, tech users need industrialized support across a highly diverse and rapidly changing technology base. To date, traditional support models, such as call center-focused approaches or software-driven models, have been unable to effectively meet the full breadth of tech users’ increasing technology support needs cost-effectively.

Regardlessofhowagivenenterprisemay choose to handle the provision of premium technology services, here are several considerations that apply:

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• Addressing today’s digital ecosystem requires a systems integration mindset. Enterprises entering this space should consider viewing this space as providing a set of changing technology services, as distinct from their historical mindset of providing technical support for a fixed asset.

• For higher value, technology services should be specialized for the customer base. A solution needs to provide “the right services for your customers” by being highly segment aware, with the ability to align experience to the terms of the customer. It should accommodate the broad range of technologies in play with your customers, and be capable of handling the increasing complexity of applications and hardware, while accounting for the rapidity with which they are being deployed.

• The service will benefit from approaching customers naturally. Whatever an enterprise’s core market segment may be, the premium technology services offered need to be closely connected to their core value proposition and, where possible, to extend from touchpoints they already possess.

• A priority must be placed on convenience. Technology service should be provided in a way that is convenient for the end user, including the capability for cases to be worked on overnight, or stopped in-flight and picked up later.

• The solution should be “industrial strength.” To meet end users’ increasingly exacting requirements of quality and consistency—and provide the support their lifestyles and businesses require—positive results need to be replicable from

case to case. Solutions in this space must be of high quality and cost-efficient relative to the tech investment they support. All these points argue for an industrialized solution which can produce highly consistent outcomes cost-effectively.

• Technology services should be capable of becoming a brand differentiator by creating an enhanced customer experience. As Matt Healey of IDC points out, “Critical to the success of digital home services will be service providers that not only provide a remote support offering that delivers customer satisfaction, but one that protects a brand’s image and increases sales.” Accenture research confirms that customers are willing to reward good service: 71 percent are more likely to buy from the same company if they have experienced quality service,

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Key considerations for establishing premium technology services

while 58 percent are more likely to refer friends and family.4 In a highly connected universe, end users will refer good or bad service to a broad network of people beyond themselves.

To summarize, for today’s end users, technology is not a “nice to have,” but a “must have” – a crucial element for managing their lives and their businesses. Just as people’s lifestyles may suffer if their cell phones don’t work, their businesses may suffer if their PC systems and other systems don’t work. Such a climate demands industrial-strength service.

Accenture has consistently contended that if consumer electronics companies and service providers are to utilize digital-home trends as a means of pursuing profitable growth, they need to rethink their business models, organizations, processes and systems for helping the consumer sort

through the technical complexities of the digital home. Part of the answer to helping consumers maneuver through this complexity lies in new ways to make devices and networking easier to use and manage.

Now more than ever, another critical part is in rethinking the business model for providing premium technical services—rather than merely delivering tactical in-home support. Traditionally seen as a cost drain, premium technology services can now be a means for driving high performance—helping generate revenue and reduce churn by helping create satisfied customers.

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Quality and the ability to work on the terms of the user are critical factors that will drive the ultimate leaders in this space.

Accenture is a global management consulting, technology services and outsourcing company, with approximately 211,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com.

Copyright © 2011 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

1 Accenture, “Finding Growth: Emergence of a New Consumer Technology Paradigm: The 2011 Accenture Consumer Electronics Products and ServicesUsageReport,” www.accenture.com/ConsumerTech2011.

2 Ibid.

3 Accenture, “Start Making Sense: Defining Customer Experiences that Enable High Performance,” Accenture Global Consumer SatisfactionReport,2009.

4 Accenture, “Digital Home Consumer Poll,” 2009.

About the author Kurt Hogan is a Senior Executive who leads Premium Technology Services within the Accenture Communications and High Tech Practice.

Contact us Please visit www.accenture.com/premium-technology-services for more information or contact kurt.m.hogan@accenture.com.