Customer Service. Simplified. www.jacada.com

The Natural Shift from Self Service Technology to Visual Connectivity

Part II Social Media, Generational Customer Experience Preferences, and the Millennials

2www.jacada.com

The Natural Shift from Self Service Technology to Visual Connectivity

Table of ContentsSection A: Social Media, The Connected Customer And Customer Experience

Consistent Customer Service Experiences Across All Customer Touch-Points

Smart Businesses are re-looking at their Mobile Strategies for both Sales and Service

Social Media Does Affect Business Results: 1-9-90 Rule Participation Rule

Make It Easy for Customers To Post Positive Things About Your Company

Section B: Generational Customer Experience Preferences Is Driving Change

Section C: Millennials And Gen Z

Summary

3

3

3

4

5

6

9

11

3www.jacada.com

The Natural Shift from Self Service Technology to Visual Connectivity

NOTE: A timeline of the evolution of self-service can be seen at the boarder of the paper. It gives a historical perspective of the progression of how self-service has transformed over the last 125 years. Highlighted are various inventions that have driven innovation, developed the technological innovations and lead us to where we are today.1

Section A: Social Media, the Connected Customer and Customer ExperienceWith the number of consumers using mobile and smart phones, tablets and personal computers and the advent of Bring Your Own Device To Work (BYOD), customers expect to have the Internet and each other at their fingers tips and in real-time. In addition to having devices that keep them connected all the time, consumers expect the interaction with your company to be as easy as using social media sites like Facebook as well as search engines like Google and Yahoo. So essentially the ease of use of these devices and social networks have raised the expectation of customers and they expect interacting with a company to be as easy. However, in comparison, most companies have not made it easier to interact with customers, leaving customers frustrated, disappointed and un-loyal.

Consistent Customer Service Experiences Across All Customer Touch-Points

The need to provide consistent Customer Experiences across all customer touch-points is more important than ever before. They are important for not only sales, but they are important to customer service. And in particular, because smartphones add a new dimension of real-time, on-the-go demands never placed on companies before, companies need a simple way to change the interactions on mobile devices.

Smart businesses are re-looking at their Mobile Strategies for both Sales and Service

That’s because it’s not uncommon to see customers, especially Millennials, in a store, using their mobile devices. They may be comparing products and then logging onto the Internet to find not only lower prices for the same products, but also purchasing them in that moment or trying to reach customer service. Often if they can’t reach customer service, they send out a negative post in various social channels.

1876 1877 1880 1882

47,900 Telephones

in the US

1st patent for a telephone switchboard

1st regular telephone line from Boston to

Somerville MA1st switchboard was

set-up in Boston

1st bi-directional transmission of

clear speech1st telephones were

rented in pairs

1880's

1st Vending Machines for postcards in

London

1888

Sears Catalog- advertises watches and

jewelry

1st automatic telephone exchange replacing manual switchboards

4www.jacada.com

The Natural Shift from Self Service Technology to Visual Connectivity

With this change in trends in customer interactions, leading companies are focusing on the ability to offer robust customer experiences, on any device, whether its via the phone, a website or a mobile device or tablet. But it’s not easy with most technology to create a consistent customer experience across all channels and devices unless you are using HMTL 5-based technology. HTML 5-based technology is designed from the beginning to easily replicate the same customer experience regardless of channel (Website, phone, chat) or device (mobile device, tablet, phone…) without coding or programming. This not only makes it easier to implement, but less expensive that trying to emulate that with technologies not based on HMTL 5.

Social Media Does Affect Business Results: 1-9-90 Rule Participation Rule

Some experts are doubting the effect of social media without really understanding the dynamics of customer interactions in social channels. The truth is customers are empowered by the Internet, social media and mobile technologies to quickly find and share a company products, services and pricing information whenever/wherever they want. Boomers are the fastest growing segment to use social media. Within that context, the 1-9-90 participation rule is important to understand so a company doesn’t under estimate the affect of social media on their bottom-line.

The 1-9-90 rules describes the ~percentage of people who:

•Post (1%)

•Respond to people who post (9%)

•Read what the 1% and 9% post and make purchase decisions, often based on recommendations from people they have never met. (90%)

The ratio for your particular business may vary somewhat from the 1-9-90, however, most people in any industry do not post. Those ~90% represent most of your current, potential or past customer base.

Now consider that social media essentially provides a giant megaphone for people to publically broadcast how poorly/well they are treated to all their friends and family, and their friends and family, and their friends and family… As a result consumer’s posts in their social networks, can easily have a one-to-millions multiplier effect, spreading bad-word-of-mouth quicker than ever.

1892 1894

Phone Service was established

between New York and Chicago

1st battery-operated

switchboard

1905

Self-Service Gap Pumps- in St. Louis,

Missouri

1915

Transcontinental telephone service by overhead wire was inaugurated

1937-1939

Elektro- the robot built by

Westinghouse, could walk by

voice command & speak ~700 words using a Voder Machine

1939

Voder Machine - the first attempt to

synthesize human speech by breaking

it down into its component sounds

and reproducing them electronically

5www.jacada.com

The Natural Shift from Self Service Technology to Visual Connectivity

Make It Easy for Customers To Post Positive Things About Your Company

Another aspect of social media is that posts are like cave paintings in that they are both public for anyone to see and last millions of years. Essentially these permanent posts are a 24/7 record of customers’ experiences and thus influence current and future customer purchase decisions. How does this work? Consider you are traveling and in a new city you look on Yelp or similar sites for a good place to stay and or eat. You read the reviews, and while you know that some may be “planted” posts, you still take into consideration the overall rating and compare hotels or restaurants based on what people have written about their experiences. This also is the case for purchasing products online at sites like Amazon.

In essence present and future customers, looking to make decisions whether to buy a company’s products or services, read those reviews and make purchase decisions. In fact data, by Nielsen and Edelman show that ~78% of customer believe what other customer’s have said about a product or service vs. the advertising and marketing by a company. Whether companies realize it or not, these customer-to-customer interactions are impacting a company’s bottom-line. So now you can see why getting customer experience right contributes directly to the company’s ability to sustain long-term revenue, profits and margins.

1941 1946 1947 1962

Credit Cards- “Charge-It” was

introduced. The $1 Buckaroo Buffet was established

Beginnings of cellular phones; AT&T proposed

the FCC allocate radio frequencies

for widespreadmobile phone

usage

Bell developed a new way to dial

area codes using DTMF

1st touch-tone phone using tones

1963

1st touch tone phones – mobile car phone model

introduced

1965

Touch screens were developed

6www.jacada.com

The Natural Shift from Self Service Technology to Visual Connectivity

Section B: Generational Customer Experience Preferences Is Driving ChangeCompanies should also be considering the differences and similarities in preferences for customer experience device choices as well as channels. These considerations are important when creating your customer experience strategy for each of the different generations. Figure 1, shows that:

•Boomers have the largest current buying power and

•Gen Y has the largest potential buying power.

Generation Date of Birth Number Age

Pre-Depression Before 1930 12M 81 and above

Depression 1930-1945 28M 65-80

Baby Boomers 1946-1964 80M 46-64

Generation X 1965-1976 45M 34-45

Generation Y 1977-1994 71M 16-33

Generation Z After 1994 29M Less than 16

Figure 1. Population of Various Generations

aka Silent Generation orGolden Generation

aka Millennials

While calling a company is still the preferred method of interaction for most customers, there is a growing shift in the desire of younger generations to use mobile and the Internet, Figure 2. Younger generations, who grew up using laptops, tablets and mobile phones expect more, and they expect it instantly. Imagine their shock when the wait time to speak to an agent at the end of the IVR interaction is 20 minutes. Customers today don’t have the patience to wait. They are ready and willing to share their frustration with the entire Internet through social media, forums, websites, blogs...

1967 1968 1970 1971 1977 1982

ATM’s Touch

Screen UI

Donald Wetzel created the idea of the

ATM network

1st cordless phones

Southwest Airlines

introduces the ability

of the passenger

to pick their own seats

HP introduced a programmable computer that fits on top of

a desk

Internet protocol suite was

standardized

1986

QVC –allowed customers to

shop from homeFCC granted the

frequency range of 47-49 MHz for cordless

phones

7www.jacada.com

The Natural Shift from Self Service Technology to Visual Connectivity

Figure 2. Channel Preferences of Various Generations Older Boomers & Golden Gen (56+)

Gen X & Younger Boomers (36-55)

Gen Y & Younger (18-35)

80%

70%

60%

50%

40%

30%

20%

10%

0%

Phone Web Social SMS

Since phone is still the number one most used method to connect with companies. It is also the most complained about experience customers usually share. Customer service departments should be prepared to provide a seamless experience for customers calling them, using their IVR, such as enabling them to use their own devices for their required path, instead o having to be constrained by a phone call. In Part III we will review Visual IVR, which address this requirement.

1990 1993 1994 1995 1996 1999

Frequency range of 900

MHz for cordless phones

Bellsouth introduces the mobile phone with a calendar, address book,

email and more

Amazon

1st digital, cordless phones

Alaska Airlines offers online

check-in

eBay AOL Napster

1987

Star Trek debuted touchscreens and voice recognition

8www.jacada.com

The Natural Shift from Self Service Technology to Visual Connectivity

In addition, each generation has preferences for the type of device they prefer to interact with a company on. This means that companies need to have effective and efficient ways to deliver consistent services on a wide range of devices, Figure 3.

Golden Generation - Phone Service

Generation Z - Edutainment

Baby Boomer & Gen X - Email / Smartphone / Tablet / "Business" Social - Productivity, Entertainment

Millennials - Texting (Store Promotion) / "Social" Networks

Figure 3: Device Preference For Each Generation

2000 2001 2002 2003 2011 2013

Microsoft Tablet

iTunes allowed customers to purchase individual

songs online

RedBoxIntroducedDVD kiosks

Web UIs and visual technologies

such as HMTL 5 lead to multi- touch devices

Mobile Payments

Jacada Introduces the

Visual IVR

9www.jacada.com

The Natural Shift from Self Service Technology to Visual ConnectivityThe Natural Shift from Self Service Technology to Visual ConnectivityThe Natural Shift from Self Service Technology to Visual Connectivity

Section C: Millennials and Gen ZMobile customer experience, especially SMS texting is growing. In fact a study by X2, shows that Gen z is not joining social networks like Facebook – in part because it’s not “cool” to belong to a site where your parents are. Instead, these younger generations are turning to alternatives like texting. That means that companies need to have a mobile strategy not just for social media, for their website but also for texting. Often companies are not segmenting their customer base and looking at the affect of younger audiences on their reputation, brand as well as customer loyalty, retention and long-term customer value. However, companies do need to look at all of the generations and create strategies based on their preferences and habits.

Millennials are the largest, most diverse, educated & influential shoppers on the planet. Positioned to be the wealthiest generation to date3:

•By 2015 in the US, annual spending >2.45 Trillion/year

•By 2018 in US, projected income will be $3.4 Trillion/yr, surpassing Baby Boomer income

•Have influence over their Baby Boomer parent’s choices & will inherent their money / real estate

As a result, companies need to consider the preferences of channels and devices Millennials and Gen z use to interact with companies. In Pew Research Center’s latest study they found 83 percent of adults ages 18-29 use social networking4. The entire generation of Millennials is a just a few clicks away from complaining loudly enough that the whole world can hear:

• 75% created a profile on a social networking site

• 55% visit those sites once/day

• 60% connect to the Internet wirelessly when they are away from work or home

• 88% text each other

• 74% say new technology makes their life easier

• 50% use it to be closer to their friends

• 65% are disconnected one hour or less a day.

Unlike the Boomer Generation who generally picks up the phone to get help, if Millennials have a problem with a company, instead of calling the company they text 5 friends and share their frustration on social media and texts. And their friends then share the story with their peer groups. The result? Friends comment on the incident and share their own stories of disappointment. A single event can spread like wildfire.

10www.jacada.com

The Natural Shift from Self Service Technology to Visual ConnectivityThe Natural Shift from Self Service Technology to Visual ConnectivityThe Natural Shift from Self Service Technology to Visual Connectivity

With respect to customer experience, Millennials:

• 70% recommend their favorite brands to family and friends

• 47% write about good online experience

• 40% have criticized a brand on a social network

• 70% would create a video and post it online or write a review about their experience with a company

© 2014 Jacada. All right reserved. 11www.jacada.com

Refrences1. Self Service Technology in Airports And the Customer Experience, University of Nevada, Las Vegas2. Study on the Lack of teens Joining Facebook3. Javelin Strategy & Research Study and IRI study4. Pew Study

The Natural Shift from Self Service Technology to Visual Connectivity

Customer Service. Simplified.

The Natural Shift from Self Service Technology to Visual Connectivity

Part III Visual IVR: Ease of Connectivity from Self Service to the Call Center

SummaryThe bottom-line is companies need to look at their overall customer base as well as future revenue streams from various customer bases and re-evaluate at their overall strategy and technology choices to deliver great customer experiences on all channels and devices. And they need to do this without breaking the bank.

Senior leadership needs understand the impact that customer experience has on the bottom-line and instead of thinking of the contact center and customer experience as a cost-center, it needs to be seen as a revenue generation and net profit contribution opportunity. Anything less means that executives are putting the company at risk. One of these changes needs to be about transforming the experience customers have when they call the customer service center using the IVR. Part III covers Visual IVR and will explore this new development.

Next in this Series:Part III: Visual IVR: Ease of Connectivity from Self Service to th Call Center