The Importance of Customer Segmentation in the Contact Center

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Customer Service
Customer Service
Understanding customer value improves service delivery.

From Customer Lifetime Value to SatMap scoring to the Pareto Principle (20 percent of customers deliver 80 percent of the value), everyone seems focused on slicing and dicing customer characteristics to achieve some sort of profile. These efforts often yield results for many parts of an organization, such as geographically dispersing salespeople or demographically chartering marketing efforts. Customer care organizations, however, are often overlooked.

In fact, many contact center managers are challenged to simply field calls and deal with customer contact as best as they can. Segmentation of any kind is usually relegated to skills-based routing and creative queue management in an attempt to optimize call handling. Who hasn't heard, "If you are a loyalty club member press 1"?

The point, especially today in such challenging economic times, is not just how customers are segmented. It is perhaps more important to determine what can be done to optimize customer retention and care while dealing with limited resources. By definition, it is simply impossible to treat everyone at an equally "superior" level. Not a revelation, of course, but what is new are choices within customer care technologies that can be creatively mixed to more effectively serve high-value customers while efficiently (and effectively) working with those prospects or clients that are unlikely to become profitable or loyal buyers.

Categories of Value

The following categories are offered as high-level benchmarks to illustrate how customer care can be implemented within a segmentation model.

Pokey Peruser - "Double P" is a challenge for the contact center. This is a caller who might not have purchased anything or simply has many questions. In many cases "PP" is tough to handle, as it may be difficult to discern whether this currently unprofitable customer could become profitable.

Surging Shopper - "S2" has potential. This may be someone who is not yet a customer, but through demographics or other profiling shows promise. They may also be a Sporadic Spender (S22 ) with the possibility to be a more frequent customer.

Champion Customer - "C-Max" is the satisfied customer or loyal buyer who deserves the greatest attention to ensure retention and encourage an ongoing profitable relationship.

Tenacious Talker - "T-Much" may initially have been viewed as a good customer, but has crossed the line to high maintenance. Frequent, and in many cases unnecessary, contact that takes up agents' time and corporate resources (e.g., frequent merchandise returner) erodes value.

Inflection point of care alternatives

How can a customer care organization effectively deal with this broad set of customers? The following chart illustrates how a mix of technology and agent resources can be used to increase effectiveness while working to maintain satisfaction across all levels:

Automation should not mean penalizing callers with poor service. Voice recognition has progressed far beyond the "press or say 1" stage that many still associate with it. Highly interactive voice dialogs with intelligence that can immediately identify a caller along with personal attributes work to initially engage, as well as to keep callers enthusiastically interacting with an automated system.

Segmented Automation

Pokey Perusers can be serviced with a mix of alternative channel suggestions, and with advertising injection and voice recognition. Callers could be greeted with prompts that might suggest a website URL, or perhaps a note that agent telephony support may be more expensive than free self-service.

Audio advertising injection can be an effective cost-deflection alternative. Audio ads can now be targeted based on caller attributes (location, credit score predictor, etc.) to increase effectiveness.

Surging Shoppers have the potential to deliver significant value, or not. A key automation component is automated surveys. Intelligence gathered about this segment can help determine which S2s might progress to the next level. Automated voice surveys can be easily created with a Web interface and offered either post-agent interaction or as an outbound call.

Personalization and customization are a primary focus for Champion Customers. Initial call identification may immediately connect these callers with a specific group of agents or move them to the front of a call queue. Additionally, personalized audio notes, such as "thanks for your last purchase," and targeted audio ads convey knowledge that the organization knows something specific about the caller.

Automation can be of great assistance in dealing with high maintenance callers - that is, the Tenacious Talkers, who are exceeding their value to an organization. Immediately repeating the most recent transaction, such as checking delivery status, from a customer's previous call using an automated dialog reduces handle time while more quickly addressing the caller's needs.

Conclusion

Companies can creatively deploy automated customer care solutions to raise overall customer satisfaction and improve retention. Taking the next step of selecting automation based on customer segmentation will help to optimize telephony-based customer care while working to reduce costs.

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About the Authors: Terry Saeger is senior vice president and general manager, enterprise services and solutions, at VoltDelta; Steve Chirokas is executive director, marketing, at VoltDelta.

EXPERT OPINION
EXPERT OPINION