2. Executive Summary/Abstract
All too often, customer service executives trust their gut around customer
tolerance when managing their organization’s customer service operations, and
specifically contact centers. They speculate about where to invest and which
service attributes to adjust. But there is a downside to this guesswork approach.
In the rapidly changing service transformation industry, pulling one lever too far
might result in an unexpectedly negative impact to customer satisfaction—one
that is hard to recover from and may result in churn.
In 2012, Accenture conducted primary customer tolerance research to provide
insight into the pivotal question about how much customers will put up with
before loyalty slips—and what organizations can do to effectively recover from
service failures.
With this groundbreaking research, customer service executives can stop relying
on hunches. Instead they can understand the factors behind customer tolerance
and make data-driven decisions about which service attributes to emphasize,
such as first call resolution, overall wait time, overall handle experience,
number of handoffs or offer effectiveness. The research results can also help
organizations to identify industry-specific issues that trigger customers to call in
for service, such as billing issues or incorrect reservations. With this knowledge,
companies can proactively apply the correct service recovery tactics to maintain
customer loyalty.
Finding the right balance of these two critical service elements can directly
impact an organization’s ability to increase satisfaction, improve retention, and
ultimately optimize the customer experience. In time, this action can also drive
growth since the customer base will be more stable.
Page 1
3. In the rapidly changing customer service These attributes were: Customer Tolerance
industry, organizations are challenged daily
with making the right customer service
• First call resolution (FCR) rate—to a Multi-Dimensional
determine how much customers value
tradeoffs to balance service levels with
resolving their issue when they first Characteristic
customer care costs. Should customer
initiate contact via a phone call versus
service executives invest in an interactive Customer tolerance is a critical
calling in multiple times.
voice response (IVR) system to quickly
• Overall wait time—to determine the
area for an organization’s customer
identify customer problems and route
accordingly? Should they increase customer impact of putting a customer on hold one service function to understand.
service representative staffing to reduce minute, three minutes or five minutes Accenture defines customer
call wait time? Or should they modify their before speaking with a customer service tolerance as a three-dimensional
organization, processes and technology to representative, and the point beyond characteristic that describes:
allow the first contact customer service which customer frustration rises.
representative to complete resolution • Overall handle experience—to determine
• The ability of a company to recover
without handoffs? which factors most contribute to from a service failure.
To address questions like these and better customers losing patience, such as
• The impact of complex service
understand the nuances around customer handing them off to another customer
service representative or putting them on
trade-off choices on customer
tolerance, Accenture conducted primary
hold during resolution. retention.
research in January 2012 in the United
States and Mexico. The Internet survey • Number of handoffs—to determine how • The impact of service experience
was designed to test tolerance across three many handoffs are acceptable before on customer satisfaction.
dimensions (see sidebar “Customer Tolerance satisfaction lapses.
a Multi-Dimensional Characteristic”) and
• Offer effectiveness—when a problem
thereby to infer the critical service elements
cannot be resolved, to determine
that most impact tolerance across five key
if an organization can atone for a
industries. These industries were gas and
service issue by offering the customer
electric utilities, retail banking/financial
something of value.
services providers, telecommunications
providers, consumer goods retailers, and In total, 1,510 customers responded to
travel and tourism providers. the Accenture survey—1,000 customers
The survey asked questions around customer from the US, and 510 customers from
satisfaction and required respondents to Mexico. The results provide data-driven
assign points in a series of paired comparison substantiation of customer tolerance levels
tests. The survey also presented respondents around specific attributes of the service
with scenarios that tested trade-offs that experience.
customers make in a complex service Customer service executives can use this
situation, and then measured the impact of research to make more informed decisions
variations on five key service attributes to to help drive an optimal experience for
overall customer loyalty. customers, while cost effectively managing
the complexity of their customer service
operations and maximizing the productivity
of customer service representatives.
Page 2
4. Key Findings from Finding 1: Recovering from values. Possible interventions include
discounts, fee waivers, special benefits, or
Service Issues or Failures
the 2012 Customer The Accenture survey results showed
other complementary products or services.
Although these negative and positive
Tolerance Research that prompt issue resolution was the
recommended way to recover from a
data patterns were consistent across the
industries surveyed, the best recovery
Analysis of multiple data points in the service issue and retain a customer’s offers should be tailored to the service
Accenture 2012 Customer Tolerance business. In fact, survey respondents across context and industry. An intervention
Research revealed specific insights in three all industries indicated they had a very low that works for one organization may not
areas related to how organizations can tolerance for delays and lapses in service necessarily work for another.
improve the customer experience. These resolution. However, when the resolution
findings were: process caused some aggravation to the It is important for customer service
customer or the issue could not be resolved, executives to note that the Accenture
• Companies can recover from service research tested generalized service triggers,
issues or failures if resolved quickly and the Accenture survey results showed that
organizations could still make interventions defined as reasons customers call for
appropriately with an offer valued by the support, by industry. While the results
customer. to recover from a service failure.
provide clear indicators on which actions
• Customers want first call resolution; To illustrate this finding, in one scenario are effective to respond to a service failure
however, wait times that are longer than tested in the survey a hypothetical gas and which will only exacerbate the issue, it
three minutes quickly outweigh first call and electric utility risked customer churn is imperative for organizations to identify
resolution benefits. of 70 percent when the customer service the specific service triggers for their
representative indicated they could not industry, and product or service lines.
• Customers are willing to be transferred
reverse overcharges on a customer’s
once to resolve a problem, but satisfaction With these defined service triggers, an
monthly bill. Conversely, the same
declines rapidly if they experience organization can then decide how to solve
organization recovered nearly 60 percent
additional transfers or other hassles. the most common customer problems.
of customer satisfaction when a customer
service representative acknowledged the Most likely this will require establishing
The sections below take a deeper look at
problem, corrected the statement for the new processes to give the contact center
the data points to help customer service
next billing cycle and offered a five percent clear ownership in resolving the issues. It
executives make more informed decisions
discount on the next bill (see Figure 1). will also be necessary to equip customer
about which service attribute levers to
service representatives with offers that
adjust—and why. As this example shows, organizations are valuable to a customer base. To design
can salvage customer relationships by these offers, organizations can use direct
providing a relevant and effective offer customer input as well as customer
that the particular customer segment segmentation to articulate customer
priorities, values and propensities.
Figure 1: Companies Can Reduce Churn by Offering Something the Customer Values
Gas and Electric Utilities
Received the correct monthly bill and Billing department says there is nothing You get through to a rep who can correct
have no need to contact the company they can do and you are required to pay your statement the next billing cycle. For
the quoted amount the inconvenience, the agent offers a 5%
Overcharged on discount on your bill for that month
your monthly bill
84% 70% 11% 9% 67%
Accenture 2012 Customer Tolerance Research
Page 3
5. In addition, organizations will need to Across all industries, results showed that However, when wait time exceeded the
weigh the financial costs of the offers customer satisfaction was definitely in three minute margin, and particularly if
and determine how much they are willing peril if the call wait time went beyond it involved being put on hold or being
to spend to retain customer loyalty. For three minutes. Given this finding, transferred multiple times, the survey
example, if customers call a mobile phone organizations should generally strive to showed that customer loyalty declined 18
provider about an incorrect bill, a company connect customers in three minutes or less percent with a five minute wait time but no
must decide if it can feasibly offer a free to customer service representatives who transfer, and 29 percent with a five minute
service or a discount on the next bill can fully resolve their requests. Regionally, wait time and a transfer—even if customers
without cutting too deeply into revenues. Mexican customers showed a slight received first call resolution (see Figure 2).
variation, indicating they were more willing
The message from customers was clear.
to trade off first call resolution for shorter
Finding 2: Limiting Wait wait times if the wait was limited to one to
If companies make them wait, it better
Time to Three Minutes three minutes.
be for a valid reason, namely connecting
them to experienced customer service
According to the Accenture survey,
To illustrate these findings further, in a representatives who can take care of their
when customers initiated contact with
scenario comparing the optimum balance requests. In fact, according to recent
a company, they placed a high priority
between wait time, transfer, put on hold Accenture consumer research, one of the
on having their issues resolved on the
and first call resolution, the results showed service characteristics that customers
first call. This finding was tempered,
that customers of a hypothetical financial value most was being able to talk with
however, by a corresponding statistic
service provider were reasonably tolerant knowledgeable, well-trained and polite
indicating customers did not want to wait
(56 percent) of wait times of up to three customer service representatives. And more
an extended period of time to speak to a
minutes as long as they resolved their issue than one-third (36 percent) of customers
customer service representative.
on the first call, and were not put on hold cited a lack of knowledgeable customer
or transferred to another customer service service representatives as a top reason to
representative. switch providers.1
Figure 2: Organizations Face Trade-offs in Balancing First Call Resolution with Wait Time
Retail Banking/Financial Services Providers
Would definitely want to do business
with that company
Overall
US
Mexico
FCR vs “Wait Time”
trade-off
FCR vs “Wait Time”
trade-off
89%
73%
56%
41% 39% 41% 38%
27%
21% 22%
Scenario 12% 14%
Elements
Wait time Least Least Least Least Escalated Escalated Escalated Escalated Escalated Escalated Escalated Escalated
(1 min) (1 min) (1 min) (1 min) to 3 min to 3 min to 3 min to 3 min to 5 min to 5 min to 5 min to 5 min
Transferred/ No Yes Yes No No Yes Yes No No Yes Yes No
Put on hold
Call First call First call Follow Follow First call First call Follow Follow First call First call Follow Follow
resolution up call up call up call up call up call up call
Accenture 2012 Customer Tolerance Research
Page 4
6. Additional survey results of interest marginal customer satisfaction may not to each subsequent customer service
included the findings that 1) there were be worth it to some organizations if they representative. Instead they prefer to
no tangible benefits to connecting have to spend considerable funds. Likewise, have customer service representatives
customers in less than one minute unless a an organization may determine that know their history based on information
customer service representative answered attempting to answer customer calls in less previously provided.2 Multiple transfers can
immediately upon the first ring, and 2) in all than one minute is not a tradeoff they wish also increase overall wait time and further
cases, being transferred or put on hold did to make in terms of budget and resources. degrade the customer experience.
not make a difference if a customer did not
To make wise use of the one transfer limit,
receive first call resolution.
Finding 3: Reducing Multiple organizations should reevaluate their
With this data as a guide, organizations Transfers and Other Hassles handoff processes and consider ways
can assign a monetary figure on retained to route calls more efficiently, prepare
According to the Accenture survey
satisfaction and make more calculated successive customer service representatives
respondents, being transferred once had
decisions about additional technology or with the customer history or smooth the
a relatively low impact on satisfaction,
operational investments in the contact transfer process using computer telephony
but multiple transfers led to a significant
center or other service channels, such as integration. Another option is to reorganize
decline in satisfaction. One likely
Web, chat or IVR. Setting a service level the contact center into groups or tiers
reason for this drop is a correlated
requirement to resolve customer inquiries in with customer service representatives who
finding that customers dislike having
less than five minutes without any transfers specialize in handling common customer
to repeat information about their issue
or holds to gain a 22 percent increase in inquiries.
Figure 3: Transferring Customers Can have a Marked Impact on Customer Satisfaction
Results based on: Gas and Electric Utilities
Satisfaction with companies respondents Retail Banking/Financial Services Providers
currently do business with Telecommunications Providers
“very satisfied” used in analysis Consumer Goods Retailers
Travel and Tourism Providers
69% 70% Average
64%
63% 61%
63% 60% 58%
62%
59%
59% 58% 52%
54%
51%
47%
38%
37%
No Yes, Once Yes, more than once
Accenture 2012 Customer Tolerance Research
Page 5
7. In terms of industry variations, the representatives, empowering them to One way to acquire a detailed, fact-based
customer tolerance results related to be customer advocates who can resolve understanding of customer intentions is to
being transferred were most distinct in the problems without handoffs. To achieve leverage analytics based on demographic,
telecommunications and utilities industries. this, companies may need to rethink their behavioral and retention data. Companies
The sharpest decline happened in the organizational construct, or facilitate can use this multi-dimensional analysis in
gas and electric utility industry, in which access to knowledge management systems novel ways to monitor individual customer
customers indicated satisfaction of 63 that make it easier for customer service inquiry histories, as well as to identify
percent if not transferred during a call, all representatives to handle more contact churn “hot spots” related to specific
the way down to 37 percent if transferred types. In some cases, regulations will service triggers and the correct retention
more than once (see Figure 3). The impact prohibit companies from making these treatments.3
of factors such as first call resolution, wait changes.
time and being put on hold on customer
Organizations also need to understand
satisfaction were also more pronounced in
customers’ expectations when they have
these industries.
multiple inquiries within a single contact.
Yet another way that organizations can Based on how related the customers believe
minimize transfers is to reconfigure the inquiries to be, they may be more or
their customer care processes to less tolerant of being transferred to another
retain first contact customer service team to resolve the subsequent inquiries.
Page 6
8. Interpreting Customer put on hold. Roughly half preferred a Additionally, being put on hold had
one minute wait time, tapering off to an impact on customer tolerance.
Tolerance by Industry
45 percent or less for a three to five Across the five industries surveyed,
Accenture collected and analyzed minute wait time. the data showed slight declines
data by five industries—travel and in satisfaction for being put on
In reality, consumers make more
tourism, consumer goods retailer, hold once. If put on hold more
complex assessments of their
telecommunications provider, retail than once, the decline became
tolerance with specific customer
banking/financial services provider, more pronounced with the most
service issues. However, a few
and gas and electric utilities. tolerance still being shown for
spikes in the industry data stand
travel and tourism providers, and
Overall, the patterns were out. For instance, in the gas and
the biggest decline of 17 percent for
remarkably consistent across all five electric utility industry, first call
telecommunications providers.
industries, suggesting that these resolution could always overcome
were general patterns of consumer longer wait times, or instances of
mindset that did not vary much by being put on hold or transferred.
the circumstance of industry type. According to survey results, positive
In all cases, the majority (66 percent reactions were lower (25 percent)
and more) of customers preferred for first call resolution with a five-
first call resolution. Fifty-one minute wait time, then a transfer,
percent or more across all industries than for non-first call resolution
preferred not to be transferred or with just a one minute wait time
and no transfer (37 percent).
Page 7
9. Applying Findings in 2. Align processes to strategy 4. Align individual and team
and ensure processes are performance measures and
Your Organization consistently followed goals with the strategy
What can your organization do to optimize • Define and improve customer care • Introduce balanced scorecards to
customer service while controlling processes. Review existing customer care hold customer service representatives
operational costs? In truth, every company processes and eliminate wasted steps. accountable and avoid over-indexing on
is unique, and must identify and understand one metric.
• Help customer service representatives to
the key tolerance inflection points for
follow refined processes consistently. • Make sure customer service executives
their specific customers. Once this step is
• Tie quality management processes can effectively coach customer service
completed, you can then make informed
to performance measurements to representatives. Conduct targeted
decisions for your customer service
help ensure consistent application training for new and established
organization that effectively balances
and compliance to processes and customer service representatives to help
what is good for your customers and your
improvement. ensure customer expectations, service
company.
levels and budgets are met.
To get started, Accenture recommends the
following steps to help your organization 3. Align organization to • Measure and reward customer service
executives based on the performance
strike that balance through an overarching strategy and goals, and of their teams. Define clear metrics and
service strategy that optimizes each area to manage staffing to address goals, and reward using performance-
maintain customer loyalty:
the goals based compensation practices.
• Determine roles to handle contacts and
1. Define strategy and goals— assign responsibilities. Define required 5. Continually monitor
and stick to them competencies, behaviors and skills for customer expectations and
• Understand customer priorities and each role and leverage this in the hiring
process to target candidates with the
the ability of the organization
expectations. Define desired customer
experiences within these parameters best chance of success in the role. to meet them
while considering how customer- • Forecast contact volumes, taking events • Build robust capabilities around customer
centric decisions may impact operations into consideration. analytics by implementing speech
(e.g., customer service representative analytics, text analytics, root cause
• Monitor status of queues in real time to
productivity, engagement or attrition). analysis, voice of the customer responses,
keep wait times, handle times and service
balanced performance metrics or cross-
• Quantify the possible operating costs levels in check. Watch transfer rates to
channel analytics.
and savings of adjusting different service understand where transferred calls are
attributes, such as wait time, handle time going and why. • Assign a dedicated team to conduct
or number of handoffs. ongoing analytics, examine trends,
• Make immediate and long-term
identify root causes of customer contact.
• Make sure leadership demonstrates adjustments to staffing levels to address
Determine how to eliminate or handle
ongoing commitment to organizational service level goals.
issues more efficiently.
decisions to help prevent the occasional
• Measure and respond to forecasting
customer complaint from derailing the Following these steps and using the
and scheduling accuracy to allow for
overarching service strategy. findings from the Accenture 2012
course correction as needed (e.g., plan
for recurring events, adjust training Customer Tolerance research can help your
schedules to handle unexpected events, organization achieve the optimal balance—
get ahead of hiring). one that delivers a positive experience to
your customers, more effectively manages
customer service operations and improves
your customer service representatives’
productivity.
Page 8
11. Guiding Customer Service Improvements for Clients References
1. Accenture Global Consumer Research, 2011
Accenture helped a communications representatives and supervisors. 2. Accenture Global Consumer Research, 2011
company to cut costs and improve The scorecards helped the company 3. Maximizing Customer Retention: A Strategic
the customer experience through to evaluate customer service Approach to Effective Churn Management,
a 36-month customer care representatives’ interactions with Accenture, 2011.
transformation. The strategic customers and measure adherence to
plan included a national customer defined processes.
care organization design, skill
In a short period of time, Accenture
rationalization and site consolidation,
improved yield by nearly 400 minutes
and updated telephony and routing
per customer service representative
infrastructure. The plan also refined
and resolution rates by 200-300 basis
the company’s transfers and repeat
points, which equated to more than
program, and customer call handling
US$7 million in value. The company
processes.
also deployed new call handling
For workforce management, flows for the 24 top call drivers and
Accenture introduced performance reduced internal cost per handled
scorecards integrated with a variable minute by 7 percent.
pay program and incentives for
approximately 6,500 customer care
Accenture conducted a contact • Update knowledge management
center assessment to help a North system content and navigation
American energy provider reduce to increase access to knowledge.
customer wait times and drive • Promote self-service options
more consistency into its customer on calls.
service experience. Based on the
assessment, Accenture identified • Implement clear leadership
quick hit and longer-term changes responsibilities for coaching
the utility could make to improve customer service representatives.
customer service representative • Institute a long-range forecast
management and customer care and capacity plan.
processes.
By focusing on the outlined
Recommendations for initiatives, Accenture projected
improvements included: the energy provider would be able
• Implement a customer-objective- to reduce their total annual call
focused call control program, minutes handled by 15% while
streamline call handling processes improving service level goals.
to remove unnecessary steps and
implement a warm transfer policy.
Page 10
