With the downturn in the economy, should companies be spending on Customer Service? Unequivocally, yes. It's the number one initiative that directly affects a company's most valuable asset: customers. What should companies invest in? Customer Service Social Media - It reduces operational costs and improves first call resolution, customer loyalty as well as provides a host of other benefits to marketing, sales, product development, and other critical departments. Companies that want to transform their relationships with customers need to move Social Media to the top of their priority list. It should be the number one customer service initiative in 2009. This talk will provide the basis for developing an ROI for social media and the customer service center.

1. How Social Media is
Natalie Petouhoff,
Senior Analyst,
Forrester Research Transforming Customer Service
Gary McNeil,
Vice President, Marketing,
Parature Inc.
and the Customer Experience

2. OUR BUSINESS
Parature is a global leader in on-demand software
(SaaS) for customer service and support
Parature enables organizations to:
• Reduce the cost of supporting their customers
• Have a 360 view of customer issues
• Retain their customers
• Improve customer loyalty
• Generate more revenue from their base
• Deliver “great” customer service

3. PARATURE - ONE INTEGRATED SUITE
• One stop shopping
• One integrated software suite – on-demand
• Parature Portal
• Parature Ticket
• Parature Knowledgebase
• Parature Reporting
• Parature Chat
• Parature Forum
• Host of other modules
“With Parature, we do not have to increase our CSR headcount…we would have needed two to
three additional CSR‟s with the rate that JobFox is growing.”
- JobFox

4. PARATURE REDUCES SUPPORT COSTS BY 5X
$40 $36.24 Cost per transaction
$35
$30 $25
$25
$20
$15
$7.94
$10
$5
$0
Phone Email Self Service Support
*A survey published by the Association of Support Professionals compares the high cost of phone support to email and web self-service
support.

7. CONSISTENT TRACK RECORD, QUARTER OVER QUARTER
27 Quarters of Growth, 750 Customers and High Retention Rates
800
700
600
500
400
300
200
100
0
Q3 2002 Q1 2003 Q3 2003 Q1 2004 Q3 2004 Q1 2005 Q3 2005 Q1 2006 Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009
“ I love your product and will be more than happy to do a case study and press release for you. A few months ago, I thought I had to hire more Customer
Support Reps, but now my reps are asking for more work because your product has reduced much of the workload.”
- Victor Pitts, VP Support, Moniker

8. 800 CUSTOMERS ACROSS INDUSTRIES & MARKET SEGMENTS
Technology Business Services Gaming and Digital Media
Education Associations Healthcare

9. MACRO TRENDS ON CUSTOMER SERVICE AND SUPPORT
• Support Channel preferences are
radically changing with each
generation
• New technology trends can impact
customer service behavior
• Understand who your target
customer is and how they prefer to
be supported
• A new generation of Service Desk
Agents embracing newer
technology
Source: SSPA and Wikipedia, 2007

10. SOCIAL MEDIA AND NEXT GENERATION CUSTOMER SERVICE
• Customers want many social media service options:
• Log a chat session with a quick question
• Go to a forum to have another customer help them with their answer
• Deliver instant feedback on your customer interaction
• Customer service via iPhone
• Post a tweet on Twitter
• Organizations are forced to act on social media interactions from their
customers
• Sometimes it is a customer who is venting about a product or service
• Responses to the customer tweet are warranted and in many cases
necessary

11. KEY CHAT CAPABILITIES
1
6 Issue Summary
Priority
2
Toolkit
5
My Chats List
4
Toolbar 3
Shortcuts

12. IN-GAME CHAT SUPPORT (XMPP)

13. NEW TWITTER INTEGRATION
Monitor What Your Customers are Tweeting About Your Business
• Help companies search the millions
of „tweets‟ to find relevant
conversations
• Capture the conversation by creating
a new ticket that tracks the original
„tweet‟ & enables easy response
Capture and monitor “tweets” about
what others are saying about your
• Easily funnel relevant solutions from business or service experience.
your knowledgebase into a „tweet‟
• Create reports to analyze how many Measure Twitter Traffic Versus
Other Support Channels in
tickets are being generated from Real-time.
„tweets‟

14. 14 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

15. How Social Media is Transforming
Customer Service and the Customer
Experience
Natalie L. Petouhoff
Senior Analyst
Forrester Research
June 24th, 2009
15 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

16. Agenda
• Creating branded customer experiences is critical to a company‟s
success
• But companies are not providing good customer experiences –
customers are disappointed
• Social Media is the key to transforming customer service and the
customer experience
16 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

17. Customer experience is critical initiative
Source: April 2008 “Customer Experience Thrives With Executive Leadership report.
17 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

18. Customers with good experiences buy more
Source: March 24, 2008, “The Business Impact Of Customer Experience”, report.
18 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

19. Customers with good experiences are more loyal
Source: March 24, 2008, “The Business Impact Of Customer Experience”, report.
19 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

20. Agenda
• Creating branded customer experiences is critical to a company‟s
success
• But companies are not providing good customer experiences –
customers are disappointed
• Social Media is the key to transforming customer service and the
customer experience
20 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

21. Consumers prefer speaking to an agent
Source: August 29, 2008, “Why Talking to Your Customers Is Ruining Your Business” report
21 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

22. Only 45% of customers were satisfied with agent phone
service
Source: March 31, 2008, “How Consumers Research, Buy, And Get Service” report.
22 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

23. Dissatisfaction is related to…
• Agent phone service
• Incorrect problem diagnosis
• Incomplete or contradictory answers
• Having to repeat information already provide via key pad or
saying it to an agent…
• Number of transfers to “experts”
• Agent attitude
23 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

24. Web: least satisfying customer care channel
Source: May 2008 “Making Experience An Integral Part Of Customer Service” report.
24 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

25. Agenda
• Creating branded customer experiences is critical to a company‟s
success
• But companies are not providing good customer experiences –
customers are disappointed
• Social Media is the key to transforming customer service and the
customer experience
25 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

26. What is social media and Web 2.0?
• Groundswell: A social trend in which people use
technologies to get the things they need from each other,
rather than from traditional institutions like corporations.
• Web 2.0: A set of applications enabling efficient interaction
among people, content, and data to collectively fostering new
business practices and social structures.
• Social media: Blending Web 2.0 tactics with customer service to
engage with customer communities and draw value from social
interaction.
26 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

27. What is social media for customer service?
• It‟s…
» Twitter
» Online communities- Lithium, Helpstream, Jive…
» Facebook, LinkedIn, MySpace
» RightNow, Parature and nGenera
• It‟s not just a…
» Forum
» A wiki
» A blog…
• It‟s a community that interacts with each other on an ongoing basis
27 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

28. Customer disdain, social media and customer service have…
•… formed a perfect storm that is super charging change
28 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

29. Today’s topic…
• Online customer service communities
» The 90:9:1 mix of communities
– Customers post questions
– 90% read the answers
– 9% post answers
– 1% (Super users) post most of the answers
– What isn‟t answered by other customers, super users or community
manager, gets answered by contact center agents
29 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

30. Who’s got an online community? B2C…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
30 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

31. Who’s got an online community? B2B…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
31 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

32. Verizon…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
32 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

33. iRobot…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
33 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

34. myFICO…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
34 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

35. Intel…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
35 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

36. What is a Customer Service Online Community?
• Online communities have evolved from
“bulletin boards”
•Today they are “posts” in the form of
forums, blogs, and chats.
• Updated “posts” sent via email or RSS
syndication subscriptions
• This instantly distribute new information
to EVERYONE
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
36 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

37. TEI™ is Forrester’s ROI methodology
Benefits Benefits
• Quantified value
• Defined metrics (Impact on business) R
Total Economic
Cost Costs I Impact
• People
• Process
(Impact on budget) S
• Technology
Flexibility
K
(Options)
“Options” created Uncertainty
• Are there new opportunities the future? • Impact of “assumptions”
Source: August 4, 2008, “The Total Economic Impact™ Methodology: A Foundation For Sound Technology
Investments” Forrester report
37 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

38. Assumptions
• Multiple customer service goals
• Small to medium sized call center
• Three year time frame for analysis
• Federated search
• Allows agents to have access to the • Attracts super users
community • Engages community to be
• Has federated search honest about their opinions
• Company is interested in
community‟s opinions…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
38 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

39. Examples of benefits
• Cost savings
• Reduce call volume
• Reduce email volume
• Increase agent productivity
• Increase in FCR
• Reduce SEO costs
Benefits
(Impact on business) • Revenue improvements
– Increase customer lifetime value
– Increase product ideation
– Increase lead conversion rates
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
39 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

40. There are many benefits of Customer Service Online
Communities…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
40 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

41. The answers are in the community
• Customers solve each other‟s problems
• Less or no interaction from a company.
• Customers read posts
• Fewer call to the contact center
• And agents use the community-enhanced KM
database
• Reduces their call time
• Provides more satisfying answers.
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
41 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

42. First Contact Resolution (FCR) goes up
• FCR affects
• Customer satisfaction
• Purchase reprobability
• Good word of mouth…
My
question
was
answered
!!!!!!!!
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
42 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

43. Customer advocates create more value
Source: February 2008 “Redefining High-Value Customers” report.
43 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

44. What happens when there’s “bad word of mouth?”
• Do the “ostrich” or…
• Handle it…
• Alert executives
• Quickly post a resolution to
the community
• Avoid
• Brand damage and
• Increased call volume…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
44 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

45. Invest in turning customer informants
• Even informants can be turned into advocates:
• Use a built-in system to recognize,
rank, and reward users
• Acknowledge their suggestions
• Thank them for helping customers
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
45 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

46. What about the rest of the company?
•Product Development
•New ideas coming from communities
can save product development millions
•Product Q&A
•Get solutions that can‟t be found any
other way
•Marketing and Sales
•Now promoting a product that was
designed with customer input.
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
46 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

47. The benefits of customer service online communities…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
47 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

48. Examples of customer service online community costs
• People
– Training
– Staff
• Process
– Marketing of community
• Technology
– Community website design
Costs
(Impact on budget) – Single Sign-on
– Integration to contact center
– Platform subscription fee
– Analytics
– Reporting
48 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

49. Start-up costs of customer service online communities…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
49 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

50. Recurring costs of customer service online communities…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
50 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

51. The ROI of online customer service community is…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
51 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

52. The TEI of online customer service community is…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
52 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

53. Be proactive about chat
• Companies spend billions annually for their Internet presence
• The investment is wasted their investment as customers abandon
shopping carts mid-order, click away from partially filled forms, or
become frustrated when they can‟t find answers.
•Proactive chat has a large return on investment and provide millions
of dollars in positive word of mouth
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
53 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

54. What the primary research shows…
Web chat is important!
Source: August 2007 “Why Financial Shoppers Abandon Online Product Applications” report.
54 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

55. Be proactive about chat
August 2007 “Why Financial Shoppers Abandon Online Product Applications”
55 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

56. Be proactive about chat
Source: March 11 2008, “Improving The Design Of Chat Interactions” Forrester report
56 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

57. Be proactive about chat
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
57 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

58. Design considerations for chat make a big difference…
Source: March 11 2008, “Improving The Design Of Chat Interactions” Forrester report
58 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

59. Look at providing ways to create consistency across channels…
Source: March 11 2008, “Improving The Design Of Chat Interactions” Forrester report
59 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

60. What the ROI of proactive chat?
Source: February 4, 2008, “The ROI of Chat” Forrester report
60 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

61. What you can do -- strategy best practices
Define you customer experience brand….
»The sum of a customer’s experience overtime
»Strategic management of customer touch-points
»Reflects your customer’s identities, needs, wants…
61 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

62. What you can do -- strategy best practices
-- Design experiences to create feelings
that emotionally engage customers…
What
Are
U
Designing?
62 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

63. Where to begin?
• Take the self-assessment
• Evaluate your organization
• Compare to best practices
• Get alignment
Source: January 13, 2009, “Forrester Customer Service Innovation Framework and Self-Assessment ” Forrester report
63 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

64. Evaluate customer service
Source: January 13, 2009, “Forrester Customer Service Innovation Framework and Self-Assessment ” Forrester report
64 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

65. Assess your customer capabilities against:
customer service agent best practices
65 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

66. Assess your customer capabilities against:
customer service knowledge base best practices
August 2007 “Forrester’s Best Practices Framework For CRM”
66 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

67. Compare your scores to best practices
2.28
2.00
2.7
2.20
2.03
2.18
Source: January 10, 2008 “Customer Service Best Practices Adoption” report
67 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

68. Customer experiences create your brand
• Great customer experiences create loyal customers
• Loyal customers create brand equity
• Brand equity creates growth, revenue and profits
68 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

69. Thank you
Natalie L. Petouhoff
+1 310.919.8467
npetouhoff@forrester.com
@drnatalie
www.forrester.com
69 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

70. QUESTIONS?
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