• U.S. consumer confidence is on the decline: Numbers released in March showed consumer confidence declined for the fourth time in five months, due perhaps to weak growth and slower job gains.
• Continuing global instability: Continuing uncertainty around U.S. trade tariffs on Canada, and the trade war with China, rising interest rates, and stock market volatility all pose significant obstacles to continued growth in 2019.
• Household debt continues to rise: According to Statistics Canada, the average Canadian household was using a record 14.9% of disposable income to service debt. This could pose a significant problem for industries like travel and hospitality, which rely on the availability of disposable income.
• Revenue-per-available-room (revPAR) is on the decline: In 2019, a 100-month streak (the second longest in history) of growth in revenue-per-available-room came to an end, as revPAR began to decline.
• Many analysts feel that a downturn has already begun: 46% of respondents surveyed by real estate advisory group RCLCO said they believed a downturn had already begun, or would begin sometime this year.

However, the outlook isn’t entirely doom and gloom. While there are certainly reasons for concern, there are also trends showing a rosier outcome for 2019 than the above trends might indicate:

• CBRE predicts that the U.S. hotel industry will see a 10th straight year of growth in 2019.
• Occupancy rates continue to rise: At the end of 2018, CBRE expected occupancy to reach 66.2% – another record level in five years of consecutive growth. This increase is attributed to demand moderately outpacing the increase of supply.

Still, however bullish some analysts may be feeling, it would be unrealistic to anticipate the ten-year period of growth enjoyed by the hospitality sector would continue without significant turbulence. It’s worth remembering there was concern about a slowdown in advance of the 2008 economic crash, but most believed if a recession happened, it would be mild.

When asked to reflect on the 2008 crash at the end of 2018, Isaac Collazo, VP of performance strategy and planning, InterContinental Hotels Group, made the following observation (emphasis ours):

“As I reflected on what happened 10 years ago, what struck me was (the industry’s) collective inability to imagine/model adequately the impact on the industry of a moderate-to-severe recession. We were so keen on having one (forecast) that we didn’t develop ranges and/or plans for anything but a mild recession. Also, we were rather myopic when it came to economic indicators; our scope was narrow versus broad, so the increasing growth in subprime foreclosures was missed until it became daily news.

“Ten years on, let’s not forget that a holistic plan based on multiple indicators (industry and economic) offers more opportunities than locking into a single one. Hope is not a strategy.”

Given that growth cannot be sustained for perpetuity, it is only rational to take stock and make a strategy for how to survive the coming downturn – regardless if it happens in 2019, 2020, or 2021. As Tea Ross, managing director for Strategic Hotel Consulting, has observed, “it’s better to be preparing rather than to be repairing.”

So, what steps should hotel chains be taking to prepare for an economic decline?

Diversify your offerings: One piece of advice echoed by many analysts: diversify product offerings, amenities and services to cushion the blow of an inevitable recession. 

Invest in dynamic pricing systems: As discussed in our previous post, major hotel chains like Starwood Hotels have already made major investments in dynamic pricing systems that juggle hundreds of variables to automatically recalibrate pricing for its rooms across all its properties.

As observed by Bernard Baumohl, chief global economist for The Economic Outlook Group, now is the time to protect margins: “It’s important to renew focus on improving efficiencies on how to operate and improve productivity.”

Cross-train your staff now: Back-of-house efficiency will be key to dealing with whatever may arise in the future. Taking the time to cross-train staff now will give you more options for adapting to less optimal conditions.

Be open and transparent with staff before the downturn hits: While solutions like dynamic pricing systems can help maximize revenue, front-line staffing will always be one of the first areas looked to for efficiencies. However, as your front-line staff are directly creating your customer experience, it’s best to have open and transparent conversations with front-line staff about the economic outlook and what it might mean – since demoralized employees will necessarily create poor customer experience.

Focus on customer experience: Today’s travelers are loyal to experiences rather than brands. To retain market share in a time of recession, hotels need to focus on meeting customer expectations and offering a personalized guest experience. Further, brands that maintain a focus on the customer experience will be well-positioned to dominate the market once the recession ends.

Be digitally engaged: According to Baumohl, hotels need to invest in aggressive and creative marketing, including active social media presences to be equipped to deal with a downturn in demand. Modern travelers expect hotels to be responsive on their preferred communication channels and will take their business elsewhere if they can’t connect with you digitally. 

Remember – each recession is different: At the risk of stating the obvious, the hospitality sector has undergone a tremendous amount of change in the last ten years. Online travel sites, travel apps, and companies like Airbnb have fundamentally changed the travel landscape since the 2008 recession. And any plan for weathering a future downturn needs to reflect that change.

Hope for the best, plan for the worst: Above all else,hotel companies need to do their homework to avoid repeating the mistakes of 2008. This means doing serious stress testing and making strategies for a wide range of adverse hypothetical scenarios, so that they can be prepared for whatever form an economic downturn might take. When budgeting cycles happen, they should include contingencies for what happens, for example, if occupancy or revPAR decreases by a given amount.

“Hope is not a strategy”, after all. But prudent planning and preparation can save you from having to play catch-up after business is already in decline, and that may well make the difference.

The post How should hospitality prepare for the coming downturn (whenever it happens)? appeared first on InTheChat.

Interestingly, while travel has been one of the most heavily disrupted industries of the past decade, the high complexity of products and services purchased means digital investment isn’t always straightforward or immediately successful.

Delta Success: First Biometric Terminal

In September, Delta became the first airline to launch a biometric terminal in the United States. Delta’s Terminal F, which was unveiled in Atlanta – the world’s busiest airport, allows travelers to use facial recognition “from curb to gate”. Additionally, Delta has plans to roll out biometrics technology in Detroit – another Delta hub.

The airline began rolling out biometric features in October of last year and launched the complete biometric experience on December 1 of 2018. Says Gil West, Delta’s COO, “We’re removing the need for a customer checking a bag to present their passport up to four times per departure – which means we’re giving customers the option of moving through the airport with one less thing to worry about”.

Delta customers who are traveling direct to an international destination can use a kiosk to enter their passport information, use the screen to capture data for facial recognition, and proceed through the terminal when they have been recognized by the system. Early reviews have been favorable – helped in large part by the fact the system saves travelers an average of 9 minutes and cuts down boarding times on a trial flight to 10.8 seconds per passenger.

Delta Failure: In-Flight Wi-Fi

Given the increasing reluctance of travelers to disconnect while they travel, it’s no surprise that Delta was one of many major carriers to invest in implementing Wi-Fi on its flights. By Q1 of 2018, Delta had installed in-flight connectivity systems by Gogo 2Ku – a provider of satellite-based in-flight connectivity – on more than 400 aircraft. However, a leaked memo published in February of 2018 showed the systems had massive reliability and maintenance issues:

• The systems suffered widespread outages, some of which took more than 30 days to correct – sparking complaints on social media.
• The design of the system made it possible for de-icing fluid to seep into the system and gum up antennas.
• Because the system is “fragile and difficult to maintain”, techs were not able to repair the system during nightly downtime, but instead had to set aside hangar space to make repairs to the system.

Further, apparently not trusting Gogo 2Ku to be up to the task, the memo announced that Delta’s own TechOps team would design needed improvements to the hardware.

Mixed Success: KAYAK and Alexa

In 2016, KAYAK created a skill that allowed users to ask KAYAK questions about flights, like “how much is a flight to the Bahamas” or “where can I fly for $400?”. Then, in late 2017, KAYAK became the first online travel site to allow users to make hotel bookings through Alexa. When the skill first launched, the functionality was extremely limited; users could ask KAYAK questions like “where can I go next month for $2,000?”. And after getting an answer, they would then have to re-do that search on KAYAK from a screen device and look for a matching result. 

Later, a partial fix was implemented that causes the tool to search from a pool of hotel rooms with free cancellation. However, the process for setting up payment methods is rather involved, with many typical online payment methods not currently accepted. For the foreseeable future, it seems that KAYAK’s Alexa skill will be limited largely to people asking curious and aspirational questions about travel possibilities, rather than using it to make actual travel decisions.

Mixed Success: Starwood Hotels

Starwood Hotels and Resorts, which was acquired a few years ago by Marriott, has made a name for itself by offering a superior digital customer experience, with such features as smartphone check-in and keyless entry. However, perhaps Starwood’s most successful digital investment has also been the least visible.

The hotel chain invested $50 million between 2013 and 2015 in an analytics software program that uses machine learning to automatically recalibrate the pricing of its properties based on hundreds of variables. According to David Flueck, Starwood’s VP of Global Revenue, this system helped the chain improve its demand forecasting 20 percent from 2015 to 2016. This success is a large part of why Marriott acquired Starwood for $13 billion – making it the largest hotel chain in the world with 30 brands and more than 5,700 properties. 

However, the lynchpin in Starwood’s customer experience strategy was customer data, which the hotel chain didn’t adequately protect, leading to a massive data breach that exposed sensitive personal and financial information of 500 million guests who had booked rooms with Starwood over the course of four years. Worse, the hotel chain could not confirm that complete credit card information was not exposed. 

And now when you search for the hotel chain, news about the data breach are among those crucial top ten search results – signifying a massive branding problem that will need to be addressed. This highlights the danger of relying on digital technology to improve customer experience. Customer data can be the most powerful engine for personalized customer experience, but equal investments need to be made in data security. 

One to watch: Marriott IoT Guestroom Lab

In November 2017, Marriott announced a new partnership with Samsung – a laboratory built in the Marriott corporate headquarters in Bethesda. The Guestroom Lab consists of two different model rooms. One room is a showcase of all the IoT bells and whistles that might be built into a completely new hotel room to demonstrate what hyper-personalized customer experience controlled by a guest’s smartphone might look like. The other room is built to show what personalized customer experience with IoT could be like in existing hotels, with only small changes or additions to infrastructure. The laboratory has been used to conduct focus testing to determine how best to design pilot programs to be implemented in Marriott hotels. 

Of course, it will be quite a while before IoT hyper-personalization in hotel rooms becomes common, as there is a number of challenges that must be overcome. Perhaps first and foremost is the issue of scale; outfitting all the objects in a room that a guest would expect to be part of a connected experience is tremendously complex and expensive. Further, there are issues of connectivity, made even more complex by the proliferation of mobile platforms. Would IoT hotels need to follow the current format of restricting users to one platform (i.e. all Google or all Apple)? Or is there a way to support all guests regardless of what platform their devices run?

Lastly, given Marriott’s previous difficulties with data security, how will Marriott appropriately safeguard the massive amounts of data that a fully outfitted IoT guest room would generate? It’s too early to predict how this might end up, or how successful it will be, but definitely this will be a future trend to watch.

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According to a survey by “Ask Your Target Market”, July is the most popular month for traveling; 46% of respondents planning to take a summer vacation were planning it for July. As the average traveler takes about two months to plan a vacation, now is when travelers are going to be researching destinations and travel options.

Few industries have been disrupted as quickly and as completely by digital technology as the travel industry.  Ten years ago, the first travel apps were just being launched and the iPad was still a year away from its first release. But given that so far, 2019 has seen slowing economic growth and an uncertain economic outlook, how is the travel industry faring in this turbulent economic climate?

Overall Industry Trends

 While it’s true that the travel and hospitality industry does have its difficulties, such as rising cost of fuel and labor, largely it seems to be faring much better than the embattled retail industry:

• Research by Deloitte shows the US travel industry has shown steady growth from 2009 to 2017 across all segments.
• Tourism already accounts for roughly 1 in 10 jobs in the global economy. (Deloitte)
• However, the travel industry has been growing faster than its ability to source labor and talent; US Bureau of Labor Statistics estimates for job openings in leisure and hospitality grew from 353,000 in 2009 to 1,139,000 in 2018 – a growth of 223%. (Deloitte)
• A 2017 report by the World Travel and Tourism Council predicted an average growth of 3.9% in the hotel industry for the next ten years.
• However, travel is a cyclical industry that is due for a downturn after nearly 10 years of growth. The outlook is solid for the near term, but travel brands need to be prepared to weather the storm when it happens.

Airline Trends

While these numbers speak well toward the current strength of the travel and hospitality industry, that strength is not reflected in airline customer satisfaction scores, which remain dismally low. 

In 2018, the University of Michigan’s American Customer Service Index – a customer satisfaction ranking of U.S. companies operating in 45 different industry sectors – showed that airlines were in the bottom 20% of US companies, where they have been since the report was first issued in 1994. This is corroborated by Forrester’s 2017 Customer Experience Index, in which not a single airline got an “excellent” or “good” rating for its customer experience. So, it’s clear that while Americans love travel, they definitely are not happy with their airline customer experience.

But if travelers see air travel as a necessary evil, that hasn’t kept airlines from realizing continued growth. So how are travelers making travel decisions?

• Travelers are increasingly using travel apps: 25% of travelers surveyed have a mobile travel app installed on their phone
• Social media is a key source of travel research: More than half of people planning a trip look for tips and advice on social media
• The complexity of travel sites means the majority of bookings still happen on desktop: The portion of flights booked on mobile has increased from 6% in 2013 to 27% in 2016.
• Travelers are increasingly unwilling to disconnect when they travel: 83% of flyers prefer flights that offer in-flight Wi-Fi, and 23% of those are willing to pay extra to access in-flight Wi-Fi.

Hotel Trends

Thankfully for the hospitality industry, today’s travelers are much more satisfied with the hotel guest experience than with the airline customer experience. J.D. Power’s 2018 North America Hotel Guest Satisfaction Index (NAGSI) showed that overall guest satisfaction increased an average of 8 points to 825 (on a 1,000-point scale). And for luxury hotel brands, these results were often higher.

Says Jennifer Corwin, Associate Practice Lead for the Global Travel and Hospitality Practice at J.D. Power, “Years of capital investment in offerings such as higher-end televisions and in-room tablets have left their mark. Now, as hotels look to push customer satisfaction levels higher, their focus should turn to service areas, particularly when it comes to direct booking.”

But do these high levels of customer satisfaction translate into increased loyalty? The answer is… sometimes:

• 59% of consumers are willing to pay between $10 to $50 more to stay at their preferred hotel brand.
• But while the difference is small, Millennials belong to fewer travel loyalty programs than older travelers

As for travel loyalty programs, how are travelers using them, and what rewards do they value most?

• For both business travelers (84%) and leisure travelers (79%), hotel nights are still by far the preferred reward (PwC)
• The second choice for leisure travelers overall was airline miles, at 19%. However, 36% of Millennials chose room upgrades as their second preferred reward. (PwC)

Travel Industry Trends, Summarized

Do you have questions about how you could improve your digital guest experience? Contact us to speak to one of our digital engagement experts or book a demo to see our digital customer service platform in action.

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• Loyal customers pay an average £75 more per year than new customers: Home insurance customers with a combined building and contents policy paid an average of £270 annually, while new customers paid just £195 for the same policy.
• The loyalty penalty grows over time, customers who stay with the same insurer for 20+ years pay about double what new customers pay: The average premium for a policy 20+ years old was £396 – £201 more than what new customers were paying.
• 70% of insurance customers are paying a “loyalty penalty”: Out of 7,000 respondents, 70% said they had been with their current insurer longer than a year.
• Customers need to cheat to beat higher prices: To get the lower prices, Which? found that some customers decided to cancel their policy and re-purchase it to qualify for the new customer discount.

When asked about the findings of the study, the Association of British Insurers (ABI) admitted the insurance market was “not working as well as it should”. Said ABI spokesperson Malcom Tarling, “we recognise that the insurance market is not working as well as it should for many long-standing customers. We want everyone to get the best deal in a competitive market, which is why we have launched an industry initiative to help those customers who do not shop around. This will include insurers reviewing the policies of customers who have been on their books for five or more years to ensure they are getting the best deal for their needs.”

However, Which?’s money editor, Harry Rose, observed that, “It is unacceptable that longstanding policyholders are taken for granted by insurance providers and hit by these excessive premiums. Customers who prefer to stay with one provider are at risk of being exploited by these vastly overpriced premiums when little has changed in the service they receive. Insurers must make sure existing customers remain a priority and are not sidelined by the push to attract new business.”

This study by Which? also highlights something which remains a fundamental dilemma to the insurance industry as it struggles to adapt to the new digital landscape: how can insurance companies build loyalty and retain customers in an era of increasing competition from non-traditional insurance products and companies?

The problem: It’s hard to stand out when you almost never interact with your customers

Insurance is a highly competitive marketplace in which consumers purchase insurance policies based almost entirely on price without concern for brand.

A 2016 report by Majesco based on a survey of US insurance buyers who are “18 or older and who make or share household decisions” identifies an additional difficulty: “insurers are increasingly challenged with the emergence of aggregators, comparison sites, alternative channels and new entrants that are redefining products, processes and engagement.” The report identifies aggregator websites that allow consumers to bypass insurance carriers and agents altogether – which further reduces touchpoints between insurance companies and their customers.

The obvious problem this poses is that it is difficult to stand out in a crowded marketplace when you rarely interact with your customers. 

The nature of insurance is such that customers only need to think about insurance when it is time for renewal or if they have a claim. According to Bain, “Worldwide in the product categories of home, auto, life and health insurance, most customers purchase an insurance product only every three to six years. In developed markets, just half of the customers have had any contact with their insurers for any reason in the past 12 months.”

And when consumers do need to interact with insurance companies by making a claim, that process is tedious and difficult. The Majesco survey asked young consumers to rank business categories by how easy they were to do business with in terms of product research, purchasing and customer service. Younger consumers ranked insurance dead last:

Which raises a second conundrum insurance companies need to address if they want to solve the problem of creating and maintaining customer loyalty: the generational shift in attitudes toward insurance means that consumers are increasingly dissatisfied with insurance offerings.

Insurance companies are not adapting to changing generational attitudes about insurance

There has been a generational shift in attitudes toward insurance loyalty. Digital-only insurance customers, who tend to be younger, are on average less loyal than those who use multiple channels, including insurance agents or call centers, to connect with insurance companies.

Says the Majesco report, “the generational gap reflects an insurance industry steeped in tradition, where business models, business processes, channels and products are becoming rapidly irrelevant for the younger generations”.

Further,, insurance companies are currently failing to address the shift in attitudes. According to Majesco, there is a gap between the needs and expectations of younger consumers and what they are being provided. The failure to fill that gap leaves the industry open to disruption, as customers find themselves shopping around to find insurance that fits their needs. According to the report, “in North America for both P&C and L&A insurers combined, this puts $1.4 trillion of premium at risk.”

What does this mean for insurance companies struggling to catch up?

Large companies looking to retain their market position need to find ways of attracting consumers that don’t rely solely on new customer discounts. Such discounts are effective at attracting business in the short-term but may end up being counterproductive in the long-term – as it is far cheaper to retain existing customers than it is to attract new customers. Insurance companies also need to survey consumers to identify the needs of younger consumers so they can offer products and policies geared toward younger consumers.

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Unfortunately, high attrition caused by poor agent morale is an industry-wide epidemic. According to a 2017 study by Meditation at Work: 

• 43% of contact center agents are unhappy in their jobs
• 35% are thinking about quitting in the next 12 months
• 52% of contact center agents think their company isn’t doing enough to prevent employee burnout

Working to reduce agent turnover benefits everyone:

• Management will be happy spending less on the associated costs of attracting and training new agents.
• Customers will be happy to get better service; contact centers with lower attrition rates are also able to provide better customer service because they will have more agents that are highly experienced.
• Your agents will be happy because addressing the causes of agent attrition will necessarily improve agent experience and agent morale.

What are the best ways for you to reduce agent turnover through improved agent experience?

Use proper hiring.

In a contact center with high attrition, it can be tempting to approach hiring as a problem of simply getting people in seats. But it’s important to hire agents with the skills and experience to provide excellent customer service. An agent with customer service skills will need less training to get up to speed and will be less stressed during that critical initial post-hiring period.

Set expectations during the hiring process.

Many new agents resign very quickly after hiring, either because they were unprepared for the workload or because there was a serious mismatch between tasks they anticipated doing and tasks they ended up performing. Setting expectations from the beginning of the process can help to reduce resignations caused by work-shock. One easy way to do this is to provide applicants with clearly-defined job descriptions, spelling out common tasks and the workload they can expect.

Use more carrot and less stick.

One of the biggest reasons for high contact center attrition is poor agent morale.Being a contact center agent can be a demanding and stressful job; relying on negative reinforcement to motivate employees will only aggravate an already bad situation. Instead of punishing agents for failing to meet targets, reward agents who do meet targets. Make those rewards clear and consistently available, so agents have a positive standard to aim for.

Don’t focus on the wrong metrics. 

It’s something we like to point out: it’s important to focus on First Call Resolution or customer satisfaction rather than AHT as a measure of agent performance. Pressuring agents to get through as many interactions as they can is stressful because agents know they’re not able to provide their best service. It also makes for unhappy customers calling back because their problem wasn’t addressed – customers who will take their frustrations out on your agents.

When you make FCR and CSAT scores your focus, everyone wins. Your customers will love the customer experience, and your agents will love not worrying about their performance being measured against metrics that are counterproductive to providing good service.

Give your agents the tools they need to do their job well. 

In many contact centers, poorly integrated systems result in gaps that require agents to use workarounds to perform necessary job functions:

• 60% of contact center agents think their company doesn’t provide the technology they need to help customers
• 44% say they lack the proper tools to do their jobs effectively

The problem is in how we think about workarounds. Initially intended as temporary, they have a habit of becoming permanent. As Aptean observed in their 2018 State of Software Workarounds report, “workarounds are meant to be temporary fixes, but in the large majority of cases they end up becoming the new standard operating procedure”.

This is a problem. Workarounds take extra time, energy and increase worker stress. According to Aptean’s report, “More than half of survey respondents stated that workarounds affect their happiness in the workplace. A fifth of respondents even went so far as to state that they may leave their job if those workarounds remain unaddressed.”

Investing in tools that are purpose-built for the tasks your agents need to perform will go a long way toward reducing agent stress and agent turnover.

Stop requiring your agents to multi-task. 

Call center agents are using an average of two monitors and seven different programs to help customers during calls. That kind of multi-tasking is very cognitively draining – and can reduce worker productivity by up to 40%. Agents experiencing this cognitive drain are more prone to stress and what we like to call “desktop overwhelm”.

To solve this problem, contact centers need to provide agents with a consolidated interface that ties all customer service channels into one platform with built-in CRM integration – so that every aspect of customer service can be handled through a single interface – eliminating task-switching delays and leading to increased productivity. By making their work less cognitively draining, you will also greatly improve agent morale.

Don’t short change your agents on the training they need. 

Training represents a significant expense, and training budgets can often be a target for cuts by budget-sensitive call center managers. However, when agents are expected to meet high standards without sufficient training, agent stress skyrockets. This stress decreases agent performance, increases the likelihood of burnout and mental illness, and ultimately causes employees to leave in search of less stressful employment.

Instead of seeing training as an unfortunate expense, look at agent training as an investment that will yield positive dividends. After all, if we are willing to invest in technology to improve contact center performance, why not invest in the people delivering your customer service? 

Related: personalize agent training to ensure agents feel supported. 

Different employees have different skillsets, and a one-size-fits-all approach to training will ensure employees with different needs will feel like they have fallen through the cracks. It’s important for managers to monitor agent performance with an eye to where additional training could improve their skills and their performance.

And don’t forget, it’s not only your agents that need training, but your management as well. Contact center management is complex, and adequate training is needed to ensure that managers have the skills to provide constructive feedback, identify which agents need further training, and ways of supporting agents that will improve agent confidence and performance. Having managers that make agents feel valued and supported will go a long way toward improving agent morale and reducing turnover.

Ask agents what would make their experience better, and act on the results.

It should go without saying that to improve agent experience, you should talk with your agents and ask them what would improve their experience. And yet, many organizations attempt to tackle high rates of agent attrition without ever asking for employee feedback. Even when employee feedback is solicited, all too often agent requests are deemed unfeasible – which only exacerbates the problem of poor agent morale. The only thing worse than not being asked what you want, is being asked and then ignored. 

To make meaningful changes in agent morale, it’s important to solicit direct and honest feedback from your agents about their wants and needs, and to commit to addressing those when possible. But more than that, you need to commit to making requested changes where you can and being transparent about the reasons for decisions when you can’t.

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As always the standard caution applies: FCR must be king. 

When improving efficiency, it can be tempting to only focus on AHT and the rate of call-deflection as the metrics that matter. However, lower AHT isn’t going to improve efficiency if customers’ problems aren’t being solved. The customer is just going to call back, duplicating the time and effort that went into handling the first call. Any program to improve contact center efficiency needs to have First Call Resolution as its cornerstone.

How can contact centers improve efficiency and cut costs?

1. Use customer data to improve efficiency

One of the benefits of contact centers is that they generate massive amounts of customer data. Rather than storing and ignoring that data, companies should be tapping into that data to improve customer experience by:

• Identifying the root cause of issues so they can be tackled head on, rather than adding to the problem by requiring agents to use inefficient work-around solutions.
• Proactively identifying new issues and trends before your team gets swamped. Getting in front of an emerging problem will help to keep both call duration and customer hold time low.

2. Use social for customer care

One social customer service interaction will cost your contact center an average of $1, as opposed to $6 for a typical customer service phone call. This is largely because social media, like other digital channels, is asynchronous, which allows agents to conduct multiple concurrent interactions. Phone-based customer service interactions, which are synchronous, can only be conducted one at a time.

The savings can be dramatic. T-Mobile Netherlands reports saving approximately $15,000 on calls to their contact center after a single campaign, which made customers aware of their social customer service option. Over the course of the campaign, they also saw improvements to their average response time.

3. Provide smart self-service that is user-friendly and up-to-date

Your customers would rather not call you on the phone if they could avoid it, so make it easier for them to get the information they need to solve simple problems on their own. Some widely-used options for self-service include:

• Chatbots
• FAQs
• Searchable knowledge bases

However, there are two important caveats when providing self-service options: 

• Content needs to be kept current. If you think customers hate calling you on the phone, wait until they must call you after information provided through your website knowledge base was incorrect or out-of-date.
• Self-service options must be periodically reviewed for usability and customer experience from the customer’s point of view. When done well, self-service options should provide a good customer experience. But done poorly, self-service options often just aggravate customers further.

3a: Make sure your self-service options are mobile-friendly

More than half of all web traffic is now mobile, and yet there are still so many companies neglecting their mobile customer experience. Take the time to ensure your self-service options are accessible and easy to use from all types of devices.

4. Don’t just implement new channels – tell customers you will support them on those channels

In digital customer service, it’s not enough to say, “build it and they will come”. Consumers want to connect with your company digitally, but they must first know it’s an option. At the very least, you need to tell customers waiting in queue about your other service options. You should also make the self-service options on your website prominent, easy to find, and easy to use. As the case of T-Mobile Netherlands demonstrates, you should also consider running promotions advertising that you provide customer support on other channels.

5. Invest in a solution that consolidates channels with an integrated CRM

The average contact center agent uses seven different programs on two monitors to access information needed to solve customer issues. That kind of task-switching exhausts your agents’ mental resources and can result in as much as a 40% drop in agent productivity. Improve agent experience by investing in a platform that eliminates this cognitive exhaustion by consolidating all digital channels into one platform, integrated with your CRM.

This will allow your agents to fully assist customers from one window, saving time and aggravation.

6. Address inefficiency caused by attrition

Agent turnover is one of the biggest causes of inefficiency in any contact center. The problem of agent turnover is complex and deserves a bit more attention than we can give it here, so stay tuned for our next post where we’ll dive into the problem of solving agent attrition by improving agent experience.

Finally, efficiency is great, but set realistic expectations for contact deflection

You’re never going to eliminate the need for human agents, when a customer has a complex issue or is dealing with a tough situation that calls for understanding and empathy, there is no substitute for a skilled human agent who can provide that human touch. And that’s a good thing! Today’s consumers aren’t loyal to brands, they’re loyal to experiences. Being able to provide caring and empathetic customer service when it is needed will increase customer satisfaction and create customer loyalty.

Do you have questions about finding efficiencies in your contact center? Contact us to speak to one of our digital customer service experts, or get a demo to see our digital customer service platform in action.

The post 5 ways to cut costs in your contact center appeared first on InTheChat.

Today, for our finale, we’re going to talk about important considerations for post-secondary institutions looking to overcome their digital transformation challenges.

Things to think about when making your transformation plan

Don’t do digital just for the sake of digital. Instead, link all digital activity to the school’s vision and strategy:

Just because something is digital, doesn’t necessarily mean it can solve your particular problem. While it’s true that post-secondary schools have lagged behind the trend towards digital, it’s important to look before you leap. So, don’t lose sight of the reasons behind your digital implementations. Taking the time to consider what makes the most sense with your organization’s vision and long-term strategy will help to avoid wasted investments and user frustration.

Related: if your school’s vision and strategy doesn’t fully reflect digital, update it:

Say you take the time to consider your options for digital solutions and you weigh them for strategic fit. It’s entirely possible the answer to: “Does this implementation fit our vision and strategy?” could be “Our vision and/or strategy doesn’t address this.”. Most post-secondary institutions are well behind the trend when it comes to keeping up with digital, and part of that delay stems from a failure to include digital in the long-term vision for the future of the institution.

However, it’s not enough to discover that the gap exists. Once identified, time needs to be taken to update your vision and/or strategy accordingly. To be effective, digital transformation requires organizational change, and that change must be built on a solid strategic foundation to be successful.

Create a student journey map:

This process is the same as creating a customer journey map. Identify each touch point and transaction type, then for each interaction ask: “Could this process be more engaging? Could it be less frustrating?” This will help you identify points of friction that need addressing.

Post-secondary schools are large organizations with a lot of data, a lot of students, and a lot of turnover. This means the process of making and evaluating a comprehensive journey map will be a big job. Working through the identified points of friction to make the overall experience easier and more satisfying is not something that can happen overnight. But it is critical to ensuring that the experience you want to deliver to your students is the experience you are actually delivering.

Ask what your students need and not what the existing administrative structures are:

When looking at digital solutions, it can be easy to get trapped at evaluating potential solutions through a lens of what will be most compatible with current systems and administrative structures. But in a hyper-competitive educational landscape, where students are increasingly demanding that schools prove their value, new digital implementations must be planned, keeping in mind, first and foremost, the needs of students.

Related: If this process highlights conflicts between student needs and administrative processes, fix them so that student needs are being met. 

When considering alternatives, you may find yourself looking at a solution that seems like a poor fit – a proverbial square peg destined for a round hole. But this is why considering student needs and student experience first is important. Post-secondary institutions can be resistant to change, and often students find themselves forced to interact in ways that are inconvenient and counterintuitive, simply because that’s the way it’s always been done.

So, shake yourself out of old mindsets and evaluate solutions with a fresh eye. If a solution looks like a poor fit, step back and ask if it just looks that way because it would require adapting the organization to fully integrate it. By the same token, if a solution looks like a good fit, take the time to consider if it solves an actual problem, or if it only looks like a good fit because it fits into existing administrative structures that are currently failing to meet student needs.

Also related: Consult front-line staff, adjunct faculty and students:

It should go without saying that the only way to understand the needs of your intended users is to ask them. And yet, many is the organization that has attempted to embark on a journey of digital transformation without taking the time to speak with the people who have the clearest picture of what the day-to-day realities of student/school interactions look like. So, take the time to gather feedback from all parts of your organization, and ask them specifically what requirements they need to have met.

Don’t forget to train your staff: 

It’s not enough to implement digital solutions and expect people to know how to use them. When you change processes, even in a way that reduces friction, staff need adequate training to adapt to the change. Implementing new systems without providing training, support or documentation will frustrate users and reduce  efficiencies, as students, staff and faculty struggle to adapt to doing things differently.

Obtain buy-in from key stakeholders:

Digital transformation is meaningless without buy-in from institution leadership, and a willingness to commit resources to the work of organizational change. After years of inaction, catching up is going to require a serious investment of time and money – so be sure the appropriate decision-makers are on-board with your transformation initiative, so that you don’t waste time creating a strategy and plan, only to have decision-makers balk at the price tag.

Plan for how you will manage the transition from legacy systems to newer systems:

Most post-secondary schools run year-round, meaning that any transition will need to happen in real time. Given the size and complexity of most post-secondary organizations, this will represent a considerable undertaking. Make the transition part of your plan from the beginning so that it doesn’t come as a nasty shock when it comes time for final implementation.

Related: Plan for protecting student data:

While there are unquestionable long-term benefits to digital implementations, it is an unfortunate reality that transitioning systems will increase the exposure of student data, putting that data at increased risk. Your transition plan needs to answer these questions: What is your plan for student data? How will you protect it as it migrates from one system to the next?

While the costs of investing in data security might seem high, the costs of large-scale data breaches are even higher. So be sure the security of student data is part of any implementation plan from the beginning.

In conclusion

Digital transformation is a complex topic, made more complex by the fact that the state of digital technology continues to evolve at an accelerating pace. Post-secondary institutions have largely failed to keep up with the pace of change, but in an increasingly competitive market, it is more important than ever to invest in creating an excellent digital student experience.

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• Increased competition for higher learning institutions through increased numbers of schools and greater competition from for-profit colleges
• The skyrocketing cost of tuition, which is increasing at twice the rate of inflation in Canada, and four times the rate of inflation in the United States
• The expectations of today’s students, who have been raised as the first true digital natives (unlike Millennials, who grew up analog and now live digital)

Unfortunately, post-secondary institutions have failed to keep up with the pace of digital change and students are frustrated by the slow rate of change, and by the lack of digital offerings and services. So, what are the biggest barriers to digital transformation at post-secondary institutions?

Barriers to digital transformation

1. Lack of clarity of vision by organizational leadership

One of the most critical barriers to digital transformation in post-secondary institutions is the lack of a clear, consistent vision. This lack of vision can happen for several reasons, such as: 

• Not understanding the urgency of digital transformation
• Conservative and risk-averse institutional culture that resists change
• Poor digital literacy among key leadership
• Lack of institutional trust in cloud-based digital technology

Lack of clear vision might arise from some or all these factors, or it might arise from something else. Whatever the reason, however, without a clear vision it is almost impossible for institutions to take effective and meaningful action toward true digital transformation.

2. No one knows what digital transformation looks like 

One factor exacerbating the lack of clarity around digital transformation is that there isn’t a clear picture of what digital transformation looks like for educational institutions. The needs of educational institutions are different than the needs of business, so schools attempting to tackle digital transformation are finding themselves in entirely uncharted waters. 

3. True digital transformation will require professional development 

For post-secondary institutions to meet their digital transformation goals, it won’t be enough to invest in modern Student Information Systems (SIS). New digital service offerings will need to be created, administrative processes will need to be streamlined, and many other smaller changes will be required organization-wide. As such, professional development will be required for faculty and staff who need to continue providing instruction and other services during the transition. 

However, the costs of this professional development can pose a challenge to already-constrained school budgets – as schools turn increasingly from tenured teaching positions, to relying on temporary and adjunct faculty. Today, 40% of post-secondary teachers are part-time, as compared to 24% in 1975.

4. Schools have the information they need, but it is heavily siloed

Post-secondary institutions already generate a wealth of student data that can be used to gather important information about student experience, administrative inefficiencies, demand for course offerings and services, and many other important insights. However, outdated SIS and a highly compartmentalized organizational structure means it is next to impossible to gain a comprehensive picture of the overall student experience because educational institutions are so heavily siloed.

5. Student information systems are stuck in the past

At most post-secondary institutions, faculty, students and staff are stuck using aging information systems that are difficult to use and all but impossible to customize. SIS software hasn’t seen significant innovation for more than a decade. Worse, post-secondary institutions have not been investing in keeping their SIS up to date. Says Jami Morshed, VP of the Global Center of Excellence for Education at Unit4, “currently installed SIS are on average more than 13-years old”.

6. Current digital infrastructure just isn’t compatible with new technology

Another problem posed by the age of current SIS is the fact they simply aren’t compatible with newer digital technologies needed to provide a comprehensive digital student experience. This means that to even get digital transformation initiatives off the ground, institutions need to either upgrade or entirely replace existing systems, which can be costly and incredibly time-consuming. 

7. Procrastination on digital has put schools well-behind the private sector

The lack of priority and investment in digital technology isn’t a new phenomenon; it’s a problem that has persisted for many years. Unfortunately, this means that educational institutions are now lagging well behind business in their digital capability: nearly 70% of public sector employees feel their digital capabilities are behind that of the private sector. And unfortunately, without a significant change in investment priorities, that gap is only likely to widen.

With all these barriers in place, what action should higher learning institutions be taking to remove barriers and make their digital transformation goals a reality? Stay tuned for our last post in our series about post-secondary digital transformation where we’ll talk about what priorities schools need to pursue and highlight some digital transformation success stories.

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Colleges, universities, and other higher learning institutions are increasingly having to confront the necessity of digital transformation, as the education space continues to grow more crowded. Research shows that competition for students among higher education institutions is increasing; figures from the US Department of Education indicate the number of colleges and universities has increased significantly in the past 20 years. Further, this competition has been driven largely by for-profit educational institutions, and as well as other newer educational models. 

The need for digital transformation at higher education institutions is also being driven by concerns around the rapid increase in the cost of post-secondary education. Post-secondary tuition fees are increasing at around 4% per year in Canada – which is double the rate of inflation. And in the United States, the rate is around 8%. Given the skyrocketing cost of tuition, post-secondary educational institutions are facing increasing pressure from cash-strapped families to find efficiencies to slow the rate of tuition increases.

Lastly, the need for digital transformation at post-secondary institutions is being driven by the students themselves; today’s students bring the same digital expectations they have for interacting with businesses to their institutions of higher learning. They expect to be able to handle basic service and administrative transactions the same way they do everywhere else: digitally. This is further compounded by the growing importance of post-secondary education to students’ future financial success. When a university education is increasingly required to secure employment in an economy where young workers experience unemployment rates twice that of older workers, students have higher expectations for the institutions of higher education that are supposed to set them up for success.

The problem that today’s universities face is that educational institutions have not kept up with the pace of digital change. Today’s students are more digitally literate than ever before, and the gap between what students expect to be able to accomplish digitally, and what educational institutions actually support, has never been bigger. Digital transformation has the potential to solve many existing problems, as it is an excellent way for schools to realize efficiencies through streamlining needlessly complex administrative processes. But how are schools currently handling the transition from legacy systems to digital?

Students are frustrated with the poor state of digital in post-secondary

Student expectations for digital are, unsurprisingly, higher than ever:

• 42% of college students use two or more devices during a typical school day.
• Members of Generation Z use an average of 5 screens (smartphone, TV, laptop, desktop and iPod)
• 87% of surveyed students said they want a single digital application for managing their university education that is accessible from all digital devices.
• 80% of prospective students judge an institution based on its website.

But institutions of higher learning are failing to meet those expectations, which is frustrating students:

• 44% of students worldwide say their institutions manage student administration digitally either ‘a little’ or ‘not at all’.
• 1 in 3 students feel poor student administration systems would make them less likely to recommend their institution to prospective students.
• 41% of surveyed students would have a better student experience if they could interact more digitally with their school.
• 36% of university and college students say that dealing with complex student administration leaves them less time to study.
• 47% of students say their education should be easier to manage, given the fees they pay to support student administration.

So, what are the problems that post-secondary institutions should be addressing?

The problem of digital transformation in education is complex, and bigger than we have room to tackle in one post. In our next post, we’ll break down the barriers to digital transformation that many post-secondary institutions are facing. In the meantime, here is a quick summary of the current state of the digital expectation gap:

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Royal Bank of Canada’s Dave McKay recently made news when he remarked that he is growing more concerned about FANG companies – Facebook, Amazon, Netflix and Google – getting into banking. 

The remarks were made at the RBC Financial Institutions Conference in New York. “They are getting between us and the moments of truth of our customers, and currently what they do with that is they sell that insight back to us in the form of search and advertising and other perspectives, and they earn a certain amount of economic rent,” said McKay, adding that the amount of money FANG companies are seeking from banks “is growing”.

These comments come as the banking industry grows concerned about the possibility of tech giants sidelining banks by handling direct payments and other financial services. Already, banks are required to open up large amounts of customer financial data to tech companies. A new EU directive coming into effect in September – will require banks to give FANGs access to customer bank accounts via APIs so that customers will be able to make money transfers through third-party apps. 

The fear is that these APIs will allow tech companies to sideline banks by leveraging customer financial data to create their own financial services apps. It would be hard for most banks to compete with a company like Facebook because tech companies, like Facebook, already have a huge advantage in being able to anticipate a customer’s financial need. 

Said McKay, “if it’s a financial service, what’s to stop them from making that offer before you’ve even come and told us you want a car, you want a mortgage, you want to buy a washing machine, you want an increase on your credit card to do that? You’re broadcasting to the world what’s going on in your life and what you’re interested in. It’s not hard to deduce what the financial need from that might be at the end of the day.”

It’s important to note that the threat posed by tech companies isn’t a future threat, it’s one that banks are already facing. McKay said he wasn’t just concerned about FANG companies, but also apps like Uber, in that once a payment source is set up, users interact more with the app’s brand than the bank’s brand.

The concerns go beyond just RBC. Bharat Masrani, CEO of TD Bank, has previously made similar remarks about concerns over “non-traditional competitors”.

Large banks are scrambling to get ahead

McKay says the best way to respond to this threat is to expand services and become a bigger part of their customers’ lives, become who they turn to “before they have to make a financial choice”. “You think about someone getting between you and your customer with that information and starting to influence the customer to choose different providers,” he said. “And therefore, you want to go back to a world where you have a deep enough relationship with a customer that they have an incentive to tell you because they trust you, because you provide them with great service, but also because they think you’re the most relevant provider for them going forward.”

McKay was clear that while this was not yet a threat for RBC – Canada’s largest bank – he wants to make sure it doesn’t become one.

RBC has already invested heavily in mobile. The Canadian bank spent more than $3 billion in the last fiscal year on technology, and now employs more than 200 data scientists. Their digital initiatives range widely from cyber security to AI. And that investment has been paying off: currently RBC has 3.4 million active users, an increase of 19% from last year.

However, some large banks may be asking themselves – if you can’t beat them, why not join them? Last year, it came out that Amazon was in talks with major U.S. banks to offer bank accounts to Amazon customers. If such a service goes through, the fate of smaller regional banks could be unclear. What would happen to smaller players if only national banks with the deepest pockets were able to make such partnerships to stay in the game?

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