When a company's mission is to deliver enhanced shareholder value over time, increasing revenue and reducing costs are pre-requisites. Revenue can only be increased by acquiring new customers or increasing the value of existing ones.

In the present economic climate, and in light of the research that demonstrates profits can be increased by almost 100% by retaining just 5% more customers, loyalty is more often than not the key. Equally, costs can be reduced by optimising the balance between the cost of service to each customer and their lifetime value to the company.

Customer Interaction Management (CIM) is central to making sense of these business equations. Excellent CIM optimises the choice of interaction channel available to the customer, with the maximum value for the organisation.

When we know that 70% of customer satisfaction derives from the interaction experience not from the product itself, why are so few companies realising this goal? Because, they fail to ensure the alignment of business processes, technology and people that facilitate successful customer interaction. Datapoint can help drive up shareholder value by unlocking the potential worth of those customer interactions.

The Rise And Rise Of Multi-Channels
The contact centre market is evolving fast as customer and technology drivers encourage and enable the use of a wider variety of interaction channels. Driven by this explosive growth in internet and mobile technologies, customers now expect to be able to interact with organisations via any channel of their choice.

Latest generation contact centre technology now permits managed web, web collaboration, chat, mobile and email contact in addition to traditional voice channels. Interactive Digital TV (iDTV) and third generation (3G) mobile applications will increase the complexity and richness of customer interaction.

Companies struggle to manage single channels. For example, in a traditional call centre, the focus is on minimising call handling time and maximising the operational efficiency of call center agents without noting the impact of the company's bottom line.

The Board speak of strategy, customer retention and satisfaction while call centre managers are driven to cut costs. The Board must ensure their strategy is executed through all levels of the organisation. The call centre managers must ensure they support the organisation's strategy.

What Is Customer Interaction Management (CIM)?
CIM is the means by which businesses build loyalty through enabling 'value-add' interactions between customers and suppliers. Challenges can include;

• Optimal use of Customer Interaction Channels - providing the customer with their interaction channel of choice and optimising its use.

• Personalisation - customising interactions based on the customer's profile.

• Integration - of channels so the customer has a consistent view of the company and the company has a consistent view of their customers.

Optimal Use Of Customer Interaction Channels
These challenges split in two:
1. Providing customer with interaction channel(s)
2. Optimising their use

In response to competition, companies need to provide high value customers with the interaction channel of their choice. They must offer the flexibility for customers to select any channel for a given interaction. This flexibility must focus on the customer's perception of the most convenient interaction channel for that particular instance.

Conversely, the challenge is also to provide low value customers with low cost (to the company) interaction channels. This must be supported by a migration of those customers to these low cost channels without compromising their perception of service.

Businesses must optimise the use of their channels to ensure maximum value to themselves and the customer when interactions occur. This can be a complex process whether it is a single channel, usually voice, or additional channels, the most common alternative presently being email and IVR.

Effective use of channels can increase revenue, reduce costs and improve the customer's experience so establishing customer loyalty. Technologies such as interaction (voice or email) routing, queuing and workforce management can reduce costs while improved customer experience leads to revenue improvements from higher customer retention rates.

Personalisation
The personalisation of customer interactions is one of the cornerstones of CRM. The goal is to deliver the one-to-one service of yesteryear in an era of mass transactions and communications. In other words, "mass customisation".

Personalisation means responding to the customer as an individual with distinct characteristics, circumstances, preferences and history with the company, regardless of whether the transaction is personal or automated.

This goes beyond generic segmentation, such as using a postal code, to treat customers in their own right, in recognition of their real-time changing status. For example, propensity marketing compares a customer's behaviour against that of previous customers. This method accurately predicts their future service needs.

Personalisation is a powerful tool in the competition for customer acquisition and retention. It allows companies to distinguish themselves by providing a better service to their valuable customers. Datapoint can help personalise customer interactions to improve customer retention and acquisition. Personalisation can improve communication effectiveness, convenience and monetary savings. This improved interaction experience is more satisfying for the customer.

Personalisation can enhance the relationship between the company and the customer. This will increase the value of that customer to the company by retention and increased sales. Within CIM, technologies such as Caller Line Identification and Speech Recognition IVR can be used to recognise callers and deliver a customised service in response.

Integration
One of the key challenges for companies is to integrate their interaction channels so that the customer experiences a consistent view of the company regardless of their channel choice. Consistency of service is an important component of customer satisfaction. It improves the customer interaction experience, improves communication effectiveness and the cost of information gathering to the customer.

For the company, the improved consistency of service encourages the retention of valued customers. It also improves cost efficiencies through quicker resolution. As a result of the improved service to customers, employee satisfaction improves, as agents are able to resolve calls more effectively.

Staples
Their motto is 1+1=5, with more than 1,200 retail stores, a catalogue business, kiosks and a website, integration of customer interaction channels is essential. When a customer is migrated from shopping through a single channel to shopping through two, they will actually spend 2.5 times as much; when they shop via three channels or more spend rises to 4.5 times as much. Staples adds incremental value and explanations for why customers should migrate, e.g. when a shopper who goes into one of the retail stores finds a product is out of stock, they can go to a kiosk, place an order for the item and have it delivered the next day.

Otis
Significant cost savings were achieved by integrating SMS to handle the 2,800 non-priority daily call-outs with a 10 second handling time for each message rather than a 90 second call handling time for messages handled via the traditional voice channel.

What Is The CIM Problem?
Creating a single view of the customer is a common problem many businesses experience. The challenge is how to align people, processes and technology to provide this single view. The complexity of this problem is illustrated conceptually below. Corporate infrastructure, business processes and customer touch points all spin round in different directions and at different speeds.

When the customer chooses to interact with the company via the touch point of his or her choice the company must be ready to take a snapshot of that individual. The complexity is, therefore, to align the channel used with the right resources, infrastructure and information depending on the "level" of the customer. This must work for every business process whatever the channel used.

The critical CIM problem is the integration of people, processes and technology to create:

• Single view of the customer - helping the company provide consistent service and target/ segment the customer according to their lifetime value.

• Single view of the company - irrespective of the customer's choice of touch point, they will receive seamless consistency. Consistency is crucial for customer satisfaction and helps build trust, the necessary ingredient for sustainable relationships.

What Should CIM Look Like?
CIM integrates technology, processes and people to create a unified customer touch point regardless of the channels used to deliver seamless service to customers. CIM enables successful inbound and outbound contacts between your business and your customers. The scope of CIM is illustrated in the diagram below;

The customer interaction sits between the customer and the back office and encompasses;

• All of the touch points - ie. all the media available for the customer to reach the organization

• All of the business processes - the services set up to respond (passively) or to reach the customer (pro-actively) irrespective of the function (billing, sales, marketing, logistics, etc)

• All the infrastructure systems - e.g. CRM, ERP, back office, supply chain.

The Customer interaction fits across all of these and aims to deliver a seamless service to the right customers, be it either outbound or inbound. It is therefore a key enabler for CRM.

Conclusions
The following conclusions can be drawn from the critical issue of Customer Interaction Management:

• Shareholder Value is enhanced by delivering improved customer interaction experiences and this is the driver of CIM.

• Excellent CIM optimises the choice of interaction channel available to the customer with the maximum value for the organisation.

• Simply, CIM is management of inbound and outbound customer interactions.

• The key components of CIM are

  • optimal use of customer interaction channels - providing the customer with their interaction channel of choice and optimising its use.

  • personalisation - customising interactions based on the profiles

  • integration - of channels so the customer has a consistent view of the company.

About Alastair Bateman:
Alastair Bateman has worked in the IT industry for 5 years and has a Masters degree in Strategic Information Systems. He is Principal Research Analyst for the Datapoint Group where he has worked for 2 years.

About Datapoint:
Datapoint is a professional services company focused on enabling companies to effectively communicate with customers using a variety of communications channels. Whether using email, telephone, the internet, iDTV or WAP, Datapoint helps companies to use multi-media communications to create business advantage.