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Great Customer Service Can Come with Great Cost Savings
Insights from the Forrester Total Economic ImpactTM Study on the Business Benefits of ServiceNow Customer Service Management
Customer service holds the key to business success. Great customer service leads to greater customer satisfaction and loyalty, which research shows leads to revenue gains and profitability increases.
ServiceNow can help companies achieve the great customer service they need to move the needle. To prove that point, ServiceNow commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study on the potential return on investment (ROI) an enterprise may realize by standardizing on ServiceNow Customer Service Management.
To find out how companies are saving millions with ServiceNow and creating great customer experiences, check out guest speaker Sean Owens, Principal Consultant, Total Economic Impact Practice, Forrester Consulting, who presents the study’s key findings here.
Here’s a recap of some of the questions webinar listeners had for Owens:
The study found $1.8 million in cost savings could be achieved by using more efficient support channels. How do you optimize value in a mixed service environment of phone, email, and web?
First, you need to look at all the support channels in place at your organization and determine what each one costs. Next, you need to identify which are the most efficient for your business and which are the simplest and most convenient for your customers. Ideally, they will be one and the same. Then, you need to employ strategies that help move usage away from the most expensive channels, which is usually phone, to the ones that are the simplest to use and maintain, which is usually web.
We saw the use of phones drop to 10% when customers were given alternatives they preferred; web contacts grew to 90% and email was eliminated. Contacts that migrated from phone or email to the web portal represented a savings of $2 to $5 per contact (the difference in the cost per contact between phone/email and web).
While you may not have email in the mix, you might have chat and social media channels. Any changes—including a new customer service management solution that can now manage all your support channels—should help you divert traffic to more efficient channels and drive down costs per contact for each channel.
Organizations can realize significant savings by standardizing on ServiceNow Customer Service Management, but are there opportunities to save for existing customers?
Even if you’re not replacing a legacy system and are a current ServiceNow customer, there may be opportunities to achieve additional cost savings with your deployment. For example, take a look at your overall management costs. How are you tracking support? If you are using a homegrown database or other more manual processes that require staff or IT resource time, those costs may represent a potential savings opportunity.
How exactly do you measure success with Net Present Value (NPV) and Return on Investment (ROI)?
The short answer is that any NPV over $0 usually indicates a good (successful) investment and any ROI over 0% a positive return. The explanation of why requires a little more detail:
NPV —this takes a series of cash flow values over time and summarizes them in a single number that reflects “today’s dollars.” It assumes a dollar you earn today is worth more to you than a dollar earned in a year, because you can spend or invest it now. Similarly, a dollar spent today is more costly than a dollar you spend next year, because you can use or invest that money for an extra year.
The NPV equation uses a discount rate, as a percentage, to account for how much more today’s dollar is worth than next year’s dollar. Forrester Consulting TEI projects use a 10% rate. Ultimate, an NPV of more than $0 is a positive investment. Note, any decisions on whether or not to invest in a project with a lower or higher NPV is subjective. You may need to consider additional factors, such as the size of the project, your business, and other strategic or unquantified benefits.
ROI—this is the ratio of net benefits and total costs. So, anything over 0% reflects a positive return on your investment, and higher ROIs indicate a project that will likely be more successful. There is no exact ROI value to decide whether or not to invest in a project or not — it depends on a variety of factors including the project scope, your industry, and your organization’s appetite for risk. But any ROI with three digits should be a strong contender.
To learn more about how enterprises were able to reduce support costs, improve customer satisfaction and retention, and even drive support contract revenue with ServiceNow, check out the full study or webinar.
