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May 27, 2009 Social Media Club
The ROI of Social Media: Customer Service Communities
Natalie L. PetouhoffSenior AnalystCovering: Social Media, Customer Experience and Customer Service
Forrester Research
2Entire contents © 2008 Forrester Research, Inc. All rights reserved.
The #1 Customer Service 2009 initiative should be
social media.
3Entire contents © 2008 Forrester Research, Inc. All rights reserved.
• Why is social media important to customer service?
• Using Forrester’s TEI Methodology to Calculate ROI What are the benefits of online communities?
• What are the costs of online communities?
• What is the ROI of customer service social media?
Agenda
4Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Why is social media important to customer service?• It’s…
– 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
5Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Customer disdain, social media and customer service have…
•… formed a perfect storm that is super charging change
6Entire contents © 2008 Forrester Research, Inc. All rights reserved.
What is a Customer Service Online Community?
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
• 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
7Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Who’s got an online community? B2C…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
8Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Who’s got an online community? B2B…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
9Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Verizon…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
10Entire contents © 2008 Forrester Research, Inc. All rights reserved.
iRobot…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
11Entire contents © 2008 Forrester Research, Inc. All rights reserved.
myFICO…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
12Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Intel…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
13Entire contents © 2008 Forrester Research, Inc. All rights reserved.
• Why is social media important to customer service?
• Using Forrester’s TEI Methodology to Calculate ROI
• What are the benefits of online communities?
• What are the costs of online communities?
• What is the ROI of customer service social media?
Agenda
14Entire contents © 2008 Forrester Research, Inc. All rights reserved.
TEI™ is Forrester’s ROI methodology
Costs(Impact on budget)
Benefits(Impact on business)
Flexibility(Options)
RISK
Total Economic
Impact
Uncertainty• Impact of “assumptions”
Benefits• Quantified value• Defined metrics
“Options” created• Are there new opportunities
the future?
Cost• People• Process• Technology
Source: August 4, 2008, “The Total Economic Impact™ Methodology: A Foundation For Sound Technology Investments” Forrester report
15Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Assumptions• Multiple customer service goals• Attracts super users• Engages community to be honest about their opinions• Company is interested in community’s opinions…• Small to medium sized call center• Three year time frame for analysis• Has federated search• Allows agents to have access to the community
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
16Entire contents © 2008 Forrester Research, Inc. All rights reserved.
• Why is social media important to customer service?
• Using Forrester’s TEI methodology to calculate ROI
• What are the benefits of online communities?
• What are the costs of online communities?
• What is the ROI of customer service social media?
Agenda
17Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Benefits(Impact on business)
Examples of benefits
• Cost savings
• Reduce call volume
• Reduce email volume
• Increase agent productivity
• Increase in FCR
• Reduce SEO costs
• 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
18Entire contents © 2008 Forrester Research, Inc. All rights reserved.
There are many benefits of Customer Service Online Communities…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
19Entire contents © 2008 Forrester Research, Inc. All rights reserved.
The answers are in the community
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
• 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.
DSL provider
20Entire contents © 2008 Forrester Research, Inc. All rights reserved.
First Contact Resolution (FCR) goes up
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
• FCR affects• Customer satisfaction• Purchase reprobability• Good word of mouth…
My question
was answered
!!!!!!!!
21Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Customer advocates create more value
Source: February 2008 “Redefining High-Value Customers” report.
22Entire contents © 2008 Forrester Research, Inc. All rights reserved.
“Bad word of mouth” gets handled!
• 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
23Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Invest in turning customer informants
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
• 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
24Entire contents © 2008 Forrester Research, Inc. All rights reserved.
What about the rest of the company?
Source: January 21, 2008, “The Economic Necessity Of Customer Service” Forrester report
•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.
25Entire contents © 2008 Forrester Research, Inc. All rights reserved.
• Why is social media important to customer service?
• Using Forrester’s TEI methodology to calculate ROI
• What are the benefits of online communities?
• What are the costs of online communities?
• What is the ROI of customer service social media?
Agenda
26Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Costs(Impact on budget)
Examples of customer service online community costs
• People
– Training
– Staff
• Process
– Marketing of community
• Technology
– Community website design
– Single Sign-on
– Integration to contact center
– Platform subscription fee
– Analytics
– Reporting
27Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Start-up costs of customer service online communities…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
28Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Recurring costs of customer service online communities…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
29Entire contents © 2008 Forrester Research, Inc. All rights reserved.
• Why is social media important to customer service?
• Using Forrester’s TEI Methodology to Calculate ROI
• What are the benefits of online communities?
• What are the costs of online communities?
• What is the ROI of customer service social media?
Agenda
30Entire contents © 2008 Forrester Research, Inc. All rights reserved.
The ROI of online customer service community is…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
31Entire contents © 2008 Forrester Research, Inc. All rights reserved.
The TEI of online customer service community is…
Source: May, 2009 “The ROI of Online Customer Service Communities” Forrester report
32Entire contents © 2008 Forrester Research, Inc. All rights reserved.
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
33Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Join the social media revolution
Source: April 6, 2009, “How to Win Funding for Your Customer Service Project ” Forrester report
34Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Thank you
Natalie L. Petouhoff
+1 310.919.8467
www.forrester.com
To Get the Slide Deck, go to:
www.forrester.com/socialmediaclubla
35Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Research in this presentation
• July 2009, “Social Media Best Practices for Customer Service: Case Studies”
• May 2009, “The ROI of Online Customer Service Communities”
• April 6, 2009, “How to Win Funding for Your Customer Service Project”
• January 13, 2009, “Forrester Customer Service Innovation Framework and Self-Assessment”
• January 21, 2008, “The Economic Necessity Of Customer Service”
36Entire contents © 2008 Forrester Research, Inc. All rights reserved.
Research in this presentation
• Why Talking To Your Customers Is Ruining Your Business, August 29, 2008
• August 4, 2008, “The Total Economic Impact™ Methodology: A Foundation For Sound Technology Investments”
• July 2, 2008, “Customer Service: A Keystone Of Your Corporate Revenue Strategy”
• February 4, 2008, “Redefining High-Value Customers”
