This content is part of a program managed by the Economist Intelligence Unit, sponsored by Accenture and Pegasystems. “Digital Evolution: Adapting Business for a Digital World” aims to shed light on the world of digital business—the strategic imperatives, challenges, complexities and pitfalls. All “Digital Evolution” content can be found here.
When Amazon announced its new line of Fire tablets ahead of the 2013 holiday season, the company included something new and potentially disruptive to customer service: Mayday.
Instead of calling into a support line or lobbing an email into the abyss, Mayday connected customers to a company representative — who appeared live on video, anytime day or night. Eight months after the release, Amazon claimed that 75% of Fire HDX customers used Mayday to contact support at the company and the average response time was 9.75 seconds.
In the two years since, companies have been keeping a close eye on Amazon’s use of video chat as a tool for facilitating CRM. Businesses have been experimenting with chat as a tech support and CRM vehicle for years, but Amazon offered something new: a friendly face to represent the company.
The friendly tech representative can see a user’s screen—even annotate it—to troubleshoot and problem solve. This kind of personalized customer service drives loyalty and, therefore, profits. Now, several industry trends indicate that we may be at a tipping point for video chat technology. One of the most important: Consumers have grown accustomed to interactive access to product information, service and support. Millennials, in particular, have a very low tolerance for long response times and want information available to them from any mobile-connected device at any given moment. Plus, video has become ubiquitous, especially on mobile.
Video is a largely untapped opportunity for brands that want to build a deeper relationship with their customers, says Neal Beliveau, senior director of product management at Pegasystems. “[Video chat] feels personal,” he says, “somebody’s there to smile at you, make eye contact with you. I think the personalization is a big draw.”
“It’s a big experiment right now,” says Kate Leggett, VP and principal analyst at Forrester Research. “Consumer acceptance for video has shifted because of things like FaceTime; consumers are more amenable to video. The value it brings can be very useful in some cases.”
Who’s using the technology?
Banks and hotels have been testing video for customer service since the mid-1990s, according to a report from Forrester. In the early 2000s, banks and hotels began deploying it to add flex capacity to their teller and concierge services.
Since then, video has maintained a stronghold in financial services; according to Forrester’s research, 25% of US adults with a financial advisor or broker interact with them via videoconferencing services.
Some retailers have also had notable success with the technology: UK footwear retailer Schuh, for instance, reports that video chat provides quadruple the conversion rates and 10% higher order values, on average, than text chat.
One impediment to widespread adoption has been cost — but there’s been a shift there as well. Options such as Skype, Google Hangouts, Twitter’s Periscope and the adoption of WebRTC — an open-source standard for live web video — have brought the cost down considerably on the tech side. However, expenses on the staffing side of the equation are still significant. Schuh’s system, for instance, employs 80 agents, all whom use multi-channel communications, including video.
Making the best use of video
The two primary use cases for video in customer service are to provide a personalized experience and gain efficiencies, says Beliveau. For instance, in the banking industry, “When a customer goes to an ATM that is enabled with video chat, he or she is getting the teller experience, but the bank is gaining some efficiencies,” he says.
Bank of America, for example, began deploying a video feature, Teller Assist, into its ATMs in 2013. As of July 2015, the company had 780 of these ATMs across the country. Such remote tellers, who speak English and Spanish, help with transactions that a standard ATM can’t handle — the ability to receive cash withdrawals in multiple denominations for one. The video tellers are available from 7 a.m. to 10 p.m. weekdays and 8 a.m. to 5 p.m. on weekends — an extension of the bank’s usual hours.
For the past three years, BofA has also run a program with remote video specialists who help customers apply for loans. Chris Mande, eCommerce channel executive SVP at BofA, says that the latter program is designed for consumers who don’t feel comfortable applying over the phone. “They have chosen to walk into a financial center,” Mande says. “They want the experience of being inside the four walls of a financial center and they want to have that face-to-face interaction and look someone in the eye as they’re borrowing a large sum of money, for example.”
Hertz, meanwhile, began offering video-based sales reps through its ExpressRent kiosks in 2012. Shortly after the company launched ExpressRent, CEO Mark Frissora credited it with helping to achieve a narrower-than-expected loss in its first quarter of 2012. “Hertz’s reasons behind implementing a video kiosk model are twofold — to meet our customers’ changing preferences while also driving operational efficiencies,” says Scott Gaines, vice president of strategic initiatives. “More and more travelers are demanding the convenience of self-service options.”
Video is also especially useful as a method to talk a consumer through a complex technical issue. “Say you are troubleshooting a home router,” says Beliveau. “Being able to use video so that the customer can show you the setup, the wires—that’s compelling, because everybody’s got a video camera in their pocket now,” he says.
And in the case of a heavy equipment manufacturer, Beliveau says, there’s been some “especially interesting things. The company can say to the customer, ‘Let me see the inside of the engine or let me see the lights on the dash or those types of things.’” Troubleshooting suddenly becomes much less frustrating and more efficient.
Look before you leap
“Video chat is an opportunity that’s not fully utilized yet,” says Adam Sarner, research VP at Gartner. “Real-time communication is the next big thing. Video is one mechanism to do that.”
Yet experts and analysts agree that other mechanisms are available — and that video should be tested and vetted before large investments are made. “We’re doing some work with [video chat], prototyping and increasing our investment — but for us the right level of investment is still unclear,” notes Beliveau.
To ensure utility, Forrester’s Leggett recommends bringing in stakeholders in the company, including reps from eBusiness, customer service, customer experience, contact centers, design and development, to decide if video is really necessary.
For many it may not be. Despite the emergence of chat and now video, Beliveau notes that voice calls still account for 95% of customer service communication. That number may shift in coming years, as more consumers use social media for customer service needs. “It has uses, and I think there are places where it can be used very, very well, but I think mobile is going to continue to be the predominant channel.”
ATMs, tablets, smartphones and kiosks will continue to be a battleground for companies trying to impress customers with instant access to friendly, personalized help. So video is absolutely worth testing, Beliveau says. He offers key issues to consider:
- Look very carefully at your use case. If you do it with the wrong one or you don’t really think through how you’re going to integrate it into your CRM platform, you’ll run the risk of alienating customers. The key test is whether video actually adds anything to the interaction. In some cases, like with rental car registration, customers may value speed over the human touch.
- Create a very friendly, customer-focused, engaged experience. If the experience is frustrating for the customer or interactions take more time, rather than less, you will lose customers.
- Make sure you have the technology in place and that it’s been fully tested. In other words, be sure you are ready.