Customer Service
Customer Service
2
Table of contents
Step 2: Deflect 9
Step 3: Automate 11
Step 4: Steer 12
Step 5: Empower 14
Appendix: Abbreviations
3
The fundamental guide for how to
provide excellent customer service in
a cost-effective manner
5
The Deloitte Digital approach: How to
provide excellent customer service in a
cost-effective manner
Deloitte is using a well-developed 5-step model for
businesses to undertake for tactically cutting costs while
enabling excellent customer service.
In the upcoming pages, we will deep-dive in each of these five steps, what capabilities and tools
that can support throughout, and highlighting main benefits from each step including the
overall benefits of following through the entire model. From a holistic point of view, the steps
are based on two major improvement areas when utilizing a company’s customer service
organization to succeed with cost cuts while maintaining high customer satisfaction:
Each of these five steps will help your business to work in a much more tactical and
streamlined manner. This will have an impact both on the bottom line and
customers’ satisfaction levels when utilized as intended.
6
Manage Demand Manage Operational handling of interactions
What is it?
Step 1: Eliminate Prevent interactions in the first
place by eliminating the reasons
First step in managing your demand for customers contacting
Customer Service
We recommend the following capabilities and What are the benefits from this
tools for this step: step?
• Proactive communication (e.g. proactive e-mails • Less incoming enquiries enables
and sms) in line with customer profiles and need more streamlined customer
for information to inform customers about service operations, and reduced
known issues before they feel the urge to seek number of FTEs when having a
help stabilized setup and structure
• Keep good track of your data and insights: • Better use of existing channels
Gather and analyze customer and contact reason when being adapted to optimal
data in a structured way company processes
• Frequent utilization of analytical tools to generate • Based on client projects, we
data-driven insights and to keep track of expect potential cost savings of
upcoming and potential reasons for customers to 5% - 10% volume reduction by
contact. Example, perform root cause analysis for solving root causes, and 5% -
solving pain points in products or/and services 10% volume reduction through
that are the primary reasons for customer utilizing proactive
contact. The root cause might be a hidden pain communication
point or problem in another part of the business,
so utilize your breadth of knowledge to crate a
win-win situation.
7
Aiming for zero contacts? Reports differ on what a customer
facing company’s optimal aim should be when it comes to what
enquiries that should be handled through customer service. Our
experience from projects with companies of various sizes, across
industries tell us that the 80/20 rule is a more viable goal:
• Aim for an 80% cut of incoming enquiries through preventing
and deflecting (step 1 and 2) as they mainly represent
repetitive questions and require limited knowledge and
experience to solve
• The remaining 20% incoming enquiries should be reflected by
true value-adding interactions that lead to customer loyalty
Value-creating
and higher employee and customer satisfaction. Throughout
interactions
these enquiries, customer service agents’ skills, knowledge and
experience are used as its best.
8
Manage Demand Manage Operational handling of interactions
We recommend the following capabilities What are the benefits from this step?
and tools for this step:
• Minimizing throughput time for agents due to better use
• Use a digital first strategy by offering your of digital tools to cover parts of or entire enquiries, which
customers digital means and tools to seek impacts current and forecasted number of FTEs required
and find answers to any questions on to solve enquiries. Cost per enquiry will reduce as an
their own based on their needs, and to effect of reduced costs for staff and from shorter time
enable them updating their own data. spent per enquiry. Potential cost savings from 10% - 20%
Examples: web portals, apps, for shorter Average Handling Time (AHT).
manuals, downloads and FAQs, etc. It’s • If enabling seamless flow of information, where
critical that the content is well-developed information and data flows between channels, these
and adapted in a knowledge base for the capabilities will have additional multiple benefits
customers to be able to solve their throughout this step:
enquiries by themselves.
• Reduced number of redundant and repetitive
• Steer customers to digital channels such questions with a potential cost savings from 15% - 25%
as self-service by reducing opening hours for repeat call reduction, and 30% - 50% for waste calls
for assisted channels (i.e. phone or even
• Improved customer satisfaction from adapted and
chat)
useful self-service channels that fit customer needs for
• Employ a structured way of using digital when and in what channels they need support through
analytics • Improved employee satisfaction from;
− Satisfied customers, as there is a clear link between
(3) In the 2022 years’ Deloitte Customer Excellence report, it
was highlighted that only 60% of the participating client- customer and agent satisfaction in the customer
facing companies in Europe offered self-service to their service context(4)
customers.
(4) The Deloitte Customer Service Excellence report showed a − Better usage of agent skills and knowledge as the
9clear positive ink between Customer Satisfaction and actions of this step aims at using agents’ time for
Employee Satisfaction in the customer service context. actual value-adding tasks
DEEP-DIVE
CLIENT 1 Deloitte was asked to carry out a cost-cutting ✓ A reduction of incoming enquiries as self-
initiative for a company which operates their service channels were further elevated
Distribution/ customer relations mainly through their and adapted to the client’s goals
Logistics customer service organization. Despite having
✓ Reduced time spent per enquiry (shorter
invested in a new mobile app and in self-
AHT) as data was leveraged upon further
service capabilities, the client faced high costs
by utilizing current tools better while
per enquiry and with forecasts showing
educating agents in data handling.
increasing costs over time.
By following these 2 steps (Eliminate and
When analyzing the cost base, it was evident
Deflect), a double effect on costs was
that even though the cost per enquiry would
enabled. After a few months, the client had
remain stable over time, the company still
secured a more streamlined cost base. This
faced increasing costs for their customer
strategy was not only utilized for the short-
service as a result of that the forecasted need
term but also for securing a more future-
for FTEs and FTCs increased over time. As the
proof customer handling´, leading to more
predominant strategy was to increase the
efficient business operations overall.
number of FTEs/FTEs for covering a heavy
increase of incoming enquiries, the costs for This case shows large cost savings potential
customer service operations would also just by streamlining customer service
increase over time. operations through these 2 steps.
By focusing on solving root causes, using
proactive communication and a digital first
strategy throughout the company’s contact Typical savings from step 1
channel strategy, this enabled multiple (Eliminate) and step 2 (Deflect):
benefits:
5% -10% cost
savings
CLIENT 2
Deloitte supported a large retail client with a By instead utilizing the actions from the
Retail Customer Service Transformation where the first two steps of this model (Eliminate
client experienced challenges with a high and Deflect), this client would not have
inflow of customer enquiries. To stop the suffered from decreased customer and
large inflow, the company utilised a typical employee satisfaction. Instead these
reactive strategy of moving the contact steps would have provided them with a
details to customer service so that they were plan on how to diminish the need for
challenging to find. However this strategy taking short-sighted actions and instead
created more harm than good, since utilized a proactive and structured tactics
customers in general were even more around the challenges with large inflow of
frustrated when actually finding the contact enquiries.
details and got hold of customer service.
10
Manage Demand Manage Operational handling of interactions
Why needed?
As numerous of processes and enquiries carried In addition, investing in modernizing digital tools
out through customer service operations are has also a positive impact upon attaining key
repetitive or partly repetitive, automating these talents, capturing additional value from new and
flows should be a basic capability within the existing customers, and to remain competitive in a
Customer Service context. Automation can provide technologically rapidly changing market(5). The
a customer with well suited information and to opportunities for companies when carrying out this
process the full service request without human step are large, there are still numerous of
assistance. For example, a company-trained companies that yet have not succeeded with
chatbot can be utilized in combination with RPA to managing this shift.
change address details or to request a follow-up
order and thereby sole the request without human
assistance.
What are the benefits from this step?
There are several ways and tools to use for
• Potential cost savings from automation in the
automatization purposes (see examples below).
customer service context:
What tools that are prioritized and best suited for
Customer Service departments depend on • Approx. 25% - 35% of low complexity calls
customers’ actual needs and the industry the reflected to cognitive channels
company operates within. This again highlights the
• Decreased AHT of 10% - 20%
critical need of gathering and using structured data
and insights to enable a good understanding of • Decreased time spent on case management
your customer specific to ensure the right efforts, approx. 15%
investments to minimize costs over time (i.e. cost
• Abandonment rate reductions
avoidance).
• Additional benefits such as cost reductions for IT as
These tools naturally require some form of
a spin-off effect, in addition to added value
investment (based on the intended need) but as
capturing such as key talent, differentiation against
they have proven to enable minimizing of manual
competitors
handling, these investments could be regarded as
cost avoiding tactics for handling current and
future customer needs.
(5) See Gartner (2023) report Driving Growth, Profits and Resilience in a Downturn
Manage Demand Manage Operational handling of interactions
Step 4: Steer
Second step in managing the operational What is it?
handling of interactions Proactively steering customers to the
right channel and experience by
human support through digital
channels
Why needed?
The second step in managing operational Also, to succeed with enabling excellent
handling of interactions concerns further customer service concerns further developing
refining the contact channel strategy. If other more cost-effective channels to
customers still require human intervention enhance customer satisfaction equally high or
for solving their enquiry, they need to be even better than telephony traditionally have
steered to channels that are both cost- and done. As noted in the graph, clear plans for
customer effective, such as digital investing in chat can enable a good balance
conversational channels. between costs and customer satisfaction.
However, to truly steer customers to more
The goal of steering is to involve human cost-effective channels, securing a seamless
agents only for handling complex inquiries. transfer between digital channels and the
There are many companies where agent human chat agent (i.e. warm handover) is
knowledge and skills are not fully optimized. critical. To ensure that the enquiry is resolved
Also, many companies lack digitally mature at the first contact (FCR) requires a seamless
channels that can be adapted to company channel transition where important details
and industry needs. For example, it is evident are captured from one channel and
that telephone is still widely used within transferred to another. The inquiry details
customer service (see graph below) that are captured in prior steps will enable
compared to digital channels. As long as the human agent to focus more effort and
telephony is offered and utilized widely, that time on the customer, in addition to creating
channel will continue to drive further costs better prerequisites for a change of customer
for your company if not shifting those behavior to utilize digital channels for all
enquiries over to more cost-effective and upcoming support needs.
digital channels.
100%
13%
9%
80%
49%
25%
7% 5%
60%
11% 14%
Mobile Application
11%
35%
40%
29%
16% 3% 16%
23% 1% 6%
Contact form
Social Media
Self- Service
Video call
20%
14%9%
E-mail
Chat
SMS
80%
82%
53%
23%
38%
35%
Call
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Manage Demand Manage Operational handling of interactions
Why needed?
The last step in this 5-step model concerns social competences that are empowered to act upon
empowering customer service agents to deliver triggers that allow for creating additional value for
excellent service by supporting them with both customers and the business (e.g. cross- and
optimized tools and capabilities to succeed. upsell). It also require clear career opportunities and
a company culture that spurs a proactive behavior to
By following the prior steps efficiently, the continuously look for process improvements as a
actions throughout this specific step will focus basic part of the agent's job. In addition, these
to enhance agents’ abilities and motivation to capabilities need to be supported by a technical
be efficient during the customer interactions. infrastructure of tools, systems and structured data
When there is an actual interaction initiated processes that are optimized to ensure efficiency
between an agent and a customer with the aim and customer centricity.
of solving an actual problem that could not have
been deflected or automatically handled, this So, customer service agents are key for enabling and
human intervention requires fully customer- keeping good customer relations, but also for
centered and personalized service. This is how securing cost-effective customer service operations
customer service agents’ skills and competences on the long-term perspective. Their input will feed
should be utilized to the most: as value-adders. the continuous loop of this 5-step model, as it leads
As highlighted in various reports, personalized us back to improving possibilities to eliminate
service is key for enabling high customer incoming contacts. Then make sure that the agents
satisfaction (see graph below). are supported well enough to harness on those
benefits!
However, being able to leverage upon those
interactions require motivated talents with
5% 3,7
30%
22%
28%
20%
0% 3,6
Individual, Time required Possibility to
personalized to resolve an solve one’s own
service from your issue problems
agents
15
Shift your mindset into
start utilizing your
Customer Service
organization to enable
actual value! It’s time to
start thinking and acting
tactical.
16
So, what is the most pragmatic way forward to
provide excellent customer service in a
cost-effective manner?
The three key enablers
Based on our experiences, there are three key enablers to succeed with
navigating in this seemingly tricky landscape:
Based on our experiences, there are great cost It should be noted that undertaking each of
savings potentials from carrying out the these 5 steps will have greater impact
tactical moves outlined, especially through the compared to prioritizing only specific steps.
last three steps of the model (with moderate That is, the benefits of each step will together
numbers of 10% - 20% cost savings). However, be greater than each step per se, as the
typical transformation savings of going combination of efforts will enable better
through all 5 steps, based on our experience prerequisites for cost savings and abilities to
from various client projects, are 15% - 25% in enable excellent customer service.
actual cost savings.
With that in mind, this 5-step model could be
The actions through each of these 5 steps will utilized as a catapult to start structuring your
depend on how digitally mature a business is customer service operations, as the goals
and the current ability to drive through (cutting costs while keeping high customer
changes of processes, mindset and existing satisfaction) have been outlined. Use the
patterns. This will in turn also imply varying model to create a common goal to strive for!
efforts and timing of when actual impact can
be realized, which will differ between
companies.
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Enabler 2: Fully utilize your Customer
Service organization and transform it
into becoming a value driver
Why Deloitte? We at Deloitte Digital have the What is the Deloitte way? We work with our
skills, experience and interest in supporting clients, not for our clients. We believe that co-
your business to go through this change in a creation is as it’s best when utilizing the full
pragmatic, tactical and cohesive way, that fits breadth and depth of knowledge to create and
with your business vision, strategy and goals. It execute on a plan together that our clients feel
needs to be successful for your company, your ownership of. Our experiences from market
customers but also for your employees. We insights and our global Deloitte network enable
know how to succeed with that change. us to really understand our clients’ businesses
and their customers while being able to nudge
their ways of working to succeed. Good
relationships is everything.
19
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Strategy, Analytics & Deloitte Digital Core Business
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Alliances
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Appendix:
Customer Service
abbreviations
Agents Customer Service
employees which role is to
handle customer enquiries and be
the company representative in
customer calls
AHT Average Handling Time, also
referred to as throughput time
AI Artificial Intelligence
Digital Human An elevated digital assistant,
building upon chatbot
functionalities
FCR First Contact Resolution
FTE Full Time Equivalent
FTC Contractors/hired customer service
agents
RPA Robotic Process Automation, also
referred to as a Digital assistant
Warm handover That the information shared within
a digital communication between a
customer and the company
(questions, responses, sentiment
etc.) is transferred in real-
time/gathered in company systems
into a new channel/with a human if
the customer prefers to change,
without a need to repeat
him/herself.
22
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