…and companies focused on delivering Knowledge Insight get much greater return.

I recently spoke with 1to1 Magazine editor Ginger Conlon about the importance of actionable insight within customer service departments and provided a few examples of how this helps deliver considerable ROI.

Injecting actionable insight into the process of resolving customer issues is a goal that most companies seek to achieve. At a high level, most business executives intuitively appreciate the relationship between a better understanding of customer issues and needs, and its impact on higher sales or greater client satisfaction.

Literally speaking, insight means gaining an accurate and deep understanding of something, for example a business situation such as a customer issue and its solution.

“Gaining insight” can consume more than 50% of the customer service department budget

The driver is quite obvious. For many companies, product diversity, complexity, and pace of change is increasing, and hence often more than 50% of their customer service bandwidth (we have even seen figures north of 70%) is consumed by activities associated with gaining understanding into customer issues and seeking a satisfactory solution for every single one; or basically customers (self-service) or agents consuming time gaining insight, and accumulating delays and frustration.

The currency of customer service is time. When you consider the cost per agent, per year of approximately $80K to $120K (fully loaded), my simple math computes this task of “gaining insight” at as much as $5M per year for a 100-agent customer service department. The more complex customer issues are the greater that costs are. We’re talking a great deal of money here.

The impact of insight challenges within customer service – we call it insight deficit – also goes beyond that direct expense. Insight deficit has huge ramifications on client dissatisfaction due to an inability to resolve customer issues fast enough and in a quality manner. It impacts revenue and reputational capital. Smarter companies will also understand its impact on agent dissatisfaction driving up costly turnover, hiring, training, quality, etc.

A study conducted in 2011 by Omega Management Group and Coveo revealed the harsh realities of contact centers as they relate to insight deficit, with agents not having the necessary information to resolve customer issues efficiently.

Of companies with 100 to 250 contact center agents, 75% cannot find the information they need to solve customer issues in the knowledge base (83% for companies with 251-500 agents).”

“Among the largest companies with more than 10,000 employees, 43% report that information contact center agents need to access to solve customer issues resides in more than 20 different systems.”

In most of those situations, calls are routed properly with account information pop-ups, the phone is working, chairs and cubicle are comfy, calls are monitored and sometimes transcripted, etc. So the contact center infrastructure is fully functional. But both the customer and the agent are frustrated because they lack the insight to resolve the issue efficiently, which happens to be what customers and agents care about at the first place.

What strategies are companies applying to address the insight challenge within customer service? Often its Knowledge Management!

But what is Knowledge Management?

What I find surprising is how many companies we talk to who appear to have a confusing, narrow and yet very costly strategy around knowledge management in customer service. Too often, knowledge-in-a-box approaches are embraced as a panacea to solve all client issues, and companies find themselves disappointed with the improvement results they obtain vs. the amount of effort that goes into curating up-to-date knowledge. More importantly, from an economics prospective this is far from optimal when you start approaching the problem holistically.

Customers and then agents – logically in my view – should always be the starting design point of a customer service process. So what do they want? They are asking for the right knowledge in real-time to understand and resolve every customer issue: complete insight at their fingertips, every time. What they are really seeking above all is efficient knowledge insight for every situation.

Gathering and curating knowledge within an ECM platform or a knowledge base is a company’s programmatic response to this requirement, a means from the company viewpoint. From the customer viewpoint nobody cares where the knowledge comes from, they just need the issue resolved.

In many customer service departments, there is a natural tendency to lean on the knowledge base as the single source of truth for everything. This is fuelled by the fact that this approach may very well resolve 60% to 80% of the simpler tickets. And hence because this is where the ticket volume is this is where initial process design efforts go. The approach has value, albeit I will discuss in a next blog that not enough attention is paid to delivering that standard content within an efficient self-service experience.

But what about the remaining 20% of the tickets which don’t have an available answer from within that curated knowledge? What if they consumed 60% of the dollars of the customer service department? What if those 20% more complex tickets were the source of 80% of customer dissatisfaction? Can you picture the dollars leaking out the door?

This greatly justifies the shift in predominant focus from knowledge management to knowledge insight, and I’ll continue to explore the differences in my next blog post, and the role that each plays within customer service.