A Closer Look at the Commissioned Forrester TEI Study on the Cost
Savings and Benefits of Using Customer Service Management at a
Communication Service Provider
Solving customer problems, making it easy for everyone to find the
information they need, and meeting SLAs: These capabilities might seem
like table stakes for a service provider’s customer service program.
Yet for many providers, they’re out of reach because of fractured
platforms, siloed knowledge bases, and costly legacy systems.
Service providers looking to improve customer service delivery have
turned to ServiceNow Customer Service Management to centralize
support systems, reduce costs, and boost productivity. But what is the
return on investment (ROI) of the solution? How can a service provider
quantify what deploying Customer Service Management might mean in
financial terms to their organization?
ServiceNow commissioned Forrester Consulting to find out and
conducted a Total Economic Impact™ (TEI) study at a communication
service provider on the ROI realized by standardizing on ServiceNow
Customer Service Management.
Guest speaker Sean Owens, Principal Consultant, Total Economic
Impact Practice, Forrester Consulting, presented the study’s key findings in a recent webinar. Here are some
of the key takeaways from the ensuing Q&A:
The study found that one provider saved $15.6 million in support
costs by reducing support calls and increasing self-service. How do
we achieve these kinds of benefits?
First, you need to look at all the support channels in place at your
organization and determine what each one costs. For example, before
deploying ServiceNow, the provider had a mix of support calls coming
in from phone, web (or portal), and email. The phone made up 60% of
the calls, the web was 35%, and email was 5%; a phone call cost $30,
while the web cost $23, and email cost $27.
Next, you need to identify which channels 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, to the ones that are the simplest to use and maintain, such
as the web. The provider was able to shift a number of contacts from
phone to a customer service portal, essentially saving $7 (the
difference in phone and web contact costs) per contact, which
ultimately added up to a significant savings.
While you may not have email in the mix, you may 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.
My organization is not a telecommunications provider, do the
findings still apply?
Yes, because everyone deals with customer support. The content of
those contacts and the volume of more complicated contacts that
require escalation will differ, but all organizations should strive to
provide efficient and useful support to their customers. Any process
changes or technology solutions that enable customer service agents to
resolve issues more accurately and quickly mean that customers are
happier (or at least less likely to be angry or frustrated). They may
be more likely to purchase again or less likely to leave for a competitor.
So, if you are in IT services, the retail industry, in another
commercial business, or perhaps even in the public sector, the themes
addressed in the TEI study can help. For some, it may be a matter of
simply adjusting some of the input metrics: the cost per contact, the
amount sold per transaction, or the cost of service-level agreement
upkeep. For those in the public sector, there are probably a few more
steps that will depend on your situation. For example, there may not
be upsell opportunities here, but there are opportunities to complete
more service contact requests and avoid other costs.
How do you measure success with Net Present Value (NPV) and Return
on Investment (ROI)?
The short answer is 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 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.
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 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 service providers can improve customer
satisfaction, reduce SLA penalties, increase agent productivity, and
reduce reliance on costly legacy systems with ServiceNow, check out
Forrester TEI study and the webinar.