Mobile Customer Engagement (II)

In my last discussion on the subject of Mobile Customer Engagement (I prefer Device-Driven Integrated Customer Engagement or DICE since it is a nicer acronym), I laid out some basic themes, but in the next two posts I want to push the envelope in two ways - the first is to think about what is the fundamental role of the mobile in "customer engagement" (in this post), the second is to visualize what the world might look like in 2015 (in my next post).

Fundamental role of Mobile in Customer Engagement
Customer engagement has evolved from a highly personalized process (at-home, in-store, call center) towards a de-personalized process (IVR, web, SMS) [which actually feels like customer disengagement]. The theory (as pitched by vendors of each new process or technology) was that the (fill-the-blank) technology would replace existing high cost methods and thus dramatically cut legacy costs while serving the customer's needs. The reality has been that each new method has generally failed to eliminate the volume of legacy transactions, and merely added new layers of cost. Confronted with this picture, the vendors and the buyers have rationalized that with all that increased contact, the customer must be feeling much happier, though few have ventured into really trying to prove this point. In fact, the customer is in many cases feeling less happy, since they now need to work harder to solve their problems as they seek to navigate the roadblocks created by their vendors. Meanwhile, companies are desperately trying to reach customers (not to deal with their problems, but to sell them more stuff), and are often overwhelming them with mail, email and SMS offers.

So net/net: customers are increasingly disengaged, the costs of serving them are increasing and the yield from new promotions is decreasing.

In this context, what is the role of the mobile phone? Will it be yet another supplementary technology or does it have the opportunity to fundamentally redefine the terms of engagement?

I would argue that the mobile phone will do the later, on the basis of the following logic:

1. The mobile phone is already becoming the primary vehicle for customer engagement. In the US, according to Nuance, already 1/3 of customer care calls are originated by mobile phone (using the voice channel), and this is projected to rise to 50%. This means that very high cost people (call center operators) and high cost network capacity are being utilized when much lower cost means are available in the same device that is being used today
2. The mobile phone is a multi-modal device, with built-in capabilities to do virtually any mode of customer engagement (text, email, IM, video call, web, on-device app), and uniquely positioned to enable seamless connection - for example an SMS can deliver either a web-link or an app, or a web-session can connect to an SMS or a live call). No other device can get even close to this - the traditional home phone has no service other than voice, the computer does not reliably link with voice. This is important because one major source of duplication is the lack of connectivity in all other channels.
3. The mobile phone has the ability to provide important contextual information - such as location (via GPS/triangulation), movement (via an accelerometer), recent phone activities (via specialized agents), and so on. This contextual information can be very critical in helping companies anticipate or respond to customer needs much better than ever before. Some extreme examples - the built in accelerometer in OnStar and some emerging phone-based apps can trigger a call to an emergency center when a car-crash or a fall happens.
4. The mobile-phone is available on a 24/7 basis, compared to other enabling devices that are less available, such as the phone or the computer. It also is closely identified with an individual, rather than as a shared device.
5. When companies have built good customer-engagement experiences on the mobile phone - be they SMS, mobile web or App-based, the adoption rates have been either good or extraordinary (often in the range of 25-40% adoption). In other words, to use the awful VC phrase: "the dogs will eat the dog-food". In fact every data point that I have seen, suggests that customers are delighted to be able to use their mobile phone for customer-engagement (or as they think about it "to solve their daily problems").
6. Initial observations suggest that mobile-engagement can eliminate in the order of 20-30% of customer-care calls, and can also displace substantial portions of IVR and web-based engagement.

Despite this logic, the reality is that maybe 5% of the Global 1000 companies are effectively harnessing the mobile phone as a channel for customer engagement, and therefore reaping the tremendous cost reduction and revenue growth benefits (as discussed in a previous posting, even the mobile operators are generally very poor in how they use this channel).

What is standing in the way?

1. Caution. Having been promised such benefits many times before, corporations are understandably cautious and sceptical about jumping on the latest technology
2. Confusion. It is difficult to determine what is the right technology choice, and how to re-engineer existing company processes to take advantage of mobile phones. For example, do I bet on something simple like SMS, something a bit richer like mobile web, or something really cool but not used by all my customers such as an iPhone app?
3. Time. In fact, there is a tremendous amount of testing and experimentation taking place. For example, airlines are aggressively testing and rolling out mobile-engagement - typically focusing on the mobile web; banks have also been quite aggressive in the past few years; mobile operators have been very active with SMS and are now migrating to more sophisticated forms. So expect to see some verticals make progress.
4. Complexity. Just like the web forced companies to rethink and retool some critical processes, Global 1000 firms will face a comparable challenge with mobile. Given that large corporations tend to develop silos' it is a complex task for them to accomplish such re-tooling.

Nevertheless, as today's smartphone becomes the standard for mobile-based interaction, with larger screens, better input mechanisms and massive processing capabilities, those corporations who ignore where the consumer is heading will find themselves eventually falling behind. In my next posting I will do my best to envision how the customer experience on a mobile could be in this rapidly emerging reality