Forrester & Freshworks: Optimizing customer service for higher customer engagement and revenue.

Excellent customer service and memorable experiences are often-overlooked drivers of business growth. The key to delivering these experiences? Technology-powered customer interactions, personalized CX, accessibility, and ease of use. In this discussion, Freshworks executive Arun Mani and Forrester analyst Kate Leggett speak about how omnichannel CX strategies improve customer engagement, and consequently, top-line revenue.

Arun Mani

President, Freshworks

Kate Leggett

VP & Principal Analyst, Forrester

What's in this discussion

  • Post-pandemic customer expectations are different: By the numbers
  • What constitutes a ‘great customer experience’?
  • The agent vs. the technologically-empowered agent
  • Why self-service and automation are critical pieces in the customer service puzzle
  • The revenue impact of customer service: Quantified



Part 1: The demands of the modern customer

Arun Mani: Here are some statistics from a survey we conducted – they will bolster our understanding of the modern customer’s behavior.

  • Customers are demanding. They have very high service expectations. 47% of customers say that they would like their favorite brands to improve their service quality and align it with modern channels and technology.
  • Customers are omnipresent. 34% said that they want service anywhere, anytime, regardless of business hours or location. 

  • Customers are on multiple channels. They don’t like being restricted to one particular channel (like email). Rather, they would like the freedom to choose between, and even switch between email, phone, live chat, and text.


Arun Mani: Kate, what exactly do customers consider to be ‘great service’?
Kate Leggett: Customers expect instant resolutions for most inquiries via low-friction channels they’re comfortable with (like text or messaging).

Kate Leggett: They also want effective support, so they shouldn't have to follow-up with you multiple times to get problems solved. Effective, easy-to-access, and tailor-made customer experiences are highly dependent on the agents’ own experiences. Simply put, agents shouldn’t have to struggle to handle customer interactions – simplifying the agent’s job by giving them the tools/software to drive faster resolutions will help them create those exceptional customer experiences.

For example, agents need real-time access to customer and product data that may have been collected at different points in time. They shouldn’t have to ask customers for details that already exist in the system. Agents also need to be able to freely collaborate with internal and external stakeholders to provide satisfactory resolutions.

Kate Leggett: Ultimately, great customer experiences have a quantifiable, immediate impact on top-line revenue

Happy customers will stay with you longer. Churn rates will drop, and they will buy more from you, increasing the Customer Lifetime Value. They will also recommend your products to their network and influence second-order sales. 

Part 2: Why omnichannel customer service is a must-have

Arun Mani: Businesses encounter two major concerns when they use multiple CX channels to create stellar experiences. The first concerns omnichannel service. We know that companies are rushing to provide experiences across different channels. However, these companies struggle to deliver consistently good service across all those channels. A survey says that 32% of customers want an answer within 30 minutes, and 57% of customers expect the same turnaround time regardless of whether it's a night or a weekend on any channel they might use.

A recent Accenture survey found that 89% of customers get frustrated when they have to repeat their issues to multiple representatives, and 87% of customers think brands need to put more effort into providing seamless experiences. Businesses are looking to create omnichannel experiences, but succeeding in that endeavor is harder than it sounds.

Here are some challenges businesses face in their pursuit of delivering those omnichannel experiences:

  • The paradox of choice: More is not always right. Customers want to talk to you across different channels. Should businesses provide those channels to them, and will they be able to consistently deliver stellar experiences if they branch into multiple customer support channels?
  • Scattered customer data kills customer experiences. In a rush to provide different channels and services, companies are forced to use multiple tools that store customer data in silos. In fact, they might be having conversations about the same customer issue across multiple channels. We see that agents who work in multi-channel environments don’t usually have the full context of the customer, leading to customers having to repeat themselves. Context is lost, resulting in general frustration or lack of satisfaction.

Businesses looking to maximize the quality of their customer experiences must carefully consider the above issues. Why? Post-2021, customer experience is expected to overtake price and product as a key differentiator, and companies with strong omnichannel experiences will retain ~80% of their customers. What’s the best way for businesses to meet rising expectations, especially in terms of customer service?

Kate Leggett: First, they’ll have to gain a keen understanding of customer expectations in their industry. Here are some tips on meeting those expectations:

Step 1: Understand the channels your customers are using and the order in which they're using the channels. Customers tend to use self-service as the first point of contact with a company. They're using your FAQs and your knowledge base and exploring forums, IVR, and chatbots. Accessing self-service content via web or mobile is a low-friction path to query resolution for most customers. Customers enjoy self-service because it saves them time and gives them speedy resolutions.

If your customers can't find answers through self-service, they use agent-assisted channels like phone calls and texting. These agent-assisted interactions are escalation calls – issues that weren't solved by self-service. They’re harder to solve and might be edge-cases or product bugs.

The choice of channels used is highly dependent on the industry or vertical your business is in.

Step 2: Understand your customer journey.

Often, customers use multiple channels to contact a company. They start a conversation on one channel (like social media) and then move to another (like phone calls). There’s a complex customer journey that spans both phone calls and digital touchpoints. In-person interactions might factor into the journey too, like an Apple customer visiting a Genius bar. Understand that your customers may be using more than one channel at the same time. Like Arun said, "As they cross channels, they want companies that understand who they are, where they are in the journey, what they've already communicated to the company – so that they don't have to repeat the information that they've already furnished.”

Understand the emotion of your customer depending on their journeys. Let’s consider the previous example of a customer reaching out to you after failing to self-help using the resources you provided. In this case, the customer tried to self-serve and consequently had their time wasted because they've had to navigate an IVR or search for an answer on your customer service page – thus, these agent-assisted interactions start with a frustrated customer. Perhaps they've had to wait in a customer service queue despite having a pressing issue. Maybe they don't understand why their perfectly valid return claim has been denied. At this point, they've been put through multiple hurdles to get connected to the right agent. Make sure that you choose the right technologies that will help your agents resolve these harder interactions. 

Part 3: Chatbots, their RoI, and how they increase engagement

Arun Mani: Can you speak about chatbots, their maturity and feasibility to be deployed as CX tools, and where they must be used?
Kate Leggett: The easier you make it for customers to contact you, the more your customers will do so. However, they’re moving away from traditional channels. Below, you’ll find data from Dimension Data's global benchmarking report that surveyed over 1000 contact center decision-makers globally.

More than half of these contact center decision-makers predict that their voice volumes will drop. Now, if you look at the bottom bar on the graphic, you’ll notice that the same decision-makers expect automated interactions and digital interactions to increase. This scenario is perfect for a self-service setup, where chatbots and self-service workflows are used in tandem to provide accelerated resolution to consumers.

Tremendous effort and investment is going into chatbots, and their capabilities are increasing exponentially. Chatbots do a really good job for simple inquiries and transactions (for example: “When’s my flight taking off?”). However, they’re less suited for things like large consultative purchases, where there needs to be a discovery of the customer’s needs before a sale can occur. Chatbots cannot make personalized product recommendations, or handle complex payments.

Chatbots fall into one of two categories:

  • Customer-facing chatbots allow for frictionless customer-business engagements.

  • Agent-facing chatbots assist agents and make them more productive. For example, suppose an agent is looking for data or content. In that case, bots can locate that content by scanning an existing database so that the agent can focus on the customer instead of having to put them on hold to search for that information.

Businesses often want to understand where the Return on Investment ROI) of a chatbot comes from. Issue deflection is a huge benefit, but not the only one. Chatbots also impact agent productivity – if the chatbot and the agent were to work together, the agent could handle 5-7 concurrent chats instead of the usual 2-3 chats. You can also mine these chatbot interactions, understand why the chatbot failed, and optimize your chatbot experience. There's a tremendous benefit in being able to roll out chatbots to support both customers and agents effectively.

Arun Mani: How advanced are chatbots in terms of supporting multiple languages? Is it only as advanced in English or are the other languages still catching up? 

Kate Leggett: The other languages are still catching up; because you need to build language models for each region. Chatbots are primarily English-based, but rest assured that most chatbot providers will offer a wide array of language support very soon.

Arun Mani: What’s the best way for a business to kick off their chatbot usage?

Kate Leggett: Start small and plan for failure. Try your chatbots out with your agents and get their feedback because if they fail with your agents, they’re certainly going to fail with a customer (and get routed back to an agent, defeating the purpose of a bot). Once your agents are confident about the chatbot’s resilience, you can roll them out to customers. Train chatbots to execute simple tasks, plan for failure for that particular task, and then think about adding advanced functionality. Always assume that customers are going to push the chatbot to their limits. Ideally, the bot should allow a graceful escalation or handoff to an agent if it cannot deliver a satisfactory answer.

Part 4: How greater engagement can impact top-line revenue

Arun Mani: Here's an interesting anecdote. After Freshworks launched WhatsApp as a CX channel, one of our customers activated it and found that the number of tickets increased by 20%. Management did get a bit concerned for their agents' bandwidth and wondered if all the new engagement would benefit the business at all.

As we invest in multi-channel support and chatbots which provide an omnipresent, anytime-anywhere type of engagement, the engagement is bound to increase. What are its impacts on the top line overall? 

Kate Leggett: Great customer experiences influence the three dimensions of loyalty, which we at Forrester call Retention, Enrichment, and Advocacy. Retention is avoidance of customer churn. Enrichment is a customer buying more products and increasing their lifetime value. Advocacy is driving second-order sales.

To answer your question – yes, great customer experiences impact top-line revenues. In today’s world, brands are actively giving their customers more ways to interact with them. There are naturally going to be more tickets – simply hiring more agents to deal with increasing volumes is not the best way to handle increasing contact volumes. On the contrary, that approach will only maximize your operational costs, and not provide a comparable return on investment.

We (Forrester) have data showing that 46% of contact center decision-makers project the number of agents to grow by 5-10% next year. 14% of decision-makers projected to grow their headcount by more than 10%. Hiring for this growth rate is not economically sustainable. You need to understand that your customers want to engage with you over self-service, often over many other channels. You have to reimagine your omnichannel operations, put self-service front and center, and automate wherever possible.

Forrester has developed a value chain for AI and automation to think about how businesses can scale their CX operations while providing personalized experiences for every customer.

Kate Leggett: You have to focus on making your customer service organization as productive and efficient as possible and use automation and AI to help accelerate context routing, case classification, or even agent scheduling. Consider leveraging automation and AI to reduce the friction in a customer's journey. For example, automatically escalating issues based on the intent of the inquiry, wherein chatbot conversations could even be automatically escalated to an agent.

You could use chatbots to empower customers to self-help, or to assist agents in systematically solving complex tickets. You can even use AI and automation to engage with your customers proactively, to serve up the right content (or coupons, if you’re in retail) to them at the right time. Try to deliver proactive service. If you use AI and automation to their fullest extent, you can really understand your customer, predict what issues they might face, and proactively deliver fixes to those issues. All these best practices will see you deliver better experiences despite expending lesser agent effort on doing so, resulting in a net positive ROI.

Part 5: Live Q&A

1. Could you elaborate on how agents can obtain better context while serving a customer or handling tickets?

Arun Mani: Here’s how I see it: when a ticket lands on your desk, identifying the problem with the least amount of questions is key because once you identify what the real issue is, the solutions are simple. Let's say you have data sitting in silos within the organization, and an e-commerce customer who is shipping something calls your team up. The agent quickly pulls up the records of their latest purchases and looks at the one that’s in transit. So the agent already knows that this is probably what the customer is going to ask about. Similarly, there are many digital footprints left by the customer that you can use to your advantage. For instance, they could go to your FAQ section and look at a few articles. Knowing which articles they’ve read allows you to reduce the number of questions asked, and the agent can gather context in a manner that's not frustrating or repetitive for the customer. All this is possible with the right software.

2. Are you noticing a difference between B2B and B2C with regard to how customers want to access support, or is there no longer a difference between the two groups?

Kate Leggett: There is a difference, but it's not very apparent. I don't think of them as B2B or B2C. I differentiate them as simple interactions versus complex long-running interactions. For example, buying house insurance is a B2C model, but it's a complex interaction. Complex purchases and complicated interactions tend to be focused on phone-based channels. Simple ones tend to be omnichannel, trending toward digital channels like messaging, WhatsApp, chat, SMS, and so on. 

3. How do you sell the idea of investing in a good customer experience service or platform to executive management and shareholders who are primarily concerned about profit?

Kate Leggett: There are tremendous amounts of cost savings that you can realize by moving to a new platform that’s equipped to deliver omnichannel service. Better service results in higher customer satisfaction, leading to more new/repeat business, resulting in higher revenue.

Modern customer service solutions also allow you to be more compliant with company policies and regulations, so you can calculate the impact of not having to pay non-compliance fees. Modern technologies tend to be delivered via cloud solutions which are cost savings in themselves, especially if you’re using expensive legacy software. Arun, do you have points to add?

Arun Mani: Yes, I would love to add a few points regarding the adoption of omnichannel solutions. I would first question the premise that modern omnichannel software has to be expensive. The very point of a solution like Freshworks is to challenge the position that powerful software has to be expensive.

Another point to note is that most businesses will not sustain and deliver outstanding service if they have an outdated system. Now, suppose you look at the customers' experience as a marketing tool that can impact the top line. In that case, the entire organization has to undergo a behavioral change to create those experiences. These omnichannel tools allow you to do that with more ease than building those experiences from scratch.