The Rise of Proactive Customer Care

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Proactive customer care (PCC) is an exciting concept that, when executed properly, delivers benefits to both enterprises and their customers. Customers want to hear from preferred retailers, healthcare providers, airlines, delivery companies, and others as long as they consider the communicated information beneficial. The challenge for businesses and other organizations is to create useful communications that their customers welcome and to deliver these messages in each customer’s channel of choice: phone; email; SMS; fax; and, in the future, video.

Dialing Is Not Dead
In 2003, when the Federal Trade Commission (FTC) enacted regulations to prevent companies from blind dialing, many pundits thought it was the end of the outbound dialing market. The rules prevented companies from annoying customers and prospects with unsolicited phone calls for products and services that held little interest or value to them. At the same time, opportunities were created for companies by forcing them to figure out how to communicate more effectively with customers who did want to hear from them.

It took a couple of years, but a few innovative companies realized they could enhance customer relationships by creating automated communications for which their customers would be willing to sign up. Those communications were intended either to decrease operating costs by reducing the volume of inbound calls and emails or to increase revenue by issuing targeted notifications via outbound self-service applications. All of those solutions started out as outbound interactive voice response (IVR) applications. But in the past two years, innovative vendors have expanded their applications to employ additional communications channels, such as email, SMS, fax, and Twitter. And more channels are on the way.

What Is PCC?
PCC is a business strategy that makes consumers’ lives easier by addressing issues before a problem or a need arises. Organizations that adopt PCC identify and address customer needs proactively by sending messages or other communications to customers and other interested parties at appropriate times.

The concept is not new, as organizations have been making welcome calls for years. For as long as there have been credit cards, fraud departments have been calling out to customers to notify them of potential problems with their accounts, and high-end department stores have been calling their big spenders to notify them of sales. Companies have performed these activities because they have helped build customer relationships while increasing revenue.

But it also turns out that PCC is effective at reducing operating costs. Customers are grateful to learn when their airplane is delayed or they are due for a prescription refill, particularly if this information is shared conveniently and unobtrusively. Keeping customers informed can reduce servicing costs and unexpected surges in call volume. Assuming that it costs $5 to $25 for a typical inbound customer service call or email and less than 5 cents for a typical outbound interaction, it’s impossible to argue with the math.

Uses and Applications
Public, private, government, and all types of organizations are finding beneficial uses for PCC. Enterprises have found the solutions improve the customer experience, build loyalty, and reduce operating expenses. At the same time, properly targeted enterprise customers have learned that PCC is a great way to reduce unproductive time. Private institutions use PCC to notify members of institutional activities to boost the effectiveness of fund-raising campaigns. Federal, state, and local government organizations are using PCC for everything from notifying their constituents about road closures and real-time traffic disruptions to school closings and catastrophic weather alerts. The result is better-informed constituents who see their tax dollars at work.

PCC improves customer satisfaction while reducing operating costs. When businesses deliver automated appointment reminders to customers, for example, the number of missed appointments drops dramatically. Companies that notify customers about scheduled deliveries and claims status help to set realistic expectations and diminish worry. Notification of unusual spending activity is another high-value communication that protects a cardholder’s credit while reducing fraud losses. Customers see these proactive notifications and alerts as great service that builds loyalty.

Marketing Uses
Marketing organizations should actively use PCC to increase customer loyalty and generate incremental revenue by delivering targeted and personalized information that improves the lives of their customers. More retailers are using PCC to subtly upsell products and services intended to make people healthier. Other retailers apply the concept to sell products associated with recent purchases, and still others are improving customer retention through loyalty programs. When companies build an enterprise PCC strategy that encompasses all customer-facing organizations, there is significant and beneficial overlap between the customer service and marketing uses of PCC.

Public Service Uses
Federal, state, and local governments and regulatory organizations are finding many uses for PCC. Outbound PCC servers enable these organizations to deliver large volumes of notifications quickly to keep the public informed. Examples of public uses include notification of road closures, emergency procedures, schedules for fireworks, and alerts about fugitives. PCC is being used to build relationships with constituents, something the government has struggled to do. Public service uses include: emergency notifications, school closings, power and other service outages, catastrophic weather alerts, Amber Alerts, traffic congestion, political campaign calls, election reminders, and polling locations.

Competitive Landscape

PCC is not yet widely recognized as a distinct technology market, even though a group of dedicated outbound technology providers has been quietly building this sector. These solutions are offered predominantly on a hosted/cloud basis, albeit many premises-based IVR and email providers have entered the field. Many companies have built products that address the needs of specific verticals, such as healthcare and transportation, while others have created broader, horizontal applications. In addition, vendors have built packaged, out-of-the-box applications that reduce deployment time and implementation risk.

Final Thoughts
Every organization, whether public, private, or not-for-profit, should jump on the PCC bandwagon. It’s easy to do and will be welcomed by its intended audience. DMG expects to see this underpromoted and underappreciated business strategy continue to gain momentum quietly because it is a successful and cost-effective way to improve customer or constituent relationships.

Donna Fluss and Gary Schwartz are with DMG Consulting LLC, a leading provider of contact center and real-time analytics market research and consulting services. Donna can be reached at donna.fluss@dmgconsult.com.

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