The Solution: Customer Communications Management
Why Are Organizations Losing at Customer Communications?
CCM Improves Customer Retention and Revenue
The Components of a CCM Solution
Why Not Build Your Own CCM Solution?
The Benefits of Hosted Managed Services for CCM
Businesses have always needed to communicate with their customers. For earlier generations of bank customers, for example, those communications were face to face. A customer handed over a bank book or withdrawal slip to a teller and at the same time learned about new types of accounts or other bank offerings. Customers were also mailed monthly and quarterly statements and end of year tax forms. These were static, one-way communications.
Today, customers have much higher expectations of the communications they receive. Their experiences with Amazon, Apple, Google and other leaders in the digital marketplace mean that they expect the companies they buy from to understand them and customize their offerings to their unique needs. When those expectations are not met, customer satisfaction and loyalty is diminished. Conversely, organizations that successfully communicate with their customers, making every interaction a positive one, win out over their competition.
Not surprisingly, companies work very hard to improve their customer communications. They retain vast amounts of customer data that they feed into analytics and AI systems to generate customer insights. They support call centers and print operations; their digital marketing departments monitor customer sentiment on social media. But at the root of it all, despite the new channels and technology, the requirements of customers have remained the same: “Know who I am and what my relationship is with you, care enough to listen to what I need, and provide it to me in an easy and accessible manner.”
Companies that are unable to do this, that cause friction in their interactions with customers, ultimately see higher rates of attrition. Many of these problems are not complex, it’s just that the internal mechanism to prevent or resolve them is broken. Most consumers, when asked, can relate problems with customer communications they’ve received similar to these:
- The signup process to open a new credit card account is overly complicated. It can’t be paused and resumed, or it requires a phone call to resolve a minor technicality.
- A bank sends a customer an introductory mortgage offer – unfortunately, it offers a better rate than the mortgage the customer already holds with the bank.
- A health insurer generates explanation of benefit statements that are so confusing, customer service representatives are overwhelmed responding to the same questions.
- A utility company closes out an account on the wrong day – and phone support labels it a back-office problem that is outside their control.
The Solution: Customer Communications Management
Managing the methods that that an organization uses to connect with customers, so that it can deepen the customer relationship, moving them from an occasional user of a product or service to a consistent one, even an advocate, is the role of Customer Communications Management (CCM) systems. CCM is a technology-based approach to communicating with customers and for managing those communications over time and across multiple communications channels.
What are Customer Communications Management Systems?
Customer Communications Management (CCM) systems manage the methods that an organization uses to connect with customers across multiple communications channels, to create and deepen customer relationships.
Today, CCM is table stakes for organizations looking to attract and retain customers. It is not enough to simply manage communications; the real need is to create a relationship based on a digital engagement experience that is consistent with consumer demands. To do this, a CCM solution consolidates customer data from different data sources to create and deploy communications across communication channels such as print, email, digitally enabled documents and text messages. Customers are empowered to choose which delivery methods they prefer. Customer data is used to personalize communications and, combined with the power of data analytics and artificial intelligence (AI), to determine further actions that will improve the customer experience.
By effectively managing customer communications using a CCM solution, an organization can generate additional revenue, upsell and cross sell products and services, and reduce customer attrition, ultimately enabling long term growth. CCM solutions also offer efficiencies. One obvious example is the estimated 55 to 75 cents saved on the cost of printing and postage for every statement that is delivered digitally. A lender who receives digital payments days ahead of traditional mailed checks also benefits from a faster time to revenue. But ideally, a CCM solution should also redesign communications for clarity and to reduce manual intervention. A poorly designed explanation of benefits statement, for example, will drive up call center costs if customers don’t understand its meaning or the action it requires from them. A bill that has been redesigned to reduce complexity will reduce call center hours and even postage costs if it eliminates the need for an explanatory page in a mailing.
Why Do Organizations Use Customer Communications Management Systems?
By using CCM solutions, organizations can generate additional revenue, upsell and cross sell their products and services, and reduce customer attrition, ultimately enabling long term growth.
Why Are Organizations Losing at Customer Communications?
Every company that has a customer base communicates with their customers and so needs to manage those communications. But most companies have a very disjointed approach to communications. Many rely on legacy applications to print output like statements and bills. Often these are generated by standalone applications that are owned by different lines of business or corporate departments.
And organizations are buried under mountains of customer data with no ability to leverage it. The data these systems use is siloed; as a result, it is not standardized or available to other areas of the organization. In addition, many legacy systems have manual processes requiring human intervention. As a result, they are fragile, unscalable and error prone.
The solution to this is digital transformation: replacing outmoded business systems and processes with modern technologies. But it is not enough to simply stand up new software systems. By definition, digital transformation is a comprehensive endeavor, one that reengineers business processes across the enterprise. It isn’t a “nice to have” – it is a necessity for organizations if they want to remain competitive. And it isn’t an IT initiative but requires the entire organization to transform. When this doesn’t happen – when a company purchases a point solution to bolt onto their existing systems – that new solution won’t enable digital transformation. Instead, it will likely be retrofitted to work with older systems or processes.
By contrast, a complete CCM platform enables digital transformation by redesigning manual process to make them digital-first and data-informed. For example, organizations grapple with high call volumes from customers who don’t understand the communications they receive. A CCM solution will employ best practices and phone call analytics to determine whether the communication was helpful or confusing, then create and deploy a new statement design.
CCM Improves Customer Retention and Revenue
Customer acquisition costs are always higher than servicing costs – on average it costs five times as much to acquire a new customer as to maintain an existing one. Companies that obtain new customers only to lose them to a competitor are wasting money and damaging their long-term growth.
Fortunately, the data organizations capture about their customers (such as age, home ownership, family size) enable them to understand the wants and needs of their customers. For a young couple, for example, those needs might be a college saving account or a down payment on a first home instead of retirement funds or home equity line of credit.
When an organization understands the specific needs of its customers, when it offers products and services that are meaningful, when customers feel they have a relationship, it improves customer “stickiness.” In contrast, studies show that up to 43% of consumers opt out of email marketing because content is not relevant. CCM solutions enable companies to directly ask customers what they are interested in, using direct communications or a customer self-service portal to gather customer preferences for language, reminders, digital vs paper, etc.
Retention is important, but so is improving revenue. There are several paths to increased revenue from customer communications management. First, by increasing revenue by cross sell and up sell of products and services. Data resulting from each communication touchpoint can be analyzed in conjunction with existing customer data to reveal more opportunities to re-sell or up-sell to consumers.
Another is the acceleration of existing revenue streams. For example, when patients are confused by medical provider bills, it slows down the payment cycle. A CCM solution that uses best practices to deploy clear-cut statements reduces days sales outstanding (DSO).
The Components of a CCM Solution
Data Management. It all starts with data. Organizations keep huge volumes of customer data, usually stored across a variety of databases. Customer data (name, physical and email addresses, phone numbers), sensitive data that needs to be secured (such as passwords and social security numbers) and transactional data (like date opened, balances, items purchased.) Organizations may also collect and use unstructured data from streams like social media and third-party sources. A CCM solution will ingest this information from various sources and normalize it to a standard data model.
Content Management. Another component is a content manager to control messaging, content and business rules. Content users manage includes assets such as company logos as well as variable content that can be placed in whitespace zones on documents. All content is collected in a central data store where it is governed by change control auditing and approval functionality.
Preference Management. Organizations usually hold some communications preference information for internal use, for example, in a customer relationship management (CRM) system. However, a CCM platform not only needs to hold information like phone number, consents, and language preferences, but also allows customers to update these when their preferences change.
Communication Design Composition. This is the actual communications composition process, combining customer data, templates, graphic assets and delivery preferences to create a communication touchpoint. For some types of communications, there may be additional processing, such as adding barcodes to printed mailings. Communication touchpoints should be logged and archived for auditing and re-creation.
Omnichannel Communications Delivery. Customer expect to receive communications via different channels, such as printed output, emails, pdf and text. The delivery functionality of a CCM solution delivers communications through the right channel every time to ensure customers receive their messages.
Communication Archive. In addition to the data collected and archived for each communication, a CCM system should log important delivery data such as date and time sent. These are necessary for regulatory compliance to demonstrate that communications were sent. The archive needs to be searchable online by customer service representative who will need to answer customer queries and resend communications. It may also be used to house pdf versions of communications in a customer portal. The archive also captures metadata on interactions, such as email opens and click-throughs, that can be used to optimize communications.
Reporting Features. For CCM, reporting includes analytics to measure the effectiveness of each communication. It also includes status reporting on each communication and regulatory auditing, and should include, beyond standard operational reports, the ability to build ad hoc reports.
Why Not Build Your Own Customer Communications Management Solution?
Many companies believe they can build their own solution faster, and at a lesser cost than a third-party CCM solution. At first glance, this makes sense. Internal teams understand their data assets and where in their process flows to implement communications customized to their particular needs. They may already license composition software and may even maintain their own print facilities.
But building a custom solution is not always the best decision. Companies that want to implement a homegrown customer communications application face a number of challenges, starting with large-scale data integration requirements. CCM solutions run on customer data, and that data tends to be stored in myriad, siloed data sources. It is a massive undertaking in and of itself to access this data and normalize it for ingestion into a CCM system. Many organizations that try to build their own solution don’t get past this first step of aggregating data from different data sources.
Another approach is to purchase various CCM components and then integrate them with existing systems. However, it requires significant CAPEX investment to purchase different point solutions, integrate them with existing systems, and then continue to pay licensing costs and keep each solution up to date.
The expectations for customer communications and the technology that supports it has changed tremendously over the past five years. It requires continuous investment to simply not fall behind. It’s impossible for an organization to implement its own solution in the same time frame as a vendor’s CCM solution. There is an opportunity cost for dedicating resources to an in-house solution, one that detracts from their many other initiatives. And building a uniquely customized solution often comes at a cost of flexibility in the application – for example, to enable switching out print service providers or onboarding other lines of business after a merger.
Another issue is that solutions built by IT tend to be IT-oriented. However, the control of customer messaging and content should not be the purview of a busy and high-cost IT department. Business owners and subject matter experts should own these systems, which should be designed to enable end users to compose and deploy communications.
Finally, most organizations are not staffed with communications experts. As a result, a homegrown CCM solution will likely eschew best practices. By comparison, a CCM solution from an established vendor will be state of the art and designed to follow best practices. It can be customized and deployed faster, and require less support from IT. It can also simplify a company’s tech stack – removing the need for point solutions that need ongoing licensing and support from technical staff.
The Benefits of Hosted Managed Services for CCM
Over the past five years, how we communicate with each other has totally changed. And the Covid world we now live in has increased the demands of customers for digital self-service options and the ability to execute a growing number of transactions online. This is pressuring organizations to expand their digital capabilities and allow a greater number of channels by which to engage.
Boarding new customers on an outdated communications and servicing infrastructure leads to higher customer attrition and negatively impacts long-term growth. Companies that still depend on legacy technology platforms will undoubtedly miss the mark and lose customers to their more forward-thinking competitors. High cost solutions with long implementation timelines will cause them to fall further behind the competition, creating a poor customer experience and leading to attrition.
By deploying customer communications management with a Hosted Managed Services model, an organization can avoid the large capital investments and multi-year timeframes required by IT projects, replacing it with a full OPEX model that covers the investment with cost savings. CCM hosted managed services combine best practices from years of industry experience in an integrated technology platform configured to meet an organization’s strategic objectives.
What if you could increase revenue, minimize risk, and improve your customer experience to increase retention and protect your investment in customer acquisition? And what if you could realize cost reductions that would cover the costs of the enabling technology? Partnering with DataOceans enables you to stay on the leading edge of communications technology. Learn more.