Customer Experience - European Commission

Customer Experience - European Commission

Business Innovation Observatory Customer Experience Enhanced customer support Case study 35 Enterprise and Industry The views expressed in this r...

943KB Sizes 0 Downloads 23 Views

Business Innovation Observatory

Customer Experience

Enhanced customer support Case study 35

Enterprise and Industry

The views expressed in this report, as well as the information included in it, do not necessarily reflect the opinion or position of the European Commission and in no way commit the institution.

Customer Experience Enhanced customer support Business Innovation Observatory Contract No 190/PP/ENT/CIP/12/C/N03C01

Authors: Laurent Probst, Laurent Frideres, Dawit Demetri, Bastian Vomhof, PwC Luxembourg. Coordination: Directorate-General for Enterprise and Industry, Directorate B “Sustainable Growth and EU 2020”, Unit B3 “Innovation Policy for Growth”.

European Union, September 2014.

Table of Contents 1. Executive summary

2

2. Enhanced customer support

3

3. Socio-Economic Relevance

4

3.1. The market potential of the trend

4

3.2. The creation of new markets and jobs

5

3.3. Client companies perspective

5

3.4. Enterprises solving today’s customer support challenges

7

3.5. New technologies offering better customer support

7

4. Drivers and obstacles

10

4.1. Supportive administrative and regulatory frameworks

10

4.2. Financing intangible assets and new business models

10

4.3. Scalability and entering new markets

11

5. Policy recommendations

12

5.1. Facilitate the adoption of innovative solutions

12

5.2. Support internationalisation of innovative enterprises

12

5.3. Improve communication on EU funds

12

5.4. Encourage networking of start-ups with corporates and investors

13

6. Appendix

14

6.1. Interviews

14

6.2. Websites

14

6.3. References

14

Customer Experience

1. Executive summary Enhanced customer support is the proactive and personalised provision of services before, during and after the purchase of products or services. The need for rethinking the interaction between companies and customers was triggered by the market transformation from shops with regular opening hours to 24/7 online business. Traditional customer support was limited to making phone calls or filling in complaint forms. Being able to shop on company websites from any place and any time of the day, customers expect to get quick answers and tailored support to their requests. Today, new technologies can dramatically optimise customer support while making it more complex at the same time. For instance, customers are increasingly purchasing items from their smart phone or tablet, which opens up completely new opportunities for faster and more personalised interaction. Customer support has therefore evolved towards live chatting, mobile applications and social media, to serve customers at any time and wherever they are. Enhanced customer support can improve enterprises’ perceived service quality, which is one of the determining factors for customer satisfaction. By using automated customer support (often based on artificial intelligence), customer service becomes quicker, cheaper and more targeted. A number of drivers has been facilitating the growth of the trend. For example, enhanced customer support can lead to the building and maintenance of a positive company reputation, all the more important as feedback sharing on products and services via social media becomes ever more widespread. Enhanced customer support has the potential to change the philosophy of conducting business by shifting from a product/service-focus to a customer-centric approach.

Enhanced customer support

On the other hand, the trend still faces a number of barriers. For instance, companies consider banks as too conservative to lend to start-ups in the field of enhanced customer support, as their business models are usually outside the norm. Concerning public funding, companies criticised that national and regional funds offer limited support to innovative start-ups for internationalising their business. And while these two sources of funding often remain closed for enhanced customer support start-ups, private investors often disqualify them due to their short term investment horizons that usually do not fit the company philosophy. Apart from the financial barriers, the nature of enhanced customer services presents another barrier in the form of the complexity to internationalise services. Indeed, enterprises are most of the time forced to create entirely customised websites for each market they want to enter to adequately target and sell their services to local clients. In order to overcome those obstacles, this case study suggests a number of policy recommendations. For example, policy makers may provide subsidies and/or tax relief for young enterprises to facilitate growth in the start-up phase. The European Commission could further encourage the creation of one-stop shops to provide legal support and advise enterprises in tackling international regulations or IP issues. Equally, the public hand could support SMEs in identifying partners in foreign markets and connect SMEs with relevant client companies from their business network. Finally, companies encouraged policy makers to invest further efforts in harmonising the Single Market’s administrative procedures and taxes.

2

Customer Experience

2. Enhanced customer support Enhanced customer support refers to the customised provision of support services, regardless of the location of the customer or of the time of day. The perceived quality of such support depends on the accessibility of companies, as well as the immediacy and accuracy of their response.

The biggest challenge for companies doing business online is to create and enhance a personal experience for the customer. Without any face-to-face communication between customers and companies, companies investigate new ways of personalising their interaction with the customers again.2

With the shift from “bricks to clicks”, i.e. the transition from physical shops with limited opening hours to websites that are accessible 24/7, customers are increasingly demanding immediate and targeted support. With customer communication diversifying across more channels, traditional marketing and customer contact centres do not have the resources, tools and expertise to provide the same level of service as before (Figure 1).

For instance, enhanced customer support draws on opportunities opened up by innovative IT technologies such as digital profiling, “The lack of visual and tactile predictive analytics or artificial presence makes it even more intelligence. If properly used, crucial to create a sense of these techniques can allow personal, human-to-human personalised customer support connection in the online even by automated means, arena” – Micah Solomon2 which makes the service faster, less expensive and more personalised.

Figure 1: The new business reality requires a fundamental rethink of customer service

Before the purchase, customers can feel lost facing the almost infinite range of products and services offered by an e-commerce shop. Enhanced customer support tries to welcome potential buyers in a personalised way and through the medium of their choice, e.g. face-to-face through video chatting, or through a chat application on a smartphone or tablet. During the purchase, enhanced customer support tries to guide the customer smoothly throughout the purchasing process by providing appropriate offers at the right time in the right way. Questions and uncertainties are understood correctly and solved in the fastest way possible, through a moderated forum, live chat or by free phone call. In an ideal purchasing process, the emotional bonds between customers and companies are strengthened. Source: LimeBridge 1

To cope with this challenge, companies are developing services that promise fast and cheap support “directly to the customer’s couch”, e.g. by offering support in the form of live chats, mobile applications or social media channels. In addition, enterprises are adapting their escalation procedures by serving customers first through FAQ webpages or moderated fora and then, if necessary, pointing them in the direction of personal support.

Enhanced customer support

After the purchase, enhanced customer support tries to ensure a timely and non-disruptive product delivery respectively service deployment, sometimes even within just hours. During the aftersales process, customers expect the same level of personalised, professional support they know from physical stores. Internationally active online stores or service providers face the additional challenge of serving customers in different languages outside their regular working hours.

3

Customer Experience

3. Socio-Economic Relevance The customer support landscape is being reshaped by different forces, causing companies of all size to recognize that a pleasant customer experience has become a critical competitive advantage: 

 

Figure 2: B2C e-commerce sales worldwide (in billions and annual change)

Customers are increasingly intolerant of poor experiences and share their dissatisfaction within their social networks; Products and prices are at parity, allowing customers to take customer experience as a differentiator; Multichannel choice adds complexity as it requires continuity, consistency and correctness of interactions.3

With the growth of social media and Web 2.0, sharing experiences with a broad audience became easier than ever. Building and keeping a good 96% of unhappy customers (online) reputation is therefore an don’t complain, however 91% important success factor for of those will simply leave and companies to compete in the never come back – online marketplace.4 4 Liveworks

3.1. The market potential of the trend Over 1 billion digital buyers spent more than EUR 900 billion on business-to-consumer (B2C) ecommerce purchases in 2013. Combined sales in North America, Asia-Pacific and Western Europe account for 90% of the worldwide total.5 The European e-commerce industry is clearly dominated by the UK, Germany and France. These three countries together represent almost two-thirds of the total European B2C e-commerce sector of the EU.6 Global growth is expected to remain in the double digits through 2017, driven by digital retailers expanding into new markets, the development of more advanced payment methods and shipping options, the increasing number of online and mobile users in emerging markets, and almost all major brands opening digital storefronts.7 The North America and Western Europe markets, however, are still growing their sales in the double digits but below the worldwide average of 17% in 2013 (Figure 2). Western Europe and North America are the only regions in the world where a majority of the online population is also a digital buyer. However, there is still significant room for growth, especially in emerging markets where many internet users are still not buying online.8

Enhanced customer support

Source: eMarketer, Worldwide B2C Ecommerce: 2013 Forecast and Comparative Estimates 9

Customer support centres are becoming the eyes and ears of companies, and failure to use its available intelligence will diminish the entire organisation’s standing. According to Gartner’s estimations, in 2013, spending on social software to support sales, marketing and customer service processes exceeded EUR 750 million worldwide.10 Gartner estimates that 35% of all customer relationship management (CRM) software is today consumed using Software as a service (SaaS), a software delivery model in which software is centrally hosted on the cloud by another software provider. Gartner expects that figure to grow to just over 50% by 202011, reaching a maximum of 80 to 85% by 202512. A recent report from Forrester observes that “retailers, consumer brands, and industrial suppliers alike are significantly bolstering their capital investment programmes to ensure they stay at the forefront of digital innovation”13. A survey Forrester conducted for this study showed that more than half (56%) of e-businesses intend to increase their spending on e-commerce-related technology. 50% of these companies again listed customer relationship management tools among their top investment priorities. One of the biggest players in the enhanced customer support field – the San Francisco based company Zendesk that was originally founded in Copenhagen, Denmark – has recently reached market capitalisation of nearly EUR 750 million, according to Google finance.14 Apart from the growing B2C e-commerce sales worldwide, a look at the call centre industry could also help to estimate the market potential of enhanced customer support.

4

Customer Experience

The call centre industry was born when in the 1960s companies began to dedicate persons to exclusively answering customer phone calls. Over the years, the industry grew continuously, and is expected to reach EUR 250 billion by 2018.15 Jordi Torras, CEO of Inbenta, shared his vision that “in the future, companies could solve 99% of their problems in an automatic way. Call centres would practically disappear.” Enhanced customer support through other means than telephone will surely take over a share of the multi-billion euro customer support market.

3.2. The creation of new markets and jobs Considering the strong growth of the e-commerce sector in general and the need for an enhanced customer support market in particular, the creation of new markets and jobs is expected. Due to its flexible, web-based nature, companies compete on a global level. By having a look at figures from the traditional customer support market, e.g. the call centre market, a first insight of the potential lying in more improved forms of customer support can be developed. The importance of the sector in the labour market on the other hand can be estimated. In Europe alone (incl. Russia, Switzerland, Norway, Turkey, Ukraine), 3.2 million people work in over 35,000 call centres, accounting for nearly 1% of the active working population in Europe. The United Kingdom is by far the biggest call centre market in Europe, followed by Germany and France (Figure 3). Ireland and the Netherlands show high numbers or marked penetration in comparison to their relative economic weight.16 Surprisingly, southern European countries like Italy and Spain are not among the top ten. The reason for such distribution might be the role of language, where the UK has a competitive advantage with English. Figure 3: Distribution of call centres in Europe

Additionally, enterprises like Qubit chose London as a strategically advantageous location for their headquarters because they saw that the UK was one of the most important e-commerce markets. Proportionately, people spend more money and time online than in other countries, while the conversion rate of website visitors that are buying is still relatively low – thereby giving lots of opportunities for improvement. London in particular is becoming a technology hub, attracting top talented engineers that are now turning more and more away from the financial sector We are finding more looking for jobs in big data and graduates wanting to go down transformational technology. the technology route instead Overall, the interviewed of traditional consulting or enterprises reflect the strong financial service sectors – potential for job creation Qubit through the enhanced customer support industry (Table 1). Table 1: Jobs created by interviewed enterprises Enterprise

Jobs when founded

Jobs today

BrainSins

3 (2008)

15

Qubit

4 (2010)

100

Inbenta

1 (2005)

50

Deskero

3 (2011)

10

Brand Embassy

2 (2011)

25

Whisbi

2 (2008)

70

All interviewed enterprises stated that they aim for global market reach. Apart from their European home market, their internationalisation strategies all lead them to focus on the US market. This is the one of the matures markets outside of Europe, and its potential makes it very attractive. Qubit, for example, internationalised initially through strategic partnerships with media agencies and consultancies before opening up operations in France to better serve southern Europe, and in Germany to help serve northern Europe (planned for late 2014). In North America, where most of Qubit’s competitors are located, the enterprise opened a full operation in May 2013 to serve the fast growing client base overseas.

3.3. Client companies perspective Good customer support has an impact on the perceived service quality, which is one of the determining factors for customer satisfaction. Especially in the e-commerce world, it can serve as a distinct competitive advantage. Source: PwC Analysis17

The research carried out for this case study brought to light that the United Kingdom and Spain show the most innovation in terms of enhanced customer support.

Enhanced customer support

In consequence, more and more companies have started to apply a “customer-centric philosophy” to better satisfy the needs of their customers at the same time as delivering greater value and making it easier and a more pleasant

5

Customer Experience

experience for customers to buy from them. Their company stories are centred around the customers and how their employees help customers to succeed.

Figure 5: Most popular channels by age-profiled customers (in percent of use)

Different channels are at companies’ disposal to improve their relations with the clients. It could be through traditional channels like telephones, physical salespeople, letters, or digital channels like chat, e-mails, forums, virtual assistants or social media (Figure 4). Figure 4: Customer care channels available at contact centres (in percent)

Source: PwC Analysis 20

Source: Dimension benchmarking 18

Data,

2013/14

global

contact

centre

Overall, traditional customer support means such as telephone or letters have become the fourth channel choice for younger generations – behind electronic messaging (e.g. email, chat SMS), social media, and smartphone applications. Web chat has become the top channel priority for half of contact centres. Cloud technologies may be another game changer that contact centres have been waiting for: 78% of companies agree it helps reducing cost to serve. Another 65% of companies already using hosted or cloud based technology solutions agree that it has provided access to new and enhanced functionalities and 64.8% state that it has improved flexibility (Figure 5).19 An important driver for client companies to adopt new customer experience technologies is to increase marketing return on investment (ROI) as digital advertising costs to acquire traffic continues to be high in mature markets like UK, Germany and North America. Further can new techniques improve companies’ marketing agility allowing them to keep up the consumer with fast IT processes and full focus on shopping optimisation. Thirdly does the need to consolidate data siloes and duplication of efforts drive companies to use innovative enterprises’ customer experience tools, as they help them to identify what is driving the most value to their business.

Enhanced customer support

On the other hand, there are barriers that prevent client companies to adapt the trend. Many ecommerce companies hesitate to upgrade or move their businesses to new platforms or to adapt “game changing” software products as this process is often time consuming, costaly and causing an enormous drain on resources within their day-to-day business. Enterprises introduced in this case study, e.g. Deskero, explicitly address this issue and promise a smooth and uninterrupting change process. Further, client companies are often stuck with vendor contracts for services that they would like to start using from innovative enterprises. Therefore they wait until these contracts are up before they invest into more optimisation technology. Interviewed enterprises serve mainly clients in the ecommerce sector, as well as in other service oriented areas like banking, telecommunication or retail (Table 2: Sectors served by interviewed enterprises). Although some client companies began to rethink their approach to customer support, the majority still considers customers as a problem instead of offering them proper information and help. Aside from losing potential business, such approach can even damage the companies’ reputation. After all, there is still a “mental barrier” on the client side to overcome before the trend advances to a level of maturity similar to call centres or other traditional customer relationship instruments. This is because enhanced customer support truly changes the philosophy of conducting business: the philosophy of putting the customer into the centre of all considerations was re-born in the digital era. The numerous new technical possibilities as well as innovative ideas outlined within this case study give a first grasp of what enhanced customer support can unleash in the future. While large companies are now taking their digital strategies more and more seriously, smaller businesses are still focusing on getting the basics right, e.g. a functioning website, effective fulfilment and optimised digital marketing.

6

Customer Experience

Table 2: Sectors served by interviewed enterprises Company

Target client sector

BrainSins

E-commerce SME’s, mainly fashion, sports, jewellery, but also banking and insurance.

Qubit

SMEs and large e-commerce businesses across retail, travel, financial services and publishing.

Inbenta

Banking, transport, utilities, consumer brands, telecommunications, mobile platform app, insurances, public administrations.

Deskero

SMEs and corporates, mostly for e-commerce, retail and service providers.

Brand Embassy

Large corporates, mainly in telecommunications, banking and retail.

Whisbi

So far large corporates, mainly from finance, insurance, telecommunication, banking, automobile and travel. In future also focus on SMEs.

3.4. Enterprises solving today’s customer support challenges To illustrate the enhanced customer support trend in Europe, a set of six enterprises has been selected to be showcased in this case study. The selection of enterprises was not only made on base of success signals each venture could already provide, but also to cover all dimensions of the trend. An overview of the enterprises and their business innovations is presented in Table 3. Further details on each enterprise and their services are provided in the subsequent section.

Table 3: Overview of the company cases referred to in this case study Company

HQ

Business innovation

BrainSins

ES

Cloud based software that improves cross- and In 2014, awarded Gartner 'Cool Vendor' status. Received up-selling, offering customisable government grants in Spain. Offices in Madrid, Barcelona, recommendations, personalisation and London and San Francisco. gamification services.

Qubit

UK

Machine learning, statistical analysis and high performance computing to optimise customer insights and allow personalisation on ecommerce websites.

Inbenta

ES

Language-based semantic search engine, which More than 100 clients, including Groupon, Ticketmaster, and can match intention-narrowed user search Telefonica. Offices in USA, France, Spain and Brazil queries with specific FAQ titles.

Deskero

UK

Highly adaptable cloud-based tool to integrate International retail chain Spar implemented Deskero without customer requests from different channels disrupting regular customer support. (email, chat, websites, social networks) into one single database.

Brand Embassy

CZ/UK High volume online paltform for identification and easy engagement with customers across the social web.

EUR 750,000 seed capital from two funds, Rockaway Capital and Spread Capital. In 2013, Winner of the Red Herring Europe Award. Offices in Praguethe Czech Republic, LondonUnited Kingdom, USA, Dubai, Portugal, Slovakia, Spain, Netherlands, and Latin America.

Whisbi

ES

400% revenue growth in 2010-2013. International awards. 100+ people working in offices in Barcelona, London, Madrid, Sao Paulo and Sidney.

Video agent technology able to synchronize in real time a normal inbound or outbound phone call with an interactive online experience.

3.5. New technologies offering better customer support Problem 1 – Standard cross- and up-selling tools, that offer online customers similar or higher-end versions of the product they originally came to buy, hardly offer customer truly relevant products. Innovative solution 1 – BrainSINS is a cloud solution for digital commerce that enables SMEs to compete at an

Enhanced customer support

Signals of success

EUR 6.5 million venture capital, out of which EUR 5.5 million from Balderton Capital in 2012.

enterprise level. By using personalisation and gamification technologies, the technology aims to improve customer experience in order to increase sales, loyalty and engagement. The software profiles each visitor by processing its previous activities (e.g. visited pages, ratings, comments, previous purchases). Putting these data together, there is a significant amount of information that companies can use to improve the customer experience. BrainSINS allows conducting real-time analytics and offers a personalised experience with a unique shop experience based on the customer’s interest.

7

Customer Experience

A board game online store wanted to help their customers to find board games that could be of interest according to their purchases profile. BrainSINS has considerably reduced the barriers for the use of these kind of services, creating a product that can be applied within 5 minutes, while being easy to configure and maintain. By integrating a product recommendation block into the product page and sending an email one hour and one day after a customer has abandoned a full shopping, BrainSINS have been able to increase the overall conversion rate of the site for 16% and to recover 24% of abandoned carts, resulting in a 33% sales increase. Sources of information for BrainSINS e-commerce personalisation solution

Qubit’s software can analyse in real-time the search, browsing or purchase behaviour and other digital information of customers. As soon as the software detects for example that a customer is lost or does not properly understand the functioning of the shop, it can serve more relevant content to that user helping them through to conversion. Farfetch, a leading European boutique retailer, uses Qubit to identify “lost” customers directing them to the FAQ section of the site. With this personalisation, customers converted on average 17% more often. Similarly, the software can identify first time visitors that hesitate to buy. When the Qubit realises that they have been idle for a period of time it an onsite layer is served inviting the user to subscribe to the shop’s mailing list, meaning they will now get recommendations and engaging content without having to come back to the site. Qubit’s platform integrated into a website

Source: BrainSINS

Problem 2 – E-commerce shops often work with standardised approaches, and do not leverage the possibilities online business offers to better target their clients. Innovative solution 2 – London (UK) based Qubit allows to optimise customer insights and personalisation on ecommerce websites. On base of the collection and processing of large data sets, Qubit applies machine learning, statistical analysis and high performance computing in order to improve online profitability. Apart from optimising conversion rates, it also gives insight on customer traffic, and helps to improve a customer’s journey on a website. Source of information for Qubit

Source: Qubit

Problem 3 – Clients do not always know what they want exactly, but they do know that they want to have it immediately. Innovative solution 3 – Focused on website and corporate intranets, Inbenta is a pioneer in semantic search technology that aims to improve the experience of online customers. Inbenta connects its semantic search technologies to customer support features such as search engines, virtual assistants, avatars, dynamic FAQs and natural language processing products. Inbenta’s search engine transforms unstructured, wronglytyped or ambiguous queries to structured, specific and concise solutions, so that the customers find the needed information. Its technology further offers interactive features like virtual assistants using avatars. The website Groupon needed an affordable solution that offered instant customer support. By using Inbenta on their customer support page, their community can access Groupon’s knowledge base more easily to the directly find answers to all common questions.

Source: Qubit

Enhanced customer support

8

Customer Experience

Screenshot of Inbenta’s virtual assistant

Problem 5 – Due to the sheer infinite number of social media, it is challenging for businesses to assess, build, track and monitor their online reputation. Innovative solution 5 – Brand Embassy provides a socialmedia based customer care platform to help businesses manage high-volumes of communications with customers via channels such as Facebook and Twitter that are largely unstructured and very different than request coming via phone or email

Source: Inbenta

Problem 4 – The more communication channels are open, the harder it is for companies to keep an overview and respond to incoming requests. Innovative solution 4 – Deskero offers simple and highly flexible helpdesk software that is able to handle customer requests from a variety of channels, following the specific customer care philosophy of a company. In today’s multi-platform, multi-device world, traditional help desk systems often feel sluggish and outdated. Some SMEs realise that customer requests can come from a variety of sources, so having a solution that integrates chatter from as many sources as possible is the best way to stay on top of customer needs. Deskero’s cloud-based software brings order into all help and information requests that companies receive through any type of media and merge them into a single database where they are easy to organise. Besides offering an easy to use support ticket system and knowledge base, Deskero also provides live chat solutions to properly answer customer requests.

Brand Embassy organises, routes and prioritises customer contacts coming from social networks, forums, e-mail, as well as blogs and discussions. Such approach ensures effective collaboration between marketing, PR and customer service departments, as the customer contact can be addressed faster and more targeted. Brand Embassy won with Vodafone, T-Mobile and Telefónica O2 three major European mobile operators as new clients within the first six months after launched its enterprise. By using Brand Embassy’s tools, Telefónica Czech Republic achieved a high level of 90% customer satisfaction and reduced response time by 70%. Social media and search engines influence companies’ online reputation

Deskero was able to implement a tailor made customer support solution for the international retail chain SPAR (i.e. Despar Nordest Italy), without disrupting their regular customer support services. Apart from implementing a live chat solution, Deskero improved Despar’s software workflow to better meet the need of proper customer care management. Converting concerned customers into happy customers

Source: Boost One SEO, Online Reputation Management:21

Problem 6 – Customers support is often criticised for being too anonymous and for lacking the personal touch. Innovative solution 6 – Whisbi is a provider of innovative “Software as a Service solutions” that combine phone and online communications to businesses selling or engaging with their customers on the phone.

Source: Deskero

Enhanced customer support

Whisbi’s patented technology is able to add to any inbound or outbound phone call the possibility to: (1) show online in real time products, offers or any content through cobrowsing; (2) show the face of the business through an online video communication; (3) track everything with a powerful analytics and reporting tool.

9

Customer Experience

Big multinational corporates like Vodafone, Telefonica, Citibank, SKY and Fiat use Whisbi’s video agents to inform customers about their vast range of telecoms products and services, resulting in a measurable increase of cross sales.

Whisbi’s tool for video assistance

Source: Whisbi

4. Drivers and obstacles 4.1. Supportive administrative regulatory frameworks

and

Both Deskero and BrainSINS experienced that the set-up of new enterprises was rather burdensome and slow in southern Europe. In comparison, We are very actively involved the overall complexity of in discussions around data registering a new business was regulations in each market we much easier, quicker and cheaper in operate in – Qubit the UK compared to Italy respectively Spain. Apart from reduced regulations for small businesses and the possibility to do most of the oldfashioned “paper work” online, it was also highlighted that trivial things like opening a bank account or registering a VAT number took only some minutes, compared to day or weeks in southern Europe. Such facilitated bureaucracy can lead to situations in which enterprises formally set-up their businesses in northern European countries, while carrying out the majority of their day-to-day work in southern Europe. Enhanced customer support often builds upon the interaction with customers online. Some interviewed enterprises criticised that European data “Setting up a limited company protection law would not be upin the UK was a breeze” – to-date, as it misinterprets Deskero activities happening in social networks. Brand Embassy complained that user information gathered on social media cannot be integrated with existing customer-specific data, thereby hindering the effectiveness of quick customer support. For example, if customers engage on social media by sending inquiries to companies, they cannot link such information to the existing customer information the company already has, as the customer did not explicitly agree upon this step. Similarly, Whisby complained that customers hanging up their phone while waiting in a telephone waiting queue, cannot be called back

Enhanced customer support

automatically as they did not give their permission to save their phone number in the company’s system. Inbenta highlighted that the expansion of their business to other European countries was much easier in terms of administrative burden compared to non-European countries such as the US or Brazil. Although still having potential for improvement, interviewed enterprises observed that most processes and regulations inside the EU are already relatively well aligned. In contrast, processes of entering non-EU countries do often completely differ in terms of financial reporting methods or intellectual property registration procedures. Also the necessity to handle complicated business visa applications often constitutes major barriers for SMEs when entering non-EU markets. The Czech enterprise Brand Embassy suggested that the opening of bank accounts or the process of tax or VAT registration should be better standardised and facilitated throughout Europe. While the set-up of its headquarter in London (UK) was fairly simple and quick, it took them over one year and cost a six digit amount of money to open-up a bank account at a UK bank. Bureaucratic problems they faced where the identification of needed legal documents, translating these documents, and letting them approve by the bank. Similarly, VAT registration also took several months due to the requirement of having a bank account opened at a British bank.

4.2. Financing intangible assets and new business models Access to finance is one of the most critical challenges faced by European start-ups. Hence it was unsurprising that all SMEs interviewed in this case study expressed the difficulties they encounter in securing funding for their activities.

10

Customer Experience

Banks were generally considered as being “too conservative” to lend to the interviewed start-ups, as the services provided by enhanced customer support enterprises are rather based on a “philosophy” then on “touchable” products, making their business models different from most clients banks typically lend their money to. According to Deskero, banks don’t like to “lend money for ideas”, as they used to lend money for cash flow or against existing assets as security. Deskero experienced that many private investors were less interested in long term engagement, but rather looking for short-term profits. In the end, “With proper external funding, Deskero decided to forego venture we could have grown much capital investors as they quicker” – Deskero additionally considered them as too intruding into their core business decisions. In consequence – just like most interviewed entrepreneurs – Deskero were forced to rely on organic growth and forego their receipt of steady income for the first months of their business. BrainSINS reported their positive experience with venture capital and business angel investors. Apart from their financial support, the advice and guidance from these investors were considered extremely helpful for the uptake of their enterprise. For instance, BrainSINS could leverage not only the business know-how and creative ideas of how to approach the market, but also in the international networks of their private investors, which was considered crucial for their international expansion. Similarly, Brand Embassy profited enormously from start-up accelerator programmes they have been supported by, e.g. the Prague based StartupYard or the UK Trade and Investment Fund. Brand Embassy highlighted the support they received from Business Angels and Incubators, mainly through getting introduced to potential business partners, advisors and investors, gaining feedback on their strategy and product, and free publicity. With regards to EU programmes, the interviewed enterprises’ impression was that EU funds were much better captured by large companies. For SMEs, on the other hand, it was considered much more complicated to find the right information necessary for applying for EU programmes and ultimately to provide the workforce that could carry out the lengthy application process. After all, SMEs complained that they usually can only apply for EU funding with the assistance of external consultants. This constitutes a considerable investment unless they could arrange on a payment only in case of success.

Enhanced customer support

Apart from EU funds, enterprises can also leverage on national and regional funds. Before engaging with private investors, BrainSINS started with a mix of 70% government loan and 30% own money. The government loan was granted through the “Centre for the Development of Industrial Technology” (CDTI), a public organization for technology development in Spain. Interviewed enterprises, however, complaint that local bodies governing own or European funds often lack sufficient funding, language skills and proper business understanding to adequately support enterprises in their business and internationalisation activities (Table 4: Source of funding for interviewed enterprises). Table 4: Source of funding for interviewed enterprises Enterprise

Source of funding

BrainSins

70% Spanish government loans and 30% self-funded. Later Venture Capital.

Qubit

Enterprise Investment Scheme (EIS) in first year of trading; EUR 6.5 million venture capital, out of which EUR 5.5 million from Balderton Capital in 2012.

Inbenta

EUR 1.5 million funding from Telefónica.

Deskero

Self-funded, currently looking for external funding.

Brand Embassy

EUR 750,000 seed round from two new funds, Rockaway Capital and Spread Capital.

Whisbi

Self-funded, later EUR 1.8 million from Venture capitalists, incl. Bertelsmann Digital Media Investments (BDMI).

4.3. Scalability markets

and

entering

new

Although the internet theoretically knows no borders, interviewed enterprises highlighted considerable barriers they faced when internationalising their businesses. In the truest sense of the word, enterprise offering enhanced customer support need to speak the language of their customers. They adapt their business model to a large extent to the different cultural contexts of markets they want to enter. The creation of a “cultural proximity” does not only entail linguistic aspects but also the translation of content, ideas and visions into different cultural contexts. Other than a company offering “technical” products, enhanced customer support enterprises need to create truly customised websites and hire new local staff for each foreign market they want to enter.

11

Customer Experience

5. Policy recommendations 5.1. Facilitate the adoption of innovative solutions Enhanced customer support could be beneficial for various public institutions. In this regard, policy makers could act as “early adopters” of innovative products. Therefore, policy makers could foster administrative simplification and reduce red-tape for SMEs seeking to work with the public sector. For instance, the Europe Direct central information service could use Deskero’s software to integrate requests from different channels, be it emails, chats, websites, or social networks, into single database. Similarly, Inbetna’s languagebased semantic search engine could be used to match citizens’ search queries with specific FAQ titles. Further, the European Commission could use Brand Embassy’s customer service tool for actively identifying and engaging with customers across the social web. Last but not least, also Whisbi’s video agent technology could be implemented into Europe Direct’s services to help clients sell products and services via their website. It was considered as rather counter-productive that many EU funds are managed by local agencies that often lack the resources to apply a European or even global perspective, as well as a proper business understanding. Interviewed enterprises would therefore appreciate to have more direct access to the European Commission. Ideally, the European Commission would communicate with enterprises through a network of local EU representations or hubs. Additionally, the EU could create one-stop-shops to provide free legal support or additional help to understand the eligibility criteria to benefit from EU funds.

5.2. Support internationalisation of innovative enterprises All interviewed enterprises shared insights into their experiences on internationalising their business. Generally, these enterprises would appreciate more support from the public sector. Public institutions could support enterprises on finding their way through international regulations. On a strategic level, help would be appreciated e.g. on legal aspects of setting up a branch abroad, whether and how to best engage with local partners, and how to adapt the business model to foreign contexts. On an operational level, enterprises raised several concerns, e.g. on how to best transfer money to non-

Enhanced customer support

EU countries, on tax regulation and issues such as double taxation, or on questions arising around intellectual property rights. The European Commission could improve the Directive on Services in the Internal Market to further simplify procedures and formalities that enterprises need to comply with when expanding their business. For example, few enterprises are aware of the existence of “points of single contact” that exist in each EU member states, through which they could obtain information on administrative formalities from one authority without the need to contact several authorities. And those enterprises that have been in contact with points of single contact in the past often complained about the very limited amount of relevant information they received. With regards to the intra-European situation, several interviewed enterprises encouraged the European Commission to invest further efforts in harmonising the common market. Especially inner European administrative procedures and taxes should become more uniform. Otherwise, the costs of engaging specialised consultants and lawyers, which are necessary for enterprises to understand the different local particularities and procedures, can hinder the international expansion even inside the EU. Interviewed enterprises encouraged the European policy makers to push for introducing European Private Companies (SPE) across the EU. Such step could remove the current need for limited companies to reincorporate themselves in the corresponding legal form in all the EU member states in which they want to work.

5.3. Improve communication on EU funds As regards EU funds, enterprises suggested better communication on all information regarding EU funds, e.g. on their goals, their eligibility criteria or reporting standards. This would better equip enterprises in accessing and using existing EU funds. Generally, enterprises complained that the European Commission still communicates too distant and too complicated. Ideally, the European Commission would simplify communication with SMEs and become more approachable through their website or by email contact.

12

Customer Experience

5.4. Encourage networking of startups with corporates and investors Interviewed enterprises would appreciate the public sector’s support in internationalising their business. It was suggested that national or European chambers of commerce could better assist SMEs in identifying partners in foreign markets. Considering that the relevance of the trend both for small and large companies, interviewed enterprises further recommended that the public sector should better support enterprises in their networking activities. The European

Enhanced customer support

Commission could open its business networks, for instance by connecting innovative SMES with large corporates. To better connect European start-ups both to other enterprises, but also to the policy maker and investors, a “European Start-up association” could be set-up. Such body could serve a better representation of the needs of start-ups at a European level and also distribute information to enterprises on relevant issues, e.g. on EU funds or legal matters. Business Angels and Incubators could be invited to participate in the activities of such association and share their experience with start-ups on a global scale.

13

Customer Experience

6. Appendix 6.1. Interviews Company

Interviewee

Position

BrainSins

Francisco Carrero

Founder, CEO

Qubit

Graham Cooke Ian McCaig

Founder, CEO Founder, CMO

Inbenta

Jordi Torras

Founder, CEO

Deskero

Ebe Buzzi

Co-founder, Strategy

Brand Embassy

Vit Horký

Founder, CEO

Whisbi

Alex Bisbe

Founder, CEO

6.2. Websites BrainSins

www.brainsins.com

Qubit

www.qubitproducts.com

Inbenta

www.inbenta.com

Deskero

www.deskero.com

Brand Embassy

www.brandembassy.com

Whisbi

www.whisbi.com

6.3. References 1

http://www.limebridge.com.au/content/Image/cartoons/2009/googleit.jpg.

2

http://www.micahsolomon.com/pdf/sevenkeys.pdf.

3

http://www.sas.com/offices/NA/canada/lp/CEM/CEMM.pdf.

4

http://liveworkstudio.com/perspectives/financial-services.

5

https://www.emarketer.com/Coverage/ConsumersEcommerce.aspx.

6

ecommerce-europe.eu.

7

https://www.emarketer.com/Coverage/ConsumersEcommerce.aspx.

8

http://www.emarketer.com/Article/B2C-Ecommerce-Climbs-Worldwide-Emerging-Markets-Drive-Sales-Higher/1010004.

9

https://www.emarketer.com/Coverage/ConsumersEcommerce.aspx.

10

http://www.gartner.com/newsroom/id/1541415.

11

http://www.crmsearch.com/crm-market.php.

12

https://www.gartner.com/doc/2679218/gartner-crm-vendor-guide.

13

Forrester, Commerce Technology Investment And Platform Trends – 2013, http://www.forrester.com/Commerce+Technology+Investment+And+Platform+Trends+2013/fulltext/-/E-RES99782.

14

http://techcrunch.com/2014/05/16/zendesks-stellar-ipo-and-the-current-tech-ipo-climate.

15

http://www.strategyr.com/Call_Centers_Market_Report.asp.

16

http://holydis.com/wp-content/uploads/2013/06/ECCB_2013_Executive_Summary_CCWorld.pdf.

17

Call Communications EU/Areia Consultoria Centro de Contacto, 2012 European Contact Center Benchmark

18

http://www.dimensiondata.com/Global/Downloadable%20Documents/2013_14_benchmarking%20summary%20report.pdf.

19

Ibid.

20

Ibid.

21

http://boostoneseo.com/wp-content/uploads/2014/03/reputation-on-search-engines.png.

Enhanced customer support

14