How to Define and Measure Deflection

Deflection Defined

Deflection is the rate that automated and self-help resources satisfy service demand that would otherwise be handled by assisted service staff.  The average rate of case deflection within the technology industry is 23%. The attainable rate of deflection is highly dependent upon factors such as the maturity and complexity of a product, the skills of the users, and the quality of tools and content provided by the service provider.

It is easy to overstate the impact of self-help, community and service automation by equating its overall effectiveness with a direct impact on assisted support.  Many issues may be resolved through self-help and automated means yet not all are destined for or entitled to resolution through assisted support channels.  For a case to be deflected it must meet the following criteria:

 

  • The customer submitting the case must be entitled to assisted support.
  • An issue must be successfully resolved.
  • The customer submitting the case requires no further action from assisted support resources to validate or clarify the answer provided through self-help or automated means.

Measuring Deflection

ServiceXRG offers the following approach to measuring deflection.  Each of the inputs for the deflection calculation are described below.

How to Measure Deflection

Multiply the number of Self-Help Service Events by Entitled Customers for a specific period of time by the rate that these customers indicate success in finding an answer using self-help resources (Success Rate).  Multiply this by the percent of entitled customers that successfully found an answer and indicated an intent to request assisted support if required (Intent Rate).  Multiply this by the percent of entitled customers that successfully found an answer and indicated an intent to request assisted support if required and indicate that no further action is required to resolve this issue (No Further Action Rate).

Target Value
Deflection = Self-Help Service Events by Entitled Customers * Success Rate * Intent Rate * No Further Action Rate

Entitlement

For a case to be considered deflected it must be submitted by a customer entitled to receive assisted support.

A case cannot be deflected from assisted support if it is submitted by someone that is not entitled to receive support assistance. Including visitors that are not entitled to assisted support in your deflection calculation will overstate the impact of self-help on assisted support demand.

How to Measure Self-Help Service Events by Entitled Customers

Establish entitlement to assisted support.  To accomplish this, you will need to authenticate customers engage in a self-help event (e.g. support site and community visitors and those served through other automated means).  Only customers entitled to assisted support should be included in your deflection calculation.

Target Value
Self-Help Service Events by Entitled Customers = # of self-help and service automation events within a specific period of time for customers entitled to receive assisted support.

Success

For a case to be considered deflected it must be successfully resolved using self-help resources or through unassisted automated means. 

Visitors will come to a support community or portal for a variety of reasons.  They may come to view a discussion thread, read an article, browse documentation, view a video or download a file.  While the use of service resources is positive, these “service events” do not always equate to a successfully resolved customer issue. Customers indicate that on average they find useful information 70% of the time when visiting a support web site and 68% of the time when browsing support communities. Useful does not however translate in to complete and successful answers.

How to Measure Success Rate

Identify the rate that service events result in successfully resolved customer issues.  The best method for determining success is to ask customers directly.  Use on-site pop-up surveys, post transaction event surveys and questions embedded in service resources.  Unfortunately, customer response rates to these types of data collection methods can be low.  Nevertheless, customer feedback is essential to establishing the effectiveness of self-help resources and automated issue resolution tools.

Target Value
Success Rate = Rate that self-help and service automation events within a specific period of time are successfully resolved.

Intent

A deflection will occur when there is intent by a customer to seek assisted support to find an answer.

In situations where customers are “browsing” available support resources, but do not intend to seek support assistance, there is no opportunity to deflect from assisted support.  Including “browsers” (visitors with no intent to seek assisted support) in the deflection calculation will overstate the impact of deflection on assisted support.

How to Measure Intent Rate

Identify customer intent to request assisted support.  The best method for determining intent is to ask customers directly.  Use on-site pop-up surveys or post transaction event surveys to establish the reason for a community or support web site visit.  Determine if the customer intends to seek assisted support if the self-help event is unsuccessful.

Target Value
Intent Rate = Rate that entitled customers indicate that their reason for using self-help or service automation is a first step in problem resolution and intend to seek assisted support if necessary.

No Further Action

For a case to be deflected a customer must indicate that the answer found through self-help has completely resolved the issue and that no further action is required. 

Some customers may successfully receive the information they are looking for but may still request assisted support to verify the answer.  Customers that request assisted support to confirm the answer provided through self-help or automated means should not be included in the measure of deflection.

How to Measure No Further Action Rate

Determine if any further action is required to resolve a customer issue.  Use on-site pop-up surveys or post transaction event surveys to establish the if a customer sought assisted support to validate, clarify or confirm an answer received by an automated or self-help event.

Target Value
No Further Action Rate = Rate that self-help and service automation events within a specific period of time are successfully resolved and require no further action.

Implementing a Deflection Metric

Using an accurate measure of deflection is imperative for establishing the true impact self-help and service automation resources have on assisted support demand.  The inputs describe above are stringent, yet necessary.  If you require any assistance in defining and implementing a proper deflection metric please contact ServiceXRG for assistance.

Featured : Measuring the Return on Knowledge Management

As knowledge management initiatives take hold and mature, it is essential to conduct a formal cost – benefit analysis to determine the proper level of investment for knowledge management and define the expected return on this investment. Continued success will come from efforts to enhance content creation processes, employ enhanced technologies and deliver tangible business value by leveraging knowledge assets. This research report introduces an approach to measure the return from knowledge management initiatives.

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Top Findings from the Customer Success Practices and Metrics Study

The State of Customer Success

Customer Success has become a widely used and universally accepted term to describe a variety of customer-focused activities. The term has many meanings: A department; a team; a role, a business strategy.

The fundamentals of Customer Success are not new, the general concept has been around for some time, but current practices suggest that something more profound is happening across the industry. There is broad recognition that helping customers adopt and apply products successfully will help retain and build customer relationship value.

Companies based entirely on “as-a-service” models have known for some time that landing new customers is just the beginning of the relationship. Companies that have evolved from the world of perpetual licensing have been slower to recognize that the imperative to retain and expand existing relationships applies to them too.

Customer success is not a one-sized-fits-all methodology and there is no right or wrong way to apply the principles of customer success provided that the outcome from success initiatives result in the ability to sustain and grow customer relationships.

Customer Success Structure

Top Findings

  • Customer Success is a series of interrelated activities performed throughout the customer relationship lifecycle.
  • Effective customer success initiatives include activities from onboarding to expansion with an emphasis on assuring customers successful use of products.
  • Nearly half of responding companies focus on just one or two customer success activities.
  • Customer Success reports to the CEO or Chief Customer Officer a quarter of the time (22.6%).
  • Typically, Customer Success is organized within an existing department, and most often within Service or Support (57.0%), sometimes Sales (16.1%) and least likely within Marketing (4.3%).
  • The primary customer success Key Performance Indicators (KPI) are strategic with an emphasis on the health and value of customer relationships.
  • The top customer success KPIs include customer sentiment as measured by customer satisfaction or NPS; recurring revenue, and retention (churn).
  • Companies report “positive” or “significant positive” results from their customer success initiatives with the greatest positive impact focused on recurring revenue rates and product adoption.
  • Customer success is reported to have the least impact on customer churn (retention) and margin.
  • 60 percent of the time the group responsible for establishing a new relationship is not responsible for the ongoing account relationship.
  • A formal hand-off from the sales channel to the team that “owns” the post-sales relationship occurs two-thirds of the time.
  • Less than half (41.5%) of companies provide formal onboarding services. Those that do are most likely to assure that customers can access and use the product or service they have purchased.
  • The initial customer welcome as part of the onboarding process, remains a personal activity using a combination of personal e-mails, phone calls and on-site visits.
  • Many (42.4%) companies use an automated welcome e-mail, but fewer than 5 percent rely on a fully automated welcome.
  • When account resources are included with product purchase they are often provided to fulfill vendor-focused objectives.
  • The responsibilities for customer retention and recurring revenue are seldom shared across multiple post-sales teams and are most often the burden of a single department.
  • Nearly half of companies surveyed indicate that they do not actively track formal Customer Success metrics.
  • The most common metric used to evaluate Customer Success team performance is customer sentiment expressed as satisfaction and/or NPS.
  • Less than half of companies have tools to enable core success activities. The majority of companies that indicate use of specific success systems built their own solution often based on their existing CRM infrastructure.

Download the full report for complete data and analysis.

Featured Report: Customer Success Practices and Metrics

Customer Success has become a widely used and universally accepted term to describe a variety of customer-focused activities. The term has many meanings: A department; a team; a role, a business strategy. Unfortunately, the broad use of the term has obscured the diverse and complex activities that underlie a potentially transformational initiative. This study examines the approach companies use to organize, deliver and measure their Customer Success initiatives.

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**A copy of the current findings (as of 12-4-18) will be sent upon the completion of the study.

Bad Attach? Is There Such a Thing?

Attach Rate measures the effectiveness of new support contract sales activities (direct or through partners) by reporting the extent to which a support contract, beyond what is included with the product, has been sold as part of a new product sale.  When you sell a new product, you expect to attach a support or extended warranty contract.  It seems intuitive to assume that it is a good thing when you sell support with a new product.

It is likely that mixed in with those newly attached support contracts are several that are at risk from the start.  What puts these support contracts at risk is the way that they were attached.  When customers unknowingly buy support with a product, or reluctantly buy support to gain greater terms on the initial product purchase (e.g. a discount or promotion) they are immediately at risk of not renewing.

The good news is that you get the first year of maintenance revenue, the bad news is that you may not get the benefit of the annuity from year after year renewals.  In most cases bad attach can be avoided.  The first step to minimizing bad attach is to recognize if you have Support sales practices that lead to it.

Signs of Bad Attach

Customers are incented with steep product discounts if they buy support.

  • Sales promotions offer attractive deals on products but require automatic attach of support.
  • It is a common practice to include support without any effort to explain the benefits to customers.
  • Support is compulsory.
  • First year renewal price is adjusted upwards to make up for initial discounts due to pricing tied to product net price.

All these scenarios share something in common – the benefits of support were not sold and justified to the customer at the time of initial attach.  When customers do not understand the benefits of support, or worse, don’t know that they have support, they are likely to question its value when the renewal notice arrives.

How to Avoid Bad Attach

  • Make sure that customers understand that they are purchasing support – don’t try to hide it, they will figure it out upon renewal.
  • Always convey the benefits of support at time of sale.
  • Avoid discounts to support, especially if the discount is for the first year only.
  • Be aware of sales promotions that will attach support even when customers do not want it – you will get the attach but not the renewal.

If you only care about the first-year revenue from support and maintenance contracts, then any attach is a good attach.  If you want to maximize revenue from Support, then contract attach followed by a successful renewal is essential.

Customer Success Practices and Metrics Study Now Available

ServiceXRG announces the immediate availability of a comprehensive study of Customer Success Practices and Metrics.  This study examines the approach companies use to organize, deliver and measure their Customer Success initiatives.  The study examines the following:

 

  • The Customer Success Organization
  • Customer Success Goals, Metrics and KPIs
  • Customer Success Activities
  • Adoption and Success Planning Services
  • Customer success Resources
  • Customer Success Tools
  • Review top findings from the study

Top Findings from the Customer Success Practices and Metrics Study

ServiceXRG Featured in Software Executive Magazine: The State of Customer Success

The State of Customer Success

This data-driven analysis of the customer success journey in the software world shows where we are now and where we are headed.

Customer Success has become a widely used and universally accepted term to describe a variety of customer-focused activities.  The term has many meanings:  A department; a team; a role, a business strategy.  Unfortunately, the broad use of the term has obscured the diverse and complex activities that underlie a potentially transformational initiative.

Customer success is not new, the general concept has been around for a while, but current practices suggest that something more profound is happening across the software industry.  There is broad recognition that helping customers adopt and apply products successfully will help retain and build customer relationship value.

Please enjoy the full article at Software Executive Magazine (you’ll find other great articles there too).