Customer service costs are steadily rising as the pandemic has accelerated digitalization in companies. Aligned with that, consumer expectations for good customer service have also risen. "Few of us are excited to be able to call our service provider about an error in the invoice," says Hermanni Hyytiälä.
Failure demand occurs when a customer must contact a service provider repeatedly and possibly through different channels to resolve their problem or to receive the service they need. That represents a growing problem in both the public and private sectors, causing unnecessary workload in more services. Up to 80 percent of customer contacts with companies can be labelled as failure demand. “In many organizations the costs are increasing due to the workload Failure Demand causes. In addition, it usually has a negative effect on the customer and employee experience”, describes Hermanni Hyytiälä, the Finnish expert in Failure Demand.
A Finnish company, Aiwo Digital, has developed the first AI-based solution that can identify failure demand from customer contacts. The innovation is based on Hyytiälä's expertise in failure demand, an area which he has been researching for the past 15 years. “Identifying failure demand has previously required manual consulting work, for example, in listening to customer calls or going through customer feedback. Creating a situational picture of failure demand has required several months of manual work. However, in the rapidly changing economy, a report based on historical information does not help to solve the current situation”, says Hyytiälä.
With the new technology developed by Aiwo, companies have been able to visualize a real-time situational picture of existing customer service events – quickly and cost effectively. This has brought a completely new starting point not only for the development of services, but also for cost control. "This feature has produced data that is very important to us and the tool is sure to be put in good use! The data met our expectations and it also provides absolutely brilliant reinforcements for the observations made by our customer service team", says Marika Ilmola of Ensin Palvelut Ltd.
Failure demand is an increasing problem in service organizations and it has consequences at many different levels: the customer is dissatisfied, the organization is overwhelmed, employees are tired and costs go up.
Reducing failure demand brings several benefits to companies simultaneously: improved service quality and availability, increased customer and employee satisfaction, and significantly reduced customer service costs.
“There is a huge savings potential for companies in identifying failure demand. For example, for telecom operators failure demand can be more than 70 percent of all customer contacts. In the financial sector the percentage can be somewhere around 30-60%”, says Pekka Törmälä, Sales Director of Aiwo Digital.
“Identifying failure demand can generate concrete suggestions of how the company's operations can be made truly customer-centric. This way failure demand would not be generated in the first place. In fact, customer-oriented and good service costs the company less, ” Hermanni Hyytiälä continues.
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Hermanni Hyytiälä, Chief Development Officer, Aiwo Digital Oy
firstname.lastname@example.org / 045 670 3775
Pekka Törmälä, Head of Sales, Aiwo Digital Oy
email@example.com / 050 423 2636