Parks Associates Blog

Monday, March 26, 2007

A New Trend in Digital Home Customer Care: Enhanced “User Diagnostics”

If you’ve followed our recent blogs, white papers (Business Models for the Digital Home, for example), and recent studies (Managing the Digital Home: Installation and Support Services), we’ve definitely tried to stay on-top of the area of customer care in the digital home space. In our research, we’ve been fortunate to have gotten to know so many companies with innovative solutions to help reduce some of the complexity and costs – both to consumers and to companies in the market – who approached us with a simple question: “When are you guys going to start writing about the challenges associated with the digital home and begin analyzing the opportunity for this space?” It’s definitely been a steep learning curve, but through years of often patient conversations with us (because we often feel like we have to ask the same question again and again to clarify the answer in our heads!), we’ve been excited at the pace of development.

Just in the last few weeks, we’ve had some really interesting briefings with a good number of companies who are implementing embedded solutions to help create more proactive diagnostics and quality measurement, as a way to address some common concerns in the broadband and triple-place space, in particular. We were recently briefed by an AT&T representative, who gave us some insight into the telco giant’s decision-making process when it came to selecting the HomePNA 3 solution as its twisted-pair and coax home networking solution of choice for its U-verse services. Critical to the final decision was the fact that Coppergate – the chipset provider – had already embedded tools onto the silicon that provide for remote real-time diagnostics and management. This turns out to be highly complementary to the TR-069-based remote management system (RMS) solution that AT&T is deploying using its residential gateway partner 2Wire. And, because the other home networking options didn’t offer this type of solution, we’re told that this made a significant difference in the final decision to AT&T.

Clearly, the broadband and television service providers have much riding on their deployments of added services and value-added features (bundled digital and IP voice, triple-play services, digital television, streaming Web content, etc.), but they are also on the hook for the customer support calls that are sure to flood into their call centers. Increasingly, many of these calls, we’re told, will be related to quality-of-service as much as those pertaining to more tangible problems, such as a service failure. For operators banking on delivering even more advanced services at the same level of reliability they were able to deploy with Plain Old Telephone Service (POTS), their need for even more granular data capture and quality measurement will be even more critical.

Texas Instruments, which has played a key role in the development of broadband solutions (cable and DSL) on a worldwide basis, is looking to its PIQUA solution (unveiled in January 2006) as a way to solve some of the thorniest quality-of-service issues. PIQUA is a DSP-based and embedded software solution designed to monitor and improve the quality of IP-based services, including voice, data, and video. The management tools provide real-time diagnostics, allowing customer service personnel to see such data as dropped-packets, line delays, and video image problems, even down to individual television sets in the home. In many cases, TI indicates that PIQUA can help the quality-of-service teams fix problems before the customer has to pick up the phone to make the complaint. And, in a world in which a 10% reduction of phone calls is considered a good success, this can be a critical tool. And, if the customer eventually does need to call customer support, PIQUA can offer a help desk agent a much more complete view of the performance of the carrier’s entire network – including the access and in-home portions.

Although cost savings as a result of reduced phone calls is one clear measure of success, increasing customer satisfaction will be an important measure for service providers going forward, as they seek of offer expanded services in an ever-competitive environment. For example, last year’s study – Managing the Digital Home: Installation and Support Services – finds that 64% of consumers who accepted a home networking solution from their broadband service provider said that the availability of customer support was a primary reason they chose the offering. The requirements for managing the customer support experience, therefore, are going to grow hand-in-hand with the advanced services being deployed by the operator.

While the requirements for enhancing service diagnostics and troubleshooting for operator-deployed digital lifestyle offerings may seem evident, are there other opportunities for extending the reach of customer care to some less-obvious areas, including the consumer electronics area? Like their counterparts in broadband and home networking, CE companies (and often their retail partners) are under great pressure to reduce customer support calls. And, while silicon-based and embedded diagnostics tools are well-positioned on the “IT” side of the industry to alleviate costs and improve service, the CE manufacturers face different variables and may require additional customer help tools.

For a broadband provider and home networking equipment manufacturer, a silicon-based approach makes sense, since these solutions do well at diagnosing hardware problems as well as low-level operating system and driver problems. Better yet, if these solutions can be designed to continue working even in the event of a software “hang” or parts of the hardware system conk out, even better. As long as there is some data flowing back to a customer support agent and some level of remote access, there’s at least a chance that the problem can be addressed.

On the other hand, silicon-based diagnostics and management tools are likely not going to be the only solution implemented for improving the customer service experience for consumer electronics products (both retail as well as service provider deployed). We’re told, for example, that, many of the customer support calls related to CE devices (DVRs, set-top boxes, televisions etc.)are actually related to device complexity and functionality, more than just mis-configured settings in the software stack or QoS issues related to an access network. Just this week, one vendor told us that they’re getting reports that 50% of customer support calls to Tier 1 OEMs and service providers are more related to “How do I use this feature,” than software, IP configuration, or driver issues. Furthermore, when products are being returned to retailers and/or the manufacturer because of “defects,” only 15% are being marked as a hardware failure.

We would therefore assert that solutions are needed that help increase customer understanding in configuration and allowing customer support agents to see how the device is being used. This would allow the agent to figure out what’s confusing the customer and then how to help them. A good solution, therefore, would be one able to integrate into the application and device code and augment silicon-based (“Hardware”) diagnostics and serve as a User Diagnostics tool.

A key realization for solutions providers in this space is that carriers and equipment vendors as well as other third-party players (remote IT support organizations, for example) need to understand the basic parameters of the digital home. At present, these entities are largely flying blind when it comes to knowing which devices are connected on a home network and how they are being used. With remote diagnostics capabilities and two-way reporting to a “knowledge database,” carriers can benefit from more timely information about the configuration and use of digital home products and provide more proactive service if their customers have problems with equipment or services.

Furthermore, the value of the knowledge database can be extended as consumers seek to add more devices to their digital home configurations. In addition to recommending fixes, the database can be used to generate recommendations for compatible software, hardware, or equipment. For example, the carrier may build internal case studies that would indicate that Wireless Bridge X works particularly well with Game Console Y, and could serve to recommend such a product when the customer is ready to link his or her game console to the broadband connection for online gaming.

Enhancing customer care is going to require major improvements to end-user hardware, software, networks, and the customer support systems by many different players – service providers, retailers, equipment vendors, and CE manufacturers. We’re certainly seeing a key trend that dictates much more automation in the way that problems are diagnosed and fixed. These are definitely going to be beneficial to the managers of customer support offices, who are charged with reducing call volumes and enhancing the level of customer care. At the same time that automated systems are being used on equipment and networks, however, we would argue that a level of detail needs to be given to enhancing the customer’s comfort with using digital home equipment. In this case, we anticipate that a little bit of education and extra TLC in helping reduce customer confusion can go a long way to building a really innovative (and dare we say – revenue-generating?) customer support solution.

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