ServiceNow, Inc. (NOW) Earnings Call Transcript & Summary

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Hello, everyone, and welcome to ServiceNow webinar for customer and industry workflows for customer service management. My name is Harriet Franklin, and we're going to talk about engaging customers with faster and smarter service. I have the privilege today of joining me later in this webinar, Lori Cobb, and Lori is one of our customers from Travelport. So our agenda for today, we are going to talk about self-service and the self-service capabilities and how that can help you in improving your overall customer service. Next, we're going to go into a fireside chat with Lori and Lori has implemented ServiceNow customer service management. And we're going to ask her questions about how she got there, what some of her challenges were and what she did and some of the results of implementing ServiceNow. So to start, this is something that I see from customers and prospects and when we look at some of the issues that customers have, it's pretty much a common theme. When customers are pushing service out to self-service channels, one of the things that is an issue is inconsistent customer experiences. And that means you have different experiences across the different channels that you offer. And what customers see is that they have fewer options to self-serve. So they may have an issue that they saw when they call, but they're not able to resolve that issue when they want to resolve via self-service channels. And then finally, agents are finding that there's really a lack of guidance in their ability to respond to customers quickly and get the answer the very first time. If we look at this quote from Gartner, and Gartner interviewed customer service and support leaders this year. And what the leaders are saying is that, they plan to devote most of their resources to 3 key areas: to improving and automating and eliminating any processes that are inefficient. And two, they're going to migrate more and more of their service volume from call to digital and self-service channels. And then finally, they're really looking for contact centers to contribute to the bottom line and help with adding more customer value in the future. So in order to engage customers with smarter and faster service, we've kind of identified challenges that we can resolve and we put those into 3 different buckets. The first one is the ability to take those processes and automate them and make sure that, that request gets to the right team the first time. Then looking at the way that we offer service, do we have the right self-service components in place? Do we have the right knowledge, the right portal pages? And then finally, how do we guide customers to self-solve for themselves via conversational channels such as chat and virtual assistant. And if we take a look at a little more detail about how we can do that, let's talk about automating and routing requests to the right teams. One of the pieces of functionality that we have available is service catalog and that is a visual menu of services that you offer. What's important is that this is a way to immediately have your request taken to the right team and it's incorporated into workflow. So the resolution is much faster. Next, offering ways to self-serve and find solutions with a portal. One of the things is once you have your portal set up, it's important to have the right information there for customers continue to go to the portal. And that's all about making sure that we have chat there for them to engage on, making sure that your knowledge is current across sources and that customers, if they need to, are able to connect with experts. And then finally, guiding customers with conversational support. And that includes the ability to leverage any of our messaging channels or chat with a virtual agent, which is an AI-powered chat bot. And then one of the other pieces of functionality is engagement messenger with the capability to take all those self-service capabilities, lift them up from the portal and actually add them to your organization's own website pages. So it's all about making sure when customers are on their journey that they have the capability to self-serve anytime they want to. And then finally, ServiceNow is the platform for digital business. And by that, what we mean is we're not asking you to go and rip and replace some of the key solutions that you have. It's all about really unlocking the value of your existing investments and adding those into the digital workflows. So if we take a look here, we can see the customer and industry workflow as well as all the other workflows on top, but they're all built on one common cloud platform, one data model. We have one data model that's across all the industries, and then we have one architecture. So it's very easy for you to take advantage of these platform capabilities such as workflow to make sure that, that request gets passed from contact center to back office to other departments to order management to make sure that that's resolved. And then the ease of configurability with a very low code, oftentimes no code configuration to realize an uptick those features faster. And then that's all built with intelligent platforms to allow you to take advantage of the new features, AI, intelligent pieces, virtual agent, natural languages, machine learning, all those capabilities, but also integrate that with your current system. So to conclude, when we're talking about enabling self-service across all these channels, we're looking to automate how we automate our processes, our resolutions, getting that request to the right team and making sure that we guide customers in all the applicable self-service channels. So next, we're moving to the second part of the presentation. And before we get to that, I do want to remind everyone that you can ask your questions in the Q&A section. And we will get to those questions as you ask them. If we get enough and you are not able to ask them, then we'll make those questions and answers available in the post call. All right. So joining me today is one of our customers, a strategic customer that helps us in driving a lot of our product direction. We have Lori Cobb from Travelport. Hi Lori. Why don't you give us an introduction of you, your role at Travelport what your department is doing and some of the customer personas that you serve today?

Okay. So just a bit about Travelport. Travelport is what we call GDS, which is a global distribution system. And what we do is we consolidate travel content. So we have primarily 2 customer personas. We have the customers that actually published content into our platform. So they're all the airline carriers globally and hotel and car providers. And then we have customers that actually consume that content. And those are travel agents that get crowd content through an application we call a point of sale that also comes from Travelport. And then we also have online booking engines that consume our content through a set of APIs that we published to their developers. So my role within Travelport is I'm responsible for the tools and technologies that we use to support all of our customers. So I have the voice over IP systems, ServiceNow CSM, any application that we plug into ServiceNow like our screen make tool and I work with my counterparts to identify opportunities and business problems to solve, and then I'm responsible for creating those value propositions for our technology team to deliver.

Awesome. Thank you, Lori. So before you implemented ServiceNow, I think you had a couple of challenges around calls and call deflection and overall low adoption of self-service. Can you please go into a little more detail about some of the challenges that you had?

Certainly. So when we first started the program, we were looking at several things. But primarily, one was how we increase adoption of our portal. We were on one of your competitors' tools. We had a portal. But what we saw is that 80% of our customers still prefer to pick up the phone and call us for support. So we really were challenged with getting adoption. What we heard from the customers was why would I use this portal? I can't find solutions that I need. So we knew we had an opportunity there to drive self-serve. And so our whole goal was how do we empower the customer to solve their problem without having to call us wait on call potentially and have that long handle time. The other interesting thing, Harriet, is that we saw 90% of those call volumes being solved at that first content. So that to us, there was an opportunity to investigate why they're reaching out to us and self-serving to the hands of our customers.

Interesting. Interesting. So if I were to summarize what you said in these industry areas, it was really an opportunity for you to -- at the time you're moving to ServiceNow really dissect, look at a lot of the information and really pinpoint some of the areas that you want to concentrate on. I do want to talk about a couple of other ones as far as you're a global company, obviously, your -- you have 16 different languages. Languages was also a challenge for you? Can you go into that a little bit, please?

Yes. So when we started this program, we actually had 28 help desk locations and 33 spoken languages, right? So it was really not sustainable for us to continue that model, especially when it comes to a 24/7 support model. So we really wanted to look at how we can optimize the resources we had to help desk, have the most skilled resources available for our customers regardless of the language that the customer speaks. We wanted to make sure we drive that adoption for the portal and we had value in the portal to make customers want to use that experience.

And also, I think you had said it was difficult to get people to register for the portal.

Yes. So some of the value that we have on our portal is somewhat sensitive, right? So we had to make sure because we're a B2B business. So not like other businesses. And we wanted to make sure that the person at the keyboard is associated with the right account. So in order to do that, there was quite a complex security process we had to take them through and I think it was a barrier to adoption.

Okay. And you did speak also about the length of your phone calls and some of the same similar security process was taking you a long time, 3 to 5 minutes. That's pretty long.

Yes. So because we are a global company, what we noticed when we listened to phone calls, you had different dialects, languages, different names, just to identify who that customer is, what they want, what their name is, what their e-mail is, what company they're calling from was taking 3 to 5 minutes. So keep in mind, we haven't even gotten down to supporting the customer with their problem. It was all introductory time. So there was a huge opportunity for us there.

Awesome. So now that we have a better understanding of a lot of the challenges that you face, once you started to implement ServiceNow, can you tell us how you saw those challenges? What were some of the key things that you put into place?

So the first thing we wanted to do was make sure that the portal that we were delivering was one that would actually, as we say, delight our customers. right? So we didn't want to give them something that just added more stress to their day, especially when they have a customer on their end, that's waiting to get the port from them. So if you think about travel industry, the service we're providing is time-sensitive. Inventory changes very quickly. Fares can change. And the last thing we want to do is to have our customer in a position where by the time they get to booking a ticket, the fare has increased by $20, right? So we had to quickly be able to help our customers, and we wanted to make sure that our portal was able to do that.

Nice. And also, you automated some processes so that 3- to 5-minute identification when you're on the phone, you implemented something that I've never seen other customers do, but I think it's genius.

So what we did was we started building portal, we got some investment. I put a business case in place, and I projected that we'd have an ROI within 2 years of launch of our portal. We invested in things like knowledge. We launched AI search to make sure we were returning the best knowledge for our customers' problem. We actually integrated the AI search with our training materials. So we get training in the results, community post, which is pretty much out of box. But we also integrate external knowledge sources that we published through [indiscernible] and those are usually user guides. So all of this comes in results for the customer. We made sure that we launched the virtual agent chat bot to guide customers to those solutions as well. So once we did that, now we still had this challenge of adoption, right? It wasn't a -- if we build [indiscernible] but it just wasn't. We ended up segmenting our customers by region and by the volume of content that came from this customer group. They actually drove 40% of our traffic to the help desk and get our channel. So what we did is in our phone system when the customer put in their account number, if they fell into this segmentation, we routed that call to a team that was there only to help them with registration. We didn't solve their problem on that call. We only helped them with registration. And it worked really well for us, and we finally were able to correct this after years of trying. So once they get on our portal, which we're showing here on the screen, they could still get support. They access online, all the automation, all the value we have here but if they still need to reach out to us, we offer them the other channels of support, one being phone. But in order to call us, they had to get a digital key to call. Once they got that key and they call back in, they put that key into our IVR. And they get the help desk agent it's a very streamlined conversation. Hi Jane, I see you're calling from ABC travel and you're having a problem with ticketing, how can I help you? It's gone from 3 to 5 minutes down to 4 to 5 seconds.

Wow, that's amazing. Talk about [indiscernible] in your talk time. So pivoting on to that, once you made all these changes, let's talk about like your ROI. You said you set a goal. Let's talk about that goal that you set. And then in the 2 key areas of call deflection and self-service, why don't you walk us through what you achieved?

Yes. Well, so data has been key for us. I think that's another thing, another value we've gotten out of ServiceNow is visibility into this data has allowed us to justify and start our next path. So I mentioned on the previous slide that we had planned for 2 years of an ROI, but what we actually achieved was ROI in 1 year. And we were targeting a 20% deflection at the end of the program. But within 6 months, we had gotten to 30% deflection. We helped -- I think I've had here about 11,000 customers with registration for the portal. So portal adoption has jumped. And for the customers that we have using the self-serve portal, we've actually seen the inbound calls drop from 80% down to 65%.

That's great. That's amazing. And I also see here in your chart, your phone call is going down, but you're able now to deflect more with knowledge and [indiscernible], so that's great. Another thing to help with some of the challenges with all the different languages and making sure people can find the information they want, tell us about before what your process was and then after what your process was for language translations.

So in the past, we used a consulting firm that would actually use humans to translate all of our knowledge articles, and even all of our online portal experience. So we were constantly trying to pull out the content on the portal and send it off for translation, get it back and uploaded in our system. That gave us a pretty good baseline. But as we started to really aggressively push this out and trying to support this global footprint that we had, we went with the dynamic language translation, which has out of the gate reduced our cost for translation by 30%. Because now what we do is when we have a knowledge article that we need translated, we're comfortable actually using the machine translation, shown that to the customer. And then since we don't have that translated article in our knowledge base, we actually put in a system to publish that into our knowledge base behind the scenes and route to our knowledge team for review, and then they publish in trial system for the next customer that needs it. So we only pay for that translation at one time.