Customer Care Glossary by Customer Care News

Customer Care Glossary

Blog: A blog is an online journal that’s updated on a regular basis with entries that appear in reverse chronological order. Blogs can be about any subject. They typically contain comments by other readers, links to other sites and permalinks. See SOCAP’s blog at http://www.socap.org/networking/blogs.aspx BOS: Business Operating System — An environment that represents the vast warehouses of knowledge of an organization-the way a business is run, the way

API: An API (a technical term for application pro-

people and information come together to add value to

Abandoned Call: The caller hangs up before reaching

gramming interface) allows users to get a data feed

a business process. A BOS is a repository composed of

an agent. (Also called a lost call.)

directly into their own sites, providing continually

a common operating environment, a business process

Access Provider: An organization that provides

updated, streaming data — text, images, video — for

library and enterprise workflow.

access to the Internet. (Also called an Internet Service

display. For example, Flickr’s API might allow you to

Brand Equity: The level of awareness and consumer

Provider [ISP].)

display photos from the site on your blog. When sites

goodwill generated by a company’s brands and/or

ACD: Automatic Call Distributor automatically

like Twitter and Facebook “open up” their APIs, it

products.

answers calls, queues calls, distributes calls to agents,

means that developers can build applications that build

Business Process Improvement (BPI): Betterment of

plays delay announcements and provides real-time and

new functionality on top of the underlying service.

an organization’s business practices through the analysis

historical reports on these activities.

Application Based Routing and Reporting: The ACD

of activities to reduce or eliminate non-value-added

ACS: Automatic Call Sequencer automatically answers

capability to route and track transactions by type of

activities or costs, while maintaining or improving qual-

and sequences calls on a first-in/first-out basis.

call.

ity, productivity, timeliness or other strategic or business

ACTUAL VALUE: The net present value of future

ARU: Audio Response Unit; automated attendants that

objectives as evidenced by performance measures.

financial contributions from the designated customer,

route calls based on digits callers enter on touch-tone

Business Process Re-engineering: A structured

behaving in the way he is expected to behave, knowing

phones. It responds to caller-entered digits or speech

approach by all or part of an enterprise to improve

what we know now, with no significant unanticipated

recognition in much the same way that a conventional

the value of its products and services while reducing

change in the customer’s needs, in the competitive

computer responds to keystrokes or clicks of a mouse.

resource requirements.

landscape, or in the company’s planned strategy. Same

(Also called IVR, VRU)

as lifetime value (LTV).

ASA: Average Speed of Answer

ACW: After-Call Work. Work that is necessitated by

Average Time to Abandonment: The average time that

and immediately follows an inbound transaction (Also

callers wait in queue before abandoning.

called Wrap-up and Post Call Processing.) Aggregation: Combining data in a way that creates new information. For example, adding the dollar values

Call Blending: Combining traditionally separate inbound and outbound agent groups into one group of agents responsible for handling both inbound and outbound contacts.

Baseline Market Segmentation Study: The first mar-

Call by Call Routing: The process of routing each call

of all of a customer’s transactions together to create a

ket segmentation study conducted by an organization.

to the optimum destination according to real-time

new field that reflects total purchases.

BELOW ZEROs (BZs): The customers who cost more

conditions.

AHT: Average Handling Time; the sum of average talk

to serve than they will ever return in value. Examples: A

Call Center: Term used to include reservation cen-

time and average after-call work for a specified time

Below Zero might be somebody who takes a lot of free

ters, help desks, information lines or customer service

period. OR Average Hold Time.

services, but doesn’t return much revenue. It could be

centers. The term contact center is being used more

AI: Artificial Intelligence is computers that act in a way

a complainer whose complaint was never resolved and

frequently, as calls are just one type of transaction tak-

analogous to intelligent human behavior.

therefore no longer does business with you. Not only

ing place. It is the part of an organization that handles

AMIS: Audio Messaging Interchange Specification; a

is that person worth zero on that account, but actually

inbound/outbound communications with customers.

standard that permits networking of voice mail systems

has below-zero value because he or she will tarnish your

Calls in Queue: The number of calls received that the

from different manufacturers.

reputation in speaking to other customers.

ACD system has received but that haven’t connected to an agent.

Fall 2012

Channel: An avenue through which products and services are rendered to end-use customers. Car dealers, retailers, computer resellers, grocery wholesalers are all examples of channel members.

Customer Care News

Churn: A term that describes customer attrition or

Customer Capital: It refers to the value, usually not

customer defection. A high churn rate implies high

reflected in accounting systems other than as goodwill,

customer disloyalty.

which results from the relationships an organization has

demands of marketers and service providers for cus-

Cloud Computing: Cloud computing (also called “the

built with its customers.

tomer information begin to clash with privacy concerns,

cloud”) refers to the growing phenomenon of users who

Customer Differentiation: The second step in the one-

new entities called Data Aggregation Agents (DAAs)

can access their data from anywhere rather than being

to-one strategy labeled “IDIC” is to differentiate cus-

emerge. By consolidating and controlling outside access

tied to a particular machine.

tomers. Customers are different in two ways: they have

to a customer’s personal data, DAAs will help business-

Conditional Routing: The capability of the ACD to

different value to the enterprise, and they need different

es provide the customer with relevant and timely offers

route calls based on current conditions. It is based on

things from the enterprise. Customer differentiation is

while protecting individual privacy. The basic function

“if-then” programming statements.

vital to pursuing Learning Relationships.

of a DAA would be to act as a central, online storehouse

Consumer Direct: Also known as Direct-to-Consumer,

Customer Experience Development: The process of

for a consumer’s personal information. In a wide-open,

it’s the channel that includes all products and services

overseeing and influencing the totality of a customer’s

wireless world, customers will require their DAAs to

delivered directly to the home through catalogs, tele-

experiences with a brand, product or service, spanning

shield them from mobile “spam,” while sending through

marketing, TV shopping, kiosks, web sites, and the

all interactions and transactions.

messages that truly respond to their needs.

newly emerging automatic grocery-replenishment ser-

Customer Loyalty: The degree to which customers

Data Mart: A special-purpose, usually smaller, data

vices. Consumer Direct describes the process involved

are predisposed to stay with your company and resist

warehouse created and managed for specific business

when a manufacturer sends goods directly to a con-

competitive offers.

units. Almost always, marketing or finance are the first

sumer via the Internet (such as providing music or

Customer Portfolio Management: An organization-

data mart users in the enterprise. It’s much easier and

video) with no intermediaries, but the term also refers

al structure placing line responsibility for improv-

faster to deploy than a data warehouse.

to direct-mail and catalog channels.

ing Return on Customer in the hands of portfolio

Data Mining: Originally a term used to describe the

Consumer Unit: All related members of a particular

managers.

recognition of previously undiscovered patterns in a

household.

Customer Relationship Management (CRM): CRM

database. Now it’s used to add sales value to almost

Contextual Commerce: When the advertisement on

is the same as one-to-one marketing. This customer-

any kind of data analysis tool. It’s one of the top 10

the web site directly pertains to the kind of information

focused business model also goes by the names relation-

buzzwords in present language. Data mining is crucial

a person is viewing, and changes with each visitor, and

ship marketing, real-time marketing, customer intimacy,

in CRM strategies, particularly in e-commerce.

with each drill down

and a variety of other terms. But the idea is the same:

Data Warehouse: A data repository created by extract-

Continuous Process Improvement: A policy that

establish relationships with customers on an individual

ing data elements from operational and OLTP systems.

encourages, mandates, and/or empowers employees to

basis and then use the information you gather to treat

Its main purpose is to provide a dataset that users can

find ways to improve process and product performance

different customers differently. The exchange between a

access without affecting the performance of the online

measures on an ongoing basis.

customer and a company becomes mutually beneficial,

systems.

Co-opetition: Partnering with your competition.

as customers give information in return for personal-

Database Management Software: Computer pro-

Cost of Poor Quality: The costs associated with pro-

ized service that meets their individual needs.

grams in which data are captured on the computer,

viding poor-quality products or services.

Customer Satisfaction Research: Research conducted

updated, maintained and organized for effective use and

Cross Functional Process Improvement: Business

to measure overall satisfaction with a product or service

manipulation of data.

process re-engineering with the goal of eliminating

and satisfaction with specific elements of the product

Database: Any collection of information — from a

stove pipe operations.

or service.

simple shopping list to a complex collection of custom-

Cross-Selling: Selling related goods and services to a

Customer Valuation: The value of a customer to an

er information — is technically a customer database.

consumer. This process is only one way to increase your

enterprise, composed of two elements. Actual valuation

However, the term is usually applied to computerized

Share of Customer.

is the customer’s current Lifetime Value, and strategic

records of information.

Crowdsourcing: Crowdsourcing refers to harnessing

valuation is the customer’s potential value, if the cus-

Design for Manufacturability: Designing or redesign-

the skills and enthusiasm of those outside an organiza-

tomer could be grown to his or her maximum potential.

ing the production process of a product so that it can

tion who are prepared to volunteer their time contribut-

(See also Share of Customer).

be manufactured with the least amount of parts in the

ing content or skills and solving problems.

Customer-Centric: Putting the customer at the center

shortest amount of time, using standard as opposed to

CSR: Customer Service Representative. ALSO

of the marketing effort. For example, measuring cus-

custom parts. (The concept originated in Japan in the

Corporate Social Responsibility, a concept whereby

tomer value, not product sales.

early 80s.)

Data Aggregation Agent (DAA): As the increasing

Design Interface: The mechanism by which a customer

take responsibility for the impact of their activities.

specifies exactly what he or she needs. An important aspect of mass customization.

www.customercarenews.com

Fall 2012

businesses and organizations perform a social good or

Customer Care Glossary

Lifetime Value: Also known as LTV, Lifetime Value is the “run rate” of a customer’s actual value. LTV: see Lifetime Value.

DNIS: Dialed Number Information Service; a string of

Hashtag: A hashtag (or hash tag) is a community-

digits that the telephone network passes to the ACD,

driven convention for adding additional context and

VRU or other device to indicate which number the

metadata to your tweets. Similar to tags on Flickr, you

caller dialed.

add them in-line to your Twitter posts by prefixing a

sales that a company holds.

Drip Irrigation: Gathering customer information

word with a hash symbol (or number sign). Twitter

Marketing Mix: The unique blend of product pricing,

slowly over time, rather than overwhelming customers,

users often use a hashtag like #followfriday to aggre-

promotion, offerings and distribution designed to meet

prospects and visitors with long surveys they might be

gate, organize and discover relevant posts.

the needs of a specific group of customers.

inclined not to fill out, and using each piece to build on every interaction.

Market Share: The percentage of an industry’s total

Marketing Research: The planning, collection and analysis of data relevant to marketing decision making,

IDIC: The four-step methodology for implementing

and the communication of the results of this analysis

one-to-one relations with customers. IDIC stands for

to management.

Enterprise Application Integration: A generic term

identify customers, differentiate them, interact with

Marketing Strategy: Guiding the long-term use of

for software that integrates legacy and disparate

them and customize.

the firm’s resources based on its existing and projected

systems.

Insourcing: The opposite of outsourcing. A service

capabilities and on projected changes in the external

Enterprise Resource Planning: Back-end processes

performed in-house.

environment.

and systems; i.e., inventory management and billing.

ISDN: Integrated Services Digital Network; a set of

Mass Customization: Shorthand for high variability

Tying your back-end systems with your front-end or

international standards for telephone transmission.

in marketing. It uses the power of the database to vary

customer facing systems is what allows customers to be

ISO 9000: A series of quality assurance standards com-

the marketing message — or the actual product — to

able to check the status of their order, and check stock

piled by the Geneva, Switzerland-based International

fit the characteristics of an individual customer or pros-

availability on an item. Without front/back integration,

Standardization Organization. In the United States,

pect. It is the cost-efficient mass production of goods

customers couldn’t do this.

ISO is represented by the American National Standards

and services in lot sizes of one or just a few at a time.

Error Rate: Either the number of defective transactions

Institute, based in Washington.

Mass customization is not the same as customization.

or the number of defective steps in a transaction.

IVR: Interactive Voice Response; automated atten-

Customization involves the production of a product

Explicit Bargain: The “deal” that an enterprise makes

dants that route calls based on digits callers enter on

from scratch to a customized specification, whereas

with an individual in order to secure the individual’s

touch-tone phones. It responds to caller-entered digits

mass customization is really the assembly of a product

time, attention or feedback. See also implicit bargain.

or speech recognition in much the same way that a

or the rendering of a service from pre-configured mod-

conventional computer responds to keystrokes or clicks

ules or components.

of a mouse. (Also called ARU, VRU)

Metadata: Data about data. For example, a table

Fulfillment: The physical handling of an order, information request, premium or refund.

that tells the system how to translate database codes into words that make a data field easier for users to

Knowledge Management: The leveraging of collective

understand.

wisdom to increase responsiveness and innovation.

Microblogging: Microblogging is the act of broadcast-

Geotagging: Geotagging is the process of adding

Knowledge Mapping: A process that provides an

ing short messages to other subscribers of a web ser-

location-based metadata to media such as photos, video

organization with a picture of the specific knowledge it

vice. On Twitter, entries are limited to 140 characters,

or online maps. Geotagging can help users find a wide

requires to support its business processes.

and applications like Plurk and Jaiku take a similar

variety of businesses and services based on location. Globalization: The trend in which businesses cross

approach with sharing bite-size media. Probably a more apt term for this activity is “microsharing.”

Legacy System: An older or outdated computer sys-

Microsite: A mini-site within a site, usually for a

tem or application program that continues to be used

partner brand.

because of the exorbitant cost of replacing or reengi-

Middleware: Software that mediates between different

Handling Time: The time an agent spends in talk time

neering it. Often such systems offer little competitive-

types of hardware and software on a network so they

and after-call work, handling a transaction.

ness and compatibility with modern equivalents. Legacy

can function together.

international boundaries.

H Fall 2012

systems are frequently large, monolithic and difficult to modify, and scrapping a legacy system often requires reengineering a firm’s business processes as well.

Customer Care News

MIS: Marketing Information Systems create rather

One-to-One Marketing: Treating each customer in

Permission Marketing: Obtaining customers’ permis-

than simplify manipulated data, presenting data in

the way he or she wants to be treated. Focused on the

sion to market products or services to them. It is a mar-

a form useful to a variety of people within the

individual customer, one-to-one marketing is based on

keting method whereby companies get their customers’

organization.

the idea of an enterprise knowing its customer. Through

permission to market products or services to them.

Mobility: The subject of mobile/wireless.

interactions with that customer the enterprise can learn

By talking only to volunteers, permission marketing

Monitoring: Listening to agents’ phone calls for quality

how he or she wants to be treated. The enterprise is

guarantees that consumers pay more attention to the

control purposes.

then able to treat this customer differently than other

marketing message. The term was coined by author

Most Growable Customers (MGC): Those customers

customers. However, one-to-one marketing does not

Seth Godin in his book, Permission Marketing. See

for whom the Strategic Value, that is the potential value

mean that every single customer needs to be treated

also Explicit Bargain.

of the customer, most exceeds the customer’s current

uniquely; rather, it means that each customer has a

Podcast: A podcast is a digital file (usually audio but

Actual Value. These are the customers who have the

direct input into the way the enterprise behaves with

sometimes video) made available for download to a

most growth potential — growth that can be realized

respect to him or her.

portable device or personal computer for later playback.

through cross selling; through keeping the customer for

OpenID: OpenID is a single sign-on system that

A podcast also refers to the show that comprises several

a longer period; or perhaps by changing a customer’s

allows Internet users to log on to many different sites

episodes. A podcast uses a feed that lets you subscribe

behavior and getting them to operate in a way that costs

using a single digital identity, eliminating the need for a

to it so that when a new audio clip is published online,

the enterprise less money. Most Growable Customers

different user name and password for each site.

it arrives on your digital doorstep right away.

are also known as second-tier customers (STCs).

Operational Entanglement: Enmeshing the opera-

Portal: A gateway to the Internet that provides not only

Most Valuable Customers (MVC): Those customers

tions of the enterprise with those of the customer.

email, calendars, bulletin boards and chatrooms to visi-

with the highest actual value to the enterprise — the

Providing tools so the customer can perform some of

tors or customers, but also customer-oriented service. A

ones who do the most business, yield the highest

the functions that otherwise would have been per-

good portal solves problems for its visitors or customers.

margins, are most willing to collaborate, and tend to

formed by the enterprise, usually so the customer can

Companies should use them as access points to improve

be the most loyal. MVCs are those with whom the

assume more control over the service being rendered.

customer service.

company probably has the greatest Share of Customer.

Outsourcing: Contracting some or all of a depart-

Potential Value: The net present value of the maximum

The objective of an enterprise with respect to its MVCs

ment’s services to an outside company.

reasonable future financial contributions from the des-

is retention. See also Below Zeros, Most Growable Customers.

ignated customer, if the company were to succeed in applying an optimum proactive strategy for changing

Pareto Principle: Named after Vilfredo Pareto, the

that customer’s otherwise expected behavior.

19th-century economist and sociologist, the Pareto

Predictive Model Markup Language (PMML): A

Natural Language Processing: Allows the computer

Principle is also known as “the 80:20 rule.” It says that 80

new industry standard created by IBM and Oracle that

to understand phrases that are only meaningful in the

percent of an enterprise’s revenue comes from 20 percent

allows models to move from system to system.

context of an ongoing conversation.

of its customers. In practical terms, though, it might be

Product Service Bundle: The services and features that

Needs-based Differentiation: How customers are dif-

90 percent of the revenue coming from 5 percent of

surround the core product, such as invoicing, delivery,

ferent, based on what they need from the enterprise.

the customers, or 60 percent coming from 30 percent

financing, packaging and palletization, promotion, and

Two customers may buy the same product or service for

of customers, depending on the firm’s Valuation Skew

so forth.

two dramatically different reasons. The customer’s needs

of its customer base.

Profiling: Using a series of distributions to describe

refer to why the customer buys, not what he buys.

Penetration Analysis: Measuring how well a com-

customers or prospects in a variety of ways, such as

Niche Marketing: A marketing segmentation strategy

pany has penetrated its potential market by finding

demographically or behaviorally.

in which the firm focuses on serving one segment of the

and reporting on the number of people who look like

market. Niche marketing is very much like segmented

customers, but have not yet bought. (Also called market

marketing, only the segments are smaller — a niche is

share analysis.)

Real Time Marketing: Regis McKenna’s term for rela-

a small, distinguishable segment that can be uniquely

tionship marketing or CRM. Refers to the utmost level

served.

of timeliness regarding the transmission, processing,

and/or use of information. A firm that collects and uses customer data in real time can manage relationships with individual customers much more effectively. See

as opposed to waiting for calls. (Also called agent

also Zero Latency. The term referred to in his book,

utilization.)

Real Time: Preparing for the Age of the Never Satisfied Customer.

www.customercarenews.com

Fall 2012

Occupancy: The amount of time agents handle calls

Customer Care Glossary

UCD: Uniform Call Distributor; a simple system that distributes calls to a group of agents and provides some Relationship Marketing: see Customer Relationship

Skill-Based Routing: An ACD capability that matches

reports. It is not as sophisticated as an ACD.

Management.

a caller’s specific needs with an agent who has the skills

Unified Queuing: Combines all incoming traffic

Response Rate: The percentage of responses received

to handle that call.

(e-mails, text chat, co-browsing, etc.) into a single

from a given promotional effort.

Social

ROI: Return on Investment; a term describing the cal-

Optimization (SMO) is a set of practices for generat-

Unrealized Potential Value: The difference between

culation of the financial return on a business policy or

ing publicity through social media, online communities

Potential Value and Actual Value.

initiative that incurs some cost. ROI may be measured

and social networks. The focus is on driving traffic from

Up-Selling: Selling upgrades, add-ons or enhance-

in terms of a payback period for the investment, or as a

sources other than search engines, though improved

ments to a particular product or service.

percentage return on a cash outlay, or as the discounted

search ranking is also a benefit of successful SMO.

net present value of free cash flows of an investment;

Speech Recognition: The capability of a voice process-

there are many different ways to calculate it.

ing system to decipher spoken words and phrases.

RSS: RSS (Really Simple Syndication) — sometimes

STC (Second-Tier Customer): See Most Growable

customer base is concentrated in a small percentage

called web feeds — is a web standard for the delivery of

Customer.

of customers. A steep valuation skew would be one in

content — blog entries, news stories, headlines, images,

Sticky Application: A portion of a web site designed to

which a tiny percentage of customers account for the

video — enabling readers to stay current with favorite

interact with customers, requiring customers to provide

majority of the value of the customer base. A shallow

publications or producers without having to browse

input and grow “smarter” over time about how to meet

valuation skew would be one where the valuation of

from site to site. All blogs, podcasts and videoblogs

individual customer needs. The “application” becomes

customers is more evenly distributed across the whole

contain an RSS feed, which lets users subscribe to

“sticky” as customers gain a stake in the service and

customer base.

content automatically and read or listen to the material

grow reluctant to take their business elsewhere. See also

Valuation: What a customer is worth to an enterprise;

on a computer or a portable device. Most people use

Learning Relationships.

see Customer Valuation.

an RSS reader, or news aggregator, to monitor updates.

Stove Pipe: Term commonly used to reflect that a

Value of Future Customer: The net present value of a

Socialbrite founder JD Lasica coined the term “news

business function operates in a vertically integrated

future customer’s lifetime value (LTV).

that comes to you” to refer to RSS.

manner, but does not interact efficiently or effectively

VoIP: Voice over IP; combines voice and data on a

with related functions.

single network.

Search Engine Optimization (SEO): The process of

Optimization:

Social

Media

queue.

Valuation Skew: The degree to which the value of a

Vortal: These are targeted vertical portals, sometimes called “vortals,” “vertiports,” or “affinity portals.” They

Touch Points: The priority areas for the application of

are aimed at specific interest groups and focus on pro-

search engine’s “natural” or unpaid (“organic” or “algo-

Knowledge Management, typically: interactions with

viding consumers with a gateway to unbiased informa-

rithmic”) search results.

customers, interactions with suppliers and interactions

tion from other sources. A good vortal solves problems

Segment: A group of customers related either by simi-

with employees. Each touch point represents an area of

for its visitors or customers.

lar needs and/or values, or by outward characteristics

potential process or quality improvement and competi-

VRU: Voice Response Unit; automated attendants that

(demographics, postal code, etc). Different from a

tive advantage.

route calls based on digits callers enter on touch-tone

portfolio in that customers in a segment are usually not

Triple Bottom Line: The triple bottom line (sometimes

phones. It responds to caller-entered digits or speech

individually identified, and customers can be members

abbreviated as “TBL” or “3BL”) is rapidly gaining

recognition in much the same way that a conventional

of more than one segment.

recognition as a framework for measuring business

computer responds to keystrokes or clicks of a mouse.

Segmentation: Grouping the individuals in a database

performance. It captures the values that some organiza-

(Also called IVR, ARU)

into segments based on combinations of demographics,

tions embrace: people, planet, profit — that is, social,

response, purchase behavior or other criteria.

environmental and economic factors.

Share of Customer: In contrast to Market Share, share

Trusted Agent: An enterprise that treats customers’

of customer refers to the percentage of a particular

interests as paramount and speaks on the customer’s

mation system in which there is no or little time passing

customer’s business a firm gets over that customer’s

behalf in all its dealings. With most organizations this

between the updating of an information record and its

lifetime of patronage. The ratio of a customer’s Actual

is a very difficult philosophy to implement, because in

availability elsewhere in the system.

Valuation to Strategic Valuation.

many cases the interests of the customer and enterprise

improving the visibility of a website or a web page in a

Fall 2012

Media

Zero Latency: A computer term describing an infor-

don’t coincide. Only in Collaborative relationships do the true interests of the customer and enterprise match.

Glossary of terms provided by SOCAP International.

Customer Care News