Great customer service is absolutely critical to any organization’s success. Today, organizations require modern solutions that can help them support customers on the channels and touchpoints of their choice, by providing customers with self-service options and arming customer support agents with access to information and experts to resolve issues quickly and efficiently. We are pleased to share the results of a March 2024 Forrester Consulting Total Economic Impact^TM (TEI) Study commissioned by Microsoft. Forrester calculates Dynamics 365 Customer Service delivered benefits of $14.70 million over three years to a composite organization. The total investment required was $3.54 million over three years and provided a ROI of 315% with a payback period of less than six months.

Methodology and purpose

Forrester’s TEI study is a methodology developed specifically to assist companies with the complexities of procuring technology solutions. The TEI study also aids technology vendors in objectively evaluating and communicating their solutions’ value proposition. To these ends, the TEI study discussed here provides a framework for business-decision-makers to assess the potential financial impact of implementing Dynamics 365 Customer Service.

Ultimately, the financial impact of the 2023 study is a projection for a composite organization developed by Forrester through real-world interviews with five businesses that currently use Dynamics 365 Customer Service. These businesses’ experiences and the interview results are aggregated to create a composite organization to obtain data about costs, benefits, and risks. For this study, the composite organization is a $1 billion industry-agnostic organization that operates at multiple locations around the world. It has 5,000 employees total, and 500 of those are customer support agents who support a growing customer base. Each agent works an average of six hours a day and spends 75% of that time on support interactions.

Continue reading to learn what key challenges the composite organization faces and the study’s critical findings.

Key challenges

In the interviews conducted for this TEI study, the organizations shared the following common challenges:

• A disparate stack of aging customer support and customer relationship management (CRM) solutions.
• Siloed customer data, which led to suboptimal support.
• Increasing support capacity requirements.
• An inconsistent and one-sized customer experience.

With these challenges top of mind, the organizations wanted to find and invest in a customer service solution that could:

• Integrate seamlessly with other Microsoft solutions, including other Microsoft Dynamics 365 modules, Microsoft Power BI, and Microsoft Teams.
• Deliver automation and AI-driven insights to the customer support function to enable agents to deliver a better support experience while limiting the requirements for additional support agents.
• Help establish and curate a knowledgebase to help agents further support the customer experience.

Key findings

Microsoft Dynamics 365 Customer Service provides service organizations’ agents the tools they need to deliver faster, seamless, personalized experiences across any channel. Dynamics 365 Customer Service simplifies and automates support agent processes with Microsoft Copilot in Dynamics 365 Customer Service while delivering faster support experiences to organizations’ customers, which can improve customer satisfaction and lead to additional revenue and profit.

Forrester’s study revealed four quantifiable impact areas: improved handling times leading to greater agent productivity, improvements to first-call resolution and misrouted calls, improvement to sales pipeline generation leading to revenue increases, and cost savings after retiring other customer service solutions.

Let’s take a closer look at each of these areas below to understand how Dynamics 365 Customer Service delivers value for customer support organizations.

Reduced call handling time by 40%

Interviewees noted several inefficiencies across their organizations’ previous customer service solutions that increased agents’ interaction time with customers:

• Multiple solutions for different support functions, leading to siloed customer data and relevant support information.
• Lack of visibility into customer histories and best practices for service and resolution.
• A one-size-fits-all approach to service-case routing.
• No automation for common support tasks.

Implementing Dynamics 365 Customer Service enabled their organizations to automate manual aspects of their agents’ daily responsibilities, which helped to reduce the time they spent searching for customer information and best practices. Because agents were able to have shorter, more efficient interactions with customers, the composite organization saved an average of 468 hours per agent each year.

Improved first-call resolution by 20%—and decreased misroutes by 15%

With their legacy customer support tools, agents at the study’s participant organizations had no easily accessible customer knowledge base with records of common support issues. They also had no easy way to locate specialists who could help resolve issues, so calls were frequently misrouted to the wrong specialists.

With Dynamics 365 Customer Service, they found they could automatically route support cases to the best specialists depending on the nature of the case. This helped them to both increase first-call resolution rates by 20% and shorten the overall time of interactions. They also decreased the times agents misrouted calls to the wrong specialists by 15%. Overall, the composite organization’s agents saved up to 292 hours per year.

Increased sales pipeline generation to drive additional profitability

Some interviewees shared revenue impact to their organizations’ revenue based on the implementation of Dynamics 365 Customer Service. A CRM product manager at a travel and hospitality organization explained that because Dynamics 365 Customer service automates the majority of searches performed by agents, they can spend more time on revenue-linked interactions. Another interviewee at a manufacturing organization said that customer information and leads are shared between support agents using Dynamics 365 Customer Service and salespeople using Microsoft Dynamics 365 Sales, enabling salespeople to see customer interactions and identify opportunities for new revenue.

Saved up to $978,000 in costs on retired customer service solution(s)

By implementing Dynamics 365 Customer Service, participant organizations were able to retire their previous customer service solutions, saving costs on license fees, infrastructure, and personnel maintenance hours. Interviewees from one manufacturing organization said their company reclaimed nearly $100,000 annually by decommissioning two third-party customer service solutions made redundant by Dynamics 365 Customer Service.

Other benefits

Study participants mentioned additional benefits to their organizations that were not quantified for this report, including:

• Integration with other Microsoft products including Microsoft Power BI for discovering and predicting common support issues and Teams for easy collaboration between support agents and specialists to help resolve issues.
• An improved customer support experience with reductions in key support metrics such as handle time, hold time, and resolution rates—and the ability to deliver faster, more personalized, and more nuanced support experiences with Dynamics 365 Customer Service.

Next steps

Forrester’s TEI study of Dynamics 365 Customer Service found four primary quantifiable impact areas and several soft benefits. Taken together, the study found that Dynamics 365 Customer Service delivered a total economic impact of $14.7 million in financial savings over three years. The total investment required was $3.54 million over three years and provided a ROI of 315%.

To get a closer look at the study’s results and a better understanding of how Dynamics 365 Customer Service can help your organization, read the full study: The Total Economic Impact of Microsoft Dynamics 365 Customer Service.

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The past couple years have been challenging for many customer service organizations. Meeting customers’ rising expectations and adapting to their evolving needs within a volatile economic landscape has been a herculean effort. Businesses are investing more in measuring the impact of their customer service, and the investment is paying dividends. In fact, it’s becoming more about the total customer experience and transforming the business models to create effortless experiences for both customers as well as employees. By 2026, Gartner predicts that 60 percent of large enterprises will use total experience to transform their business models to achieve world-class customer and employee advocacy levels.¹ This growing acknowledgment is a positive indicator that service is finally recognized as a core business value driver as support teams became pivotal in retaining customer loyalty and winning new customers throughout the COVID-19 pandemic.

But are service organizations ready to face challenges and equipped to provide this level of service at scale? Customer service leaders are turning to modernizing technology and digitization, such as Microsoft Dynamics 365 Customer Service, to provide high-quality customer service experiences.  

Five trends to modernize customer service

1. Recognize and quickly connect with customers

Modern customer service means showing up for your customers on the channel of their choice. Customers increasingly expect companies to offer a robust service experience right in their favorite channel. With each social channel representing diverse customer segments, engaging across these channels offers countless opportunities to deliver excellent service.

• 63 percent of customers expect companies to offer customer service via their social media channels, and 90 percent of social media users have already used social media as a way to communicate with a brand or business.²

The Omnichannel for Customer Service add-in for Microsoft Dynamics 365 Customer Service offers a wide variety of social engagement options for customers to engage on their preferred channel. Now with 2022 release wave 2, we’ve added Apple Messages for Business to our list of social messaging apps. This rich messaging can be used to generate interactive content and experiences that all take place within the messages application. And remember, when you enable agents to respond using the customer’s channel of choice, it drives brand engagement, creates a positive experience, and builds customer loyalty.

When engaging on social, always remember that you are not interacting with just one customer issue, but a wider audience that may not have context around a customer’s challenge. With an increasing number of eyes on you, it’s crucial to respond with precision, empathy, and quality.

2. Help customers help themselves with self-service

Intelligent self-service empowers customers to conveniently secure answers when and how they want, and this online, anytime support option is growing in popularity with customers. Business-to-business (B2B) and business-to-consumer (B2C) customers are likely to search for an answer to an issue within a knowledge base, online community, or portal before reaching out to a customer support agent. These critical self-service capabilities free up your agents to focus on high-priority, complex issues, and drive customer satisfaction.

• In a McKinsey survey of customer care leaders, nearly two-thirds of respondents who successfully decreased their call volumes identified improved self-service as a key driver.³

AI-powered chatbots are leading the charge in intelligent self service. Bots serve as the first point of contact for customers, alleviate customer frustrations from long wait times, and provide around-the-clock, immediate online support.

With the right service solution, bots can be deployed as conversational interactive voice responses (IVRs) equipped with natural language processing. A direct benefit of this intelligent, human-like conversation experience, paired with around-the-clock availability, is increased resolution speed. A quick response to a problem can be the difference in keeping a customer or having them pivot to a competitor.

• By 2027, chatbots will become the primary customer service channel for roughly a quarter of organizations, according to Gartner®.⁴

AI and machine learning advancements continue to make bots even more powerful and more efficient in understanding and conversing with customers. The use of bots in customer service is likely to expand as the technology becomes more and more democratized.

3. Personalize and drive brand loyalty

Customers want businesses to quickly recognize them as individuals and tailor their customer support experiences. Personalization isn’t only about knowing your customers and their histories, it means being able to understand and accordingly respond to their sentiment in real time. The ideal solution creates interactions based on each customer’s profile, which uses their current and past interactions and user data to customize the experience. It can be as simple as greeting a customer by their name and pulling up their order automatically by an email address or phone number, or it can mean taking the first step and implementing proactive customer care.

This trend in personalizing customer service demonstrates the value of the relationship to the customer, enhancing CSAT and strengthening loyalty, while significantly impacting the company’s bottom line.

• 63 percent of consumers expect personalization as a standard of service and believe they are recognized as an individual when sent special offers.⁵

• 80 percent of customers are more likely to make a purchase when businesses provide a customized experience.⁶

Improving Customer Satisfaction with AI

Learn how AI is helping customer service leaders drive higher customer satisfaction scores.

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4. Improve agent productivity

• In the past two years, customer service leaders have seen a dramatic shift in the number of employees working from home—up to 85% of their workforces in some cases.⁷

With agents working from more places than ever, they need new ways to find experts who can help them solve customer challenges. The right data at the right time is key to empowering agents to meet customers’ needs quickly and accurately. However, as omnichannel customer profiles grow, agents need tools that proactively surface insights that matter in the moment.

Advancements in AI technology, especially natural language understanding, enable real-time analysis of conversations and the ability to surface real-time insights and knowledge. Agents can be alerted to similar cases and successful resolution steps, along with knowledge suggestions customized for the current context. All of these capabilities help agents solve customer issues more quickly, improving resolution rates and customer satisfaction.

5. Optimize with automation and run your business lean

Many customer service leaders are making it a priority to transform their departments from cost centers to growth centers. At the same time, they face continuous pressure to keep costs down.

Unifying tools onto a single, cloud-based platform reduces redundancy and enables cost flexibility to meet changing business conditions. If that platform has an open architecture and no-code/low-code development capabilities, the time and cost of development can be dramatically reduced—putting innovation within reach across the organization.

Building tomorrow

These are just a few of the trends in customer service, but one thing is for sure: customer service is evolving rapidly. The real challenge is being able to serve customers wherever they are and making sure every customer interaction is captured and available in a single profile for the support agent to use in resolving customer issues.

Microsoft is listening. We’re continually adapting and innovating to provide service leaders with the tools you need to consistently deliver exceptional customer service. We continue to invest in features like self-service, bots, social engagement, and agent productivity tools that bring value to you, your customer service organization, and most of all, to your customers. Our goal is to build intuitive, sophisticated, easy-to-use tools that enhance your service delivery and empower your service representatives to exceed customer and organizational expectations.

Our service product roadmap is filled with new features and innovations that will take your service experience to the next level, differentiate your brand, and ultimately help you rise as a leader in your industry.

Learn more

Learn more about Dynamics 365 Customer Service, watch our Modernize the Service Experience guided tour, and check out Apple Messages for Business.

End notes

¹Gartner webinar, The Total Experience Strategy for Better Retail Digital Interactions. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

² 180+ Social Media Marketing Stats You Can’t Ignore (2023), Dreamgrow.com.

³ The state of customer care in 2022 and beyond, McKinsey, 2022.

⁴ Gartner Press Release, Gartner Predicts Chatbots Will Become a Primary Customer Service Channel Within Five Years, July 27, 2022. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

⁵ Consumers expect personalization, reveals report, Retail Customer Experience.

⁶ New Epsilon research indicates 80% of consumers are more likely to make a purchase when brands offer personalized experiences, Epsilon Research.

⁷The state of customer care in 2022 and beyond, McKinsey, 2022.

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