I've spent the last 13 years in Xbox support. In October 2025, I shared a case study at the virtual Customer Support Summit about a Tier 3 transformation that changed how Xbox thinks about escalations.
This is the story of how we reduced Tier 3 escalations from about 4,000 per month to just tens per month – and why it took more than one tool or one policy change to get there.
An important acknowledgement
I must add that this was an entirely joint effort. During his tenure as Director of Xbox and Surface Customer Support, Experience & Operations, my colleague Greg Stephens led the Tier 3 redesign and drove his Tier 3 team to implement the new operating model.
In parallel, I led my teams to build and roll out XEMPT and to enable frontline resolution across the broader support organization.
Our programs amplified each other because we reviewed journeys together and partnered with cross-functional teams to change processes and policies.
Together, we combined Tier 3 program changes with frontline empowerment and automation, removed friction in high-impact customer journeys, and used data-driven trust signals to reduce unnecessary handoffs.
The scale of the challenge
Xbox serves millions of customers worldwide across technical and non-technical support, commerce and refunds, repairs and warranties, and launch readiness. We automated many of the easy scenarios with self-service and AI. That work helped customers and reduced total demand.
It also exposed a new problem. As self-service handled the simple issues, the remaining cases skewed complex. Those cases needed judgment, exceptions, approvals, and access to data that frontline customer support agents often couldn’t reach. Complexity increased, and escalations became the pressure valve.
When the Xbox escalation process became the problem
By the start of FY22, we saw approximately 4,000 Tier 3 escalations per month.
Each escalation represented a customer who couldn’t get a resolution through normal channels. Escalations created delays, repeated contacts, and frustration for customers. They also created friction and rework for frontline teams.
We had built many of our policies to prevent fraud. That goal made sense, but we applied it too broadly. We treated too many good customers like potential bad actors. That choice drove the behavior we didn’t want: frontline agents escalated issues because the system blocked them from doing the right thing.
The friction behind Tier 3 escalations
We didn’t have a single root cause. We had a pattern.
A customer would hit a high-friction journey, the frontline agent would understand the right fix, and then policy or tooling would block the fix. The agent would escalate, and Tier 3 would perform the same work with better access and different permissions.
That dynamic appeared in many scenarios, including order status and shipping exceptions, refunds and cancellations, warranty provisioning, inventory or substitute order decisions, repair exceptions like repeat returns, and partner or commercial provisioning needs.
The Xbox controller journey
In hardware replacement scenarios, our standard flow required the customer to ship the device to us first. Only after we received it would we send a replacement.
That process can be reasonable in some situations, but it became a clear illustration of friction when the customer needed a fast resolution and had a strong history with us. Frontline agents often knew the right outcome, but they couldn’t execute it without escalating.
I use this controller story as one example of the broader problem. It wasn’t the primary driver of escalations. However, it simply makes the pattern easy to see: friction plus limited authority turns routine issues into escalations.
Grace Gupta
How we reduced escalations by trusting and empowering frontline agents
Greg’s Tier 3 team drove a scenario-by-scenario transformation from the escalation angle, and I led teams across the rest of support to remove upstream friction and enable frontline resolution. We didn’t do this work alone. Our teams did the build, and we led the change.
What would happen if we trusted frontline teams to resolve the majority of customer issues, and we designed controls that targeted risk instead of blocking everyone?
That shift required culture change, policy change, and tooling change. We had to move from control first to trust first, while still protecting the business.
How we built trust through data and insights
We started with analytics and journey mapping focused on the escalations that mattered most. We looked for repeatable patterns, risk signals, and decision points that created unnecessary handoffs.
Then we built a trust model that separated most good customers from a small minority of truly risky scenarios. We used customer signals and scenario context to guide decisions. That allowed us to loosen constraints for low-risk situations without removing safeguards.
Grace Gupta
Stakeholder alignment, one scenario at a time
We had to earn buy-in across the business. Hardware leaders worried about inventory loss. Finance is worried about fraud costs. Business teams worried about policy drift and inconsistent decisions.
Greg and I partnered across those groups with a simple approach: pilot, measure, learn, expand. Greg led his team to prove the Tier 3 model, and I led my teams to scale the enabling changes across frontline operations and tooling.
In refunds and cancellation scenarios, for example, we often found that faster and clearer resolution reduced repeat contacts and reduced downstream cost. In logistics and inventory scenarios, we partnered to change policies so frontline agents could offer substitute products when inventory blocked a case beyond a reasonable threshold.
Tools and automation that supported human judgment
Culture didn’t change on intent alone. Frontline teams needed access and tooling that matched the responsibility we were asking them to carry.
We focused on a few practical enablers:
- Visibility, so frontline agents could see key status and tracking information without escalating.
- Exception handling tools, so the system could apply the same decision logic Tier 3 used for common scenarios.
- Automated approvals in clear-cut cases, so agents didn’t wait for manual gates.
- Better documentation support, including automation that pulled relevant information into cases and reduced administrative work.
We also used Copilot and automation inside our support tooling to help agents understand context quickly and choose the right resolution path, while keeping human accountability for decisions.
The cultural transformation
This approach worked because we treated it as a behavior-change program, not a process rewrite. Greg and his leaders reinforced it through the Tier 3 operating model, and my leaders and I reinforced it through frontline coaching, access, and automation.
We involved frontline agents early. We ran roundtables to learn what blocked resolution. We shifted quality from punitive to coaching-focused. We published clear decision principles, then reinforced them through training, audits, and feedback loops.
We also invested in global consistency. We gave every site the support resources they needed to close skills gaps and sustain the shift away from legacy habits.
The results
The transformation took sustained effort, but it delivered clear outcomes:
- Escalation reduction: 99% reduction of Tier 3 escalations from March 2022 to February 2025.
- Current volume: From about 4,000 escalations per month to just tens per month.
- Customer satisfaction: CSAT reached about 4.78 in key scenarios.
- Hardware turnaround: Hardware resolution times improved by 2 or more days.
- Financial impact: Multi-million annual savings and reduced resource needs, driven by fewer escalations, fewer repeat contacts, and less rework.
- Operating model: Tier 3 shifted from case management to program management, focused on operational quality and performance.
Grace Gupta
Lessons you can apply
Of course, the work at Xbox won’t map one-to-one to your business, but the core principles can certainly be applied:
- Trust your frontline teams, then back that trust with targeted controls.
- Design for the majority, and use data to isolate true risk.
- Remove handoffs by giving agents the access and tools they need to resolve issues on first contact.
- Treat culture change as core work. Reinforce it with training, coaching, and consistent measurement.
- Align stakeholders with pilots and evidence, not arguments.
The ongoing journey
AI and automation matter, but they don’t replace trust. Tools accelerate outcomes when you give people authority and clarity. Without that, tools only move friction around.
If you want to reduce escalations, ask a blunt question: Where does your system block the right outcome, and force your team to escalate to get work done?
This article is based on Ivo’s talk at the virtual Customer Support Summit in October 2025.
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