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Radical reform – the new model for customer contact

For the last ten years, the mantra in customer service (or ‘customer experience’ - the phrase with a more contemporary feel) was ‘omni-channel’. Organisations that had invested in providing multiple channels for interaction with their customers were, and indeed still are, amplifying their investment in integrating those channels. In theory, this allows customers to move seamlessly between channels for an integrated, 360° experience. In practice, this is largely not being achieved.

This is mainly because we expect technology to deliver results with little or no experienced analysis of business dynamics, business process and commercial return on investment. One commentator notes that, “the top oversight among retailers is rushing to launch too many buzzy technology programs at once, without considering how they function together”.

Global business analyst Deloitte coined the phrase ‘Smart Contact’ in its Smart Contact 2017 report, to encapsulate where the next generation of customer experience management needs to go. In the report, the concept was summarised as: “Smart Contact is about aligning… operations with the changing nature of customer interaction, driven by new technology and the behaviours of the connected customer”. This analyst has identified four key themes central to the Smart Contact agenda: 1. The move towards digital interaction; 2. The rise of the bot; 3. Making personal connections; 4. The agile operating mode.

Such a structure poses an existential threat to the structure of the contact centre industry (outsourced and in-house) as it currently stands. As more contact moves to text and data channels and – more importantly – artificial intelligence in the form of bots takes over the handling of much of its simpler traditional work, the size, format and skills base of the contact centre is changing. At the simplest level, inbound frontline teams are going to shrink. Demand volumes are going to become much more unpredictable, and it is likely that such spikes and troughs simply cannot be handled by traditional voice-based contact. Flexible solutions, combining the best in automation and live contact handling, will be needed to handle these volatile contact patterns – especially as consumer confidence in such capabilities grows. Greater skills levels will be required from more experienced live agents to proactively handle higher risk, higher value contacts.

The potential impact and scale of change is daunting. On the other hand, those organisations that fail to change will be left with dislocated customer service, brand damage and competitive disadvantage. Normal business disciplines still need to be applied to reforming an organisation’s customer contact. All contact strategies should come seamlessly out of the organisation’s strategic business direction and goals. Robust business cases must be built. And rigorous pilots have to be conducted to prove ROI in real life situations.

 

The financial impact of reform

So, is this need for change simply the province of innovative pioneers, or is there a strong commercial imperative for the mainstream?

Based on the study of over 100 organisations that have begun addressing this issue in the last five years, NeosWave has built a projection of the current cost to various UK sectors failing to address their customer contact infrastructure. The controlled trials underpinning this study have showed that, at a basic level, analysing business processes, then restructuring customer contact infrastructure using an appropriate combination of AI and skilled agents, will deliver a baseline bonus of just over 20%+ cost savings. This is the baseline return on investment. A variety of individual examples are delivering savings greatly in excess of this baseline level – through more rapid resolution rates, demand spike answering rates, complaint reduction and the loyalty bonus of greater customer retention/share of wallet.

Taking the baseline bonus rate, and based on just a 70% implementation of contact centre market restructuring, this paper estimates that UK contact centres (in-house and outsourced) are wasting at least £2.1bn every year by failing to migrate from old and outdated business models.

Clearly, such economies provide a compelling business imperative to restructure contact centre operations. The baseline savings deliver a rapid return on investment, with follow-on competitive benefits potentially multiplying those returns and placing the organisation at a strategic advantage over competitors.

 

Benefits of reform 

Take the example of a mid-ranking UK department store chain. A key part of the brand persona was approachability and high levels of customer service. The initial analysis of contact handling options that the company made available to customers showed that some 30%+ served no useful purpose. Customers did not value these points of contact, they were under-utilised, yet they still were costing the company substantial sums each year.

A further 30% of contact volume was identified as benefiting from automation. Better, clearer, quicker response was offered by automated systems, but only when some serious integration improvements had been made to product catalogue databases, stock management systems and delivery tracking data. Finally, customer profiling identified a highly engaged cohort of customers frequently using key contact points. Not only were a goodly proportion of these customers high-revenue and high-margin, they were also very active on social media. Their more complex queries were fed through to a highly-trained and experienced set of super-agents. Often, this expert management of more complex or non-standard queries was seen to result in almost immediate, and highly influential, social media activity by those same customers.

Not only did radical reform of the company’s whole approach to customer contact and CX save substantial sums; CX scores and NPS ratings rose as much poor contact experience was eliminated, the investment in effective automation improved and complex queries better handled by properly experienced personnel.

 

Conclusions

The traditional contact centre model uses legacy technology, is committed to fixed overheads, and employs lower-skilled workers. They are often cited in areas or catchments with a low penetration of the talent pool required for ‘super-agents’. As a result, their ability not only to be technology agnostic, but also have no vested interest in changing the balance between people and automation, is very limited.

Radically reforming this model – combining the best of automation and experienced personnel – reduces costs, improves customer experience and importantly frees up resource to re-invest for growth and value creation. It also offers a value-proposition to client companies that does not perpetuate a constant outsourced service outlay, but gradually transfers value back into the client company over the contract period.

Click here to read NeosWave’s full research report, including a sector-by-sector breakdown of the cost of outdated contact centre management.

 

Graham Ede, CEO at NeosWave.

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