Managing Director & Senior Partner
This is the first in a series of articles on the digitalization of customer contacts.
Even in the digital age, the outlook is bright for contact centers staffed by people. To be sure, more and more interactions between consumers and companies are taking place on digital channels, and smart machines are poised to take on all sorts of contact-related tasks that today require human agents. But contact centers are not about to go the way of the steno pool, passing into business history.
Indeed, even as digital touch points multiply and contact center volumes fall, human agents can become more important as a source of value for consumer-facing companies, helping them compete on customer experience at a time when core products and services—such as flight bookings or checking accounts—may be viewed as commodities. Deploying agents in new, higher-value ways is a key element in an overall strategy to use digital tools to improve customer contact, whether human-to-machine or human-to-human.
Rather than forcing contacts onto digital channels to cut costs, best-practice companies are looking at where digital contact works and where human contact is more effective, and creating seamless handoffs between the two. The model that’s emerging is what we call the virtual customer relationship center. Implementing this model will require new skills as well as new technologies. But companies that do this right can improve the customer experience, capture savings, and create new sources of revenue.
Advances in digital technologies will make it possible to automate more contacts and tasks that human agents now perform. Technology will also help companies better manage contacts—both human-to-machine and human-to-human. The net impact will be to blur the line between digital and human touch points. Agent contacts—through customer service help lines, for example—will be tightly integrated with digital touch points such as mobile apps, social networks, and online communities. All of these contacts can be monitored and analyzed to improve the customer experience and create new sales opportunities. Data analytics can tell companies which kinds of contacts are most effective for resolving specific issues and where adjustments are necessary. Or by combining transaction data and customer profile data—products used, customer lifetime value, social media activity, demographic data, and so on—companies can create custom deals for upselling or cross-selling that have a better chance of succeeding than one-size-fits-all offers.
Here we look at two kinds of technologies: those that are used in digital channels and those that can improve the efficiency and effectiveness of contact center operations. To get the most benefit from these technologies, companies should implement them as part of an overarching service design, rather than in a piecemeal fashion.
Technology for Digital Channels. New apps and back-end technologies are making human-to-machine contact much easier for people and more productive for companies.
Technology to Improve Contact Center Operations. Digitalization can offload tasks such as customer verification from agents, extend agent capabilities, and improve the customer experience, while increasing efficiency and effectiveness. A typical configuration of these technologies can reduce call times by 35%. (See the exhibit.)
Additionally, several noteworthy technologies that improve contact center operations, all related to artificial intelligence, are on the horizon. AI is already being applied to a few areas in centers. Within five years, we expect smart machines to take on a wider range of self-service activities and increasingly complex tasks. We estimate that the following emerging technologies could reduce the demand for labor by 50% to 60% by 2022.
Advanced technologies in the virtual customer relationship center will transform the work of human agents. Technology will not only offload repetitious and routine tasks but also give agents new capabilities. There may be fewer agents in the contact center, but they will have more skills and take on more important work. Agents will be there when companies need to respond to a problem before there’s time to reprogram a computer. They’ll be there when customers need to talk to a person—to know someone is listening, to hear a note of kindness or a joke about the weather. Most important, they’ll be there to handle the most challenging customer problems, prevent the loss of at-risk customers, and generate sales by ascertaining customers’ needs. Agents are uniquely positioned to increase value per customer (that is, share of wallet), save faltering customer relationships, and increase brand engagement and consideration.
One of the best opportunities for agents to add more value is in matching additional products and services to customers’ needs. Using data analytics, for example, centers can now customize offers that agents can work into the conversation. Every offer can be based on detailed knowledge of the customer’s habits and history with the company. Centers can test and analyze various approaches to determine which offers and messages elicit the best responses. Data analytics can also create better incentives for agents—basing their rewards on improving value per customer rather than on the number of items sold, for example. Done right, these service-to-sales approaches can generate revenue that covers 15% to 30% of center costs.
This extraordinary opportunity also comes with considerable challenges, particularly for centers that have been managed for cost above all. Most organizations today lose sales opportunities in the contact center because they use “inside-out” targets rather than understanding and responding to customers’ needs and striving for service excellence. Companies also make the mistake of treating all agents as potential sales reps; some people do not have the sales gene and should be encouraged to build other skills. Management should identify and cultivate sales talent in the contact center and devise processes to route calls that have potential for upselling or cross-selling to those agents.
There are more opportunities to open a sales conversation than many companies realize. But the right talent must be on the line with the right competency at the right moment. Calls in which the agent is able to provide expert knowledge or help a customer with a decision are obvious door openers. But a conversation that stems from a service failure can also turn into a selling opportunity. If the agent has the skill to solve the problem and has treated the customer well, the customer may be grateful and open to a sales idea.
To give digitally enabled human agents everything they need to succeed, companies must aggressively pursue continuous operational improvements. Virtual customer relationship centers enable companies to measure performance and use data to that end. This effort applies to agent work as well as digital contacts: even as they digitalize more contacts, most companies can make significant gains in operational performance in contact centers. Indeed, best-practice companies are establishing an operating rhythm for the data reviews and other processes that drive continuous improvement. Five steps are critical:
As companies plot customer journeys, they should not underestimate the power of multichannel contact with customers. The proliferation of digital channels is multiplying the opportunities for contact. Data analytics give companies the insights to tailor every response to a customer’s query for optimum results. Every contact is an opportunity, and every type of contact—especially with a human agent—can help shape satisfactory and productive journeys. Because none of these changes should be treated as an independent development, the virtual customer relationship center lies at the heart of the digital transformation.