Keith Dawson's Analyst Perspectives

In a previous Analyst Perspective, we discussed some of the big-picture trends that are bringing cost control back as a core driver of contact center operations. In this report we will tackle some of the practical ramifications: how those trends affect decision-making and operations.

The pandemic opened the door to a much broader consideration of how organizations engage with employees, everything from working conditions to career pathing to training and pay and benefits. What pundits are calling the Great Resignation is part of this — organizations must work harder to maintain a labor pipeline and keep it skilled and available. They also have to invest in the technology needed to support agents from remote locations. The same social phenomena powering the Great Resignation is creating a pool of hyper-energized and motivated consumers that want more from the organizations they do business with. All of this has cost ramifications.

For example, Ventana Research asserts that by 2024, two-thirds of contact centers will have increased their budgets for training and coaching due to the rigors of managing work-from-home agents and the increasing complexity of agented interactions.

At the same time, COVID provided a justification for some organizations to embark on long-awaited and very necessary upgrades. Some of this was the acceleration of digital transformation projects, and some of it was needed for business continuity and resilience in the face of difficult conditions. In either case, the money flowed. Spending it during the pandemic holds the promise of some savings when things return to a new normal — investments in digital infrastructures will make customer communications less expensive on a per-interaction basis going forward.

On the technology side, we would still be looking at integrating tools like artificial intelligence (AI) into the technology stack with or without the pandemic. We would still be seeing the consolidation of applications into suites, even suites that include contact center tools, within larger systems for customer experience (CX) across departments or communications platforms that include business phone systems and unified communications (UC). From a cost point of view, that technology advancement and consolidation, especially in the fundamental platforms at the bottom of the technology stack, means that innovation and improvement move through the organization much more quickly. Once something like AI or customer analytics is deployed somewhere, it is hard to keep it from expanding its use cases, putting new technology at the service of more users in more contexts, lowering the overall total cost of ownership.

One of the most promising developments is that many centers are learning to view the agent as much as a potential revenue participant as a cost. If you see the daily work product of an agent as a series of relatively simple, repetitive encounters happening at great scale, in which you are desperately trying to minimize the time spent on each interaction so they can cram more of them into a single shift, then you are naturally going to be cost-focused. But that is not the real, lived experience of many agents right now, and going forward it is going to be less and less the picture.

Agent work is quickly becoming less mechanical and more consultative. The mechanical work — answering simple questions about product delivery or account balances — is what you can offload to automation. What you cannot offload is the kind of empathy work that creates real, lasting customer relationships. Agents are increasingly going to take on more of a concierge role to help customers navigate complex issues and processes, bringing in experts and taking a longer view of a “case” or issue than just the duration of a call or chat.

That means you cannot evaluate them using the same criteria as before, and you cannot assume the same kind of cost structure based on how many minutes they spend on a call or how much after-call time they put in. I submit to you that reducing costs in the modern contact center has less to do with headcount reduction than it does with revaluing the way agents spend their time and better measuring the results of what they do based on different aspects of the customer relationship. Marketers are good at this, and I think contact center management should start to adopt some of the best practices learned from those peers in terms of costs and revenue-generation metrics.

Another key to cost control is understanding how becoming digital changes the nature of the customer relationship and the organization’s ability to respond to customers. Customers, after all, are the ones driving digital growth — businesses are only adding contact channels because customers insist on using them. The majority of interactions already have a digital component, meaning a lot has already happened before the agent gets on the phone with a customer.

If non-agented interactions cost significantly less than agented ones, the temptation may be to shove as much into the automated digital realm as possible. That is not always the best approach, because having a human in the loop establishes the empathy connection that is needed to establish long-term relationships which generate significant revenue. So, a lot of organizations are wrestling with the question of exactly how much to automate, where to put the human in the process, and how much to emphasize the digital part of the interaction relationship.

Planners face questions like: Should you segment your customer base into high value and low value and reserve the expensive human interactions for those that are more valuable, or those that you project might be high value in the future? If so, then the center is going to need more AI or analytic technology to make those assessments and factor that technology upgrade into the cost equation. From a cost perspective, it makes sense for contact center management to start arguing for a bigger share of digital transformation project budgets and using the revenue-generation capabilities of the center and its agents as a justification for that bigger share.

In the end, cost control is not only going to be solved by dramatically reducing headcount or interaction volume. Improved technology will play a role. But it is possible that the best way to control costs is to offset them with revenue by training agents to find and leverage sales opportunities and better measuring the impacts centers have on customer loyalty, longevity and value.

Regards,

Keith Dawson