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Outsource magazine: thought-leadership and outsourcing strategy | September 23, 2017

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Call Me Maybe?

Call Me Maybe?
Outsource Magazine

This article originally appeared in Outsource Magazine Issue #29 Autumn 2012

 


In many ways these are great times for the customer contact business, with new technology providing hitherto-unthinkable opportunities for smarter and more effective contact; new delivery locations emerging almost day by day; and expertise and best practice deepening with every interaction. Nevertheless, there are clouds on the horizon; with every opportunity comes a new challenge, some significant – even existential – ones for individual providers and the industry as we know it today alike…

 

Technology

As any professional even half-familiar with the customer contact space will be well aware, technology is driving change at an incredible rate in this industry – and in a great many different ways. Most obviously, there is the increased use and capability of technology within traditional call centre operations: more efficient call handling and smarter IVRs, cost-efficient VOIP, the increasing deployment of artificial intelligence. But there is also the deeper transformation being wrought by technology in the form of the move from a call centre to a contact centre philosophy, with more and more customer interactions taking place via purely electronic means as smartphones proliferate (a recent Rapide survey revealed that 86 per cent of businesses believe mobile communications will be indispensable to future customer experience systems), the use of social media explodes (see below) and consumers become more and more happy interacting with non-human touchpoints. There is also the cloud factor – the development of the cloud model is impacting upon customer contact as much as, if not more than, it is anywhere else in business – and the contribution customer contact makes to an organisation’s big data mountain.

These of course represent wonderful opportunities for those responsible for customer contact, either in-house or outsourced. But there are also huge challenges being thrown up here. One of course is cost: as businesses are required to cater for an ever-greater array of formats, platforms and types of interactions, so to do their costs rise in areas such as infrastructure, development and training. The complexity of today’s multi-platform content environment is much greater than that at play at the start of the call centre business and this has its attendant price – and risk. Furthermore, there is uncertainty about the long-term viability of any given platform; huge investment might go into adopting certain technologies only to find that they are obsolete within a comparatively short time (the speed of technological advancement here colliding with an increasingly fickle consumer base).

The move from call to contact centre is specifically challenging because it calls into question the economics of the whole industry: if the human factor is to be removed as much as possible from customer contact, the traditional pricing models become obsolete – along with things like established career development paths and sought-after skill sets (especially at managerial level). The balance of power in the provider space shifts significantly too, from the suppliers of people – who have access to high-quality affordable talent – to the suppliers of technology.

While it’s unlikely even in the long term that the human factor will be removed altogether from customer contact, the incentives to downsize headcounts are obvious and, increasingly, the technology exists to facilitate this – at a cost, of course, and with the risks described above. But this isn’t necessarily going to be a smooth journey – many organisations have struggled along the way even now to find the right balance between human and non-human touchpoints, as any customer can testify who has taken their custom elsewhere after one lengthy queue too many – and the unparalleled complexity of technological options now available continue to provoke serious head-scratching even as it offers access to brave new worlds of efficiency and next-level service delivery.

Social Media

Alongside engagement with new technologies, social media has been at the heart of changing customer behaviour in recent years and customer contact professionals now have to factor in Twitter, Facebook and other platforms into their portfolios. Individuals are increasingly comfortable tweeting brands to demonstrate satisfaction or otherwise – and the “social” element of the media means that a refusal to engage with an unhappy customer, or a failure in that engagement, is likely to be visible well beyond the traditional “confession booth” confines of the customer/brand relationship. In other words, customer contact is now not just about contact with a customer but, via that one customer, with a host of other customers, with a raft of prospects, and with one’s competitors who can of course witness these interactions in the raw.

As social media remains a relatively nascent field, there is a great degree of learning on the hoof going on – what proportion of spend is to be allocated to social media responses now and going forwards; what specific language and tone is most effective; what are the benefits of “success” and the costs of “failure”? And this of course creates uncertainty. What is most definitely certain is that social media are an increasingly important channel for the consumer: a recent study by Echo Research and Fishburn Hedges showed that the proportion of UK consumers contacting brands directly through social media nearly doubled from 19 per cent to 36 per cent in only eight months to April this year. Crucially, 65 per cent of respondents to that survey believed that social media were a better way to communicate with companies than call centres (highlighting both the advantages of social media and the poor standing of call centres in the public eye).

As with the myriad new technologies available in the space, there are a huge number of social media platforms for call centre providers to take into account – while concentrating on the highest-profile platforms is a no-brainer, failing to cater for more niche platforms which may be popular amongst your organisation’s target market could prove costly. Therefore, again, there are costs and risk associated with uncertainty over which platforms are viable over the long-term and how much resource needs to be devoted to any given platform.

The biggest challenge of course is the lack of control companies (or their suppliers) now have over brands. Because of the aforementioned high visibility of engagement via social media one superficially small error can have significant repercussions once exposed to the social ecosystem (as several high-profile cock-ups in recent months evince). How customer engagement executives understand this and build that understanding into their operations going forward is one of the key challenges facing the space today.

Talent Acquisition & Management

Ask any senior professional in the outsourcing and business transformation space to enumerate his or her biggest challenges and sourcing and retaining key talent is almost certain to figure highly – and this situation is no different in the customer contact arena. On the one hand, a gloomy economic outlook (see below) and relatively high levels of unemployment in the west should be creating for onshore providers and captives a bigger, higher-skilled talent pool in which to fish (and certainly many providers are happy to talk up the talents of those employees they’ve already engaged). However, there remains a talent deficit above a certain level of expertise in many verticals and ensuring a steady flow of the right people into the right positions remains a key challenge for providers – especially as the macroeconomic picture (hopefully) improves.

Offshore, in the voice BPO heartlands of India and the Philippines especially, attrition remains a huge problem (though less than it was perhaps two years ago). Talented, capable individuals abound; the problem is keeping them. Training (especially cultural familiarisation) costs are spiralling and yet increasing wages to keep key talent is reducing the labour arbitrage value which remains the single most important factor in decisions around offshoring. How providers nurture and keep their talent while maintaining margins is an ongoing difficulty and one that will only be exacerbated by rising inflation in many offshore hot spots.

Reputation

Rightly or wrongly, call centres hold a less-than-special place in the heart of the average consumer. Despite the fact that individual interactions with centres tend to be resulting in ever-greater levels of customer satisfaction, the overall perception of call centres and consumers’ interaction with them remains generally negative – in other words, customers tend to hold onto their prejudices despite improving service levels. This should come as no surprise; it’s established fact that we remember – and talk about – a negative experience much more than we do a positive one, and half an hour on hold to one contact centre is almost certainly going to outweigh – at least when it comes to a consumer’s overall perception of the industry – speedy resolution via a handful of others.

The problem here is the old adage that one bad apple spoils the barrel – in other words, poor performance by one centre ruins it for everyone else that consumer interacts with. To an extent this is true, of course – and while it doesn’t mean that everyone should just give up on good customer service (the primary responsibility, of course, being to the brand, not to the contact centre space) it does reinforce the fact that improvements need to come across the board and as universally as possible for the reputation of the industry to improve.

It may well be asked: why does the public standing of call centres generally matter at all as long as the service of the centre being contacted at any one time is exemplary? The issue here is that unless a customer has already had a positive experience with that specific centre, he or she is likely already to be in a negative mindset when making the first contact, doing so reluctantly and with a sense of foreboding generated by his or her anti-call centre prejudices (and at any rate coming, most probably, from a starting point of having a problem requiring resolution). This then makes the task of interacting with that customer successfully all the harder, requiring more of the agent/s handling the customer and increasing the risk associated with sub-optimal performance.

Cynically, one might well ask why this matters at all, as consumers are presented with little choice as to whether or not to engage contact centres per se; but for the industry to attract and retain top talent, for example it would certainly help to be viewed as more of an employer of choice than an employer of last resort.

Unfortunately for the industry as a whole, the only way to tackle the reputational challenge is by a wholesale improvement of service quality (which is of course pretty much what has been going on already, according to the Bright contact centre benchmarking index which saw negative scores drop from over nine per cent of customer respondents in Spring ’09 to around four per cent in Autumn 2010) – and even then it may well be that old prejudices simply refuse to die (hardly unknown in society at large, of course).

Economic Uncertainty

It should come as little surprise that the ongoing economic gloom afflicting much of the world is having an impact upon the call centre and customer contact space. This impact manifests itself in various ways. Firstly, there is the impact in terms of activity volume – and here the picture isn’t a wholly gloomy one, as many organisations are actually driving more activity through their captive contact centres (it’s important to remember that not every business is doing especially badly from the slump) or choosing to outsource to providers eager to snap up the work. However, under the familiar mantra of “more from less”, buyers are negotiating – and renegotiating – harder and margins are squeezed.

Perhaps more pernicious still, however, is the ongoing uncertainty which continues to colour the macroeconomic outlook. Buyer organisations remain, in the main, less willing – or able – than previously to make long-term commitments and this is of course having a markedly negative impact upon suppliers whose own strategic planning depends on the ability to forecast future volumes and types of work. For providers whose operations span multiple geographies the issue is further complicated by the increased currency volatility which has developed as a consequence of the downturn.

Moreover, the huge budgetary hits taken by local and national public sector organisations, particularly in the UK and mainland Europe, are themselves creating a lack of clarity: while an upsurge in outsourcing is being witnessed, with less money to go round the amount of work available is decreasing as some services are slashed or abandoned altogether. Many organisations previously heavily reliant on the public purse are now seeking new territory (with consequent further downward pressure on margins). The radical restructuring of some very large bodies with huge customer contact requirements – for example, the UK’s NHS – creates yet more uncertainty as the future viability of existing services comes under the microscope.

The solution for call centre providers may well be similar to that mandated for most other organisations throughout this protracted period of sluggishness – agility, flexibility, streamlining, a tight focus on cost, an ability to think ever further outside the box – but it is difficult to shake the feeling that the call centre space more than most sectors is at the mercy of its buyers’ fortunes, and perhaps the challenges posed by the economic climate will prove particularly intractable in this space – despite (or perhaps because of) its value to organisations of all kinds seeking to secure their own survival.

The Anti-Outsourcing/Offshoring Backlash

The ongoing US election campaign has seen a significant focus upon the “o” word – but for “outsourcing” in the jibes of Messrs Romney and Obama read “offshoring”, for it is the flight of American jobs overseas which has created so much animosity amongst the electorate. Even the most cursory glance at the mainstream news channels (and much more so Twitter) will demonstrate the depth of the anti-offshoring feeling in the US; and the same picture is mirrored in economies as far afield as the UK, Canada and Australia.

For many consumers however the most immediate contact with offshoring comes via a call centre; the foreign accent at the other end of the phone is for many all the proof that is needed that work continues to flood overseas, and as a result customer contact has become for many the archetypal offshored process – and as such draws a great deal of flak at a consumer level. So much, in fact, that the last couple of years have seen a significant trend towards backshoring or returning customer contact to an onshore operation. Major organisations such as Santander have made huge PR play in recent times about returning their previously offshored call centres to onshore locations – yet this of course comes at a cost, since labour arbitrage, while diminishing, has by no means gone for good.

Despite calls for action, it seems unlikely that either Presidential candidate will – or could – take any extreme steps to reverse the offshoring trend; however, tighter legislation may well have an impact upon call centre operations, and even without the ungentle touch of the long arm of the law the anti-offshoring mood cannot be ignored. Working out how to gain all the advantages of offshore components without incurring the wrath of increasingly nationalistic populaces (and hence consumers) in the west will be an ongoing challenge for the space and one to which there may well be no simple answers.


Image: Getty

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