Topo Speak

The Next Big Thing To Hit Call / Contact Centers and Customer Service

tom@topoenterprises.com (Tom Topolinski) — Tue, 14 Jul 2009 05:34:00 +0000

Predictions

Over the next 5 years the call / contact center industry will undergo enormous change. Consumer and business customers will no longer have to deal with accent problems and call queue waiting. The cost of customer service, technical support, telesales and telemarketing will be greatly reduced while being enhanced with more efficiency and control. Today’s labor intensive environment will change dramatically and will be augmented by Artificial Intelligence (AI) technology.

Within the next year a few early adopters, mostly savvy outsource vendors as well as self-source companies will implement the use of AI within their call/contact centers and will expose the industry to its true power and capabilities. Within two years 25% of call/contact centers will be employing some level of AI. Within 5 years, the industry will become reliant on AI as a resource for servicing customers. Yes, there will still be the need for human agents; however, AI will reduce that number greatly from today’s market size at a much reduced price and cost. And most human agents will be providing back up to the AI front end contact systems versus being on the front end today. No, the AI system won’t provide for all calls, so back up to a human agent is required for a portion of the contacts. But in time, the AI system will learn and be modified to accommodate a majority of the calls through fruition.

Today’s Environment

The technology and practices employed today for servicing customers is not much different than what is was 15-20 years ago. Yes, technology has evolved and the systems employed are more advanced, but still it’s basically the same. This holds true for operational practices as well. Bottom line, we’re still completely reliant on human labor forces to deliver customer service for most of the industry.

There are Interactive Voice Response systems (IVR’s) which provide a low percentage of coverage beyond traffic management, but these are limited in function and restricted by how far they can maintain required customer satisfaction levels. Most IVR’s only provide front end traffic management to a human agent today and the percentage of full customer service is very low for IVR-only support.
The Internet also offered some advancement in operations and technology but we’re still doing the same basic things that we did 15-20 years ago. Internet, or Voice Over IP (VOIP) has lowered the cost of communications, but this still has not changed the industry.

There has not been a “Next Big Thing” in the customer service and call/contact center market within the past 15-20 years. Some would argue that off-shore, springing forward some 8-10 years ago was a big thing, but it didn’t really move the market forward into a changing evolution. Off-shoring merely lowered the cost to a degree but also introduced problems related to accent, attrition and control. Bottom line, the customer service and call/contact center footprint hasn’t really changed much during the past 15-20 years.

The Next Big Thing

A definition of a Next Big Thing would include something employed on a grand scale which would change an industry completely. Current AI technology which is available today for call/contact centers and customer service will do just that. This technology has been under development for decades for various other reasons, such as national defense, national intelligence, national security and some commercial applications.

Today, there is an offering available which is designed to replace the human agent in a multitude of applications in the customer service arena. This technology is basically an Avatar which sounds, speaks, listens, thinks and reacts much like a human. Designed to function like an agent or rep within a call or contact center, this technology can perform at amazing levels today for a fraction of the cost of a human agent, while still providing acceptable customer satisfaction.

AI goes way beyond IVR’s and Interactive Virtual Communications (IVC’s), which are basically script oriented and deal with fixed responses. Even the smartest IVR’s today can’t match up to the AI solution available now. AI passes the IVR by speaking, listening, thinking and reacting to the responses outside of standard fixed scripting and responses. AI does this within conversational modes and does not sound like an automated IVR or recording.

AI also resides in a cloud and eliminates reliance on high cost communications, which eliminates standard clogs in an Automated Call Distributor (ACD), eliminates most metric problems in a call center and can eliminate most brick and mortar costs associated with human labor. AI can eliminate most Key Performance Indicators (KPI’s), including abandonment rates on an inbound queue, average speed of answer (ASA), average hold time (AHT), etc. because it resides in the cloud and can answer almost any number of calls coming in at the same time without hold time. This also applies to outbound calls, as AI can make thousands of calls at the same time versus having to trudge through an agent available queue to do an outbound call. AI can be used in a mixed inbound and outbound scenario within the cloud or within an ACD, where outbound calls can be made during light inbound periods according to scheduled time zones. Most important, AI can solve most of the unpredicted inbound call waves which can bury a call center in an instant.

AI will also eliminate the need for workforce management systems at the level required today, as well as workflow management as this can be “trained” into the AI system and modified more easily than training a huge human work force. The AI’s modifications can be a fraction of the cost of training human agents as well as much less time to train hundreds or thousands of agents. Human Resource expenses, recruiting costs and attrition management costs will be greatly reduced due to less human agents required, as well as customer satisfaction management, or quality control, as AI can record every session and literally learn from its experiences with guidance, approval and modifications from management. Current AI technology can also communicate over various channels, such as voice, chat, e-mail, text and IM.

Summary

AI will be the next big thing in the call/contact center and customer service industry. This is not Star Wars, nor some other fictional high tech dream. It’s here today and is growing like wild fire. Like most unusual technologies, it will start out slowly but will take the market by storm once the early adopters prove its true value. These adopters will be the big winners in this technology infusion, getting a jump on their competition. Especially in the outsourcing industry. It is already being used by many of the early adopters in the self-sourcing community and has proven itself quickly. The capabilities and cost savings will drive this new technology forward on a natural course. This will only take one to two years from today to get established and within five years will encompass the entire market.

About the Author

Tom Topolinski has been in the technology and customer service business for over 35 years. He has held positions in Gartner, Inc. as a lead-CRM analyst for 5 years and has held executive positions in major BPO companies, including Sutherland, Sitel and Digital Equipment Corp. He has also been a Senior Advisor for the Outsourcing Institute. Mr. Topolinski has also been sought out by major publications such as Time, Inc., Business Week, Reuters and many others for his opinions and writings. Mr. Topolinski has won the IT Thought Leadership Award in 2008 from the Outsourcing Institute for his article on customer care. He is now a consultant and can be reached at www.topoenterprises.com for more information on AI applications.

When Revenues Are Down, Do You Increase Pressure On Sales?

tom@topoenterprises.com (Tom Topolinski) — Tue, 17 Feb 2009 17:14:00 +0000

When revenues are slowing or dropping, what do we typically do? Most managers put more pressure on sales while reducing sales expenses and at the same time reducing operational expenses where the losses are occurring. Is this the right thing to do? Not necessarily.

Let’s look at it another way. As a consumer and a family patriarch, when gas prices are climbing and climbing, do you let the air out of your family’s tires forcing their vehicles to drive at a slower pace so they don’t use as much gas, while delaying on maintenance costs of the vehicles to save money? If you did that, would your family still get to the same destination safely and on time at a reduced expense? No, they would have to drive slower with more risk while they would be putting more wear on the tires and deal with mechanical problems on the road while having to spend more time traveling. You’ll be buying tires sooner, fixing higher cost problems in an emergency situation while dealing with late arrival issues or complaints due to longer times to drive. You’ll be spending more money than what you’re saving on gas while alienating your family against you! Not many of us would take this route.

So why would many of us do this for our business? From a business management point of view: just putting more pressure on sales while cutting expenses to make up reduced revenues due to lost revenue while reducing operational expenses where the losses occur is basically the same thing. It will erode your past investments on sales through attrition or worse, it will reduce motivation and efficiency of those that stick around and in the end will reduce sales productivity and capabilities on building new business. You are still at risk to meet your goals because of reduced revenue and lesser efficiencies for new business growth that have not been realized.

Let’s go back to the car analogy. If we need to cut costs on driving expenses when operating expenses are on the rise, wouldn’t the best tact be to ensure your cars are driving at their best and that each trip taken is for a cause to the end goal? An alternative course of action is that we can cut out any non-productive trips, ensure our destinations are made in the shortest possible routes, make sure the cars are running at top efficiency and eliminate any wasted weight in the trunks that don’t contribute to your goals (yes, get those golf clubs out in the winter). In doing this, we’re getting the best performance of our vehicles while ensuring we’re not wasting any expense on non essential items.

So returning to business, if we pressure the sales team to instantly gain the loss we’re seeing in revenue while we’re cutting back on operational expenses and capabilities, this will cost us in sales ability and deliverable abilities now and in the future. It will jeopardize our sales training investments we made in the past and efficiencies we already gained both in sales and operations. Or we can come up with another solution much like we did with the car analogy.

If we focused our sales teams to run at top efficiency by trimming out waste with better qualifying up front with less expense (maybe more phone and e-mail vs. trips and utilize better qualifying techniques) and reduce the part of the sales team that couldn’t deliver well in the best of times (the golf clubs) we can then further our sales efforts more efficiently. Same goes with operations. Instead of just cutting resources because of sudden loss of revenue in a specific program or product line, if we trimmed out any waste on all programs or products, focused on more efficient processes, shifted proven resources in losing areas to more solid areas and reduced costs of operations by operating better (running at top efficiency), wouldn’t that be best over just reducing costs where we see loss?

As business managers, this may seem like business 101, but in practically, many managers in a sudden change are apt to react differently. The point is, change is in order when revenue drops quickly. However, how you change or are pressured to change can be managed carefully and can produce a much easier transition and add more control and less loss until the economy returns to normal, when that happens.

None of us know how long the recovery to this economic downturn will take; we only know that it is affecting most of us now. So the way we respond can be reactionary or we can be proactive in our plans for the future, when it does recover.

Tough Times for Working In the Outsourcing Industry

tom@topoenterprises.com (Tom Topolinski) — Mon, 29 Dec 2008 18:13:00 +0000

We're interested in hearing from others on how tough or not it's been working in the Outsourcing Industry? Specifically, the call center arena? There are millions of professionals working globally in the call center / contact center field. Many employees have been under the gun with the latest economic challenges. Are you challenged or threatened with job loss, reduced revenues, or at the minimum uncertainty?

Tell us in your comments in this Blog and we'll share with you what we know about what we see in the industry and business climate as a whole. As we enter into 2009, how do you feel about your job security? How do you believe your company is performing? Are they being honest with you? Are your customers that you depend on doing ok?

Let's get a blog going on this area.

Thanks,

Tom

US Economy Challenges Will Impact Outsourcing Vendors

tom@topoenterprises.com (Tom Topolinski) — Mon, 29 Sep 2008 15:15:00 +0000

Tough Times for Customer Support Outsourcers Focusing On US Business

The US economy is headed for a huge downturn now, being affected by the institutions loaning money to consumers and businesses. Past loan practices used for mortgages and business loans over the past several decades and precarious borrowing practices have created high risk on paybacks and loan fulfillment. Defaults to loans are massive and have created failures to the largest borrowing institutions in the US. Questionable loans for housing values are a key problem; however, business loans in general have also impacted the problem the US is realizing today. And with a problem with the US economy, so goes the global economy.

This financial problem affects US home owners as well as overall consumer and commercial purchases and will affect global businesses dependant on US end-users. Borrowing money will become difficult to most US consumers and businesses, thereby limiting spending and any economic growth. This will also affect dollars gained from customer support or customer service supporting products sold to US consumers and businesses. The original sources of this money for US buyers are in jeopardy. The US financial institutions of these funds are in trouble now. The problem will quickly escalate beyond the mortgage markets and will impact GDP in general. Unemployment will continue to rise (it’s rising now) and cutbacks in business overall will be realized.

As this relates to business, we can expect to see major setbacks and downturns from business and a cascading affect on all actions and tactical executions from the business institutions’ decisions on spending as a whole. This will heavily impact outsourcing as it’s easier to displace a contract than an employee agreement in the US. Many companies will choose to perform the outsourcing tasks internally on a smaller scale, or hold off any new outsourcing dependent on growth strategies. As the economy in the US falters, outsourcing will deter. This puts on-shore, off-shore and near-shore outsourcers in jeopardy on existing and new contracts. We can expect a downturn in the global outsourcing business as a whole.

Outsourcing contracts are typically easier to dissolve then other labor intensive agreements. That puts outsourcers in a precarious position. With the US economy going into a recession (which is expected to be a long one), outsourcing contracts could be some of the first areas of cost reductions we see in this current scenario. New project development will be put on hold unless critical path to survival of a business. Customer service offerings will lose their importance with some companies and have a lower priority based on spending priorities.

Outsourcing contracts, both existing and new, may be at risk based on history and current events going on in the US. If we look at the most recent economic down turn in the US in 2001, outsourcing as a whole dropped dramatically. Even with outsourcing services evolving over the past 7 years, the basic value proposition is the same. Thus, we can expect a similar repeat action during this down turn. Outsourcing will be impacted.

What Outsourcers Can Do

Outsourcers’ dependant on US customers can help themselves by ensuring their value over other alternatives is higher to accomplish the client’s tasks. If you’re taking care of customers for a US vendor, ensure you are doing it well and better than anyone else can do, and with the best ROI. Ensure your support is protecting your clients’ business through revenue and profit. If you’re building new systems or applications be sure the project is critical path to your customer’s business. This is your main protection to a cancelation.

As an outsourcer, reach out to your US contact now. Ask about the US economic problem and how it’s affecting them. Be a partner, be willing to do whatever it takes to assist in the challenges your customer is going through. Expect cost cutting measures and be willing and ready to volunteer what you can afford without jeopardizing your delivery abilities. Be assertive and don’t wait for the cancelation call, which is highly possible if don’t do anything proactive. This is a global problem as much as a US problem. As a simple metaphor, if a farmer is growing wheat in a leased field and the market is dropping on wheat, the farmer is at risk if the wheat market is falling. The land owner is also at risk if the farmer can’t make money off the land he’s leasing. Outsourcing is the same. If the customer of the outsourcer can’t make or protect their money, then the outsourcer looses as well. This is the dilemma facing outsourcers over the next month and beyond.

Summary

The US economy is going to affect the global outsourcing market directly. If you are a vendor dependent on US consumers or commercial end-users, you are clearly going to be affected. In the early 2000’s when the economy dropped, we saw a major drop in the outsourcing revenue and those dependent on on-shore, off-shore and near-shore services were seeing major losses in revenue and contracts.

Being proactive early on is key and sharing losses in business will be important in maintaining contracts with US based firms. Focusing on critical path projects and services for your customers is the best insurance to maintaining or growing new outsourcing business. Don’t expect the US Government’s “rescue plan” to resolve these issues immediately. Even with this rescue bailout plan, the US economy will take several years to recover, based on history. Depending on existing high performance and strong business relationships is the solution to surviving tough times ahead.

Supporting Customers – The Basics

tom@topoenterprises.com (Tom Topolinski) — Wed, 24 Sep 2008 09:09:00 +0000

Supporting customers today is big business. It clearly affects the competitive value of many organizations as well as the bottom line. Customer support is not just a line on the expense tab: it can make or break a business, affect cost of sales, increase or decrease revenue and most importantly, influence and shape the brand equity of a firm.

Customer support is not just a tactical play or a must-do for survival. It goes way beyond the typical business activity of creating and offering products or services, such as writing a user manual. Customer support can be the key to overall product success or failure. A great product is only as good as its ability to actually work for the client. Customer support is the bridge to making that product or service work for the buyer.

Supporting customers today can be over the phone through call centers or over e-mail or on-line chat through contact centers. It can also be provided over the Web or automated phone systems (interactive voice response – IVR) through self-help. One can support customers for service related products, discrete products, hardware and software. Customer support can be found in banking and financial activities, the food industry, transportation, education, government, medical, retail, wholesale and services. Customer support can be used in pre-sales, sales and post-sales relationships with the buyers. Supporting customers today is often executed either directly by the manufacturer or original equipment manufacturer (OEM), distributors (channel sales) or outsourced through a business process outsourcer (BPO).

Customer support can be provided at different levels in the customer relationship ranging from sales, customer service and through product support:

· Sales support is provided to explain and assist the customer to select the proper product or service, including ordering the product or service

· Customer service is the support of the business relationship with the buyer (i.e. shipping or delivery, ensuring proper product was selected, problems with the acquisition, billing)

· Product support is the act of supporting the product’s use with the buyer (once the buyer receives the product or service: implementing, installing, initializing, functionality problems, technical problems, etc.)

Customer Support can take the shape of very quick inquiries or range into long interactions with the customer. Some customer support activities can span several contacts, including outbound contacts back to the customer to close out the issue.
Typical terms used in customer support activities are service level indicators (SLI’s), service level agreements (SLA’s) and many metrics which measure the management and expectation of providing customer support. Typical metrics are:

· average handle time- AHT (how long the support interaction took)
· abandonment rate (when someone is on hold waiting to talk to an agent, then hangs up)
· wait time (time a caller is in a hold queue)
· average answer time
· customer satisfaction (often through an on-line survey or external call back survey, or e-mail survey)
· first call resolution -FCR (a call which is resolved on the first attempt of the caller)
· call backs (a caller calls in with same problem after believing it was solved prior)

Many companies have decided to reduce the cost of customer support by off-shoring. This is the practice of using less expensive labor to support their customers in other countries. The most notable countries are India, Philippines, Mexico, South America, Africa, Eastern Europe to name a few. Off-shoring is an acceptable tact in some cases; however challenges are typically accents and attrition. Accent problems are difficult when your customers cannot communicate easily with the support provider and cannot explain the problem or understand the solution. This adds to the frustration level of the customer. Attrition is the constant rotating of support agents and causes problems around skill ability. Support agents who are fresh in the seat do not have the time to develop the required support skills necessary to provide quality support because they leave the job only after a few months and are replaced by new hires. High attrition equates to lack of tenure in the support role. Attrition is most commonly caused by work environment, high saturation of support jobs in a single locale or low pay. Too often attrition is also caused by the difficulty in working in a job which has no future advancement, is positioned as a better job than what it is or is operated as a pure sweat-shop with little positive re-enforcement to the employees.

On-shoring is the term used to describe the offering of customer support in the same region as the customers. In the US, this would include having customer support centers in the US, supporting US customers. Near-shoring is the term used to describe the offering of customer support in a close region, but typically out of country. In the US, near-shoring would be offered in Canada, Mexico, Puerto-Rico or some area close to the US borders. Both on-shoring and near-shoring eliminate many of the accent problems; however attrition is still a problem due to the same challenges in off-shoring. Cost is typically much higher in on-shoring, as the cost of brick and mortar (the actual center) and the labor costs are high in the US. US based call or contact centers tend to be very expensive and often are in high saturated markets, increasing the attrition challenge. Near-shoring can be somewhat less expensive, however with the current US dollar value the way it is today, Canada is now close to the US costs and Mexico is rising accordingly. The challenges on on-shoring and near-shoring are most commonly related to expense and recruiting. Competition for new recruits is often found in non-customer support jobs as the rates used in most support centers are often the same as unskilled labor rates found in retail, food service and manufacturing markets.

Home-shoring, Home Agent, or Work at Home (WAH) is the offering of customer support in the on-shore area but executed remotely. That is, support agents use technology to reside at their residence while performing the same job as if they were in a call or contact center building. Home Agent offers many companies the ability to access more resources because of the lack of a regional limitation. Home Agent programs offer the support agents the ability to work flexible hours, less hours and not worry about commute time or expense. With the cost of gasoline running in the high $3 to $4 levels, Home Agent has a great draw to many recruits and employees. However, the Home Agent service is still young and remains at low levels of support offerings today. Some companies have cracked the code and are using Home Agents successfully and in growing numbers, but percentage wise it’s not the leader of customer support while most companies are still using centers for the majority of their support offerings. The cost of Home Agent is less than in-center on-shoring support, but it is still higher than most near-shore and off-shore services.

Customer support is an art and a science. The science is the technology advancements that today allow for incredible and efficient communications to customers through several channels, either by phone, e-mail, on-line chat or self-help over Web or phone IVR. Systems are available that manage the communication link, networks that allow for global connections to multiple centers, disaster recovery and business continuity technology and techniques which keep the communication open and data applications which track customers, their activity and the support centers activity. Data can be analyzed and customer support activity can be used to develop efficient support agent schedules, skill based routing, queue management, workflow management and workforce management. Real-time data can allow managers to coach and train troubled support agents, predict future work flow and manage spikes and dips in call volume. Customer satisfaction data allows for training plans, performance evaluations and process improvement.

The art of managing customer support is more flexible. Managing customer support by pure data and metrics does not always accomplish what is desired by the customers or the companies. Applying finesse to customer support is important in insuring that the personal touch with the customer is one of empathy, is genuine and delivered in a manner promoting the importance of the customer’s relationship to the company. Customer retention is key to any company and is achieved by not only solving the customer’s problem when they need it, but doing it with soft skills.

Soft skills are best described as the ability to solve the customer’s problem while making the customer feel good about the interaction. It is very easy to intimidate, frustrate or infuriate a customer who is having a problem with something they bought and can’t get to work right. Soft skills are used to eliminate those problems while the technical skills are used to solve the problem. Both are necessary. Thus, the art and science of customer support is providing support in a timely fashion, in a quality manner and leaving the customer with a great feeling about the dealings with the company.

In summary, customer support is key to any business that sells or creates products or services for its customers. From the first contact in a pre-sales environment to the post sales product support, through order taking and closing a sale to delivery of the product, through short inquiries about billing or long interactions dealing with product problems: how a customer is handled, how the communication is conducted and how the issue is resolved is just as much part of the customer’s impression of the company as is the product or service they purchased.