Contact Strategy is changing. It is a vital part of customer service and impacts sales and marketing functions. We are in the early stages of a revolution in the cost and value of contact. We are facing a major change in the fundamentals of contact strategy that organisations need to come to grips with as a matter of urgency. The customer experience cost of contact is reducing, while the value of customer experience contact opportunities is increasing.
The customer experience foundation has been studying these trends as part of its customer experience modelling work for the past 2 years. Put simply contact costs are going through the largest change we have seen in the last 5 – 7 years. Organisations are having to rebuild their customer experience cost & value models and to continue to monitor the changes as they continue to unfold. This is a customer service issue as well as a call centre issue. The choice of the right contact channel for the right situation is the customer experience. The customer experience model that you use has become a key part of your internal best practice in Customer Relationship Management (CRM) and Customer Experience Management (CEM).
Looking at the last twelve months we can see a number of drivers reducing the basic cost but increasing the value of making contact with customers. Cloud based services, VoIP (voice over IP) and the accelerated growth of social media have begun to gather momentum. These are combined with the increase in automated self-service to change the fundamental costs of making contact with customers and prospects. Automated self-service through speech recognition, traditional IVR and web portals have reduced the transactional cost of most simplified business processes to a fraction of the cost that applied over the last three to five years. The drive to reduce the cost of customer service has been a pressure on quality of customer experience over that period.
The acceleration in the use of these automated self-service customer experience tactics has dramatically increased during the last twelve months. It is also worth mentioning that the move to out-sourcing into countries with low cost bases for staff and buildings has also been a factor in this change but most organisations have revised the principal of outsourcing front line services. Taking all of these factors together, you could argue that the fundamentals of the cost of contact have been reduced overall.
Although the cost reductions appear, on the surface, to be a good-news story, it is worth considering the impact that these tactics have in terms of the value of contact with customers. Building customer relationships is about managing effectively situations where your customer is emotionally involved in the relationship. Much of what we have already talked about relates to situations where simple processes are dealt with more effectively through automation and, to a great extent, customers buy into simplified automated processes where they are appropriate. When checking your balance, or making regular payments, the need to talk to a live agent is significantly reduced providing you are delivering those processes in a way that your customers are satisfied with.
Contact Strategy Best Practice has changed over the last 2 years as organisations have reviewed the customer experience cost against the value of outsourced front line customer service. This has given rise to one of the key changes in business strategy where organisations are finding that financial cost models are not working for them properly.
Fig 1. Changing Contact Values and Costs
The problem arises when you consider this move to automation from the point of view of deepening and improving your customer relationship. Fundamentally, a relationship is developed through person-to-person contact and the number of situations where you are actually engaging your customer in a real conversation is being reduced by these trends. Put simply, you are talking less to your customers. This means that the value of each real conversation and the opportunity to build customer loyalty is year-on-year being reduced to less conversations. It therefore follows that the value of live contact has been significantly increasing over the same period.
It also follows that if you have very little live contact with your customers, the opportunity to strengthen your relationship is reduced as your services become just another commodity with no real service differentiation. In a recent study we found that most organisations are not delivering additional training on the increased emotional value of live contact to their agents. Yet, if you consider these two major trends, it is obvious that the emotional importance of dealing with live situations has dramatically increased. This year research from ContactBabel suggested that contact centre staff churn rates were continuing to increase and looking at the Fig 1 you can see quite simply that the job that staff are being asked to do is changing.
It is at this point you realise that you are operating under completely new conditions and that new rules will apply. The first key step is to review your contact strategy and understand its strengths and weeknesses. Then you have to consider cost v value as you will find that cost models alone will not guide you forward. At that stage you need your first contact strategy workshop and I have outlined a simple exercise in 10 Questions by Morris Pentel. I hope you find them useful.
