More Customers Push Automated Customer Service Button

MBA (8/4/2008 ) Palaparty, Vijay
As customers say “thanks, but no thanks” to the option of talking to a person at a contact center—choosing automated customer service instead—if organizations do not optimize value of their customer relationship management investments, according to a report from Dimension Data, Johannesburg and Datacraft Asia Ltd., Singapore.
The report, 2008 Datacraft/Dimension Data Global Contact Center Benchmarking Report, said the trend of customers using self-service in contact centers shows little sign of abating. Ten years ago, human agents completed 90 percent of transactions, but today they handle only 50 percent of in-bound transactions.

“Contact centers are under pressure to deal with far higher volumes of calls and to execute queries faster and more effectively,” said Alex George, spokesperson at Data Dimension. “What’s more, increasing numbers of customers are demanding information immediately and it must be correct. Gone are the days when customers accepted slow responses from the contact center. Instead they’re opting to use self-service.”

The report said the global contact center industry is estimated to be worth $130 billion annually, but only 16 percent of organizations ranked creating direct customer relationships among their top three commercial drivers—a number that was 50 percent 10 years ago.

“Minimal progress has been made in adopting a more customer-oriented, CRM-based approach within the contact center environment over the last 10 years,” said Karina Majid, general manager for customer interactive solutions at Datacraft Asia. “When we compared this year’s findings with those from our inaugural 1997 report, the picture is not positive.”

The report said a key indicator of CRM is the establishment of a single view of the customer—a capability that 39 percent of organizations had 10 years ago, dropping to 34 percenttoday.

Furthermore, the report said customer metrics could help organizations, including factors of customer lifetime value and profitability. But less than 10 percent of centers have the capability to measure lifetime value and only 18 percent of centers use profitability as a metric.

“Findings indicate development of a more holistic and sophisticated approach to customer management is less of a priority than it was 10 years ago, and there is a back-to-basics trend with contact centers focusing more on basic performance efficiencies and cost reduction,” Majid said.

“When the basic service components are firmly in place, customer service experience improves and client retention accelerates,” George added.

Thirty-eight percent of contact center managers said they believe a contact center agent’s ability to resolve a query during the first call is an important factor in service improvement while 74 percent rated it in their top three. The time a customer waits before a call is answered was reported to have the second greatest impact—47 percent of managers ranked it in their top three. Communication and service skills were ranked third with 34 percent of managers including it among their top three improvement indicators.

“Contact centers still rely on standard efficiency metrics,” the report said. “Abandon rate is the most commonly used target with 90.1 percent of contact centers using it as a key metric, while only 63.4 percent use First Call Resolution as a performance target.”

“Findings indicate a discrepancy between what customers want and what contact centers focus their costs and energy on,” George said. “Taking into account that call resolution is the greatest indicator of customer service improvement, we were surprised to learn that not all contact centers have aligned themselves to its measurement and targeting.”

The report said self-service transactions, however, present and 85 percent cost savings of a human agent call. It said the average cost of a self-service transaction is $4 compared to $34 per human agent transaction.

George said contact centers still have to evolve to realize cost benefits of self-service. “The cost of getting it wrong is significantly higher than the cost of getting it right,” he said. “However, this requires a paradigm shift when making decisions to implement a self-service application. Customer expectations, increased complexity of inquiries, and highly dynamic environments are just some of the considerations that impact a successful self-service offering.”

George added that contact center managers would do well to increase usage and keep customers coming back for more while saving costs. “The contact center industry is fast approaching the time when it will no longer be able to manage the volumes of demand from customers,” he said. “To retain these customers and save costs, it’s vital that contact centers move the simpler, routine transactions to well-designed self-service channels.”