Study Identifies Strength and Changes in Interaction Recording Market
October 24, 2008
The practice of recording interactions between companies and their customers has been in place for many year within the contact center. These organizations use such practices to evaluate performance, improve coaching and training, assess processes, and event conflict resolution.
According to research from the PELORUS Group, 2007 was a banner year for interaction recording vendors. Vendor-level sales were tallied at $795.9 million in 2007 and during that period, the stock market suffered slumps, oil prices surged, unemployment grew, wages were stagnant, inflation rose, the housing market collapsed and the financial and insurance sectors suffered major setbacks. Yet at the same time, sales grew 45 percent from the $550.5 million that was reported for 2005.
A strong growth engine for recording systems vendors is the migration to VoIP-enabled call servers as this transition is having the effect of accelerating the normal replacement cycle. Over the long term, the VoIP effect is expected to dissipate, but will continue to drive strong sales.
The most powerful drivers of new purchases now from contact centers are due to compliance requirements and liability concerns. These centers had not previously invested in automated recording technology and are now being required to do so by state and federal regulations.
To date, interaction recording vendors have been able to weather the global economic storms without much of a scratch. PELORUS researchers believe that it is dangerous to assume that the meltdown in the U.S. and U.K. housing markets and the consequent impacts on the banks, investment houses and insurance companies will not impact the interaction recording industry.
It is important to remember that financial services and insurance sectors make up two of the largest customer segments for contact center hardware and software. As these markets are suffering, sales of interactive recording systems and devices will also suffer, especially as cost cutting is taking an initiative more strongly than in the past.
There are a number of things that are rapidly changing the competitive landscape, according to PELORUS group. Smaller players are finding innovative ways to match the leaders in terms of product depth, and are also carving out profitable market niches. New entrants are coming onto the scene for the first time in years, creating new dynamics in the industry.
Technologies such as VoIP and speech are transforming recording systems from basic call center monitoring and agent performance measurement to essential tools for understanding customer behavior and adjusting corporate business strategies. These changes are rampant and obvious throughout the global industry and much of this change will be for the better.
Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan's articles, please visit her columnist page.
Edited by Stefania Viscusi