Contact Centers Maturing from Cost Center to Profit Center: Ready or Not?

By Wes Hayden

TMCnet Contact Center Assets Columnist

 

Anyone who doubts the changing role of contact centers, need only to look at a single example. Six years ago, one of the top ten retail banks in the U.S. measured its customer service performance primarily by how much it cost to serve each customer—how long its agents spent on the phone, and how efficiently each of 36 call centers managed requests for their independently run business unit.

 

Today, that same bank uses new metrics, such as overall products per customer, referral rate, profit per call, and cross sell rate. To enable this effort, they have overhauled their contact center to support multiple business units and business processes, and significantly extended their measures of their customer service organization.

 

Anecdotes are great, but we wanted a broad-based model that could be applied to a wide range of companies to answer the question: How prepared are contact centers to move from cost center to profit centers?

 

To find out, in 2006 we surveyed over 300 contact centers world wide and took added input from 30 analysts from 14 global firms¹. As a result, we gained some key insights into what contact centers need to do in order to extend their role in the enterprise.

 

We’ve all been hearing the same thing for a long time—if you want to stay competitive you have to make the contact center a strategic part of your business. You’d better knock down those walls and integrate with your customer relationship, sales, marketing, and channel systems. Optimize performance and dynamically share data to ensure that you are not missing opportunities to better satisfy customers and drive profits. And don’t forget, you better hurry or it will be too late and your competitors will snag those customers you don’t satisfy.

 

We began to wonder what it all really means. What do businesses really want from their contact centers? Are what they want and what they need the same thing? Are contact centers ready to deliver? If not, how do they get from where they are to where they need to be?

 

Our goal with the Genesys (News - Alert) survey was to develop a Contact Center Capabilities Maturity Model that any company could use to measure how much progress they had made. We found clear patterns and telltale signs that were just too good to keep to ourselves. The Genesys Contact Center Maturity Model is made up of four phases, with each phase representing a cluster of capabilities that are common across most contact centers within that phase.

 

 

The core of the Genesys Contact Center Capability Maturity Model is the concept that a contact center’s maturity level is an evolutionary process, with each phase adding to the foundation and providing for continuous process improvement.

 

Establishment phase. This is the earliest stage for most contact centers, where the priority is setting up basic operations. Operations in this phase of maturity may use simple Automatic Call Distribution (ACD) routing or “hunt groups” as adjuncts to Private Branch Exchange (PBX (News - Alert)) systems for corporate telecommunications, and multiple non-integrated applications for managing customer contact and problem tracking. Any multiple communication channels, such as e-mail, are not integrated. Any cross-selling or up-selling functionality likely hasn’t been integrated into the overall contact center strategy. Self-service, if available, is very basic. Customer satisfaction, if measured is usually measuring satisfaction concerning product factors, with little attention to the service experience itself. This is the stage of peak customer frustration, with the highest loss of customer and market share.

 

Consolidation phase. During this period, management begins focusing on efficiency and goals, such as reducing queue times. New technologies can lead to customer service improvements and cost reductions. Companies reaching this phase have realized that service quality is itself a competitive differentiator and that excellent service does not mean offering the same service to everyone. Information, systems, and operational integration begin in this phase. As integration progresses, information is often managed by a Customer Relationship Management (CRM) system that collates all customer-relevant data and manages most customer processes from a single unified set of processes.

 

Performing phase. At this stage, the focus shifts from reducing costs to improving quality. Customer segmentation and routing are used to drive better business results, and revenue generation becomes a key objective. This stage includes the use and integration of all customer communication channels. Companies in this stage have uniform, integrated systems and processes that manage and track customer activities across all communications channels. Customers and issues are now segmented across channels and agents are further segmented by their level of skill in working in each channel of com­munication. The ability in this stage to inte­grate self-service and agent-assisted service across multiple contact channels, creates higher levels of self-service use by customers, and therefore offers very efficient operations to those companies making the investment at this stage of their development.

 

Optimizing phase. At this point, the contact center begins to find a true balance between cost, quality, and revenue and is able to adjust dynamically to both business and customer needs. Few companies today have achieved this advanced stage. Companies operating at this stage see customer service as a strategic differentiator to the success of the enterprise, and that the contact center is the nex­us of this success. Customer service operations are now unified across divisions, around the world, and are managed in real-time by people who are experts in service management technologies and practices. Real-time interactions drive many marketing, service and collections campaigns, where contacted customers can respond and are routed to the people specifically trained to meet their needs. Agents lever­age personal dashboards with metrics on their specific performance. In this dynamic contact center, operations run at peak efficiency, since multiple centers are now virtually networked and routing decisions take place in real-time across a large group of services and agents.

 

By reviewing their current level of capabilities, contact centers can see the phase they are currently in and understand what they need to put in place to move to the next level of maturity.

 

So, how ready are our survey respondents to move up the maturity model and make their contact centers profit centers? Well, for starters, the analysts estimated only a quarter of all contact centers had reached the top two phases—with nine percent of all contact centers in the optimizing stage, and 17 percent in the performing phase. Meanwhile, according to the analysts, 36 percent were in the consolidation phase and 38 percent were in the establishment phase. Clearly there is room for improvement. But there are also signs that things are about to change.

 

 

Companies have been struggling for years with striking a balance between controlling contact center costs and maintaining customer satisfaction. A shift is occurring though. Corporations are coming to understand the direct and significant impact that customer satisfaction has on profitability. This point was driven home when over 90% of the analysts surveyed agreed that improving customer satisfaction is the key challenge facing companies.

 

Customer service executives are in agreement. Fifty three percent of survey respondents say that improving customer service is their top priority. Contact center objectives at this level are in synch with corporate initiatives. They accept their responsibility to help drive profits and they are preparing to invest in the technology and infrastructure that they need to ensure happier customers and higher profits.

 

 

Across the board, our customers told us that they are stepping up to the challenge. They are investing in the technology to improve performance and increase customer satisfaction. But they have a long way to go to achieve a true enterprise wide impact.

 

Forty-seven percent of respondents that collect contact center data use that information for decision making in other departments. But only 17 percent integrate that data into all of their customer-based decisions. So while this indicates a critical move toward integrating backend databases with contact center systems, there is still a lack of integration to the extended enterprise.

 

Companies that can analyze data, such as who is contacting them and why, can use that information to improve outbound customer communications; marketing campaigns and offer development, for example. But if systems aren’t integrated the likelihood that the information will be used effectively outside of the contact center remains low.

 

More than half of the participants see IP technology playing a major role in this transformation. Sixty percent of survey respondents indicated that they intend to migrate to an IP-based network within the next 24 months. This is good news, and is consistent with an overall industry trend toward IP solutions.

 

In order to make this move, it will be important for contact centers to also invest in open systems to support the move toward the virtualization of contact center resources, operations, and infrastructure that IP solutions will make possible. Otherwise the investment in IP-based networks will not realize its real potential in terms of increased customer satisfaction, lower costs, and higher profitability.

 

Fifty-nine percent of respondents indicated they currently utilize self-service in their contact centers. However, 61 percent offer only touch tone-based self-service, not speech automation. This is a significant opportunity for improving customer satisfaction.

 

 

We think everyone would agree that these results are all positive. They indicate positive steps forward with lots of room for improvement. However, there is one critical component to our research findings that leads us to believe that most contact centers aren’t as ready as they think they may be to play a significant role in the enterprise.

 

Only 33 percent of contact center survey respondents say that their contact center is a significant source of competitive advantage and brand extension. We strongly believe that customer satisfaction and good customer service is critical to supporting a company’s brand. There is a reason that Citibank invested millions in a marketing campaign just to tell customers that they can reach a live customer service representative at any time by simply touching “0”. And there is a reason that it created such a furor in the industry. Customer service is so significant that it can cause you to win or lose new customers.

 

 

Only the most mature contact centers are prepared to truly support enterprise-wide initiatives. While everyone agrees that customer satisfaction is the top priorities. How many contact centers are prepared to deliver today? The top business challenge and the top contact center priority are one in the same—customer satisfaction. However the reality is that most contact centers are still focused on improving basic operational efficiencies. They are struggling with integrating disparate systems. They are integrating and consolidating product, customer, and business operations and beginning to integrate their contact center and customer relationship management systems.

 

It is critical that contact centers continue to put the technology in place necessary to support strategic customer satisfaction goals. However, it is as important not to put the cart before the horse. Businesses should move quickly but intelligently, starting by taking a close look at their contact centers to really understand where they can make the most meaningful investments based on the maturity of their contact center and build from a solid foundation.

 

Finally, most respondents put themselves within the consolidation phase of the Genesys Maturity Model, indicating acceptance of integrated contact center systems as critical to efficiency and process improvement, but leaving room for greater leverage of advanced capabilities such as IP-based applications and systems. Those contact centers that are planning future infrastructure investments that keep them open, flexible, and able to rapidly zero-in on customer-value will be leading the pack.

 

 

Our maturity model is an important benchmark, but it is only a starting point. It is important for contact centers, no matter what stage they are at, to continually evaluate their current capabilities, seek improvements in customer service, and improve integration with the enterprise. The impact of the contact center on customer satisfaction is only going to become more significant. And customer satisfaction will play an increasingly important role in creating competitive advantage and driving profits. To remain competitive contact centers must pay attention to and adapt to technological changes in order to provide customers with more sophisticated and effective services.