The Essential Contact Center: Delivering a World-Class Customer Experience
The Essential Contact Center: Delivering a World-Class Customer Experience
By Donna Fluss
Written for GreaterChinaCRM
Customer Relationship Management (CRM) is an enterprise business strategy designed to improve corporate profitability by building and maintaining better relationships with customers. The fundamental principles behind CRM remain critically important. To succeed, enterprises must build and maintain profitable customer relationships. Given that its 8 to 10 times more expensive to acquire a customer than to retain one, investing in programs that result in loyal and profitable customers is good business. Therefore, enterprises need to put a strong emphasis on managing the lifetime value of customers. The basic problem with CRM as a corporate initiative, however, is that customers do not want to be managed. Enterprises can invest in all kinds of CRM programs, but do not always find customers as cooperative as they would like.
The CRM movement was on the right track back in the late 1990s into the early 2000s, but it missed the fundamental customer element. Customers are independent thinkers who believe they have the right to do business how they want, when they want, where they want and the way they want. By the mid-2000s, enterprises realized that CRM had introduced many good business practices and a great deal of needed investments in systems and infrastructure, but it couldnt solve the fundamental problem of managing the customer, as customers do exactly as they want. Even those who used to be considered captive customers are actually flight risks, if they are pushed too hard in a direction they do not want to go.
Customer Experience Management Enters the Business World
Customer Experience Management (CEM), another buzzword, was introduced in the early 2000s. DMG Consulting provided the definition for CEM back in the November 1, 2002 edition of Customer Interface Magazine, where I wrote that CEM extends and leverages information gathered in the contact center to enterprise decision makers, senior management, and sales and marketing organizations. This information can be used to increase revenue, improve customer satisfaction and loyalty, identify trends and customer concerns, and improve risk management. I have since updated this definition to address all aspects of the customer experience and not just the quality management systems where the term originated. Enterprises now understand that building and retaining lasting and profitable customer relationships requires the best practices and systems introduced in the CRM era, in addition to new ones that facilitate the delivery of a consistent and outstanding customer experience in all channels at all times. Service is a strategic differentiator and, in some cases, is perceived as the only differentiator between otherwise commoditized products and services.
Customers Expect an Outstanding Customer Experience in all Channels
Customers expect outstanding and consistent service every time they do business with a company. It is no longer acceptable to provide different levels of service in different channels. Whether in the context of a retail transaction, a Web experience or a live or automated contact center interaction, customers expect to receive consistent information and the best service. Today, unfortunately, this level of service is the exception and not the norm. The good news is that many companies appreciate the importance of both CEM and CRM and are building enterprise strategies to provide a consistently outstanding customer experience.
Throughout the year, GreaterChinaCRMs newsletters address many aspects of CEM, including four important touch points: contact center, retail, Internet and marcom. Enterprises that want to succeed must address all four in their combined CRM/CEM strategies. This issue of the newsletter addresses the contact center.
What is a Contact Center?
By definition, a contact center is a multi-channel (phone, Web, IM, fax, video), multi-purpose (sales, marketing, service) organization that serves a variety of constituents (customers, prospects, investors) in a locally consolidated, but physically disaggregated operating environment. (This definition was developed by Gartner in approximately 1997/8.) Phone centers handle calls and are more limited in scope than contact centers, which are intended to handle all channels and are not limited by physical walls. There are many types of contact centers and they function in different ways. There are contact centers that employ a variety of remote agents who work at-home, in secondary or satellite sites or in a retail outlet. For example, Home Depot, a large home improvement chain located in the United States, has a formal contact center and can also access staff with wireless headsets in their retail stores, who help live customers when they are not answering calls. Using in-store staff enables Home Depot to provide an outstanding customer experience by putting customers directly in touch with experts who can address their issues. It also builds rapport and, ideally, loyalty, by attempting to put customers in touch with stores in their neighborhood.
Contact centers are an essential corporate resource that is often the focal point of customer interactions; they represent the voice of the customer to the enterprise and vice versa. There are many internal and external uses of contact centers. On the external side, a contact center can handle inbound or outbound transactions and, increasingly both. External sales, service, collections and fraud functions are used by most verticals, including financial services, insurance, hospitality, entertainment, retailing, manufacturing, fund raising, political awareness, education, government and many more. Internal uses are predominantly for human resources and internal help desk, although contact centers also serve other internal purposes, such as handling emergencies or mergers.
The challenge for too many enterprises all over the world is that contact centers are cost centers and are perceived to be problem resolution departments. Service-oriented contact centers can and should answer customer inquiries, as they are often the primary customer touch point, but there is no question that they are positioned to do much more, if empowered by their organization. DMG Consulting believes that within the next five to ten years, the role of contact centers will shift from a negative cost-center orientation to being one of the most important revenue generating departments within most companies. However, a lot has to happen to make this prediction a reality, involving significant changes in culture, process, staff and technology. Of interest, the technology may be the easiest factor to change.
Changing Business Landscape Begins to Alter the Contact Center Mission
Recent changes in corporate thinking, including the recognition of CEM as a corporate strategy, are beginning to alter the charter of contact centers from reactive service providers and order takers to proactive, engaged customer advocates and sales forces. Companies that actively engage their customers and build rapport have a competitive advantage in an era when service is increasingly viewed as the only differentiator between otherwise indistinguishable products. Engaged businesses anticipate and proactively address their customers needs in real time. Contact centers that deliver real-time service build lasting and profitable relationships, making businesses more productive and reducing expenses by optimizing the use of resources to go beyond the basics and extend the customer relationship in every interaction.
Using the contact center to proactively engage customers and extend relationships requires changes throughout the corporation, from the executive suite to contact center agents. Senior decision makers in sales and marketing must invite contact center managers to participate in corporate goal setting, and the contact center must be given objectives that go beyond service, including revenue generation, improving loyalty, enhancing the brand and building lasting relationships. But contact centers cannot lose site of cost containment, as they remain one of the most expensive, people-intensive departments within companies. Maximizing the return from every real-time customer interaction requires standards-based, open and integratable systems that facilitate information and data sharing, both to and from the contact center.
Contact Center Infrastructure
Contact centers are technically sophisticated operating environments that use anywhere from 1 to more than 50 systems or applications to process a transactions (calls, emails, Web chats, IM, faxes, video sessions, etc.). Transactions can be processed by multiple systems, some premise-based, some hosted, and some outsourced. See Figure 1.
Figure 1: Contact Center Systems and Applications
Source: DMG Consulting LLC
Essential Components of Contact Center Infrastructure
Contact centers have five common categories of systems, applications and technologies:
- Core Systems The core system components are the primary applications used in contact centers. Core systems include: the automatic call distributor (ACD), interactive voice response system (IVR), computer telephony integration (CTI), speech recognition application, universal queue (UQ), network management and the dialer. The ACD routes and queues transactions and is the only required system in a contact center operating environment.
Contact centers can use either time division multiplexing (TDM) or Internet protocol (IP) technology as the primary method of transporting calls. TDM is the traditional approach, used since the introduction of contact centers. IP technology has been around for close to 20 years, but not until the end of 2004 did IP-based contact centers become technically and functionally viable and competitive with TDM-based switches. IP has advantages over TDM, as it is agnostic about the types of transactions that it handles voice, data or video and it can move them anywhere. (TDM works with only voice-based transactions.)
- Management Systems Management systems are used to improve the effectiveness of contact centers. Management systems include: recording, quality management, workforce management, surveying, coaching, eLearning, real-time analytics, speech analytics, business intelligence (BI), performance management and reporting applications and systems. During the past two years, there has been a great deal of innovation in the management systems categories. The traditional quality management/liability recording vendors have built contact center management suites, called workforce optimization suites, with an analytic orientation that adds great value to contact centers. (See Figure 2.) Additionally, there are many stand-alone vendors who provide one or more of the management modules. Traditional infrastructure providers, Huawei, Alcatel, Aspect, Avaya, Interactive Intelligence, Nortel, etc., are also offering some of these capabilities.
Figure 2: Workforce Optimization Suites
Source: DMG Consulting LLC
- Supporting Systems Supporting systems improve contact center productivity and quality. These systems include: knowledge management (KM), eService suites, email response management applications (ERMs), Web self-service (WSS), chat, content analysis, collaboration, scripting, letter writing and voice verification software.
- Front and Back Office Applications Front and back office applications are used to manage the customer experience once the transaction reaches the contact center. These systems include: CRM suites, sales force automation (SFA), telesales, field service and dispatch (FS&D), enterprise resource planning (ERP), customer service and support (CSS), collection, held desk, human resources and supply chain.
- Enabling/Common Applications Enabling/common applications are systems, applications and technologies that are used primarily in other parts of an enterprise and should be made available to the contact center to facilitate the processing of transactions and improve the customer experience. These systems include: middleware, workflow, integration, security (data and physical), databases, data marts, configuration engine, marketing encyclopedia and contact management systems.
Contact Center Provisioning Options
As recently as five years ago, contact center and IT managers did not have viable and flexible alternatives for acquiring contact center systems, applications and agents. If a company wanted to invest in a new system, it generally had to purchase one. There were some exceptions, such as Centrex for hosted ACD and hosted IVR, but these options were often expensive and did not always include feature-rich and competitive alternatives. In the past few years, there has been a proliferation of excellent provisioning alternatives for contact center solutions, as can be seen in Figure 3.
Figure 3: Contact Center Provisioning Options
Source: DMG Consulting LLC
Contact center managers can acquire systems from the traditional premise-based providers, as always. However, they now have many other strong options, including outsourcing, hosting and managed services. Not only do these providers expand the range of choices, but they have also shaken up some of the premise-based providers, who now realize that they need to enhance their offerings if they want to stay competitive and maintain their customer base. DMG Consulting predicts that by the end of 2007, 20% to 30% of all new contact center seats will be hosted. (See white papers Hosted Contact Centers are Ready for Prime Time, and Hosted Contact Center Solutions Vendor Guide.)
Contact centers can be totally or partially built in-house and then enhanced with outsourced or hosted options. The four primary sourcing options for acquiring contact center capabilities are:
- Premise-based The end-user organization purchases a solution from a vendor and installs it at their site. The system can be installed by the end user, a consultant or the vendor. Once the system is installed, it can be managed by the end-user organization or a managed services provider, which is generally a consulting firm or outsourcer.
- Outsourced Some or all of the contact centers infrastructure, technology, or staff can be outsourced to a third party. Outsourcing has many models and may address the entire operation, just the technology, just the staff or a combination of both. In some situations, enterprises elect to use their own technology infrastructure, but the outsourcers staff, or, in the opposite case, they may use the outsourcers infrastructure and their own staff. In other situations, an outsourcer functions as a backup facility and receives transactions only when the enterprises primary contact center exceeds a pre-defined volume threshold or is out of service. Another scenario will have an outsourcer performing just one or two functions for an enterprise, such as telemarketing.
- Hosting/On-demand Hosted solutions are also known as on-demand or application service provider (ASP) offerings. When using a hosted solution, some or all applications are rented from a vendor, who generally manages all aspects of the applications. As is the case for all of the other options for building contact centers, the exact management of this arrangement varies greatly, which is one of its advantages customers have choices and flexibility. In some situations, the application is hosted and managed from the hosting companys site and in others, the server may be placed at the primary companys site, but managed and operated by the hosting company.
- Managed Care When using a managed care option, the end user hires a third party to manage all aspects of an application which is generally based at the end users site. The third party is generally an outsourcer or a consulting firm.
Creating a World-Class Real-Time Contact Center
To operate effectively and provide an outstanding and differentiated customer experience, the contact centers staff, procedures and technology must all be carefully aligned. (See Figure 4.) Achieving the right blend of people, process and technology is extremely difficult, as there are so many aspects to manage, but maintaining a high level of quality over an extended time period is even more challenging. Enterprises that want to build and maintain a world-class operating environment must have a supportive management team and a culture that is open to constant change.
Figure 4: Contact Center Management Challenge
Source: DMG Consulting LLC
Its tough to build a contact center that promotes lasting and profitable customer relationships and an outstanding customer experience while constantly decreasing servicing costs. Its even harder to transition an existing contact center from good to world-class, as it requires modifications in every aspect of a contact centers culture, systems, processes and people. To succeed in todays increasingly demanding and competitive environment, companies must build real-time, engaged, profit-oriented contact centers that are as dedicated to providing a world-class, outstanding and differentiated customer experience as they are to meeting corporate goals.
Donna Fluss is the founder and President of DMG Consulting LLC, a firm specializing in customer-focused business strategy, operations and technology services. Ms. Fluss is a recognized thought leader and innovator in CRM, contact center and real-time analytics. She is the author of The Real-Time Contact Center and many leading industry Reports, including the Contact Center Performance Management Market Report, the Speech Analytics Market Report and the Quality Management/Liability Recording Product and Market Report. Contact ms. Fluss at email@example.com.