The Customer Still Comes First: Defining the Mission of the Modern Contact Center
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1 Global Headquarters: 5 Speen Street Framingham, MA USA P F I D C E X E C U T I V E B R I E F The Customer Still Comes First: Defining the Mission of the Modern Contact Center September 2003 Adapted from Identifying and Addressing Evolving Customer Requirements to Adopt or Enhance Call/Contact Center Solutions: Pinpointing Opportunities by Vertical Market and Company Size Segments, by Lucie Draper, IDC #29792 Introduction Customer relationship management (CRM) and contact center technologies can increase profitability by allowing companies to retain customers while spending less money. Companies have more ways to interact with their customers then ever. Yet many companies are also finding that they have fewer opportunities to initiate contact. As enterprises feel the backlash against telemarketing and spam, they must seize the opportunity to get the most out of every customer touchpoint. The good news is that network and communications technology now allow companies to consolidate the different means of communicating with the customer phone, , Web, and fax into a unified customer contact center. This means that a service person receiving a call can now be enabled to access all records relating to a customer, from complaints to Web chat help sessions to in-store purchase records. This information can also be processed through CRM and business intelligence (BI) software in order to gain efficiency and improve customer-facing procedures. The next step is to take advantage of this information and use it to achieve two goals: Improving customer retention. A well-prepared contact center staff will be able to deal with customer issues more quickly and also often be able to anticipate customer needs. This goal is particularly important in a down economy; when more competitors are chasing fewer customers, remaining customers will become more demanding and want more personalized service.
2 Growing the bottom line. This can occur in two ways: by increasing sales and by improving efficiency. Customer contacts can be used to upsell customers to new products or allow them to renew subscriptions. Improved understanding of customers can also allow companies to better pursue new accounts and gain efficiencies at all levels of their business. Such improvements demand that enterprises unify contact center resources, CRM, and new communications technologies into a smoothly working whole. Even as companies add new technologies, the customer must stay top of mind. For instance, some companies have implemented Web-based communications that have left customers confused and frustrated, ultimately harming their business. Complexity must be hidden from the customer, even as companies pursue new capabilities. Improving Profitability and Customer Retention Companies are paying more attention to pleasing customers. This trend is illustrated by spending on call centers, which continues to grow, reflecting the importance of retaining and pleasing customers. Of companies surveyed by IDC, 46% indicated that they were increasing spending on their call centers. Among large enterprises (above 1,000 employees), this figure was 57%. The average increase in spending was 3%, not an insignificant number in a period when many companies are slashing IT spending. The traditional call center is also evolving. A call center used to be a place where operators sat at telephones, fielding incoming customer calls. Now such staff has access to a wide variety of communications. This has led many enterprises to reclassify their call centers as contact centers or interaction centers. These people may be inside the company, or they might be employees of a thirdparty service provider located in another country, thousands of miles away. With so many choices about how they can structure their contact center not to mention a wide and growing variety of technical tools they can put at their disposal enterprises should make an honest assessment of their goals. This will affect what areas they choose to invest in, and the order in which they pursue them. Even though call centers and CRM are still growth areas, most companies are looking to constrain IT spending and get the most return on investment (ROI) on what they do spend. While there are many different reasons for companies to invest in contact center resources, the top eight identified by companies surveyed by IDC are: Increasing customer loyalty and retention. This is the core of call center and CRM investments. By improving customer service, enterprises give their customers fewer reasons to go elsewhere and more reasons to spend a greater share of their money with one provider IDC
3 Integrating sales and customer care. This has become more important as customers have become less tolerant of sales and advertising efforts, particularly telemarketing and spam. Customers also expect more knowledge and expertise from all company contacts, including sales. Improving marketing/campaign optimization. Contact center technologies can allow companies to track the efficacy of particular sales and marketing efforts with greater accuracy. Given that sales and marketing is expensive and getting more so it is important for companies to know what is really working. Increasing customer base. This can happen in a couple different ways. Improved customer interaction allows enterprises to better determine a profile of likely customers, and how to please these customers. It can also lead to improved sales via customer word of mouth. Improving productivity/cost reduction. Contact center applications make staff more efficient by increasing the number of tasks they can conduct on a single call and reducing the amount of time staff spend looking for information and transferring calls. Supporting service and sales via the Internet. Internet-based interactions such as , website FAQs, and chat can provide efficiency for companies and convenience for customers. Increasing information about customer. Unifying customer contact data doesn't just make interactions easier on the customer. It also allows companies to gain a more holistic view of their customers. Deal with technical complexity. Call center technologies allow greater integration among different modes of interaction, and also hide complexity from customers. Two other traditional goals lowering costs and gaining more customers were also key and outpaced the other goals, further emphasizing the fact that even as call centers and CRM applications become more complex, their primary mission has remained largely the same. These results can be seen in Figure 1. Outside of these goals, secondary contact center goals varied greatly by industry. This emphasizes the need to design a contact center that closely maps to business goals above all other factors. Nearly all (99.0%) of the banking and other financial services companies rated "increased information about customers" as most highly important. This compares with 76.7% of services companies, the next most likely group to rate this as highly important. Improved marketing and campaign optimization were rated highly by companies involved in distribution activities, such as wholesalers and retailers. A customer call center solution to support service and sales 2003 IDC 3
4 via the Internet is extremely, or at least very, important among a vast majority in the transportation and utilities sector. Figure 1 Importance of Various Benefits in Justifying Investments in a Customer Call Center Solution at North American Organizations Increasing customer loyalty Increasing customer base Improved productivity/cost reduction Integration of sales and customer care Supporting service and sales via the Internet Increasing information about customer Deal w ith technical complexity Improved marketing\campaign optimization (% of respondents) n=174 Source: IDC's Enterprise Technology Trends Survey, 2003 Integrating CRM, Sales, and Customer Care There are a wide variety of capabilities that companies can implement under the purview of customer care and interaction. This will vary widely depending on the size of the company and the business they are in. However, what all of these efforts have in common is the need for dependable bank-end software. For most companies, CRM software will provide this anchor. This need is reflected in the growing ubiquity of CRM software. As of Q IDC
5 2003, 42.3% of North American companies surveyed by IDC had implemented CRM solutions, and an additional 28% were evaluating such solutions with the goal of implementing them within the next 12 months. CRM consists of packaged CRM software, and generally addresses several of the following areas: Customer call/contact center. Helping manage customer contacts and interactions remains the main focus of CRM software investments. Customer service and contact center applications were a $2.6 billion worldwide market last year, set to grow to $3.7 billion in CRM analytics. This involves the gathering and use of information via customer contact. By analyzing information gathered through customer contact, companies can improve not only customer facing activities but products, supply chains, and other factors. Support for field service, sales, and marketing. Customer data does not have to stay in the contact center. It can also be used to support employees in the field. For example, onsite consultants and product support people can tell clients about additional services available to them. Web-based CRM. Customer data can be used to provide support to clients less expensively through means such as Webbased self help, online FAQs, and services menus. Again, industries vary a great deal in the areas of CRM that they emphasize. For instance, insurance companies, utilities, retailers and other companies that deal directly with consumers tend to invest heavily in call/contact center-related technologies. Retailers and financial services are also extremely interested in using CRM to support sales efforts. Enterprises in the B2B space, on the other hand, tend to emphasize other means of contact, particularly those that are built directly into supply chain software; examples include aerospace, telecom, and manufacturing. Addressing Contact Center and CRM Needs As we have shown, contact centers and CRM should be closely aligned with business needs and each other. Companies in different industries must address different audiences and goals, yet have the common emphasis of trying to save money and promote customer loyalty. Companies must find the right mix of internal and external resources to support their customer-facing needs. Generally speaking, enterprises can implement one of six strategies for implementing their contact center: Build from the ground up. Create customized application primarily with a programming language IDC 5
6 Buy a packaged solution. Purchase and implement package software on systems residing at the organization. Use an application service provider. Purchase and access online software solution. Such a solution can be accessed by inhouse or outsourced staff, generally on a per-seat basis. Outsource the solution. Outsource the solution on external IT systems (the technology associated with the call/contact center). Outsource the entire business function. Outsource the entire corporate/business function to specialized business process service provider. Enhance existing solution. Change existing solution, add features/functions, upgrades, or new versions. There are also a wide variety of CRM services available, covering: Planning. Combining technologies and internal and external staff needed to create a smoothly-running contact center/crm requires a great deal of planning. Many outside providers have experience in setting up strategies for particular industries. Implementation. This deals with the actual technology integration involved in launching the contact center. Operations. Many companies choose to fully outsource their contact centers, both the technology and staffing. Education and training. Contact center staff must be trained on the technology and customer-facing procedures they must use. Maintenance and support. These services can be provided even for companies that maintain their contact centers in-house. Considerations Your call center/crm strategy should reflect your customers, not just your internal organization and IT. Customers should be central to all decisions, not just IT decisions Technology integration can be a challenge, particularly when trying to mix internal and external resources, or new CRM or contact center technology with older, vertical market solutions. The contact center, supported by CRM data, can be an important sales tool, particularly for consumer-facing companies who are limited by the growing legal and ethical movements against telemarketing and spam. However, intrusive, badly-targeted and overly-insistent sales efforts will alienate customers. Particularly if they feel they cannot get support without an unwanted sales pitch IDC
7 Conclusion CRM applications and contact centers have taken on many new capabilities and functions. CRM software has taken on more tasks, extending into sales, marketing, and supply chains essentially taking on roles that affect every part of a company. Meanwhile, companies face an essentially unlimited menu of choices in terms of enabling their contact center staff. The key is to choose the capabilities that will do the most to help your bottom line. Any technology a company implements should help them: Please customers. The focus should be on the customer, not the technology. Any technology should have specific benefits in making customers lives easier by improving support, lowering their administrative costs, or giving them reasons to shift more business to your company. Save money. This can occur by increasing sales or lowering costs. Either way, every capability you implement should have a direct, measurable impact on the bottom line. COPYRIGHT NOTICE The analyst opinion, analysis, and research results presented in this IDC Executive Brief are drawn directly from the more detailed studies published in IDC Continuous Intelligence Services. Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from IDC. Contact IDC Go-to-Market Services at gms@idc.com or the GMS information line at to request permission to quote or source IDC or for more information on IDC Executive Briefs. Visit to learn more about IDC subscription and consulting services or to learn more about IDC Go-to-Market Services. Copyright 2003 IDC. Reproduction is forbidden unless authorized IDC 7
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