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Salesforce Commerce Solution Guide

The Year of the Customer: Balancing Service and Efficiency

By Dan Yalon
Feb 9, 2010 5:00 AM PT

The big question as we move through 2010 may be, "What does the future hold?" But really, the past year will give us a clearer glimpse into the future than any crystal ball possibly could. 2010 is the year of the customer.

The Year of the Customer: Balancing Service and Efficiency

December 31st, 2009, marked the end of one of the toughest years companies have faced in decades, both in terms of the challenges of a major economic downturn, and a major shift in how companies interact with their customers -- the customers who are increasingly more demanding and can change providers easily.

Today's customers know what they want, when and how they want it. What they don't want is to be "managed." And while the economic crisis has made businesses focus even more on the bottom line, cost cutting cannot be done at the expense of customer satisfaction.

Even in terms of pure numbers, it is considerably more expensive to attract a new customer than to keep an existing one. Forward-thinking companies are positioning themselves for quick performance improvements by planning investments in technologies that help promote customer satisfaction and loyalty, such as speech analytics, better utilization of cross-channel information and smart-agent desktops.

Contact Center Is Key

The contact center holds the key to success in "the year of the customer." It is the front line with customers, and it offers valuable insights into how a company can grow sales, improve marketing effectiveness, better serve customers, and improve back-office processes for increased overall operational efficiency.

Several business and technology trends are top-of-mind as companies look to balance cost-cutting with operational efficiency -- and, most importantly, with customer satisfaction. NICE Systems' first annual benchmark study identifies some of the key trends in the contact center industry, which will become more pronounced as we move into 2010. (The study was commissioned by NICE Systems and conducted by Ventana Research, an independent third-party firm.)

Important research findings:

  • Customer satisfaction, operational efficiency, and compliance are top operational priorities: Companies are focused on increasing customer satisfaction and reducing operating costs. Regulatory compliance is a key priority, along with increasing customer satisfaction.

    Financial services organizations are facing greater scrutiny, and the penalties for noncompliance are stiffer than ever before. Companies are concerned about avoiding the consequences of noncompliance, and are also very aware of the possibility of rogue employees damaging their reputations.

  • Growth in customer interactions: 44 percent of respondents expect increases in customer interactions -- those conducted over the phone, as well as alternate communication channels such as instant- and text-messaging and Web self-service.

    Growth in customer interactions is also attributed to the economic turmoil. For example, in the financial industry, many more customers are calling to receive information about their finances, voice their personal financial concerns, or to refinance their mortgages.

    While the role of the contact center has expanded into a source of intelligence for the whole organization, the scope of expectations on the part of the customer has expanded as well. In many cases, call volumes have increased as people become more concerned about their investments, have trouble paying their mortgages, or seek to compare deals among competitors.

  • Speech analytics deployments are expected to increase by 182 percent: Interviewees noted that speech analytics presents an opportunity for expanding this source of intelligence by obtaining valuable insights on key business issues from a readily available and historically overlooked information source -- the conversation inside the call recordings. Respondents see plans for speech analytics deployments growing by 182 percent by 2011 compared with the first half 2009.

    The contact center, generally the first point of contact for customers, carries most of the weight of ensuring a satisfying customer experience, but even more importantly, bears the burden of keeping customer churn to a minimum. As the interactions companies have with their customers increasingly occur through channels other than traditional telephone calls (e.g. email, Web chat, and text messages), speech analytics solutions evolve into broader interaction analytics solutions. Many companies are implementing interaction analytics solutions in order to better understand customers and keep them. Analytics also offers an opportunity to understand how resources can be used more effectively and business processes can be improved to streamline operations and reduce costs.

  • Over 50 percent of infrastructures will be VoIP-based by 2010: Considering the challenges of the current economy, the efficiency and cost containment gained through the use of VoIP technology may help to offset some of the budget shortfall.

    While some organizations have used headcount reductions and resource cuts as a tactic in these times, progressive companies have used the cost savings associated with VoIP to avoid those steps and prevent a negative impact on service. Thus, VoIP was noted as a high investment priority, due to its ability to help reduce operating costs, and more than 70 percent of respondents indicated that they plan to have more than half of their infrastructure VoIP-based by 2010.

    Furthermore, large multi-site enterprises are centralizing their contact center operations, made possible by advancements in VoIP-enabled solutions, and as a result are prioritizing investment in VoIP.

  • Workforce Optimization investment growth: Agent workforce optimization and performance management systems also ranked high, significantly outpacing expected growth of other types of technology investments, due to its impact on both increasing efficiency and decreasing customer and agent churn.

    Customer churn is more important than ever, as companies are painfully aware of the cost of attracting new customers over keeping existing customers. Reducing agent churn is key to putting customers first, as staffing a contact center with experienced agents who are knowledgeable about the organization and its products is critical to providing outstanding service.

    The study also showed that 81 percent of respondents expect staffing levels to remain steady or increase slightly, with 37 percent anticipating an increase in home-based agents.

Wealth of Hidden Information

The importance of contact center interactions across multiple communication channels continues to be at the center of business strategies to streamline operations while optimizing the customer experience. Though the global economic climate has created challenges for contact centers, the need to operate more efficiently and ensure exemplary customer experience continues to be a top priority, as it is directly linked to profitability.

Companies will increasingly rely on technology solutions that can capture and reveal the hidden information present in all customer interactions -- and enable organizations to act on that information -- as we move through the "Year of the Customer."


Dan Yalon is chief strategy officer at NICE Systems, provider of Insight from Interactions solutions and value-added services, powered by advanced analytics of unstructured multimedia content. Please visit the NICE Blog.


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