Wednesday, June 17th, 2020 | 7 min read
In an economy where every company is under immense pressure, cost savings are important to find wherever possible. Customer service and care are a big expense, but they’re also incredibly important for customer retention and growth. According to Forrester, 62% of US customers have stopped doing business with a brand due to poor customer service.
We researched insights from several analyst firms and distilled some key strategic takeaways for companies seeking to cut costs while improving customer experience.
Modest, incremental digital engagement measures aren’t enough to tip the balance, says consulting firm McKinsey. Contact centers must invest boldly and chart a clear direction, tying what customer experience teams are doing to clear economic goals like cost savings. Just digitizing the customer experience is an investment that gives back in meaningful ways. McKinsey found that using technology to revamp customer service can reduce the cost of service by up to 40%. It noted that one health insurer cut front-office work by 70% and back-office work by 80% using a mixture of automation and omnichannel customer communications.
Forrester predicts that one in four customer experience professionals will lose their jobs because they don’t quantify the value of their customer experience achievements. Cost savings can be a great way to quantify that impact.
Companies can use automation for significant cost savings, according to analysts. In fact, it’s a growing imperative. In 2017, 46% of companies predicted 5-10% more agent seats, and 14% predicted that their customer service projects would grow more than 10% (Forrester). That was, of course, even before the pandemic. That’s unsustainable, say analysts, who point to self-service automation as a valuable tool in the battle to save money.
Emerging technologies like machine learning-powered virtual agents are fueling an exciting new era of self-service applications. Companies are racing ahead into this automated future, with 70% of customer interactions set to involve technologies like machine learning and chatbots on some level by 2022 (Gartner).
The internet of things (IoT) will play an important part in lowering customer service costs as well in the future, because it enables companies to monitor equipment and services remotely in the field, giving agents valuable intelligence on service status when dealing with customer calls or even preventing technology issues before they become problems at all. That’s why customer service and support is an investment driver for 38% of companies using IoT, second only to lower operating costs (Accenture).
Don’t think about automation as a way to replace human operators. Instead, use it to unlock their real value (McKinsey). Smart companies will combine their talent with cutting-edge technology to produce a powerful customer service combination. AI may excel at natural language processing and decision trees, but matching additional products and services to customer needs for cross-selling and up-selling purposes can still benefit from a human touch. (Not to mention exception handling for unusual cases.)
This service-to-sales approach can pay for up to 30% of a company’s contact center costs (BCG). A company embedding AI in its customer engagement platform can boost operational efficiency by 25% within five years (Gartner).
Automation can generate tangible external benefits to keep customers coming back for more, but too often – contact centers today aren’t using it to focus on customer value. Today’s companies spend the lion’s share (21%) of their tech budget for new projects on internal improvements, leaving just 14% for more effective customer-facing sales and service activities (Forrester).
One of the most powerful technology investments a contact center can make is in personalization. Companies can cut employee costs by up to $5 million using advanced analytics to understand what customers want, thanks to savings in agent time and effort during customer interactions (McKinsey).
Analytics will be a foundational tool for long-term improvement, both in terms of customer care improvements and cost savings. Companies have already used it to reduce average handling time by up to 40% (McKinsey). They can also use customer service analytics to prioritize the most pressing customer concerns and fix them at the source. Sprint did exactly this – and saved $1.7bn in annual customer service costs (Forrester).
There is clearly no shortage of innovation opportunities for contact centers eager to improve their customer care. To do it well, though, they’ll need to be agile. They need organized teams that excel at communication and teamwork. This means replacing disconnected teams with self-managing versions that own and handle customer issues from end to end. One financial service provider used this technique to reduce unnecessary duplicate work by 60% and cut contact center costs by 30% (McKinsey).
Don’t be daunted by the task of managing these improvements while continuing to operate a functional contact center. Companies can gain agility by moving critical customer care infrastructure such as inbound telephony, call routing, and reporting to the cloud. It enables them to adapt to changing customer needs while also shaving up to 35% from their cost base (Accenture). This is an industry benchmark, ask us about Sprinklr’s ROI metrics – we measure them for every customer.
Cutting costs doesn’t mean cutting service quality. Cloud-based contact center innovation gives companies better customer care for less money by driving more efficiency into customer engagement. Analysts across the board agree that it’s time to make your contact center budget work smarter by doing things differently, rather than spending more dollars to do things the same old way.
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