From the introduction of Automatic Call Distributor (ACD) systems in the early 1970s to the AI-driven Interactive Voice Response (IVR) technology of today, the contact center industry has evolved to become a vital customer experience (CX) hub.
Driven by rapidly advancing technology, workforce changes and shifting customer expectations, industry leaders are acknowledging the challenges, and strategic imperatives facing an increasingly complex environment.
In this whitepaper, we’ll explore the impact and challenges of industry changes, the reasons behind emerging trends, and predictions of how the contact center industry will look in the not-too distant future.
The (obvious) key component of the earliest contact centers – or answering services as they were known in the 1960s – was the telephone, which was the beating heart of business sales.
The invention of Private Automated Branch Exchange (PABX) enabled the creation of switchboards and the handling and direction of multiple calls.
The significance of telephone calls as a sales tool expanded quickly to become not just a support function but a key component of customer relationship management, even though ‘customer service’ was a term that did not have the meaning and importance it does today.
With the increasing sophistication of contact center technology, Computer Telephony Integration (CTI) became the cornerstone of the multi-channel communication capabilities of modern contact centers.
The rise of digital channels has enabled the integration of text, email, web chat, video calling and social media communication, enabling organizations to cater to customers wherever they prefer to communicate.
By the early 2000s, Voice over Internet Protocol (VoIP) technology revolutionized business communication, as a way to avoid expensive international and long distance call charges.
At around the same time, the introduction of cloud-based solutions further revolutionized the contact center industry, enabling greater flexibility and the rise of offshore call centers where businesses could take advantage of cheaper labor costs.
Mobile technology means that customers are no longer tethered to landlines, and can use apps to engage with customer service agents through voice or video calls or text messages around the clock, ensuring that contact centers stay agile, efficient and customer-focused.
Today, automated contact centers using IVR, AI-powered virtual assistants and CRM platforms are set to dominate the landscape. While the human touch remains a key aspect of customer service, automated contact centers are a critical component of modern business communication strategies.
As little as a decade ago, the concept of AI-powered bots handling customer service needs was something of a futuristic fantasy.
However, according to McKinsey, it’s clear that the contact center of the future is likely to be an AI-dominant environment. The dilemma facing CEOs and COOs is how far to go with automation strategies to retain the right balance between human and AI-powered operations.
While still in its relative infancy, AI in customer service today is a rapidly evolving technology composed of several software and data components.
AI agents are software entities that can interact intelligently with their surroundings. They can perceive, make decisions, take actions and achieve goals in their digital or physical environments.
Many organizations have already shifted call volumes from live channels to virtual assistants, finding that this is transforming customer care.
AI-driven solutions are able to solve simple transactional issues through virtual voice and chat assistants by leveraging internal and external knowledge bases.
They are adept at planning, and can turn large goals into smaller, manageable tasks.
Using past experiences and/or user behavior data, AI agents have the ability to optimize processes through tool integration, which extends their ability to manipulate and control their environment.
McKinsey reports that “one leading energy company has successfully reduced its billing call volume by around 20 percent and shaved up to 60 seconds off customer authentication by integrating an AI voice assistant into its back-end call workflow.”
Human agents are seeing the arguable upsides of AI integration in contact centers, including reducing call times and increased productivity by reducing After Call Work (ACW), using AI tools to summarize issues and interventions.
However, AI’s collaborative capabilities are still developing, and complex interactions often call for the empathy and judgment that only humans can provide.
A McKinsey customer survey found that 71 percent of Gen Z respondents believe live calls are still a better way to reach customer care and explain their issues. For baby boomers (59 years old and up), this preference is shared by 94 percent of respondents.
A number of factors solidify the importance of some human-to-human interaction and a potential slower adoption of Gen AI – at least for the near future.
Technology integration. Since the disruptive effects of the pandemic, many organizations have experimented with different contact center technology solutions, often without a clear idea of what genuinely enhances customer and employee experiences.
Slow decision making. Organization leaders are often slow to decide whether to upgrade existing technology systems or prioritize new and advanced technology.
Voice is still the dominant interaction channel. While text channels like email and chat are improving, Gen AI technology struggles with voice due to latency issues.
AI has revolutionized many modern contact centers by enhancing CX and operational efficiency.
AI chatbots and virtual assistants can handle basic inquiries and repetitive tasks like scheduling and appointments, freeing up human agents to deal with more complex issues, and provide a more personalized service.
AI can analyze caller data and route calls to the appropriate agent more quickly, ensuring customer satisfaction.
Through conversational insights and the ability to analyze large amounts of call data, AI can identify customer trends and sentiment, helping to identify CX issues.
Without careful planning and sufficient resources, technology hurdles can be an issue when trying to integrate AI into existing systems.
Handling sensitive customer data can be a major challenge, so it’s essential to ensure data privacy and security or risk legal consequences and damage to customer trust.
Both employees and customers may have reservations about new technology. Employees may fear AI endangering jobs, while customers may not wish to interact with a machine.
The global Contact Center as a Service (CcaaS) industry is forecast to reach $19.8 billion by 2031, according to a report published by Allied Market Research (AMR).
This equates to a 16.8 percent annual growth rate, building on its $4.3 billion valuation in 2021.
An excellent customer experience is at the core of most globally successful brands. To achieve this, many organizations are deploying cloud-based contact center solutions to better help them engage when, where and how their customers want.
Because CCaaS is hosted and managed by a provider, it offers scalability and more simplified management, eliminating the need to manage and maintain on-premises infrastructure like servers, hard-wiring and physical space.
Unlike the hardware limitations of traditional, on-premises infrastructure, CCaaS cloud-based contact center solutions enable organizations to quickly respond to changing customer and agent needs.
CCaaS accommodates operational flexibility in the case of remote working. It also makes financial sense, turning upfront infrastructure costs into manageable operational expenses.
Where on-premise solutions are pre-built and have a maximum capacity, cloud-based contact centers provide flexible licensing models that mean you only pay for what you use.
Organizations who plan to take their CX strategy to the cloud need to consider the long-term pros and cons to ensure that their migration is seamless.
Creating a list of improvements to contact center operations. For example, coordinating customer experiences in real-time would personalize and improve outcomes. This would not be possible with the technological limitations of an on-premises infrastructure.
Omnichannel support, predictive routing and enhanced analytics are all features that offer deep insights into customer behavior, and made possible by a cloud-based CX strategy.
Data residency, data security management and compliance are crucial to a contact center’s success.
Data residency means the physical location of cloud data, and understanding data protection regulations is critical. Make sure your cloud vendor has the experience and certifications to navigate regional compliance regulations.
For example, regardless of its global location, a call center must adhere to GDPR standards when handling the personal customer data of European Union (EU) consumers.
Choosing the right cloud model (public, private, or hybrid) is a decision that depends on priorities like cost, security, scalability and compliance needs.
In the past, phone calls and emails were a contact center’s two primary means of communication, but things are very different today.
CX is the highest priority for organizations, and that means providing a number of ways to interact through a variety of different channels, including live chat, SMS, social media and even video.
Not only do customers expect companies to be active on all of these channels, but they also want seamless and consistent interactions and levels of support.
A multichannel contact center allows companies to connect with customers across two or more channels such as voice, email, video, chat or social media.
The problem with multichannel is that each channel is siloed – and information across that channel can’t be shared with another.
While a multichannel strategy provides the ability to assign specific agents to channels based on their expertise and skills, the lack of data integration means context can be lost as customers switch from one touchpoint to the next, leading to often frustrating repetitive agent interactions.
Omnichannel is considered next generation, allowing contact centers to integrate channels, share contextual data and insights and allow conversations to continue smoothly across every touchpoint.
Total channel synchronization is a game-changer that enables customers to seamlessly move between voice, chat, email, text, and social media channels when contacting a business, without an interruption to their journey.
For example, a customer on a live chat inquiry may exit the conversation unexpectedly, but can pick up where they left off, even if they reach out later by phone. Omnichannel contact center agents have immediate access to all prior interactions.
In addition to supporting frictionless customer journeys, omnichannel contact centers deliver real-time customer insights for personalization and performance measurement.
Without an omnichannel strategy, contact centers rely on historic, and often outdated customer data to provide insights, rather than real-time information that an agent can see immediately, and use to deliver true personalized service.
Workforce optimization in a contact center starts with customer service agents, and goes hand-in-hand with an excellent customer experience.
Good agents are a contact center’s greatest asset, so maximizing the quality and efficiency of an agent team involves proper training, ongoing support and constant monitoring.
Workforce optimization is driven by a set of technology solutions that are often automated to make the process easier.
Workforce management software performs the critical tasks of scheduling agents and forecasting what staff will be needed and when. This helps contact center managers ensure that they can meet customer demands in the most labor-efficient way.
Quality management (QM) applications record calls and digital channels, providing a way to assess the quality of the interactions, deliver agent coaching tools, and offer reporting on quality and development results.
The best QM solutions also incorporate analytics to increase efficiency and agent engagement, often enabling self-evaluation and agent-accessible reporting.
Performance management systems help develop and engage agents by offering real-time and historical dashboards for instant visibility into performance against KPIs. Performance management solutions often include gamification and social collaboration functionalities.
Call recording is an important part of workforce optimization as it directly relates to quality management. Call recording captures audio interactions between customers and agents, while screen recording captures agent monitors during the interaction. This provides valuable insights related to agent processes, and can help facilitate additional coaching if needed.
Now more than ever, with AI blocking the horizon, contact centers face even bigger challenges in relation to the rapidly evolving security and compliance landscape.
Robust security and compliance measures are a top priority, focusing on data protection and AI integration, along with evolving customer expectations.
Contact centers are handling more and more interactions and therefore have more data to manage in a compliant way every day.
To emphasize the priority of added security, just last year there were several major security incidents that highlighted the vulnerability of consumer data, including Transport for London’s widespread system disruption and Ticketmaster’s massive data breach affecting over half a billion customers.
With a growing emphasis on consumer protection, global regulatory bodies are introducing stricter laws to safeguard customer information with particular focus on vulnerable populations such as the elderly, and those facing financial hardship – with increased penalties for noncompliance.
Every interaction including recorded calls and the mining of customer details, must comply, so contact centers need to be vigilant at all times.
In compliance terms, this highlights the importance of end-to-end encryption, more secure access controls and regular audit processes.
As mentioned earlier, omnichannel communication has completely transformed the way customers communicate with businesses in a positive way, but it has also complicated call center compliance. More channels mean greater potential for compliance lapses.
Every touchpoint, from phone calls, email, chat, social media, etc. may have its own regulatory requirements and potential risks. Ensuring compliance means monitoring every channel consistently and accurately.
In addition, all center compliance training should be regularly reviewed and improved and compliance check-lists implemented to keep on top of changing rules and regulations.
In every industry, it’s important to know what’s going on within your IT infrastructure. In a contact center environment, it’s mission critical to monitor interactions between customers and agents to improve quality and adhere to strict compliance regulations.
Before real-time monitoring, contact centers relied on post-call analysis of recorded interactions, often listening manually, and using scoring systems to assess agent performance and compliance.
With the added complexity of omnichannel interactions, real-time monitoring is even more important, as it enables managers to oversee and track interactions across every channel as they’re carried out.
Real-time monitoring provides call analytics, dashboards with complete visibility and alerts to ensure a consistent level of customer service.
Every organization aims to boost contact center productivity and streamline processes so that they can deliver the best possible customer experience. After all, this is the key to better customer retention, increased revenue, and faster call resolution.
Use the power of real-time monitoring to go beyond the average metrics of first call resolution and average wrap-up time. Real-time monitoring provides insights into more valuable metrics like agent language usage and sentiment analysis.
Measure your internal data against industry benchmarks to get a realistic idea of targets for agent performance and service level.
Make sure your real-time monitoring software provides you with 100% call coverage.
Use the immediacy of real-time monitoring to create a positive workplace environment by highlighting high quality work and winning behaviors. Share these across the organization.
As we enter a new era dominated by AI and ML, contact center industry leaders are rethinking existing strategies and leveraging new technology to meet the ever evolving needs of both customers and employees.
We’ve already explored the impact of AI in contact centers, and with the growing sophistication of AI technology, the use cases are almost limitless.
Natural Language Processing (NLP) continues to advance, helping improve customer satisfaction and provide operational insights.
Robotic Process Automation (RPA) is taking over various routine tasks, helping streamline contact center operations, reduce costs and enhance service quality.
Predictive call routing uses machine learning to identify the best agent to handle a customer by using past interactions, persona type and personality traits.
Traditional personalization uses general data to focus on broad customer segments. Hyper-personalization takes this further, using granular data to create interactions that are tailored to individual customer preferences, behaviors and needs, to create highly relevant and customized experiences.
In the near future, personalization will extend to colleagues, enhancing engagement and performance by tailoring workflows and training.
A contact center is one of the richest sources of customer data, and organizations are realizing the value of customer interactions to drive improvements in product and service development, marketing, and customer experience.
Forward-thinking businesses who recognize this value, are leading the trend toward a more strategic CX model, positioning the contact center as a hub of advocacy and insight.