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Software // Information Management

Automation at the Expense of Customer Satisfaction

Customer contact processes are technology-heavy, but companies lack best practices.


Innovative Contact Centers (ICC) are in their infancy.  They are evolving out of traditional call centers, which initially were created to centralize the handling of inbound customer calls.  Early call centers acquired a reputation as sweatshops, with agents locked away in darkened rooms with the single objective of handling the maximum number of calls at the lowest possible cost.  Their operation was measured by poring over huge piles of data obtained from the Automated Call Distribution (ACD) system and then producing largely inaccurate spreadsheets that subsequently were used to predict future call patterns and required agent profiles.  As customers called more, costs skyrocketed and companies looked to more automated methods of call handling in order to manage the costs. However, the price for this cost cutting has been a dramatic lowering of customer satisfaction.

Ventana Research asserts that in today’s highly competitive markets and with a generation of less loyal customers, this must change.  Customer contact processes must mature at a faster rate and companies must pay much closer attention to managing the performance of what are now key components of their business.  Real attention must be paid to customer satisfaction.  Technology will play a role, but without proper attention being given to the business processes and contact center agents, much of this investment will not yield the expected returns and customer satisfaction will remain at extremely low levels.

Call centers were created to centralize and manage inbound calls from customers.  Companies recognized that customers had several touchpoints with them, with the result that contacts were not being handled very efficiently.  By centralizing call handling, the theory went, not only would the calls be handled more efficiently but customers would be given better service, back office resources would suffer less disruption and the costs would be more manageable. 

However, the creation of the call center led to two unfortunate consequences: Companies were finally forced to confront the real cost of handling these calls, and the mere existence of a single point of contact led to more and more customers calling.  So inevitably the main driver became cost reduction, and call center managers’ goals became keeping queue sizes to zero, reducing average call lengths, avoiding call hand-offs, increasing first-time call resolutions and using similar cost-cutting tactics as needed.  Ventana Research cautions that organizations should not follow this short-sighted path at the expense of customer satisfaction.

Driven by cost-cutting logic, consultants pointed out that one-on-one agent calls are vastly more expensive that postal mail, with e-mail next in line and the cheapest of all the Web.  This opened up the possibility that costs could be controlled by deploying self-service technologies such as Interactive Voice Response (IVR), kiosks and the Web.  However, all of these fixes ignored one major fact of human psychology: People actually prefer to talk with other people. There is little satisfaction to be gained from shouting into the phone at an IVR system that has stranded you in the midst of an overly complex series of menus. So as technology substituted for customer service representatives, customer satisfaction declined even more.

Next on the cost-saving agenda was outsourcing.  Companies had seen the huge savings to be realized from business process outsourcing, offshore software development and moving service provisioning to less costly locations.  With considerably lower labor costs, companies could maintain the human touch yet keep their costs under control.  Skilled labor was readily available and the bandwidth was there to support remote communications.  However, once again some of the basics were ignored.  One of the biggest determinants of the effectiveness of an agent is his or her length of employment and the skills learned while doing the job.  Staff turnover in many outsourced centers is substantial, which translates into inadequate customer service. So whatever labor cost savings were realized were offset by a further decline in customer satisfaction.

Customer loyalty for many companies is only a fond memory.  Customers today are prone to shop around, they expect more and are prepared to complain more. In addition, customer acceptance of technology is growing as the Web, text messaging and instant messaging become increasingly prevalent. Because of this, Ventana Research believes that the use of technology should no longer be driven by cost saving, but rather by a desire to meet or exceed customer expectations. 

The challenge is to take technologies such as VoiP, Application Integration Frameworks, workflow managers and customer profiling analytics systems and glue them together to create a single, coherent solution, an Innovative Contact Center that is aligned across processes, technologies and communication channels. However, Ventana Research strongly believes that technology alone is not the answer.  Strategy, people and process still dominate. Companies should carefully consider their overall customer service strategies and how they plan to improve their performance to meet new customer demands.  This will require a careful look at existing processes and a greater recognition that no one process fits all customers or all channels of communication. After all, dealing with a customer in real time on the phone is vastly different than responding to an e-mail or text message. 

On the people side of the equation, companies should continue to pay substantial attention to agents, their training and their performance metrics. Their role may be changing and evolving, but for several more years they are likely to play a major part in customer retention and business generation.

About Ventana Research
Ventana Research is the leading Performance Management research and advisory services firm.  By providing expert insight and detailed guidance, Ventana Research helps clients operate their companies more efficiently and effectively. These business improvements are delivered through a top-down approach that connects people, process, information and technology. What makes Ventana Research different from other analyst firms is a focus on Performance Management for finance, operations and IT. This focus, plus research as a foundation and reach into a community of over two million corporate executives through extensive media partnerships, allows Ventana Research to deliver a high-value, low-risk method for achieving optimal business performance. To learn how Ventana Research Performance Management workshops, assessments and advisory services can impact your bottom line, visit

© 2005 Ventana Research

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