Are contact center outsourcers feeling the heat? If not, perhaps we all have our heads stuck in the break room freezer while the building is burning down around us. Because change is happening and it is going to continue to erode the core of the contact center business: agent-based contact handling. There is a whole lot of research currently published that points to this fact that we all know intuitively. Demand for phone-based customer service is on the decline. There are many drivers behind this shift. This quote from Gartner’s Michael Moaz in his lastest Magic Quadrant for CRM Customer Service Contact Centers says a bunch about one of those drivers.
“A new generation of customers has a deep resistance to telephone-based customer service”
This fact is irrefutable. So in response, every contact center is, or should be working on addressing this shift in channel preference and integrating new capabilities. But, that alone, will not guide the contact center industry to sustainable future growth.
Now I know that every outsourcer worth salt has some portfolio of solutions beyond ‘butts in seats’. Those solutions range from technology platforms like custom IVRs and auto dialers to analytics and contact center consulting services. But, at the end of the day, these services continue to play a supporting role to the leading role of contact handling operations. All you have to do to validate this assertion is look at the net margins contact centers generate. Despite the move to diversification, margins and revenue mix across the industry continue to reflect the fact that ‘call floor’ is still king.
How long is this business model sustainable? How long before the bottom falls out? Well, that’s the challenge. Change is happening more subtly. And with current razor-thin net margins (publicly traded firms average in the 2-5% range), subtle change can easily tip these margins into negative territory.
What to do? What to do?
All ye heretics, join me in a group contact center headstand:
In the new world of the contact center, interaction handling will play a supporting role. What we’re all really after is the data. The insight into the customer; her experience, preferences and needs. From this information, we can deliver technologies and analytic services that have a broader strategic value across the client enterprise.
If you’re in the contact center business, you might be looking at this and saying: “We already do all that new model stuff”. And, this is a true statement in many cases. The key question you need to ask is what strategic focus do these services have within my portfolio. Can these solutions stand on their own? Are clients lining up to pay you real money for delivering these solutions? Or, are they hanging out in pre-sales purgatory? Thrown in as a deal sweetener to get the seats.
Having had the experience, and at times frustration, of launching a consulting business within a software company, the key challenge is to build a portfolio that aligns with customer expectations, yet breaks the mold of customers’ perceptions of you as a call center outsourcer. Only then, will client value perception align with client value realization in such a way to generate higher margin revenue for your business.
Higher value for clients, higher margins for the outsourcer. Everyone wins.
