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On-Demand Customer Service - part 1


Presented By: CrmXchange

Does it mean the end of the contact center as we know it or will it prove to be the catalyst to a new level of evolution?

Part 1

What is driving the need for On-Demand Customer Service and what are the components that make it work?

A revolution enabled by new technologies and shifting consumer habits… companies rapidly ascending to unprecedented levels of success by putting information at our fingertips and giving us the instant gratification we want… an innovative new industry redefining commerce by making people’s lives easier. These are just a few descriptions applied to the growing phenomenon known as the ‘on-demand demand economy’.

The effects are already having a significant impact on the larger economic picture. According to the Harvard Business Review, more than 22.4 million consumers are active users of on-demand services, accounting for $57.6 billion in annual spending. The largest category of on-demand spending is online marketplaces such as Ebay and Etsy, with 16.3 million consumers each month, shelling out almost $36 billion annually. On-demand transportation, with ubiquitous names like Uber and Lyft, is second with 7.3 million monthly consumers and $5.6 billion in annual spending, followed by food/grocery delivery at 5.5 million monthly consumers and $4.6 billion annual expenditures. Home services/beauty services, freelancers and the like bring in an additional $8.1 billion

A 2015 National Technology readiness survey, cited in the Harvard Business Review summary, indicates that the on-demand economy isn’t solely the domain of the wealthy. 46% of on-demand consumers have an annual household income of less than $50,000, and only 22% have an annual household income of $100,000 or more. It appeals to people in all geographic environments, highest (39%) among people in rural areas and small towns, and almost equally divided in outer suburbs (30%) and cities (31%). Men (55%) outnumber women (45%). Caucasians represent a far higher proportion of users (63%) than African-Americans (17%), Asians (12%) and Hispanics (9%).

Access to automated, fast-paced service technologies is dramatically changing the way businesses interact with their customers. One immediate outcome is that people now expect to have their information requests and service issues addressed on-demand as well. And just as the Ubers, Etsys and InstaCarts have disrupted their respective spaces, the customer service industry is now scrambling to reinvent the relationship between people and technology to ensure that people get the information they want when they want it.

Businesses are taking a number of different paths to providing on-demand service. Some companies are reassessing the way they deploy human capital assets, seeking cost-effective options to increase agility and flexibility. Others are investing in a variety of automation technologies. Numerous organizations are taking hybrid approaches to blend human resources with emerging technologies.

One solution extends on-demand customer service beyond the confines of the contact center. San Francisco based Directly offers predictive routing that can identify which experts in a company’s community are most likely to be able to resolve contact center tickets. The solution is designed for companies that outsource inquiries to external users of their products. It enables them to determine which individuals would be best suited to respond to inquiries based on similarities between incoming tickets and past tickets that had been successfully resolved.

These expert users, who are recruited because of their affinity for, and extensive knowledge of, a company’s products, are either given financial compensation or other tangible rewards for their services. Their expertise and enthusiasm often exceeds that of hourly contact center workers, making it a win-win proposition. Such experts answer questions on-demand whenever and wherever they are available. According to Directly co-founder and CEO Antony Brydon, using this method provides significantly faster response times, delivers CSAT ratings that average 92.5% and offers demonstrably higher resource efficiency. Directly technology plugs into help desk solutions or can be integrated into a website. Companies such as Pinterest, LinkedIn, OfferUp and Republic Wireless are using Directly to route inquiries to their expert users and provide “person-to-person” service while reducing the number of inbound tickets handled by staff.

“The fundamental nature of work is changing from a fixed workforce to a fluid workforce,” noted Brydon. “Companies that adhere to a fixed workforce model are going to struggle to compete. The second chapter of on-demand isn’t technology. It’s on-demand talent. Of all of the different functions…sales, marketing, engineering…it’s our belief that the first pie wedge of a company to move forward to on-demand is customer service. ”

Of course, not every type of business is currently positioned to route inquiries to external experts. Most organizations are looking at less complex strategies to provide on-demand service. This includes increasing their use of part-time and freelance workers, recruiting and integrating work-at-home agents and working with solution providers who offer the services of a scalable squadron of cloud-based specialized agents.  

These approaches illustrate the changing role of agents in the on-demand economy (or as some refer to it, the “Gig Economy”) where hiring for non-permanent positions and utilizing independent contractors for short-term engagements has become the prevalent business model.

In a July 2016 blog, Mike Bourke, SVP and GM for Workforce Optimization at Aspect noted, “Historically, most contact center agents had been employed as regular 40 hour/week full-time employees. But recently, pressures from many different directions point to a different future for a sizeable percentage of the agent population.” Among the factors he cited in this evolutionary process were:

- Cost savings in the 30% range   Employers do not have to provide benefitssuch as payroll taxes, worker’s comp insurance, unemployment insurance, vacation time or health benefits for part-timers or contractors. The Affordable Care Act is a major driver in the push to hire part-timers. A study by the American Health Policy Institute determined that the annual cost of the ACA to U.S. employers is estimated between $4,800 to $5,900 per employee. If the employee’s average working time is less than 30 hours per week, this expense can be avoided.

- Millennial Agents    Millennials have become the largest segment of today’s workforce, particularly in contact centers. They place a high value on work-life balance, making them ideal candidates for work schedules that flex around their personal lives.

- The Emerging Prevalence of Work-at-Home Agents   The 25% annual growth in the number of work-at-home agents is not only impressive, it’s an indicator in the direction of the contact center industry. Work-at-home creates opportunities for a broad segment of the population with physical disabilities, childcare issues or those who are located in remote areas. With more part-time workers, contact centers have a more agile workforce that can ramp up and down quickly, matching contact center staffing to call volumes. In addition, companies can choose agents with highly specific skillsets from anywhere in the nation.

Work-at-home has also become an attractive alternative to offshoring. A recent CIO article noted that while overseas labor rates are typically 40 to 55% lower than onshore rates, increased automation options have helped defray some of the extra expense of home-based agents. Work-at-home agents are now typically 5 to 10% cheaper than on-site professionals in the U.S. Software Advice, an evaluation company for call center software, reported back in February 2014 that although call center jobs went off-shore during the 1990s, many have returned to the United States. 

There are also on-demand options available for businesses that either want to have a well-trained workforce at their disposal without the high cost and complexity of hiring their own staff.  They can be ready to scale up to ensure the right amount of high-quality coverage during unexpected spikes in demand. ‘LiveOps Nation’ is the term specialist LiveOps uses to describe its network of 20,000 work-at-home agents who handle over 100 million interactions a year for a roster of over 200 clients. LiveOps’ strategy is to source both a higher quality and quantity of agents while disseminating a certification program employing a distance learning methodology delivered on an advanced eLearning platform.

“When you choose to outsource and utilize a virtual agent model, you get a different type of quality agent,” said Greg Hanover, chief operating officer, LiveOps, Inc. “With no limits to the sourcing footprint, we can find motivated quality agents no matter where they are located. This enables us to give clients a flexible call center model with passionate agents who have an affinity for their brand.”  

The segment with perhaps the greatest growth potential for delivering on-demand customer service is automation. This encompasses a broad spectrum of technologies including the increased use of analytics, predictive routing, improved multichannel service solutions, robotic process automation, artificial intelligence (AI), and natural language-powered (NLP) virtual assistants.

A recent Everest Group study, cited in an article in CIO noted that so-called “enabler technologies” accounted for about half of the reported investments by contact center providers from 2014 to 1015 — with analytics, automation and multichannel tools the biggest areas of spending,

The use of NLP virtual agents is also a surging segment. According to outsourcing and technology specialists, Xerox Services, 56% of consumers say they’d be happy to use a virtual agent. While consumers can’t always access sophisticated IVAs at this point, this is a technology whose time has come. Xerox believes that as the costs of contact center services continue to increase, there will be a greater incentive for companies to get automation right. In a recent study, they estimated that 36% of contact center volume is a direct result of digital channels failing to provide timely, accurate answers. They predict that “robotic process automation and artificial intelligence solutions, based on machine learning, will offer the capability to deliver service that matches or exceeds human interactions”.

Web Self-Service, SMS and chat are also alternatives to voice that can provide service at the speed that customers now demand. Companies such as 800 Flowers and Fandango are now experimenting with customer service bots that combine artificial intelligence with text messaging programs to understand requests and provide answers via messenger.

Stay tuned. In our second report, we will take a closer look at how these on-demand customer service technologies will affect the contact center workforce.