Charting the future of customer care through a core optimization philosophy
New
customer-care technologies have made it possible to maximize revenues, savings,
and customer experience all at once. But to maximize competitive advantage, companies
must be smart—and quick.
Until recently, the majority of the discussions around customer
care focused on reducing labor costs by optimizing service levels, implementing
lean practices, and achieving the optimal mix of offshoring. The increasing complexity
of customer engagement meant few if any companies were equipped to pursue these
goals while at the same time improving customer satisfaction and increasing
revenues from their care interactions. However, with today’s highly discerning
customer base, companies across industries realize that customer care has
become a major contributor to their overall customer satisfaction and can serve
as a competitive advantage in the market. The proliferation of digital-care
capabilities—for example, web and mobile, interactive voice-response (IVR)
powered by natural language processing (NLP), and behavioral routing, among
others—has enabled companies to adopt a customer-first mind-set without giving
up on cost and revenue targets.
The challenge for companies, today and in
the future, is serving digitally oriented customers while finding ways to use
customer care as a core differentiator. The contact center, a vital component
in this strategy, must now focus on achieving performance excellence across all
three key priorities: customer experience, cost optimization, and revenue
maximization.
Five
dynamics shifting the industry
Amid this ever-evolving landscape,
McKinsey conducted a survey of customer-care executives to gain a better
understanding of the factors that are shaping the future of customer care.1Our
analysis identified five key trends that executives should factor into their
strategies.
1. Inbound calls will decline in number or be eliminated
Frontline automation is rapidly changing
the requirements of traditional call centers. In our survey, nearly three out
of five customer-care leaders said that inbound call volumes will decrease in
the next five years. Within ten years, 40 percent of respondents said the
number of inbound customer-care calls will fall significantly, perhaps to zero.
As digital channels handle more transactional requests, the remaining customer
interactions will be more complex and account for the largest share of volume
in traditional call centers. Meanwhile, more and more executives are becoming
aware of the competitive advantages of a superior customer experience. Enterprises
are therefore adopting service designs that emphasize simplicity and lower
costs while reducing the need for agents to handle low-value calls (or
low-value transactional activities) by directing traffic to digital and
self-service channels. Striking the optimal balance between digital and human
interaction will be critical going forward.
2. Digital-care channels are already the starting point for most
customer-care interactions
Survey respondents said that in 2015,
digital-care channels (such as web chat, social media, and email) accounted for
30 percent of all their customer-care interactions. By 2020, they believe that
share will rise to 48 percent. One reason: the growing number of “digital
natives” who grew up communicating over the Internet and expect digital care.
As one executive noted, “Customers are demanding it.” Organizations will
therefore continue moving forcefully to service and resolve their customers’
low-value transactions, inquiries, and problems through digital channels,
including Internet robots, or “bots.” Over time and across industries, all such
interactions will take place through digital channels. With the evolution of
bots and virtual assistants focused on chat, such channels are poised to become
the gateway and triage medium for all of today’s live telephone contacts. Apps
on mobile devices already provide virtual assistants to help customers navigate
self-service options or to route customers directly to the right agent queue.
To develop an omnichannel strategy for customer care, leading organizations are
focused on mapping the customer journey across digital and traditional
interactions.
3. Large investments will be required to improve the skills of
customer-care workers
As transactional calls move to digital
channels, more complex interactions—such as cross-selling and upselling and
financial advisory—will account for the largest share of volume in traditional
call centers. The majority of survey respondents expects automation to replace
not only more transactional interactions but also about 25 percent of the
activities of even exceptional customer-engagement agents. Consequently,
customer-care executives may need to develop teams of highly skilled agents
able to handle more complicated, higher-value transactions.
Specifically, many customer-care leaders
do not believe that their companies currently have the frontline skills or
leadership talent to meet these changing customer needs. Large investments will
likely be required to fill the skills gap.
4. High-end customized experiences will require companies to
rethink customer engagement
As customer-care leaders transition their
function from a lower-skill cost center to higher-skill profit center, the
function’s approach to creating value will change. To that end, executives are
mapping the customer journey and using design thinking to reconfigure
traditional customer care and enhance customer experience. Executives who are
considering a shift from outsourcing to in-house support (in an effort to build
customized capabilities) are also exploring live-interaction channels such as
video and augmented reality. For example, more than a third of our survey
sample say they have already invested (or are eager to invest) in video. About
half say they will rethink the location of their contact centers, given changes
in talent, sociodemographics, and service offerings, and three in ten are
considering bringing part of their customer-care operations in-house to
maintain greater control over customization.
5. New technology providers will flood the customer-care space,
so companies must choose wisely
leaders acknowledge the changing
technology landscape and the need for more tech investments to support a
longer-term strategic vision. Nearly half of the executives we surveyed rated
investing in new technologies as one of their top priorities over the next five
years. Three technology areas are likely to become prominent: insights or
behavioral routing software, artificial-intelligence agents, and visualization
technologies. Companies that align their purchases with their customer-care
strategy could quickly upgrade their digital profiles and capabilities. The
proliferation of new customer-care technologies and the availability of cloud
computing have dramatically accelerated implementation timelines: instead of
traditional step-by-step design-and-build solutions that might take years to
implement, leaders can mount rapid process-digitization efforts and adopt a new
breed of quickly scalable and modular “plug and play” technologies.
Collectively, these five trends will usher
in a new era of customer care that bears scant resemblance to current
contact-center operations but at the same time positions the contact center as
a strategic advantage to the broader organization.
The
future state of customer care
Based on responses from the customer-care
survey and our recent set of customer-care transformations, how companies
engage with customers and the tools that support and enable this interaction
will be dramatically different. According to McKinsey analysis, websites and
apps will be the digital channels that customers use to engage with companies,
accounting for 30 to 60 percent self-service (although the figure will vary by
industry). A true omnichannel world will emerge: when customers interact with a
company, they will have access to a wide range of contact options—from social
media and chat to voice. Fully 75 percent of customers will use not one but
multiple channels to contact companies. Frontline robotics will also play the
important role of gatekeeper, helping to determine customer requests and handle
simple issues. We expect that robots will be able to fully resolve 30 to 50
percent of all requests.
These developments won’t mark the end of
human contact-center agents; far from it. In this future state, the most
complex requests will still be handled by agents, who will be supported and
coached by robotics and artificial intelligence. Solutions will digest large
amounts of data, recognize voice patterns, and communicate insights and recommendations
to these agents. Meanwhile, manual work will be widely automated, allowing
agents to focus fully on advising customers, delivering the best experience,
and pursuing cross-selling and upselling. To achieve performance excellence in
this future state, talent management and coaching will be crucial in empowering
agents to seamlessly handle complex requests.
For companies focused on integrating the
current wave of technologies into their customer-care operations, talk of
transitioning to a future state might seem a bridge too far. While the journey
to robotics-enabled customer care won’t happen overnight, it will become a
reality far faster than some executives expect, in part due to the accelerating
pace of technological advancement. And these innovations have the potential to
transform every facet of customer care.
Getting
there
Despite the evolution of technology, the
ultimate goal of excellent care remains “remarkable, digitally enabled customer
and employee experience.” Building on the survey results, internal research,
and client engagements, we have developed a philosophy to transform the
holistic structure and operating strategy for the future of customer care. It
includes a balanced focus on achieving significant operational effectiveness
and cost efficiencies, enabling a high-quality, omnichannel customer-centric
experience across key journeys, and creating a next-generation revenue engine.
This compendium will explore each aspect of this philosophy, highlighting some
of the most important priorities in each dimension.
Drive significant operational
effectiveness and cost efficiencies. Besides
the fundamental, highly relevant levers such as using lean principles,
efficient steering, and footprint design, the emerging opportunity is
harnessing omnichannel and digital to achieve rapid cost reductions. Digital
self-care channels already allow companies to direct 30 to 50 percent of
contact volume to online self-serve tools, representing a massive opportunity
to prevent low-value contacts and to save resources. Companies should seek to
limit or eliminate contacts that don’t add value by addressing root causes
systematically and adopting an end-to-end view on business drivers and
simplification. Tools such as chatbots and assisted workflows dramatically
increase the efficiency and effectiveness of agents: a blended chat with bots
identifying customer intent and resolving easy inquiries before a human takes
over can double productivity while reducing cost by half. Adopting a digitally
enabled strategy will require companies to incorporate an agile mind-set and
pursue a design-test-learn process to develop solutions that can be scaled
rapidly throughout the enterprise.
Enable a high-quality, omnichannel
customer-centric experience across key journeys. Contact centers are in a unique position to
improve customer experience. After all, they are responsible for a growing
range of customer channels in the evolving omnichannel world, and these
interactions provide the function with visibility into customer behavior at key
touchpoints across channels. This vantage point enables customer care to
strongly influence customer perception and even has the potential to spearhead
a customer-experience transformation.
Mapping the customer journey is a key
enabler to identify customer needs (such as emotional support or empathy),
develop customer-care approaches that promote integration across channels to an
omnichannel experience, and incorporate automation and digitization into
operations. In addition, customer care can collaborate with sales and marketing
and back-office functions to redesign engagement and achieve a unified view of
the customer. Such efforts can improve performance and customer satisfaction
dramatically while reducing costs.
Create a next-generation revenue engine.To generate revenue and growth through the contact
center, companies should strive to move past traditional contact-center models
and adopt a service-to-solution approach, going from reactive, siloed customer
care to a customer-engagement approach that uses segmentation and analytics to
better understand the needs of customers. With these insights, companies can
tailor product and service offers to specific customers in order to increase
customer satisfaction and generate increased revenues. To make this shift,
companies will need to invest in frontline management and skills, empower
agents by creating relevant offers in each channel, and acquire new
technologies to provide real-time recommendations and support consistent
coaching. Leading companies offer a template for how to proceed.
Another important aspect within each of
these improvement dimensions is continuing to nurture foundational call-center
capabilities. In light of new requirements for talent, companies should review
their current processes and redesign them to align with new technologies. For
example, enhanced steering using the latest tools and advanced analytics can
reduce waste and underutilization among contact-center agents. Since a
consistent customer experience across channels depends in part on the
effectiveness of the contact center, retaining experienced and knowledgeable
agents is critical. New McKinsey research highlights the link between employee
satisfaction and retention as well as the factors that can lead agents to stay
with their organization. The findings also suggest tactics companies can deploy
to create a sense of community and career paths for promising agents.
Creating a remarkable, digitally enabled
customer and employee experience at lower cost represents a baseline for
companies, but customer-care leaders are pursuing engagement strategies that
enable them to tap additional revenues and gain a competitive advantage. To
thrive in the future state of customer care, companies should direct their
energy and resources to the three priorities outlined above. This compendium
explores aspects of these topics in an effort to help customer-care functions
chart a path forward.
By Jeff Berg and Julian Raabe
https://www.mckinsey.com/business-functions/operations/our-insights/charting-the-future-of-customer-care-through-a-core-optimization-philosophy?cid=other-eml-alt-mip-mck-oth-1803&hlkid=700ae6fd2fb94c58be39f3a4d1a25436&hctky=1627601&hdpid=858ff648-b75e-4b3c-8e81-d02d0090eec4
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