Article of the week 33 – 2023

Customer Service in the Digital Age – Human versus Machine?

„Everything used to be better!“ – An often-heard mantra that is also readily applied to customer service. Was customer service really better „back in the day“ when you could still call the customer service representative at your local bank and all calls were answered by agents in person? In reality, neither the agents nor the organization of the call centers were better then than they are today, but the requirements of markets and companies were aligned better with the technical developments and the expectations of the customers. 

With globalization and digitization, not only product landscapes have changed, but the „American customer service expectations“ have also found their way to Germany and the consumer urge for digital services is increasing, while „hyper competition“ is developing among companies.

This increases the pressure on service centers, whose managers are confronted with growing cost pressure, rising numbers of customers and an increasing complexity of tasks at hand. This is often due to organically grown, outdated structures that lag behind market requirements and technological state of the art. Approaches such as artificial intelligence (AI) or chatbots are celebrated in the industry as possible solutions, but the reality in many companies often falls short of what would be possible.

50 percent of contact center executives see potential for improvement through AI, but only about a third use chatbots or voicebots at all, let alone to their full capacity. Most customers interact with companies on more than one channel, but integrated omnichannel solutions are still not in use in many contact centers. Information silos prevent integrated processing and appropriate reporting. Even suitable CRM systems are not a given in every contact center. And work force management also leaves a lot of potential unused.

If this is not remedied, it leads to increased fluctuation and valuable know-how leaves the company. Customers become more dissatisfied and move on, and additional costs are incurred while sales decline. To prevent this development, it is essential to identify the right levers both in the contact center and throughout the company.

One key factor here is of course digitization. It can significantly reduce costs and improve customer service if the tools are used correctly. Chatbots, process automation and machine learning can contribute to the solution. However, important rules must be observed for a successful digital transformation:

1. Start with the customer: companies should focus on the customer and understand the customer journey as well as the mindset and wishes of their customers before considering suitable systems.

2. Do your homework: First of all, an analysis of the current customer-related processes must be carried out and, if necessary, adjustments made before optimizations can be implemented through digitization measures. 

3. Taking stock: new digitization initiatives should be harmonized with existing projects in order to exploit synergies and avoid duplication of effort.

4. Great impact in the short term: it is advisable to first digitize the processes that generate the greatest savings or involve the most customer inquiries.

5. Lasting innovation: The introduction of agile project management methods and a flexible, adaptable approach are necessary to deal with a constantly changing roadmap and new technologies.

Technology can help to optimize processes and improve services, but it is not the sole way to salvation.  People are still indispensable in numerous customer interactions. Complex and multi-step processes often still pose a challenge for purely automated solutions. An automated chatbot can guide a customer through a process and answer simple questions, but it cannot (yet) compete with the emotional nuances and personal connection of a human service agent. This is especially important for complex or sensitive inquiries, or when cross/upselling is the intent in a service call.  

Needless to say that people still play a central role in customer service. Accordingly, employee satisfaction, training and motivation are crucial to the success of a contact center. Here, too, certain basic rules must be observed in order to be successful:

  1. Involve people in the change: Digital transformation should be accompanied by appropriate change management initiatives to prepare employees for the changes and reduce fears.
  1. Appreciation culture: Companies should specifically promote a culture of development and appreciation among agents, thereby increasing both employee satisfaction and overall customer satisfaction.
  1. Training and skills development: Creating targeted trainings, coaching and development programs for agents increases their competence in resolving customer issues, their confidence and satisfaction, and thus overall performance.
  1. Regular performance reviews: Team Managers can offer constructive criticism, identify areas for improvement, and recognize agents‘ skills by conducting regular performance reviews and feedback sessions. This ongoing dialogue encourages agents to improve their skills and promotes steady growth.
  1. The right Incentives: The right compensation models encourage a positive work attitude and motivate agents to give their best. Performance bonuses, agent spotlights, and gamification elements as part of the agent’s daily routine lead to camaraderie and foster healthy competition.
  1. Modern framework: Our society has evolved from an employer society to an employee society. In a labor market where the employee has a free choice between similar positions with different employers, it is important for a company to differentiate itself, for example, by offering flexible working hours, the possibility of working from home and opportunities for promotion.

The goal of any digitization initiative in the contact center should be to build a functioning infrastructure that is adapted to the needs of customers, employees and companies, and to provide qualified customer service with sensible digitalization of the right processes. Simple inquiries should be able to be processed automatically, while more complex issues are forwarded to motivated and well-trained agents and be automatically verified and pre-selected ahead of time. The agents should then be able to resolve the majority of customer concerns from all channels in a friendly and competent manner and exploit sales potential. In the process, all call reasons are not only documented automatically, but also analyzed, clustered and fed back to the right places in the company in order to work on the reasons for the contact there and improve products/services and processes.

This approach establishes a continuous improvement process that takes customer needs into account and avoids unwanted contacts in the future. While customer satisfaction and loyalty increase, costs are reduced. 

It is time to rethink contact centers and create long-term success for companies, customers and employees with holistic and sustainable digitalization and humanization.

Svenja Wright – Marketing & Bid Manager


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