Building the Contact Center of the Future

December 17, 2019 (Updated)

Chatbots, Conversational Messaging, Customer Service

TL;DR: 

  • The elephant in the room for customer support departments and contact centers is a huge communication gap with their customers that they don’t support: messaging
  • Customers aren’t going to tolerate poor customer service any longer: it’s the number one reason they take their business to another company, across verticals 
  • Scaling and managing messaging queries from customers is really difficult, and companies are lost
  • Automation is the only way forward with messaging,  but it’s not so simple, and has to incorporate great experience design

When we think of a contact center, most of us envision rows of desks and headsets, people in chairs speaking away or typing furiously. The reality is that customer service departments are changing. 

Soon, instead of handling more volume with more agents, service departments will rely on meaningful automation to handle up to 80% of queries. This means for the human element of a contact center, in addition to customer service agents, they’ll employ conversational user interface designers, UX profiles, machine learning developers, NLP/NLU experts, linguists, and automation operations managers. 

This is a huge shift in the skills needed to run, power, and manage contact centers, and at the center of it is one main channel: messaging. 

It’s less about the technology, and more about customer experience.

Conversational technology is finally at the point where it adds real value to customer experiences. We’ve evolved way beyond frustrating chatbots; clumsy text-based systems have been replaced with useful apps with far superior interfaces, and now these experiences are available beyond a branded app, and customers can interact with brands from whatever messaging app they prefer. 

These interfaces will power modern support hubs, creating seamless interactions with customers wherever, whenever and however they prefer. The shift towards customer preference is the driving force. It’s less about the technology, and more about the experience customers have. 

The future is now for digital transformation in client care, and support hubs have much to gain. Those who don’t adapt will struggle to keep up. 

The customer support revolution happening now

Time and time again, we see that what happens in our personal lives is replicated in business. Ten years ago, everyone called and emailed friends. Now, we only pick up the phone when it’s urgent. Most of us use email for work and have stopped using it for personal communication, and even then many workplaces have transitioned to Slack and productivity tools like Asana to reduce email and improve productivity.

Instead, we use WhatsApp and other messaging platforms for everything, from personal to professional. Things like sending pictures, voice notes, emojis, gifs, and files are done through messaging. Messaging provides the immediacy of a phone call with the multimedia capabilities of email, making it the best of both channels.

Phone calls are reserved for longer or more sensitive conversations. We even have anxiety about using the phone: 76% of millennials experience anxiety-induced thoughts when they hear the phone ring.  

It shouldn’t surprise anyone that when we think about interacting with businesses, customer expectations have shifted.

The reality is that the vast majority of companies still force customers to call or email to receive care, but for years customers have preferred messaging when it’s available to them as an option. In fact, 68% of WhatsApp users agreed that WhatsApp is the easiest way to connect with a business. It’s not a matter of whether companies will have to transition to messaging, it’s a matter of when.

Until recently, the messaging experiences we’re talking about weren’t optimized and provided a lot of friction and frustration. Now, technology like Hubtype’s, which focuses on user experience, is allowing interactions on messaging to be high quality, effective, and satisfying. That hasn’t always been easy to achieve. 

Text-based chatbots were trending in 2016, but the customer experience didn’t measure up to the hype. It was almost impossible to manage customer expectations when they could only use text to interact with a bot: they could say anything, they could say multiple things, and they could say them all at once; further, they may be poorly written, riddled with typos or misspelled. It’s hard for a machine to parse that, determine which issue is the most urgent or most important, and respond accordingly. That’s why leaning only on AI really doesn’t work.

The possibilities (and limitations) of chatbots were unclear to consumers because of their poor design, and brand experiences with chatbots ended mostly in frustration. In a time when consumers were already used to graphic user interfaces (GUI) like apps with buttons, carousels, menus, calendars and other interactive elements, these bots failed to use a visual language that set clear expectations and made the interaction easy for customers.  

It’s not a matter of if companies will have to transition to messaging, it’s a matter of when.

Then, there was a brief period of time when developers and marketers looked to AI to solve all of these problems, but we saw with the same rise of chatbots the failure of AI for text-based conversations for most instances–and we know why: it’s expensive, it’s time consuming, and it is still being developed. As we look ahead, AI does play a role: but it’s not center stage, and it isn’t the core of what’s needed to provide great customer experience and sufficient automation to manage volume. 

To develop usable AI, companies need access to a tremendous amount of quality data. Training data is absolutely essential to the development of any machine learning model, and it’s something that companies don’t have enough of. This is especially true in cases where the model will have natural language processing and understanding abilities. Most companies don’t realize they lack data and that clean data is very expensive to create or curate until they’ve already invested in technology that they’ll inevitably end up not fully utilizing because of this oversight. 

Depending on AI to power customer interactions is not both not enough and not feasible  for mid size or even large companies to lean on as a core element of their project. Using Artificial Intelligence correctly takes a lot of time and resources, and while it compliments a lot of use cases, it’s usually unnecessary to make it them work well. Unless you’re a company like Apple and want to develop a tool like Siri, centering your customer interactions around AI probably doesn’t make sense for your use case. 

Depending on AI to power customer interactions is not both not enough and not feasible for mid size or even large companies to lean on as a core element of their conversational project

Text-based chatbots and AI weren’t the answer we were looking for, but the key issue still remained: if you open messaging channels, then automation is necessary to scale it and use it meaningfully, otherwise, it’s too difficult to manage. Automation is necessary for scale, but it can’t feel robotic or ridgid, and there needs to be a human aspect. Combining bots and humans is key to managing customer expectations and providing great customer experiences on messaging channels: one handles the majority of simple queries clogging customer service queues faster and better than humans can, and the other handles sensitive, high value, and complex cases in a way that well, only humans can.

As we move past text, we come to conversational messaging interfaces. Conversational interfaces combine buttons, carousels, calendars, time selectors and other rich elements to significantly speed things up by using a visual language that people already understand. They allow for optimal levels of automation, and can seamlessly transition a customer between an automated agent and humans.

Real, meaningful relationships are being built at scale by combining text, GUI, automation and human agents. Businesses save money, sell more, and with that, a new era of customer service is born. 

Conversational interfaces use a visual language that people already understand.

All of these factors have come together to form a contact center revolution, and it demands new tools and a different skillset in contact centers or support teams. It’s a transition we’re already seeing happen, and the value it brings to businesses is clear. 

A holistic customer experience drives the ultimate KPI: LTV

The reason why messaging is so critical to customer care goes back to customer preference. Customer centric is a phrase we’ve heard for some years, and it’s one that customers have come to expect. They’re demanding seamless experiences from their first touchpoint to their last, and they want to choose where and how they interact with businesses.

For the first time ever, customers control the conversation with brands. They decide when the conversation happen and will no longer wait around for an appointment. They’re used to asynchronous channels that know them. They expect the person (or machine) on the other end to know who they are and their personal history with the brand. 

What’s more is that all of these conversations are recorded on the customers’ phones, giving them a historical log of interactions to reference at any point–and the same goes for the business, recording interactions across whichever channels the customer prefers to their customer profile in their backend system. These trends come together to form a much higher standard of customer service, and the pressure for brands to adapt is high. 

Harvard Business Review illustrates just how profitable it is to decrease churn; a 5% increase in customer retention leads to an increase in profits of between 25% and 95%.

This is often referred to as omnichannel, but any company not meaningfully serving customers on messaging in 2019 is NOT truly omnichannel.  It’s key to keeping a customer engaged through every stage in the customer journey. Omnichannel breaks down traditional silos between sales, marketing, and support, and between offline, apps, messaging, social and other channels. It creates personalized relationships that are contextual, consistent, and relevant, which translates directly to increased Lifetime Value (LTV) and decreased CAC (Customer Acquisition Costs). 

The impact that omnichannel has on customer retention is highly lucrative. It’s easier and less expensive to retain customers than it is to acquire them. In fact, Harvard Business Review illustrates just how profitable it is to decrease churn; a 5% increase in customer retention leads to an increase in profits of between 25% and 95%.

When contact centers focus on providing value to customers where and how they prefer, messaging becomes a clear and critical tool. 

People simply prefer messaging to other forms of communication. If this isn’t already made clear by the number of people you see constantly texting, consider the data: 

  • 84% of people want to be able to make a general inquiry via messaging. 
  • 74% of people feel more confident if they can message a business on WhatsApp. 
  • Customer satisfaction scores are 50% better when companies use messaging as opposed to the phone.
  • Messaging resolves cases 5x faster than email. 

Source: “Motivations, Mindsets and Emotional Experiences in Messaging (vs. Feed)” by Sentient Decision Science (Facebook-commissioned survey of 8,156 people in BR, GB, IN and the US).

Of course, customer preferences can’t be the only driver of decisions, or else we’d all be out of business. Messaging has to make sense financially, too. That’s an easy decision, though. Messaging is 80% cheaper than phone (per contact)–and that’s without using any automation at all. This is because:

  • It’s an asynchronous tool: 3-5 inquiries can be solved at the same time
  • 80% of queries come from 20% of the questions: these FAQs are easy to automate and free up a lot of time for human agents to focus on higher-value work 
  • Faster resolution times mean more time and money is saved

There is also a lot of data to support how messaging impacts a business’ bottom line indirectly. For example, human-automation handoffs allow for cross channel solutions, which decreases purchase cycle length. Messaging increases customer satisfaction rates, which increases brand loyalty and sales. 

Once businesses adopt messaging, dependence on phone will practically disappear.

These facts paint a clear picture of the future of contact centers. Contact centers are already seeing less reliance on phone in the last two years, and this trend is accelerating. The queries are moving to messaging.  Once businesses adopt messaging, dependence on phone will be cut in more than half. Conversational apps are where the majority of conversations will take place in the next three years.

How contact centers will evolve

Once contact centers adopt a messaging strategy, there is a natural progression towards automating parts of the customer journey. Some companies begin with only human agents, and then seek out places where they can automate parts of the conversation as they grow. This is a good, solid, iterative process that we support. Other businesses need to be able to message at scale from the start. 

Regardless of how they get there, the longer-term solution almost always involves automation. The result is a combination of automation and human agents, and it’s critical to the future of contact centers. 



Customer experience is now central to brand success

Part of this evolution includes a shift in the existing roles of human agents in the customer experience. For example, the skills that modern customer service agents should possess now vary based on how they’re interacting with the customer. By allowing human agents to focus on specific channels, businesses see higher rates of return, lower costs per contact, and more conversations handled simultaneously. In layman’s terms: it’s better to let agents focus purely on messaging, instead of having them multi-task across channels. It pays you back in operational efficiency and allows them to truly be efficient and asynchronous with messaging.

It’s important to note that even though automation helps companies tackle call volumes with less agents, hiring growth for customer service jobs is increasing, not decreasing. The U.S. Bureau of Labor Statistics projects that growth will continue by another 5% over the next 10 years. So, AI isn’t eliminating customer service roles, it’s simply changing them to adapt to technological shifts. 

Further, this trend is really just a reflection of how important customer service has become to the holistic customer journey: it matters more to consumers that in did in the past. In fact, poor customer service is the #1 reason customers change from one brand to another, so it’s easy to see how improving customer service can impact the bottom line of businesses adopting a conversational messaging strategy.

In addition to the evolving role of existing agents, there is also a tremendous opportunity for contact centers to invest in new roles. New roles include developers and consultants who can continuously improve upon conversational apps and interfaces. They could be software engineers, linguists, or scientists of natural language processing (NLP). Essentially, contact centers need resources to provide automation services.  

This is a particularly important idea for outsourced contact centers to embrace. Outsourced contact centers typically sell contracts based on the number of individual agents that will be serving them. So, a client who has fifteen customer service reps usually pays more than a client that has five dedicated reps. 

For this reason, outsourced contact centers can initially be adverse to the concept of automation. They think that less agents means less profit. But once a contact center understands how to evolve its business model, it quickly learns just how profitable it will be. 

The modern contact center contact should be priced to include automation. For example, rather than selling ten agents to a clothing retailer, a contact center should sell a package to the retailer that includes human agents and automation. Or, they could sell packages based on volume of customers attended to, regardless of if they’re serviced by a human, automation, or a combination of both. 

A modern contact center package should also include analytics and insights into the client’s customer base. Data from modern contact centers will be much easier to parse and analyze. With the right people who can work with this data, companies will extract patterns, draw conclusions, and deliver reports to clients. This piece of the puzzle adds a ton of value. Companies will make better decisions on how to scale, sell more, and ultimately keep customers happy. 

Right now, most contact centers don’t this because it’s difficult and time consuming. That’s why contact centers that deliver actionable insights will have a major leg up on the competition. 

Companies need to prepare now 

We’ve seen that companies have a false sense of comfort in regard to how much time they have to adapt. The reality is that customer expectations are already at a huge gap to the experience companies deliver them, and it’s widening fast. If contact centers don’t keep up with customer preferences, they will fall behind and lose customers to companies that got on board faster–like last year. 

Innovative business models are built around customer pain points and improving experiences.

New companies begin with this mindset. Innovative business models are built around customer pain points and improving experiences. Take N26, Venmo, Revolut, or Monzo, for example. They challenge the traditional processes that have been a source of friction in banking for years. 

N26 gained millions of customers in Europe by offering free accounts that can be opened in minutes via smartphones. The challenger bank made a big push into the United States this past August, and their goal of eliminating physical branches, paperwork, and hidden fees is paying off. According to a Reuters Article published last week, the company is currently adding up 10,000 clients a day and counts 3.5 million customers.

If you asked some of the world’s largest banks five years go about what threat, if any, a completely mobile banking app would pose to their future, you’d be hard pressed to find many leaders who took the issue seriously. The business model seemed unrealistic to incumbent banks. Now we’re seeing just how wrong they were. 

The technology exists to improve customer experiences, decrease costs, and increase profitability. Contact centers are already using conversational interfaces to deliver greater value to their clients, and they’re saving and making more money doing it.

The failure to evolve is already impacting companies’ bottom lines. Terrible customer service is no longer tolerated by discerning customers. As demonstrated by N26 and other challenger banks, even traditional industries and longstanding institutions are not immune to growing customer expectations. Long hold times, paperwork, and slow processes were once an expected frustration. Now, bad experiences go viral on Twitter, and good experiences drive customer loyalty. 

New, innovative business models put pressure on leaders across all verticals. We see the most dramatic paradigm shifts happening in the commerce, travel, transportation, and hospitality sectors. It is no coincidence that success in these areas is dependent on customer satisfaction and loyalty.

Assuming that there is still time to adapt is a dangerous game. Technology moves quickly, businesses adapt. By the time a company realizes it’s behind, it’s too late. 

Industries leading the way

The contact centers of the future already exist. Innovative industries were among the first to adapt their business models. Online retailers and ecommerce businesses were a natural fit for modern customer service solutions. Many of them already offered live chat on their sites, so the move to intelligent automation wasn’t a huge leap. 

Ecommerce is an industry that’s moving quickly. The companies that adopted conversational strategies are reaping first-mover advantages. Companies like Sephora, H&M, Burberry, and Massimi Dutti (Inditex, and a Hubtype client) were among the first to adopt conversational strategies. Now, online retailers that haven’t taken a hard look at their customer service strategies are most at risk to fall behind. 

More traditional industries still have much to gain. Banking, for example, is an area where the contact centers of the future can provide incredible value. Companies who go to market with new customer service strategies will be positioned to  rival the experiences provided by digital banks like N26 and Revolut. 

Continuing with N26 as an example, its conversational strategy is fundamental to its business model. The company believes that “the best service is seamless service.” In fact, that’s one of the companies three customer service pillars. The second pillar is the use of automated customer support, and the third is access to reliable live customer service agents. Clearly, N26 understands the value of omnichannel experiences and how to use automation and human agents to achieve them.  

Pioneers of conversational messaging  

It’s inevitable that the antiquated way we’re approaching support–on phone and email–isn’t going to cut it for today’s consumers. The need for conversational messaging and quality automation in contact centers is growing, because these channels represent a huge volume of queries with low-friction to use.

At Hubtype, that means that we’re growing, too. Hubtype enables large companies to create personal relationships at scale with their customers on messaging apps (like WhatsApp or Messenger) by combining automation and human agents: by implementing their conversational strategies. In a world where messaging dominates, our clients turn to us for experiences that move the needle. 

We help contact centers open new channels while maintaining existing teams. We provide the tools to make this transition possible, with a focus on combining automation and humans for maximum efficiency. Our tools help our clients empower their agents, save money, and improve experiences. The shift towards conversational apps isn’t slowing down anytime soon, and that means that neither are we.

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