01 Feb Contact Center Revenue: How Value Creates a Profit Center and Cost Reducer
The negative nickname of ‘cost center’ applied to contact centers works against the success of quality customer service. Yes, there are costs to any aspect of business. Costs can be reduced with planning and acting on data. Further, there is an argument for the contact center as a means of increasing profit and using other department budgets wisely. Recognize opportunities for contact center revenue and cost reduction. This helps get bosses on board with investing in customer service as a profitable sales tool.
Adding Value
Our previous article: “Non-value Added Work in Contact Centers: Identifying and Removing the Waste” talks about activities that don’t add direct value. Many of these are necessary business tasks. Regular refinement of these tasks and use of innovations like automation reduce their drain on overall profit.
However, it’s important to identify tasks that don’t seem to directly add value, but are something a customer is willing to pay more for. Human based customer service is one of these.
For some customers, talking to a human being about their issue is preferable to using self-serve options even if the issue is simple. McKinsey considers this human touch an “essential differentiator,” and part of the effectiveness of the contact center as revenue driver.
This may not be cost effective for every business. But if enough of a company’s client base indicates this preference, and it impacts customer loyalty, it’s a worthwhile investment.
Good Customer Service Adds Value
For other customer bases speed, accuracy and other preferences are paramount. It’s key to use data to know which type of customer base a business has to know where to put the support budget. It’s not just human service, but quality service based on needs that’s the goal.
Is the customer base predominantly in one age group or lifestyle that uses specific channels or has specific needs? Does one customer segment bring in the majority of profit? This data informs what quality service is for different segments and the ROI for each segment. That quality service can prevent massive losses.
Qualtrics data from a US study showed 53% of consumers spend less after one bad company experience. Worldwide they found bad customer experience equates to customers ceasing to spend $1.7 trillion on those businesses and reducing another $3 trillion in spending on them. That is a potential global loss of $4.7 trillion dollars from negative customer experience alone.
Providing excellent CX is one key to keeping customers, which is another key to revenue.
Contact Center Revenue Includes Keeping Customers
Generally it’s more cost effective to keep current customers than acquire new ones. It isn’t just the cost of acquisition that’s a problem. It’s the cost of bad customer service.
Hubspot’s recent study found that some of this is down to customers not trusting businesses as much and becoming more impatient and demanding. Their data showed 90% of customers felt an immediate response by customer support is important. By “immediate” they discovered customers mean within 30 minutes.
PwC Customer Loyalty Survey 2022 showed the top two reasons for leaving a brand as bad experience with a product/service and bad customer service experience. Those accounted for 69% of respondents.
Steritech did a 2022 study that found that bad reviews online are costing North American businesses over $200 billion each year. Considering customers trust other customers and friends more than they do businesses, that makes sense.
An efficient, data fueled contact center with well trained staff and smart automation can help to retain and convert these valuable customers.
The Value of Proactive Data
Contact centers are rich sources of data. Tracked and applied proactively and strategically this data enables:
- More cost effective marketing
- Targeted product creation
- Greater customer personalization
- Streamlined processes
For example, segmenting customers at risk of canceling, crafting an offer that shows the company understands their needs, and reaching out to them before their contract ends is proactive.
Using the data to understand the channels customers contact the center through most often helps businesses know where to allocate marketing efforts also.
The customer information collected by the contact center, when made available across platforms, gives a clearer customer picture. This can be used for personalization and creating products that match customer needs.
The Value of Service Agents as Sales Team
Every customer touch has the potential to deepen the customer-brand connection. Well trained agents with solid product knowledge, empathy, and good communication skills help build that connection.
Agents know customer needs better than most employees of a company because they interact with customers every day. Those interactions are sales opportunities too.
Customers seek out support. They are less likely to seek out sales. In the process of helping a customer resolve their issue and have a positive experience, the agent is in a good position to convert a customer. Training and access to customer data is necessary for this success.
If not direct sales, an agent with inter-department access can be trained to recognize an upsell opportunity and connect the customer with the sales department.
Either way, the agent is part of making the contact center a revenue driver when they’re trained and supported. Empowering agents with tools like automation to deal with repetitive tasks, frees up agents to focus more on profit increasing activities than minutiae. IVR (interactive voice response) can route calls. Chatbots, FAQs and knowledge bases can provide quick, simple solutions. AI solutions can search databases, provide real-time training and QA. Then agents can focus on giving the kind of customer experience that builds loyalty, CLV (customer lifetime value) and contact center revenue.