Winning the expectations game in customer care

Call centers aren’t what they used to be. Here’s how to capture the loyalty of increasingly demanding customers.

The customer, so the saying goes, is always right—and these days it’s increasingly evident that customers don’t hesitate to flaunt their power. Assisted by technology, they wield unprecedented influence over the purchase of goods and services, as well as the ongoing care from the companies that offer them. Customers want service now: experiences marked by immediacy, personalization, and convenience. When they don’t receive it, substantial numbers defect, often after just one bad customer experience.

This rising bar of customer expectations has significant implications for customer-care organizations in all regions and sectors. As channels—in-person visits, telephone calls, web contacts, and mobile platforms—proliferate, customers are demanding seamless and consistent service in all of them, not to mention human interaction and security for personal information.

In short, this added power is posing novel challenges for managers as a new era unfolds. We believe that customer care will change dramatically in coming years around two key dimensions: first, understanding the evolving value and complexity of transactions and, second, choosing the right level of human interaction and automation for superior service.

To explore these trends, we undertook a research effort surveying customer-care leaders on the front lines.2Among our key findings:

• Inbound transaction calls will decline significantly or be eliminated entirely, as many expect, and care will move toward ever-higher levels of customization.

• New-age Internet robots and virtual assistants will serve as gatekeepers for critical channels, such as chat, voice, and automated interactive-voice-response systems (IVRs).

• Focused investments will be needed to improve the skills of customer-care workers in both service and sales and to hire new ones who can handle increasingly complex interactions.

• The demand for higher-end personal experiences will force companies to determine which levels of customized care they want to provide and whether to provide them in-house or through outsourcing.

• Technology-investment choices will be critical as managers navigate the new products now proliferating and balance costs against scalability and implementation speed.

These changes will shake up traditional customer care. As they take root, we see simple call centers evolving into hubs where companies manage the overall customer experience. The number of online customer touchpoints will continue to increase, as will the number of automated resolutions. The volume of live customer interactions should remain steady in the near term, but they will be of longer duration and greater complexity. They will take on new importance as unique and critical opportunities to provide distinctive customer service, to build best-in-class customer-satisfaction capabilities, and to uncover future sales opportunities.

To that end, customer-care groups will become increasingly important profit pools, strategic assets—or both—for organizations that can select the right digital customer-service tools, invest in and build the skills to customize interactions, and provide the personal touch in a digitally efficient way. A systematic framework can help managers segment customers by their needs and relative value and help bridge these competing demands. Yet while nearly all of the 50 customer-care leaders we approached in our research largely shared this view of the future, just 20 said they felt well prepared to meet future priorities.

A shifting landscape

We believe that the wave of change already under way will fundamentally reshape customer care in the long term: for example, there will be greater use of machine-learning software, which can already identify issues and solve some problems of customers without any human interaction at all. Over time, this will reduce the number of inbound calls not just for transactional service but also for technical support and other complex matters.

In this article, we examine the core themes our research unearthed and provide recommendations to help companies build an early competitive advantage in this new environment.

Inbound calls will decline in number or be eliminated entirely for certain types of calls or transactional activities

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 said, the number of inbound customer-care calls will fall significantly, perhaps to zero.

Meanwhile, more and more executives are becoming aware of the competitive advantages of a superior customer experience. Enterprises are therefore adopting service designs that not only emphasize simplicity and lower costs but also reduce the need to service low-value calls (or low-value transactional activities) through higher-cost customer-care channels.

For example, the insurer USAA’s visual IVR system (with voice recognition) already provides transactional services, better routing, and one-touch Internet-based calls with agents. Live video chat is available through desktop or laptop devices. Similarly, activating a new credit card no longer requires an in-person call to a customer-care agent. And large credit-card organizations use apps to alert customers and verify possibly fraudulent transactions proactively.

Digital-care channels will be the future starting point for most customer-care interactions

Our 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 grow to 48 percent. (Two airline executives we interviewed in our research put that proportion as high as 80 percent in their own industry.) One reason: the growing number of “digital natives” who grew up communicating over the Internet and expect digital care. As one executive says, “customers are demanding it.”

Organizations will therefore go on moving forcefully to service and resolve their customers’ low-value transactions, inquiries, and problems through digital channels, including Internet robots, or “bots.” A few companies, for example, are taking the lead in using Facebook’s instant-messaging service as the interface with chat bots that respond to users in the background. One of these companies, Uber, lets users book rides through Facebook Messenger. Another, Expedia, uses a bot to field questions about travel dates and destinations.

Over time and across industries, all such interactions will take place through digital channels. With the evolution of new-age 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 navigate and recommend self-service options or to route customers directly to the right agent queue.

Large investments will be required to improve the skills of customer-care workers to meet changing consumer needs and call types

As transactional calls move to digital channels, more complex interactions—many emphasizing service-to-sales activities—will account for the largest share of volume in traditional call centers. Customer-care executives will have to develop smaller teams of more highly skilled agents. Most of the leaders we surveyed expect automation to replace not only more transactional interactions but also about 25 percent of the activities of even exceptional customer-engagement agents. Companies are already beginning to bypass customer-care channels and directly route more complex technical issues to engineering and product groups, especially for cloud-based computing, such as Amazon Web Services.

This trend will require highly skilled agents to provide superior customer service for more complex and valuable transactions. The majority of the customer-care leaders we approached do not believe that their companies have the frontline skills or leadership talent to meet these changing customer needs. Large investments will probably be required to fill the skills gap.

Of our sample of practitioners, a majority said that to meet the need for agents with novel capabilities, it would be necessary to hire new employees or train current ones rather than rely on technology (Exhibit 1). The most pervasive training-related sentiment was the need to develop both service and sales capabilities simultaneously—a departure from the two roles’ largely separate profiles today. These leaders also highlighted the importance of adding technical and problem-solving skills to help agents resolve issues on the initial call or with the fewest transactions possible.