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I have been involved in the contact center industry for more than 25 years and often see organizations that are slow in keeping up with consumers’ expectations; many of them seem reluctant to change, regardless of the need to do so. For example, agents of my cell phone operator ask the same four questions at the start of a call as they did 30 years ago; my bank supports several channels of communication, but it doesn’t provide the same information on all channels; and a well-known airline couldn’t tell me where my bag was for 36 hours (it was at the airport where I departed!). My list goes on, and I am sure you have your own.

On reflection, I trace much of this behavior back to early call centers. They were created essentially to centralize call handling, thereby making the process less expensive. There was a heavy focus on technology and call-handling metrics such as queue times, average handling times and number of call transfers. As companies saw the real cost of handling calls, they introduced cheaper, self-service channels such as IVR and Web-based Q&A, which typically were done so badly that the majority of customers resorted to phoning the call center. In summary, centers were inwardly focused and obsessed with cost savings, and the customer came a poor third. Our research into next-generation customer analytics strongly suggests that little has changed: Companies more often use financial metrics (such as adherence to budget) and process metrics (such as performance vs. SLAs) to assess contact center performance than customer-related metrics (such as customer satisfaction).

However, it is certain that consumers and their preferences have changed, and I don’t mean just millennials. Mobile devices have basically changed the way consumers communicate; even I use text messages and text-based apps more often than calling people. I also find more and more people will do anything to avoid ads; we record TV programs to watch when we want to, and fast-forward through ads; read news online rather than in print; and use filters to send email straight to the spam folder. Millennials in particular have changed the way they shop, preferring to search and buy online rather than visit a retail outlet. To do things when we want to, many of us prefer to use self-service technologies (if they work well) rather than meeting or talking to someone. And we have more choice, so companies have to provide products and customer service that meets our expectations or we will look elsewhere. To respond to this drastic shift, innovative companies are rethinking their business models and using technology to reinvent outdated ways of doing business. Uber is one of the most obvious cases – it uses a mobile app, chat, GPS and a website to change how people hire a “taxi” to get from one place to another – not always successfully in my case, but it has undeniably changed the taxi business.

For the same reasons, contact centers and customer service departments need that degree of change, and they need it now. They have vast amounts of data that is waiting to be analyzed and understood to guide policies and practices. Yet I was astounded at a recent conference when I asked 120 CxOs if they know why customers interact with their company; only five said they do. If you don’t know why your customers are calling, emailing and texting your company, chatting with your employees, searching through your website, screaming at your IVR, posting things about your company on social media, how do you know what you are doing right and wrong, and what is good or bad about your products and services? How do you know what the impact of one business group is on other business units?  And very importantly how do you know which of your competitors are outperforming you? You have the data, so use it. Our recent research into next-generation customer engagement shows vr_NGCE_16_new_technologiesthat while three-fifths (61%) of organizations recognize that analytics will help improve customer engagement, only about one-quarter have applied it to big data. Records of interactions – recorded calls, Web or chat scripts, text messages and social media posts – are big data; they exist in huge volumes and are unstructured. Advanced big data analytics can provide insights from speech, text and event data, and by combining this with transactional business data such as CRM, such a product can produce a comprehensive view of your customers and your interactions with them. It can identify which of your employees are getting it right and which need extra coaching and training. Analytics can identify product and service issues as well as customer preferences, temperament, intentions and trends. It can identify inefficient processes, the journeys customers take across business groups and communication channels and the outcomes of those journeys. In summary, multifaceted analytics can tell you what your company is doing right and wrong, and what you can do about it. This is a key reason why many companies now see analytics as an essential part of any customer experience program, and this will become even more true as the Internet of Things gathers pace and companies acquire even more customer-related data.

Another essential step is to support customers’ choice of communication channels. Our next-generation customer engagement research shows companies moving in the right direction, as on average they now support about seven channels. It also shows that contrary to some opinions that the old channels are not dead or dying; phone calls are still the most popular channel, followed by email and the corporate website. New channels such as virtual agents, video calls and interactive video have begun to be used but only by early adopters. Perhaps even more importantly the research shows companies are expecting growth in all channels, revealing a pent-up demand for customers to engage with those that support their favorite channels. But there is a problem. There is a lot of discussion around omnichannel experience, but the reality is that most companies can’t provide such comprehensive service because their channels of communication have been implemented as silos and are not processed using the same rules or supported with the same information – different information on different channels is not omnichannel. To reach this goal my experience suggests that most vendors providing omnichannel support are based in the cloud – another change that many others need to embrace.

Often in the same discussions about omnichannel, reference is made to the “digital world” because many people prefer to use digital channels of communication rather than speak to other people. As I noted, above the telephone is not dead; some consumers still like to use it, and some are forced to resort to it if self-service or the mobile app fails. Likewise, the contact center is not dead; for example, I recently heard a case study of a company that did not provide a telephone number for its customers to call but had to offer one after an unexpected number of complaints. This means that people are still involved in engaging with customers, and our research shows that every business group except IT is involved with proactive customer engagement. To provide an omnichannel experience companies have to manage all employees who handle interactions to ensure that the right number of skilled employees are in place to handle any form of customer engagement, and to be efficient and effective, they need to use a common set of rules and information to provide this service. To achieve this capability I recommend evaluating suites of advanced workforce optimization systems, which should support collaboration so all employees work from the same basis and groups can work together to resolve customer issues.

Using analytics, omnichannel engagement systems and workforce optimization, all integrated with business systems such as CRM, most organizations can take the first steps toward changing customer engagement to meet customer expectations. But technology alone won’t be enough. Any such program is likely to require cultural change, putting the customer first and process change – changing the customer journey across business groups, communication channels and even during interactions, and focusing on customer- and business-related metrics rather than operational metrics. Several companies ask me which CRM systems can deliver satisfying customer experiences; the answer is that by themselves, none of them can. It requires the combination of systems I have discussed here. Companies that get that right stand a chance of meeting customer expectations and matching what successful competitors do.

Regards,

Richard J. Snow

VP & Research Director, Customer

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I recently attended the Interactive Intelligence Interactions 2016 conference and came away with four key insights regarding the company’s plans and progress in providing contact centers in the cloud. These include the short-term success of PureCloud, the company’s financial performance, the importance of customer support and dealing with change.

PureCloud has surpassed the company’s expectations.

A little over a year ago, the company announced it was adding PureCloud Engage to its product portfolio. Like many other consultants and analysts at the time I commented that this was quite a risk as its other two products – CIC and CaaS – are both highly successful, and PureCloud was a completely new development on what was then a fairly untried platform – Amazon Web Services (AWS). Company CEO Don Brown opened a special track for analysts, consultants and media with the news that although CIC and CaaS remain successful, the results for PureCloud exceeded his expectations – 24 new accounts in Q4 of last year, 118 in Q1 (vs. a target of 50) and the same number expected in Q2. As a result it has nearly 200 accounts in production in every region in the world that AWS serves (North America, Latin America, U.K., Middle East, Japan and Australia). Brown showed that the architecture, and by using AWS services, speeds up development cycles to such an extent that in one year PureCloud matches and in some cases exceeds the capabilities of CIC, which is a mature product. He admitted that there are a few areas such as workforce management, outbound dialing and administration that need improvement but insisted that overall the product has rich capabilities and more are being added.

Brown compared CIC to a Sherman tank – that is, it’s a proven if monolithic product that is effective for companies that operate large contact centers on-premises. CIC remains the foundation of the company’s financial results, but PureCloud is its future. That said, he was adamant that there are no plans to stop evolving or supporting CIC, which is good news for existing and potential customers. Much was made of the architecture of PureCloud, which is based on the concept of using microservices (small pieces of code that handle specific functions). This design makes it highly flexible and scalable because customers can start by implementing only the capabilities they immediately require and add new ones when required. For its part Interactive Intelligence can add new capabilities by adding new microservices (such as support for emerging communication channels) without having to rebuild the whole system. It also uses AWS microservices for various system functions, which makes it totally dependent on the AWS platform. Don insisted that PureCloud will run only on the AWS platform and will never be ported to another environment.

The company’s financial performance continues to impress.

Strong sales are backed up by an impressive financial performance. Revenue has grown steadily growth over the last five years, reaching US$390.9 million in 2015 and estimated to surpass $430 million in 2016. In 2015, just short of two-thirds (59%) of the total was recurring revenue, mainly subscriptions for CaaS, the single-tenant, cloud-based version of CIC, and a small percentage from PureCloud subscriptions. The company expects income to shift even further toward recurring revenue as PureCloud sales accelerate. To sustain this growth while waiting for the number and value of PureCloud sales to grow, the company has worked on improving the margins for its CaaS business, which now are more than 50 percent. In a market where some other vendors are struggling with cash flow and levels of debt, the combination of increased revenue, better margins and internal operating efficiencies puts Interactive Intelligence in a strong position to reassure customers and prospects of its ongoing financial viability.

The company focuses on keeping customers happy.

As well as increasing cloud-based revenue, PureCloud has a fundamental impact on the company’s target market, moving the focus from fewer sales to large customers to more sales of less upfront value to smaller organizations. During a panel discussion, each of three speakers from new accounts emphasized the importance of customer service to them and testified that so far Interactive Intelligence has met or exceeded expectations in this respect. One speaker described the company’s help in transitioning quickly from CIC to PureCloud, but on a slightly less positive note comments were made that PureCloud needs additional capabilities. At this point the product is immature, and prospective customers should not get carried away with the architecture but evaluate its capabilities with the same diligence they apply to any other product.

Management strategy involves partners.

I began my career developing contact center systems from the ground up to meet customer requirements. Over time I have tracked the progress to on-premises products and more recently cloud-based systems. During this journey one important aspect has always been the role of partners and consultants, regardless of models. The basic value proposition of cloud-based systems is that it is easy to sign up, get online and get going, yet I see cloud-based vendors generating large volumes of professional service business for partners and consultants. Don Brown explained that “yes, it is easy to get PureCloud up and running, but that this is only the start of the journey in getting full value from the product.” PureCloud allows organizations to change the way they interact with customers, but this involves changing processes and people as well as adopting new technology. Cultural and behavioral change is probably the hardest thing for companies to do, but Interactive Intelligence asserts that its partners can help customers work through it. PureCloud includes multiple APIs that allow it to be integrated into existing architectures; companies can do this themselves or work with partners that have the skills and industry understanding to make it happen.

My research over the last two years leads to two indisputable conclusions. The first is that to meet customer expectations companies mustvr_NGCE_15_supporting_multiple_channels support multiple channels of engagement, and the second is that customer experience is an enterprise issue because customers engage with both multiple channels and business groups as they move through their journey of doing business with an organization. Our research shows that companies face three major issues in meeting these expectations: difficulty in integrating systems, managing communication channels as silos and giving customers inconsistent information at different touch points. The architecture and capabilities of PureCloud can help companies address all these issues. It has features to enable integration with existing systems and can manage multiple channels of engagement as one. Being cloud-based it can be shared by all users who engage with customers and give each user the same information.

Some of the consultants in the audience suggested this might involve too much complexity in too short a time for some organizations; on the contrary I see it as a strength because companies can build toward providing omnichannel experiences at a pace that allows them to get comfortable with one set of changes before moving to the next. Of course technology alone is not enough – companies need to change processes and train employees as they move through the journey. Many of the people who will be involved along the way will be from the business side of the house; to them I say don’t get bogged down in the technology but stay focused on the capabilities you need and building toward your final goal, keeping an eye on the benefits it will bring your organization.

Regards,

Richard J. Snow

VP & Research Director, Customer

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