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If you’re on the hunt for great talent, you’ll appreciate how time consuming the hiring process can be. This is the starting point to finding your next great employee, someone who will take part in influencing the company culture and success – that’s no easy feat. Unfortunately, the contact center space is one that experiences great churn, making the interview process even more critical. Take a moment to consider the cost associated with employee turnover, including interviewing, onboarding, and reduced productivity, just to name a few. This is a huge expense for call centers, and one that can be easily reduced.
Interview questions carry a ton of importance, however not everyone understands which questions to ask, and more importantly, what answers to look for. As candidates prepare and practice their responses, interviewers too should be compiling critical questions and thinking about the best responses. It’s also important to have a mix of ‘canned’ questions that are significant to the success of the role, while leaving room for some conversational questions. If you can develop a dialogue in the interview you’re more likely to build rapport, which can lead to faster decisions and a better outcome.
These interview questions work for any level of the hiring hierarchy – contact center managers, supervisors, even call center agents.
1) Tell me about yourself.
Let the candidate tell their story before jumping into all the specific questions. This helps to get the candidate comfortable, and it also give you a high level overview of who they are. A good answer will explain why they left one organization to go to the next, and what they learned from each venture.
2) What about the job description enticed you to apply?
Now that you know a bit about them and their background, it’s good to get a sense of why they’re interested in this particular role. Look out for specific keywords in their answer. Assuming this is a role for a contact center agent, responses like “customer facing” or “problem solving” might be great keywords for you. It also shows you how well they understand the role.
3) Tell me about a time when you had to handle a difficult customer.
Surely they have a story to tell, presuming they came into this role with some customer service experience. It’s important to see what kind of story they choose to share. Ideally they’ll explain how they were ultimately the hero in an otherwise terrible customer interaction. That they went over and above to make the customer happy, and that their manager was thrilled with the outcome.
4) Tell me about a time where you received constructive criticism.
It’s always interesting to hear how people handle constructive criticism. This is a tough one to analyze, but you can usually tell in their story if the criticism was well received. If the candidate says something like, “I appreciated the feedback”, then it’s likely they weren’t defensive when the advice was received.
5) Where do you see yourself in 5 years?
Ideally the person you hire is someone who can grow in your organization. If you’re hiring an agent and their goal is to be involved in management in the next 5 years, it shows you that they’re motivated to grow and lead. This is a great way to hold on to talent!
6) Why are you leaving your current role?
If the candidate is currently employed, it’s important to understand why they are moving on. Answers like, “I’d like to learn more” or “it’s time to spread my wings”, are great, but not if they’ve only been at the job for a few months. Watch how often the candidate jumps from job to job, since this can be a bad sign. Also, if they quickly go into shaming the company, this shows a lack of loyalty and professionalism.
7) Tell me about the toughest decision you had to make in the last 6 months?
Talk about a challenging question! I can’t even think about a tough decision I’ve had to make in that timeframe. (Don’t worry, we’re leading into an easy question next.) There’s no right answer here, just let the candidate tell their story, and hopefully the challenge had some merit.
8) What do you like to do for fun?
If they say things like, “hanging out with friends and watching movies”, they probably aren’t the go-getter type you’re looking for. Great talent has passion outside of the office: Perhaps they like to cycle, play guitar in a band, or they have a side gig (what better way to show a hard work ethic!) In any event, while ‘hanging out with friends’ is a good social trait, you should certainly look for the candidate that offers more to this answer.
9) Do you have questions for me?
This is a good opportunity to see how much they know about your business. Maybe they’re asking about your client base, or what the work environment is like – these are all great questions! Bad questions would be jumping right in to compensation or, worse, not having any questions prepared at all. The first shows you that they’re mainly interested in money and not the opportunity; the later shows you they aren’t serious about the role.
This is a solid start to getting you to the right candidate! It’s also important to remember that employees need continuous nurturing. After the candidate is hired, make sure you devote time to ongoing relationship building. Have regular meetings to make sure they’re happy, and their goals are being met.
The big question we talked about in those posts was whether Flex would be a “formal” cloud call center offering, with per-agent / per-month pricing or some kind of upgrade to its existing call center related APIs. Turns out it’s neither. It’s something new: a call center platform. Fascinating.
In his speech, CEO Jeff Lawson emphasized that Flex would be “customizable at every level”. What he means by “level” can be seen in this diagram, which I think is the best explanation of what Flex is:
The lowest layer is Twilio’s existing API-driven communication system. The second layer is an existing Twilio product called “Task Router”, which provides the core functionality of a call center. They talk about it as a general purpose engine to send requests (incoming calls, texts, service tickets, etc.) to resources (an agent, a bot, etc.). An old-school call center would call this an ACD (Automatic Call Distributor).
[Fun historical fact: the original ACDs were adapted in the 50s from air traffic control software. That is, they swapped managing incoming flights with incoming calls. I wonder if we could reverse the flow and use Task Router to run an airport today. I was thinking about this because at the end of his speech Jeff adapted Flex to be a “drink-serving” system to attendees where you text in your order and it is sent to the bar.]
The third layer is “Studio”, Twilio’s drag-and-drop GUI for building flows, which was announced earlier this year. Here’s a neat video for you to check out.
The fourth layer is the first new thing announced last night: a programmable UI. This allows you to design the desktop that the call center agents and managers will see. Product lead Al Cook did a lengthy demonstration of this UI last night. Both Al and Jeff emphasized several times that you get “pixel level control” and “absolutely everything” is customizable, in contrast to the other systems where your customizations are limited to “just a corner” or “just a widget”.
It’s true that every other call center system has an out-of-the-box agent desktop and manager desktop and usually you can make adjustments from there. But, I’m not sure how many call center users see that as a bug rather than a feature. I’m wondering if that messaging is aimed more at companies that want to build and resell call centers with Flex, rather than end-users of Flex.
The fifth layer is also new: a marketplace of partners building on top of and with Flex.
That fifth layer is really interesting. Let’s look at it section by section.
The “CRM Service” section is probably the least interesting. Having hooks into all the main CRM systems is table stakes. No call center can exist in 2018 without this. (Part of the ongoing collisionbetween those two worlds.)
The “Technology” section is also not that surprising. Twitter, Kik, Line, WeChat = messaging platforms used as customer service channels. Whitepages and NextCaller = ways to pull in caller ID and other information, so that you can present context to the agent. VoiceBase and Watson = call transcription. It’s an impressive list, but not that surprising.
The “CC-as-a-Service” box is the interesting one. Serenova and NewVoiceMedia appear logically at the top. These are CCaaS (Contact Center as a Service) products, built on Twilio, which we included in our industry map two weeks ago (See below). But where’s Talkdesk? Maybe they didn’t want to be included? RingDNA, Velocify, SalesLoft and CallRail all focus on streamlining outbound sales calls. Not strictly “call center”, but it’s not as stretch to put them in the same box. I was surprised to see OneReach in there, they’ve been focussing mainly on bots.
Twilio released something very compelling and innovative with Flex. Looking back at earlier posts, this lowly blogger was perhaps narrow-minded in seeing only two options: Either Flex will be a CCaaS offering, and compete awkwardly with Twilio’s existing CCaaS customers, or it will be a “professional services” offering building bespoke call centers using existing Twilio components. I’m happy to be wrong! Actually, it’s more accurate to say I’m happy to be surprised. Unexpected twists and turns keep this industry exciting!
The number of cloud-based call centers is growing quickly and they are increasingly built on top of Amazon and/or Twilio. That includes both newcomers like TalkDesk and Serenova, as well as legacy vendors like Avaya and Genesys. However, Twilio and Amazon now have their own call center platforms (essentially competing with their own customers). Will the Amazon / Twilio “stack” define the contours of the next generation of call center?
How the New “Stack” Will Impact Technology Decisions Moving Forward
If more and more call center platforms are built on the same infrastructure, does that mean that they will effectively work the same way? If that’s the case, what’s the distinguishing factor for call centers looking to choose a brand new system or upgrade their current system?
Something new this week! As a result of recent acquisitions and other maneuvers, we now have a nice sample size of publicly listed companies for whom cloud call center is a key focus. Many of them released their Q4 earnings in the past couple weeks. It’s interesting to review the numbers at a high level to see what kind of picture they paint for the near term future of the sector. Short answer: Pretty positive.
Let’s take a quick look at what was reported by Avaya, Five9, NICE, RingCentral, Twilio and 8×8.
It was a big moment for Avaya: their first quarterly report as a public company in 10 years. It was also the first earnings call run by new CEO Jim Chirico. (Slides here.) They reported $752M in revenue, but that’s a bit skewed because they had to cover a period that started with the end of their bankruptcy, rather than a regular calendar quarter. But the number that jumped out for me was that contact center revenues grew 16% vs the previous quarter.
One question is whether their acquisition last month of Spoken quiets the critics of their cloud strategy. So far the answer seems to be yes. You can see in the transcript that analysts asked this several times. Chirico’s answers: “…the Spoken acquisition … brings full cloud multi-tenant capabilities … offers our high enterprise contact center customers a real path now to the cloud…” and “We are now building out Spoken, which was really purpose built for Avaya and it is native cloud…”
RingCentral had a break-out year. They reported $140.5M in revenue last quarter, which is a 34% increase over last year. They are primarily a UCaaS company, but I think that’s going to change. Currently they resell inContact as a call center solution, but it’s rumored they will either build or acquire a call center of their own shortly. One hint towards the build option is last year’s hiring of Jim Dvorkin to be the Call Center SVP. He was formerly CTO of Five9 and VP of Call Center for Salesforce. (See Salesforce Has Many Fingers in the Call Center Pie.) They also brought over our pal Max Ball from 8×8, to be director of product marketing for the call center. (He held a similar role at 8×8).
If they build, odds are good it will be on top of the Amazon/Twilio stack that has become the norm. (As we wrote about last week.)
8×8 reported quarterly revenue of $75.58M. I believe about 20% of that is from the call center product – (“VCC”) has been seen as a bit lackluster by the public and analysts, as you can see by Ovum’s latest Decision Matrix. But their recent launch of the new “X8” product last October is aimed at fixing this. When asked about the conversion of customers to the new product, CEO Vik Verma said, “Over the next few quarters categories are going to go away, and they’ll all be a continuum of X products… X8 will become our signature product, which will have a lot of core functionality also from VCC brought in, all the way from speech analytics, quality monitoring, et cetera, will all be part of X8.”
Twilio handily beat revenue expectations, rising 41% to $115.2M for the quarter. Twilio is already a considerable force in the cloud center world via its platform. Companies like Serenova, TalkDesk, NewVoiceMedia & Zendesk use that platform to build their own call center products. Twilio then gets a revenue for each minute of voice and each text message that runs through its platform. Twilio also builds a la carte solutions for large clients like ING.
The big question looming here is whether they will announce their own cloud platform at the upcoming Enterprise Connect conference.
Five9 is from the “original batch” of cloud call centers, and the first to go public. They just reported record revenue of $55.4M for the last quarter, which is up 25% year-over-year. They also hit the nice milestone of $200M in revenue for the year.
One interesting development recently is the acquisition of AltoCloud by Genesys. Five9 had been using Altocloud for the journey analytics component. Now they’ll have to find a replacement.
Today’s cloud-based call centers are increasingly built on top of platforms created by Amazon and Twilio. That includes newcomers like TalkDesk and Serenova, legacy vendors like Avaya and Genesys and companies from adjacent sectors expanding into call center like ZenDesk. For better or worse, this “stack” is going to define the contours of the next generation of call center. That raises a lot questions and suggests some predictions too.
Is this ultimately going to help or hinder innovation? Raise or lower prices? What should we make of the fact that both platforms are now offering their own call centers (Amazon with “Connect” and Twilio with “Flex”)? Is that a caution against building on top of platforms that may end up competing with you, or is this simply the new reality of the software universe?
The Unexpected Power Couple
If you time travelled to today from 10 years ago, you would probably not be surprised to see the growing number of agent seats served from the cloud. After all, the cloud trend was already established back then. (And it’s really just part of a larger trend where all enterprise software has been moving to cloud architecture and SaaS pricing.)
It would also not surprise you that all the legacy vendors had introduced (or acquired) cloud call centers and were (mostly) deprecating their on-premise ones. And finally, it would probably not surprise you that new entrants, built natively as cloud applications, were challenging those incumbents.
What would surprise you is the dominance of Twilio’s and Amazon’s platform in this new world. Neither of these companies would have even been on the radar of an industry observer back then.
Looking at the Stack
The chart above tries to represent the interaction between the Twilio platform, the Amazon platform (AWS) and a sample of some of the current cloud call center products. It’s obviously a simplification of very complicated interactions. You shouldn’t think of it as an engineering diagram, but more a mental model to illustrate the “big picture”.
The Amazon Layer: Sometimes it seems like Amazon’s AWS powers half of the internet. The juggernaut cloud computing service has grown to become a business with $20B in annual sales. Call center products based on Amazon use it for hosting, storage and processing, but build all the call-center-specific code themselves.
The Twilio Layer: Twilio offers a vast array of communication APIs, including all the functionality you need to build a call center. This means that it’s easier to create a call center with Twilio’s building blocks compared to just building with AWS. Building without AWS or Twilio is harder still. This also means that call centers built on top of Twilio are going to be more alike in features.
The Telco Layer: All cloud call centers need to pay a telco provider (like AT&T or Level3) for voice minutes (aka “termination fees”) and text messages. If you build on Amazon, you have to deal with Telcos separately. If you build on Twilio you can buy the minutes and messages through them. (So, essentially Twilio is reselling “raw materials” from both telcos and AWS.)
What it Means
The new “stack” based on these platforms is going to define the next generation of call centers. Here are some ways their influence is going to be felt:
New functions: When new functionality appears in Twilio or Amazon APIs, we can expect the overlying products to make it available soon after. For example, Amazon made automated speech transcription available in December, so we should see wide availability through the Amazon ecosystem. This means the opportunity window for 3rd party add-ons gets shorter. (There’s no reason to partner with someone else to add transcription to your call center if it’s available via API on the platform you’re already on.) In a way, this is the inverse of the “sit-on-top” approach like the Genesys AppFoundry or Talkdesk AppConnect, with new functionality coming “from below”. Although there’s no reason both can exist at the same time.
Nuances: Nuances of underlying APIs always “bubble up” into the products built on them, sometimes in unexpected ways. We should expect this with the Twilio- and Amazon-based products. Furthermore, even a call center product not based on those platforms will be affected, because of the unavoidable comparisons with the products that are.
Pricing: The diagram above also shows how COGS (cost of goods sold) is going work in this new era. All three layers offer API-powered, consumption-based, volume-discounted pricing. Everyone has to buy minutes and messages from the telco layer. That becomes the absolute price floor. If you build on Amazon, then you add in storage, computing and bandwidth charges. If you build on Twilio, you only have one bill to pay, but it rolls up the telco and Amazon costs within it (plus a margin for Twilio, of course). Ultimately, each call center can set prices however it wants, but the whole world knows the base COGS, and that’s a constraint.
More Enterprise DIY: Larger organizations are getting empowered to “roll their own” call center using basic components plus internal or external developers. For example, see the Twilio-ING case study. This scenario is also Avaya’s hope with its modular Breeze+Snap-Ins framework (but recent moves suggests less focus on this, at least in the near-term).
More Players: With Twilio’s high-level APIs, it’s easier than ever to build a new call center offering. So a straightforward prediction is we should expect an increase in offerings. A harder prediction is what that will look like. A race-to-the-bottom price war? Lots of vertically-focused offerings? Maybe we’ll see some creative ideas that rethink the fundamentals of how call centers should work. When the start-up costs are so much lower, it’s easier to do radical experiments. (This is all reminiscent of the LAMP stack that powered an explosion in creativity in the last decade.)
Ovum recently released a report called “Selecting a Multichannel Cloud Contact Center”. You can grab it here, sponsored by our good friends at Genesys. They created a cool bubble graph summarizing their opinion on “technology” vs “execution”, with bubble size mapping to “market impact”. We recolored the graph based on the usage of Twilio or Amazon, yielding another view into the dominance that we’re discussing here.
This post ended up being the 3rd in an (unplanned) series of posts. The others:
The field of customer service is very close to my heart. As a young student I worked as a customer service representative, and as a “young” professional, I’ve dedicated myself to a solution that improves contact center interactions around the world. The customer service sector is unique in that it requires both companies and people to undergo continuous improvement. Though, in my humble opinion, this is also what makes it so fun.
At Fonolo, we have distributed a ton of written resources to help professionals in the field, but of course people all learn in different ways. Today we’d like to share some must-watch TED Talks.
If you haven’t watched TED Talks before, you’re in for a treat. TED has done a fabulous job at building a global community of people across virtually every discipline. This organization posts free talks online, covering a slew of topics! Here are three videos that are sure to help customer service professionals.
How to Speak So That People Want to Listen | Julian Treasure
Julian Treasure offers some useful vocal exercises and shares tips on how to speak with empathy. The power of speaking is important for those dealing with customer interactions.
How to speak so that people want to listen | Julian Treasure - YouTube
Your Body Language May Shape Who You Are | Amy Cuddy
Social psychologist Amy Cuddy argues that “power posing” — standing in a posture of confidence, even when we don’t feel confident — can boost feelings of confidence. This is critical for front-line staff in a customer service organization.
Your body language may shape who you are | Amy Cuddy - YouTube
Walking in The Shoes of Your Customers | Nigel T Packer
Since customer service has become more digital, it’s important to understand the customer journey from an online perspective. Nigel Packer has provided businesses with a wealth of understanding in the way we use the internet and the irritations that make us want to throw our mobiles, tablets and PC’s out of the window.
Walking in the shoes of your customers | Nigel T Packer | TEDxSwansea - YouTube
No Soup for You!
Ok, this one is just for fun. Jerry, George, and Elaine patronize a new soup stand Kramer has been praising. Jerry explains that the owner, Yev Kassem, is known as the “Soup Nazi” due to his temperament and insistence on a strict manner of behavior while placing an order.
Rumors broke on Friday that Twilio will be launching its own call center product called “Flex” next month. If true, this would be a major shake-up of the cloud call center world. There are already many cloud call centers available, but this one is different.
First, Twilio has strong financial resources to develop and market this new product. Second, Twilio has an advantage over most other competitors in that it runs a massively scaled, global telephony network. Third, and most importantly, Twilio has – until now – been solely providing call center building blocks that other call centers were built on. Now, Twilio will be competing with its customers, at least to some extent.
How big of an impact will this be? It really boils down to one question…
Twilio essentially created, then dominated, the category of “Communication Platform as a Service”. (Voxeo deserves a lot of credit as a pioneer as well, but they never achieved the global scale that Twilio has. Their “Tropo” technology and team live within Cisco.) Other competitors in the CPaaS space are running far behind the leader: The aforementioned Tropo, Nexmo (now owned by Vonage), Plivo (still independent) and Zang (owned by Avaya, but probably will be renamed as part of Avaya’s pivot to cloud). For more on these see Twilio, Tropo, Nexmo, Plivo… ZANG! What Does it All Mean?.
The keys to Twilio’s success, in my opinion, are:
Developer Marketing From day one, they focused their marketing towards developers recognizing the trend that IT purchases and decisions were starting to be made from a “grass roots” level inside large organizations, rather than from the C-suite down.
API Focus They strongly connected the company’s identity with APIs. This formerly geeky term has become much more common, and now even mainstream publications like Forbes talk about the “API Economy”. The API focus also carried through to pricing: everything is sold per-minute or per-use; and the go-to-market strategy: exclusively self-serve. I remember seeing a panel with a number of call center executives. One of them said, “Our software has a full API”, the Twilio guy responded, “Lots of products have APIs, our product is an API”. Mic drop.
Platform Not Product
Related to the API focus is the concept of staying “low” in the product value chain. If companies are going to build their products on top of your services, they want to know that you’re not going to also use those services and compete against them.
With the launch of a call center product, Twilio is breaking all three of the guidelines above, at least to some extent. That doesn’t mean the move is bad – companies often adapt as they grow. Now that Twilio is a $400 million public company, it needs to keep finding growth areas, and that may require re-inventing itself. (A more pessimistic view is that the short-sighted pressures of public company investors are forcing it to divert from what’s been a successful strategy.)
What’s the Impact?
In a blog post last month (The Hidden Power Structure of Cloud Call Center Vendors) we asked: “Will Twilio use its unique position to give its in-house call center an advantage over all the other cloud call centers running on its platform?”. I guess we’re about to learn the answer to that question.
The companies who built their call center on Twilio’s platform, are likely at the edge of their seat right now: Talkdesk, NewVoiceMedia and Serenova. (There may be others as well.) Those three are all significant players in the cloud space, so this is not a trivial issue.
The chart is based on research from Ovum (sponsored by our good friends at Genesys). You can grab it here,.
There’s Lots of Room
Keep in mind, that this is not a zero-sum situation. There is still a huge opportunity ahead for cloud call center. Although we are already a decade into the migration away from on-premise, growth rates are still impressive: 23.6% according to Markets and Markets. That same report predicts an increase from $5.43 billion in 2016 to $15.67 billion by 2020.
Finding The Balance
The motivation to move “up the application stack” is no mystery: the higher you go, the more value you capture and the larger your revenue-per-deployment. Furthermore, moving up makes your product less of a commodity. The question is, can Twilio find a balance between moving upwards, and not alienating developers?
According to this story in TechCrunch, an internal memo shows that the company is indeed concerned about the impression that it is competing with its own customers. Their defense, according to the story, is that Twilio Flex will “…put an emphasis on the developer experience… offering basic building blocks to power the communications experience, single sign-on and integration points… it’ll take some extra integration work on the side of the customer to make it work.”
The language used there is carefully chosen. Twilio already has “building blocks” for call centers; that’s exactly what Talkdesk and the others are using! And Twilio has already used it’s own building blocks to deploy large call centers. For example, ING used Twilio to replace a legacy Avaya call center. So what’s different here?
What to Watch For
What, exactly will Flex be? A self-serve, ready-out-of-the-box product? Or attaching a brand name to an existing professional services team? (i.e. productizing what they did for ING.) If it’s more the latter, the impact may not be that great.
If you want to boil it down to a single question, it’s this: “Will Twilio announce a per-agent-per-month price?” That question doesn’t capture every nuance, but I think it’s an important fork in the road. Right now, all the call center components that are available from Twilio are priced individually and “per authentication” or “per task”. That makes it difficult to compare shop against the other cloud call center providers. If we see a per-agent-per-month price then “it’s on”.
One thing is for sure: Twilio’s keynote at the Enterprise Connect conference just moved to the top of the “most anticipated” list.
The relationship between contact centers and their customers can be a volatile one. Sometimes the experience is just not up to par, other times customers are ranting and raving about how happy they are. I’m sure your contact center can relate to both sides of the spectrum. Just keep in mind, there are always things you can do to increase the amount of positive outcomes you receive. Yesterday, Cupid drew his bow to embrace the love between contact centers and customers. After you put these strategies in place, be sure to review them again and again – consistency is the name of the game.
Here are five things you can do to take your contact center to customer relationship center.
1) Rethink Your Channels
Go beyond the standard call center metrics! Find where your customer lives and expose your brand to those channels. If it’s social media, make sure you’re proactively engaging with them on those particular channels. Doing this often translates into positive customer experiences, leading to improvements in customer loyalty, and ultimately, brand perception.
Technology has made it simple to track customer preferences, and big data provides trends and insights. Companies can easily understand a customer’s likes, dislikes, preferences, and buying patterns. Organizations that use this data properly can give their customers a better and more personalized experience, outshining the competition.
4) Motivate Your Front-Line Staff
Studies have shown that call center agents quit most often because of their work environments rather than their compensation. Companies need to find more ways to increase agent engagement, improve coaching, and motivate employees.
5) Invest in Smart Software
Arming your agents with the right tools is one way to keep them motivated at work. When you provide agents with the proper infrastructure you reduce the burden put on them to manage customers, and at the same time you’ll also improve the customer experience. It’s a no brainer!
We hope Cupid’s tips are able to help! Remember, better customer relationships start at the call center.
Chat-based customer service is growing quickly. But there’s one central question that I think is not being addressed as critically as it should: Is chat acting as a substitute for phone calls? This is a harder question to answer than you might think.
First, to be clear, I’m not talking about chat-bots, i.e. automated self-service, I’m talking about a conversation with a human agent via some form of text-based channel. (Chatbots are an important topic too, which we’ve covered separately here and here, and will revisit shortly.)
If it is proven that a significant amount of conversations that would have been voice are moving to chat, that has huge implications for the 40,000 US call centers, and the $25 billion BPO industry. But note the italicized part of the sentence; That crucial point is often glossed over by analysis of this topic. Why is it hard to get a definitive answer?
Is Chat Replacing Phone Calls?
Before we dig in, it’s worth restating the focus. It’s a really unfortunate coincidence that “chat” and “chatbots” ended up so lexically similar. This post is only concerned with human assistance via chat, not automated responses.
[It’s doubly unfortunate that we also use “chat” to refer to interpersonal communication (like “chatting over Skype”) and to team collaboration tools (like Slack, Microsoft Teams, Jive, and others). That one little syllable is carrying a lot of weight right now!]
So we’re really focussing on the two ways human agents can deliver real-time customer service: voice and chat. Once again, the key question is:
Is chat becoming a substantial substitute for phone calls?
If so, it leads to the more powerful question:
Can we project this forward and expect a decline of voice agents and call centers?
Of course, we can find lots of anecdotes. Everyone can tell you about a great chat experience they’ve had (or a bad one). Chat vendors love to tell anecdotes about great deployments. But the plural of “anecdote” is not “data”. What does the real data tell us?
Well, we have lots of data that answers similar questions, but none that really hits it square-on. Some examples, in increasing order of helpfulness:
1) Data Showing The Overall Volume of Messaging
“There are 20 billion SMS messages per day.” [source]
“Chat is more popular than social media.” [source]
Flaws: Doesn’t distinguish customer service from person-to-person communication; or between human-generated messages from automated ones. Counts each “turn” in the conversation separately, leading to a really high number. (How many individual messages would have been required to replace the last phone call you had with a company?)
2) Data (Via Surveys) About the Growing Consumer Preference for Chat
“42% of consumers say that they prefer live chat functions because they don’t have to wait on hold.” [source]
Preference doesn’t always translate into usage. Someone might have that preference, but not actually act on it when the time comes, others might have the preference, but chat isn’t available from the company; or they don’t know how to chat with the company.
[By the way, if you’re interested in fixing consumers’ aversion to waiting on hold, call-backs are just the thing.]
3) Data Showing More Companies Deploying Chat
“1 in 4 US contact centers are looking to implement web chat within the next 12 months.” [source]
Flaw: Doesn’t translate directly into usage.
4) Data Showing Growing Usage of Chat
“Contacts handled by chat increased from 1.6% to 2.6% between 2015 and 2016.” [source via here]
Flaw: Often fails to distinguish between the use case.
Let’s explore that last example: remember what we’re trying to understand is the substitution factor. Consider the following use cases:
1. Customer uses chat to find the store’s opening hours, or if an item is in stock. This is replacing what might have been a self-serve web interaction or a self-serve IVR interaction.
2. Customer uses chat, but their issue isn’t resolved and a subsequent phone call is needed.
3. Customer chats with agent and then it escalates to a voice call.
In all three of these cases, a phone call was not replaced by chat.
I am keeping an eye out for data that tackles this definitively. Please let me know if you see any!
From Another Perspective
We can also look at this issue from the “other side”: Are customer service voice calls declining? Here, data seems to say no. That doesn’t mean that chat-substitution isn’t happening, because total volume of all transactions might be growing. But, if we did have a drop in phone calls, that coincided with the rise of chat, that would be a tempting correlation to make.
Chat is Vital and Here to Stay
This post is not intended to disparage the value of chat. There exists lots of solid and positive data regarding chat deployments: High satisfaction scores from chat interactions; agent head-count reductions; cost savings; increased NPS. I am overall bullish on chat as a big part of the customer service mix.
Even if there isn’t a substitution effect, chat is important. If there is a substitution effect, it’s a big story, but we simply don’t know yet. I think it’s important to keep that in perspective and not get ahead of the data.
Analyst Donna Fluss summed it up well in a recent post:
Chat is an excellent communication channel for certain types of interactions, but in most cases, chat remains a valuable complement to, not a replacement for, the voice channel for customer service. Despite chat’s many advantages and strong following, it cannot be viewed as a replacement for phone calls. DMG research has shown that in times of need, when emotions run high or time is short, people of all generations (Millennials, Generation Xers, and Baby Boomers) prefer to call a company. No matter how good a chat agent is, it’s much easier to pick up subtle cues and personalize a conversation’ when you’re actually speaking with someone.