Life for the contact center looks good. As enterprises deal with fallout from the recession over the next few years, they’ll outsource more of their customer service functions. And, in a positive domino effect, thousands of new jobs will be created. The only caveat for the call center community? Don’t grow complacent, because clients’ expectations for quality will be higher than ever.
According to new data from research firm Ovum, enterprises’ in-house call center budgets will stay at their constricted levels for some time. Throughout North America, Western Europe, Australia and New Zealand, only one in five big companies thinks its customer relationship management budget will grow this year – that leaves 80 percent certain their finances will contract or stay flat, Ovum said.
The money problems, of course, all stem from the global economic collapse, which has forced firms worldwide to cut spending on a number of functions, including customer service. For enterprises with their own call centers, trouble is brewing. The continued pressure on their budgets is forcing them to decide which is less risky – running a pricey in-house resource or relying on outsourcers to maintain brand reputation. And enterprises need to make a move soon, said Peter Ryan, Ovum’s lead analyst.
“Limited cash on hand means they are unable to invest in new and leading-edge technology, and agent management will be compromised in terms of investing in ongoing training or increased staff incentives,” Ryan said. Plus, if they’re not careful, those businesses will incur “the erosion of the end-user relationship over the long-term.”
The best solution tends to be using a call center provider whose agents deliver “superior” service, Ovum found. That means enterprises are looking for more than just cost savings, Ryan noted. Besides looking to outsourcers to lower expenses, companies want those vendors “to develop leads on the back of service calls to the extent of converting them into cross-sales/upsales of other products and services,” Ovum found. “This will reduce the actual cost of the contact center as a service, while at the same time increasing overall profitability.”
Enterprises are catching on to that reality and the contact center industry is benefiting. Analyst firm Frost & Sullivan says United States contact center revenue will top $29 billion by 2014. Similarly, the United States Bureau of Labor Statistics projects the customer service representative sector will account for the third-highest number of jobs by 2018, just behind healthcare professions.
To that point, outsourcers are bracing for impact. For example, both Convergys Corp. (CVG) and Ryla Inc. say they’re hiring to keep in pace with increasing demand. Convergys is hiring 120 agents in Hickory, N.C. to work exclusively with telecommunications clients, while Ryla plans to add 1,200 more jobs by 2011. Last year Ryla more than doubled its agent workforce and opened a second facility in Alabama to accommodate growth.
Still, contact centers have that quality thing in mind. Yes, adding jobs is important, said Mark Wilson, Ryla’s co-founder and CEO, but “we also know that we need a workforce that feels empowered and has a high level of job satisfaction ... for us to deliver unparalleled service to our customers which, in turn, creates more business opportunities."
Ovum said that is exactly the right strategy, and one that marks a shift from the end of 2008 and beginning of 2009. In that period, recession-hit companies put the most emphasis on using lowest-cost providers. Now, those same businesses see more value in contact centers that help them up- and cross-sell, and develop end-user loyalty.
