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Customer Retention, Cost Containment Priority: Dimension Data Annual Contact Center Survey

September 17, 2009

Contact centers are on the way of getting it right: creating value for enterprises at optimized costs, but they still have ways to go. Those are among the key findings from Dimension Data’s just-released 2009 Global Contact Center Benchmarking Report, an annual survey of more than 550 centers in 36 countries across five continents.
 
Companies are slowly but at least getting the message that it is more profitable to focus on retaining customers than to slash-and-burn existing ones. More than 20 percent of respondents named customer retention as the number one trend affecting their contact centers, up significantly from last year.
 
 “It’s widely accepted that it is seven to eight times more costly to win a new customer than retain an existing one,” says Martin Dove, global managing director for Customer Interactive Solutions, Dimension Data. “For this reason, companies are waking up and focusing their energies and resources on delivering better service to the customers they already have.”
 
The report also unveiled clear signs that companies are looking at new ways to place customers at the centers of their businesses. Dove reports that more businesses are offering more options to customers to improve overall service levels. For example, it is seeing more contact centers – a rise of 10 percent to almost 70 percent – focus on how to streamline and simplify processes, and also offer more self service options for their customers’ convenience.
 
Changes in customer behavior are also prompting contact centers to focus on the new ways people prefer to communicate with them. In fact, 52 percent of consumers between the ages of 16 and 34 are using the Internet as their first means of contact.
 
“As younger consumers change the way they interact with businesses, and in light of the global rise in popularity of social networking sites such as Facebook (News - Alert) and Twitter, companies need to find ways to offer these customers more communication choices, or face losing them,” Dove said.
 
Additionally, Dove said that the good news for consumers is that they should expect to see a greater degree of consistency and continuity across the board.
 
“While offering customers more choices, companies must understand that this means also ensuring the service remains the same, regardless of what channels customers use to talk to them,” Dove said.
 
Dimension Data is also seeing evidence of a more pragmatic and practical approach to Customer Relationship Management, or “CRM.” Much importance is being placed on this trend, with 60 percent of companies reporting they have ‘triggers’ in place to identify sales opportunities. Dove said that this will be one area of technology investment in the coming months as organizations look for new ways to identify and increase sales opportunities from inbound calls.
 
Even as more companies are recognizing the key role that contact centers can play in creating overall value for the business, they continue to remain focused on driving costs down, says the report. Some 66 percent of centers stated they have a strategy in place to cut the costs of serving customers, a year-over-year increase of 9.4 percent.
 
For example, the number of contact centers telling their customers about the benefits of using lower-cost methods of communication, such as the web and self service, has doubled to 36 percent this year. Dove said that this is an encouraging sign that companies are evolving. However, he warns this will only benefit the business if the lower cost options meet customer expectations. At the same time the global contact center industry is still relatively young and it may take some time to get the basics of cost optimization right.
 
“The important shift is away from pure cost optimization to the next stage of evolution where driving revenue and value becomes a priority,” Dove said. “While companies have focused on consolidating and rationalizing processes, functions and activities to cut costs, they’re now seeking ways to deliver more value to the bottom line.”
 
 “We expect this transition to value creation will take the next three to four years to fully take hold, and it is within this context that we expect to see investment decisions made. However we need catalysts to create this change, and the economic conditions of today may well be one of them,” Dove said.

Brendan B. Read is TMCnet’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.

Edited by Kelly McGuire

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