ISG Software Research Analyst Perspectives

I have written several times that the market dynamics around customer relationships are changing faster now than at any previous time in my experience. Smartphones and tablets are changing the way consumers communicate, social media has opened up a channel of communications over which companies have little control, and finding new customers has become harder, so companies are placing more emphasis on retaining existing customers and increasing the amount of business they do with each. One option for organizations to address these challenges is to outsource the task to a third party that specializes in these issues. Transcom is a large provider of outsourced customer service. It emphasizes improving the customer experience and increasing revenue per customer. Transcom operates globally and has more than 24,000 employees. Its core business model is centered on the telephone as the primary means of communication, and its revenues have come largely through the amounts of time its service representatives spent on the phone with customers. However, although its customers are still turning to outsourcers to save money, Transcom is finding they now place more emphasis on customer loyalty, generating additional revenue from their customers, and the customer experience. This is causing a change in reward models for Transcom, which increasingly depends on the levels of revenue generated by its agents, not just the time they spend on the phone. Operations have changed as well. Companies are asking Transcom to support additional channels of communication, including social media. To meet customer expectations in this area requires tighter integration among all channels of interaction because customers want a consistent experience regardless of channel. Another consequence of these changes is that companies seek more customer-related information, which requires the outsourcer to use more advanced analytics tools when producing reports and analysis for its clients. These lessons learned by Transcom are applicable as well to in-company contact centers and customer interaction-handling operations. Each of them reflects our research into customer relationship maturity, which shows that the most mature companies now support multimedia customer interactions, including social media, are increasingly adopting speech, text, process, predictive and social media analytics, and focus on customer retention and the customer experience. None of this is easy in terms of people, processes, information or technology. For companies unwilling or unable to address these issues, turning to an outsourcing provider that has adapted to the changes is one option to consider. How well are you managing customer interactions? Please share your experience and collaborate with me on Transcom. Regards, Richard Snow – VP & Research Director

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