Authored by Jon Arnold from J Arnold & Associates
For most contact centers, the main focus is now about customer experience (CX), and the pathways for doing so are increasingly built around artificial intelligence (AI). As with all other facets of business operations, solutions for the contact center are technology-driven, and there’s nothing inherently wrong with that. The benefits of modern technology are undeniable – presuming applied effectively – and AI in particular is showing transformational potential beyond anything that has come before it.
With so many contact centers struggling to meet customer expectations - along with being under growing pressure to improve quickly - it’s not surprising to see the urgency for adopting AI. There are very real constraints posed by existing, legacy-based systems, and AI offers solutions that can be deployed right now at a manageable cost. At face value, that may seem to be the right approach, but regardless of how well AI performs, this alone will not solve all the ills facing the contact center.
..."regardless of how well AI performs, this alone will not solve all the ills facing the contact center."
The silver bullet nature of AI makes it appealing, but contact center leaders cannot lose sight of the current realities in front of them. For the foreseeable future, customer service will largely be about human interactions between live customers and live agents. Aside from routine, transactional inquiries, the key driver for CX ultimately distills down to how effectively agents deal with customers in the moment, and that moment usually occurs over the course of a phone call.
"...customer service will largely be about human interactions between live customers and live agents."
A key use case for AI in the contact center is self-service, and while better forms of automation can really help CX, chatbots can only address a small portion of customer inquiries. The day may come when both customers and agents interact solely through personal bots, but for the moment, addressing today’s customer needs is paramount for CX.
Two traditional contact center KPIs are especially relevant here, and I’ll address each in this post – not just because they are important for CX, but also because there is much to be gained from making improvements. First would be First Call Resolution (FCR), followed by the closely-related Average Speed to Answer (ASA).
Of all the KPIs used in the contact center, this is the one that matters most to customers. Most KPIs have been in place for many years, but are used to improve operational performance more so than customer satisfaction. This is largely due to the fact that most KPIs were developed before CX became strategic for the business, and were focused internally on operations and agent efficiency. With CX now being the priority in many businesses, it should be evident why First Call Resolution (FCR) is such an important metric. Not just for making CX better, but as Figure 1 below shows, it’s also the most important factor for customers.
"...most KPIs were developed before CX became strategic for the business..."
It stands to reason that when you properly address what’s most important to the customers, you’ll get the best results. AI can play a key role supporting agents with FCR – such as with sentiment analysis and virtual coaching – so this should be a prime use case for AI. Even without AI, however, the takeaway here should be to focus on the customer’s needs, and with FCR being the most important thing for them, that should be the starting point for delivering a better CX.
While that may be the correct intention, contact centers have been doing a good, but not great job in terms of execution. Figure 2 from the same study shows that FCR rates have hovered in the range of 70-75% for quite some time. While the trend line shows gradual improvement during this timespan, roughly one in four inquiries are not resolved in one call. In time, AI may help improve that, but no contact center can accept this as the status quo if they are truly focused on making CX better.
At face value, the need to improve FCR should be clear, but the problem set is more acute in some sectors than others. Many customer service needs are universal, but every vertical market has specific and distinct issues that contact centers must support. Customer needs aside, some sectors are more competitive than others, and where customers have more choice, the tolerance level for poor CX is lower. Also, some sectors are more regulated than others, in which case, there may be less emphasis on being customer-centric.
"...where customers have more choice, the tolerance level for poor CX is lower."
Given all of these variables, it’s not surprising to see varying FCR levels by sector. As Figure 3 below shows, FCR is particularly poor in Insurance, Energy and Retail. Across the board, each sector may have its share of high FCR – albeit small in most cases – but the incidence of low FCR is quite high in these three verticals. For vendors looking to help contact centers address improving FCR, these would be attractive segments to focus on. For contact center leaders within these verticals, this data underscores how they are lagging here, and if their mandate is to improve CX, this should support their business case for targeted investment.
Important as First Call Resolution is – both to customers and contact center leaders for improving CX – it’s not the first thing that happens when customers make inquiries. In fact, the decision to contact your company via the contact center, may very well be the last step in their journey to resolve an issue. Today’s digital-first customers will typically do online searches and pursue self-service options first, and only when those avenues are exhausted will they make the call.
At this point, the customer may have had a frustrating journey of blind alleys that only adds to the anxiety around the actual issue itself. This could easily compound to the point where anxiety is bordering on anger, and this is often due to the company having ineffective channels for customer engagement, which only exacerbates the issue at hand. All of this points to the fact that in today’s environment, when customers do call the contact center, there’s usually a lot on the line. Beyond solving the problem, the onus is on the agent to represent the brand well, and to convey that the customer is valued and the company is listening.
This is often easier said than done, but none of that can happen until the customer is actually speaking to the agent. There is one small, but incredibly important link in the chain that is easily overlooked for CX – hold time. While all the issues in Figure 4 below have merit, none is more problematic for customers than waiting too long to speak to an agent. With 36% saying “very often” for long wait times, and a further 41% saying “fairly often”, it’s fair to say that three in four customers have an issue here.
This brings us to the second factor that is highly important for customers in terms of overall CX. That would be Average Speed to Answer (ASA), which reflects the second part of the on-hold experience. The first part would be the act of being put on hold – which is what most customers expect, since contact centers don’t have the luxury of having enough live agents to answer all calls as they come in.
That’s less problematic than the second part – the length of time being on hold – especially since the customer usually doesn’t know how long the wait will be. It stands to reason that the longer the wait, the greater the anxiety, and the greater the pressure on the agent to resolve the issue on that call.
As Figure 5 below shows, ASA has been trending in the wrong direction, although 2022 saw a marked improvement. Even with this one-year improvement, ASA has been steadily getting longer, and the call abandonment rate has been hovering around 6% for many years now. These KPIs do not make for great CX, and along with FCR, they represent important areas for improvement for contact center leaders.
Specific solutions to the above are beyond the scope of this article, but the main takeaway is to identify two root-cause CX issues from the customer’s point of view. AI has many practical applications in the contact center, but those that focus on operations or agent experience will largely be transparent to them. This may be the mindset of contact center leaders grounded in legacy technology, but if better CX is the objective, the focus needs to be more customer-centric.
Both FCR and ASA are key CX drivers for customers, and AI can be impactful here, but only if contact center leaders choose to make that a priority focus. There are many applications of AI that can improve FCR and ASA, but they are only part of the solution.
Agents need access to the right resources at the right time for FCR, and that’s not solely a function of AI; the important thing is for contact center leaders to recognize that the best way to improve CX is to focus on the issues of greatest importance to them.
The same applies to ASA – it’s not realistic to eliminate being put on hold, and customers can accept that under the right conditions. One would be shorter hold times, which AI can help address with intelligent routing. Second would be to make the on-hold experience something more than dead air, repetitive messages and elevator music, so customers are in a more receptive state of mind when finally connected to a live agent. This is another area where AI can help, such as with personalized options that let the customer choose what they would want to hear while on hold. Contact centers do little in this area. Improving the current customer experience must remain a priority as we build the customer experience of the future.
As Principal of J Arnold & Associates, Jon is an independent research analyst providing thought leadership and go-to-market counsel with a focus on the business-level impact of disruptive communications technologies.
