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Flat Customer Care Budget? Outsourcing May Be the Answer

by Mike Hasler in Contact Center Outsourcing, Customer Service Outsourcing, Mike Hasler

As we slowly emerge into recovery, the post-pandemic world looks very different and we’re seeing it with new eyes. Our social lives have shifted, our work environments have changed, and how we spend our money is also quite different. Today we look at how this last consideration applies to the way companies are investing in customer care.

We took a deep look at recent data published by Ryan Strategic Advisory, surveying more than 600 contact center decision-makers. Read on to discover our perspective and insights.

What’s the Outlook for Contact Center Budgets?

From consumers to small businesses to enterprise organizations, there’s no denying that wallets were squeezed in 2020 as the height of the pandemic took its toll. For contact centers, things got tight as many saw a sustained drop in contact volume. But equally common, depending on the industry, were spikes in volume, requiring immediate and significant investments in extra resources.

But what does such an unprecedented year mean for the years ahead in terms of contact center budgets? We’re well into 2021, and the good news is that, so far, just over half (52%) of companies around the world are expecting and experiencing a moderate or sharp increase in their customer care budgets. In the US and Canada, that looks like 56% and 52% respectively.

But that data is a little deceptive. First, it still leaves a significant portion of companies that are reporting flat or decreasing contact center budgets in 2021. Second, and of more concern, is that next year is likely to lose any positive momentum, with almost 70% of US companies, and almost as many worldwide, expecting their budgets to flatline or decrease by the time 2022 rolls around.

Why the sudden shift? One possible theory is that the pandemic forced companies to front-load their investments in response to pandemic-induced conditions. For example, as customer care teams migrated to work-from-home environments and consumers quickly came to expect 24/7 omnichannel functionalities, contact center investments followed quickly, in the form of remote infrastructures, cybersecurity, and omnichannel solutions. Now those capabilities are in place, budgets are backing off.

Where Are Companies Prioritizing Contact Center Investments?

Regardless of a company’s intent and capability to invest budget in their customer care departments, there are some specific areas they will continue to prioritize. In particular, data protection and business continuity continue to be two critical pieces of the puzzle. Data protection has been an ongoing trend in recent years, as contact centers continue to gather, store, and analyze exponential amounts of customer data. Data is the essential driver of better customer experiences, so this priority is likely to remain for years to come.

On the other hand, business continuity has taken on even more importance as a direct result of the pandemic. 2020 saw business disruption in the contact center like never before. The resources, technology, and human capital it took to keep customer care efforts consistent and effective were monumental. And the pandemic opened the eyes of business leaders to the devastating impacts of events outside of their control—surely COVID-19 won’t be the last—and so business continuity plans and associated investments naturally became a top priority. We are hearing from organizations keen to outsource for the first time primarily for business continuity reasons: mitigating risks by leveraging hybrid work-at-home plus on-prem solutions and leveraging new outsourced partnerships to enhance their internal models.

It makes sense, then, that the next priority for businesses worldwide is cloud-based contact center solutions. Virtualization isn’t going away with herd immunity. It’s here to stay, and customer care initiatives must keep up.

Finally, among other priorities, there has been an increased interest in investing in diversity and social inclusion programs. For some companies, this has been an ongoing cause for many years, but others have been sparked by the social unrest of 2020. Diversity and inclusion in the contact center is critical for many reasons, but in particular can help companies interface with a diverse customer base in a more authentic and compassionate manner.

How Can Contact Center Outsourcing Help?

So, some companies have the budget to pull the trigger on these and other investments in their contact centers. But for the majority that shortly expects a flat or decreasing customer care budget, how can these priorities be met?

For many companies, the answer can be found with an outsourced contact center partner. Though there are a variety of contact center pricing models, your typical outsourcer will have an all-inclusive price “per agent hour.” That number not only includes compensation, benefits, and taxes, but also the cost of technical infrastructure, management and HR costs, and even intangible costs like that of attrition and retention (find more here about the costs of in-house versus outsourced contact centers).

Even more importantly, that “per agent hour” cost includes your outsourced partner’s efforts and initiatives in the very areas you might be prioritizing—data protection, business continuity, cloud solutions, and more.

In many cases, those factors aren’t just priorities, they’re some of the biggest business challenges you face. Business continuity, for example, is ranked as the largest challenge for businesses with in-house contact center operations. This is closely followed by the challenge of recruiting the right agent profile. The fact is the right customer care partner is more prepared to quickly overcome these challenges—and often has already done so—at no extra cost to you.

Essentially, if your in-house contact center budget is flat, transitioning to an outsourced model will likely help you meet your priorities without investing additional funds in the research and implementation of further resources.

Curious about contact center pricing models? Click here to find out more.

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