(Sources: Tractica, Credit Suisse, Digi-Capital, BI Intelligence)
Now think about this. What kind of experience did you have the last time you spoke to your internet provider? What happened the last time you tried to speak to your smartphone provider? I’m waging that the experience more than likely sucked. I’m pretty certain that you would have been on hold forever, spoken to someone who (at best) was apathetic, someone who didn’t really understand your needs. Probably someone who blindly followed a script and felt like they wanted to get rid of you as soon as possible.
So how can an industry that has been supporting it’s customers for over 10 years have got it so wrong ? The answer lies in Outsourcers. BPOs. Monster-sized Call Center vendors. Or more in the relationship between Outsourcers and the brands that they are representing.
Think about it. As the industry grew, so did demand for customer service. Volumes of interactions grew exponentially. At the time, technology was not capable of smoothing the growth. So brands looked to offload their customer service requirements to Outsourcers. Ultimately it was the cheapest way to manage the tidal wave of calls that they were about to drown in. Outsourcers were (are) good at hiring and firing people, resource management, rinse-and-repeat processes. They had the infrastructure, the real-estate, the footprint. So brands used these guys to manage the need.
However, price-point quickly became an issue. How do we do it cheaper ? Offshoring ! Put it somewhere where labor costs are cheap. Hence the rise of the Indian Call Center. The rise of the Phillipines.
But brands continued to push the Outsourcers for lower and lower cost of service. So the brands with high volumes used multiple Outsourcers, playing one off against the other to get a cent or two off the transaction price each time. So the service providers have huge margin pressure in trying to keep competitive. BUT they have a high cost base. Buildings full of people, telephony equipment with spare capacity to handle huge volumes of calls, software licensing for the thousands of people that they employ.
In order to stay alive, Outsourcers needed to sweat their assets, get efficiencies through technology, through process enhancements, through automation. This series of facts brings me full-circle to the beginning – you get a vanilla service from your Internet or phone provider, because the only way of Outsourcer can afford to run the service at the price the brand demands is to do everything as generically as possible and as quickly as possible.
· Scripts mean you can employ lower skilled workers who don’t really have to think for themselves.
· Feedback on what is really happening on the product in question takes time, costs money, so it’s not done. This feedback is invaluable to product teams, but often lost entirely.
· Reporting is on the generic SLAs – how many calls, when, how fast did we do things. None of it is really valuable or beneficial to the brand being served.
· Employees are not treated as well as they should be. It’s a modern-day production line where meeting SLA is the primary objective. Staff are not developed, it’s not really a career.
So, what does this have to do with VR and AR companies ? With Drone manufacturers ? With 3D Printing, laser engraving, desktop CNC ?
The key point is that you guys are on the cusp of huge growth. NOW is the time to start thinking about what you should learn from the lessons that the Smartphone guys went through. Do we as an industry want to repeat the past, or do we want to really do the job properly ? We have the ability to create a customer-centric world, engender huge loyalty to each brand, and embrace technology to really leap forward.
Craig Rich - Dec 2016