Business

Video: Contact Center; From Cost Center to Profit Center

Published November 26, 2019·Written by Wonderflow

cost center to profit center
On 8/10/2019, Riccardo Osti gave a speech on Customer Contact Week in Amsterdam about the use of customer feedback and the need for modern companies to turn customer-centric. In this video, you get a taste of what transpired on the event and the theme surrounding Riccardo’s speech. So what does it take to become customer-centric and activate the full potential of the contact centers? Three things:

  • Strategy
  • Technology
  • Customer-centric KPIs
If you enjoy this type of videos, subscribe to Riccardo Osti’s channel in YouTubeThink of a car manufacturer in the old days, like Ford, when it launched the iconic Model T. It was the first ‘mass-production’ car ever, it came only in one color (black) and…that was it. The more cars sold, the lower the (fixed) production costs.

Usually, Product-Centric companies have their competitive advantage stored in product expertise. Remember this. It shouldn’t be surprising – in fact, the more we become ‘experts’ of technology, the more we irrationally feel that we don’t need to listen to customers.

Generally, Customer-Centric companies try to align development and delivery around the current and future needs of a set of customers. This sentence is very important, as it introduces three new concepts that are not present in a strict Product-Centric culture:

  • Future
  • Segmentation
  • Personalization

In fact, Customer-Centric companies try to maximize shareholders’ value by distinguishing highly profitable clients from less profitable ones, introducing the concept of lifetime financial value. Hence, Customer-Centric brands do not only care about today’s revenue but invest to cultivate clients that may spend more in the future. As a consequence, Customer-Centric firms’ competitive advantage is in the relationship experts, and no longer in the product.

Sounds good, but how do Customer-Centrics execute their plan? Mostly by focusing on these three tactics:

  • Customer development: make existing clients more valuable
  • Customer retention: cultivate clients so they don’t leave for another brand
  • Customer acquisition: focus on behaviours, not on demographics

So why is it so important that executives know and understand the product and consumer-centric concepts? Because moving from Product-Centric to Customer-Centric requires a cultural change from the above. Changes may impact design, structure, processes, metrics, and even incentives. The focus needs to move from ‘sell now’ to bigger, and more long-term goals.

What if you realise that your company is a Product-Centric company? First of all there is no good or bad here. There are many successful product-centric companies out there, but it is also true that in highly competitive markets most brands are now becoming Customer-Centric.

What if you aren’t an executive? Well, you can start your Customer-Centric transformation without having the support of the top management (yet). Try to experiment with this routine:

  • Ask your clients/contacts/colleagues for feedback after an important interaction
  • Write it down, segmenting by different customer persona
  • Collect them during the week, and ask at least another colleague to do so
  • Organize a 20-minute meeting with your team to share the feedback, discuss learning, and think about improvements
  • Implement the changes into your day-to-day while you keep track of new feedback
  • If results are encouraging, share them with the management
  • Advertise the changes to your customers, as they would be delighted that you heard their voice.

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