Proactive vs. Reactive: How Savvy Use of Analytics Helps Contact Centers Navigate and Adapt to Uncertainty

The disruption and uncertainty caused by the COVID-19 pandemic has impacted virtually all businesses within all industries, of all sizes, and all around the world. The impact varies across all businesses depending on their unique dynamics; however, many contact centers were caught unprepared by the pandemic’s economic fallout and continuously struggled to adapt—with many still struggling to do so. The reality is, COVID-19 is hardly the only disruption firms have faced (or will face) during their existence.

Firms have always experienced unpredicted disruptions, ranging from major economic downturns, such as the Great Recession of 2008, naturally occurring events (like Hurricane Katrina, earthquakes), geopolitical events, and even new or changing regulations. Disrupting, unexpected events pose a unique challenge for businesses to adapt to — but these challenges can represent opportunities for businesses to distinguish themselves from competitors. By rapidly adapting to (and even leading) change, contact center activities will be aligned with the ‘next normal’, giving proactive contact centers an edge. 

The ability to anticipate ever-changing factors plays a critical role in contact center success. This is where the difference between ‘proactive’ and ‘reactive’ comes into play. Proactive firms continuously monitor changes in customer behavior and expectations as well as broader market dynamics. This allows them to anticipate how those changes will affect their activities, plan how they should respond, and manage change in a timely and effective fashion, minimizing potential disruptions to their activities. Proactive contact centers rely on analytics to leverage customer experience (CX) and operational data and infuse artificial intelligence (AI) and automation capabilities, so they can analyze and act on vast volumes of data—both structured and unstructured—in a timely and accurate manner.

On the other hand, reactive contact centers rely on business “carrying on as usual”. In other words, they only act when they observe changes impacting their activities — unlike their proactive counterparts that use CX and workforce data to anticipate potential changes and be prepared to address negative impacts, or even circumvent them entirely. Let’s now analyze which approach (proactive vs. reactive) is more successful in helping contact centers achieve desired results—and building blocks contact centers can use to maximize their success.

The ROI of Becoming More Proactive

Contact center leaders typically aim to achieve multiple goals at the same time. Aberdeen’s survey, The Intelligent Contact Center (June 2020) showed that improving the results and consistency of CX activities is the number one objective driving contact center leaders. This is followed by the second objective: controlling and reducing operational costs — an endeavor that requires ensuring operational efficiency. The third top objective is improving the financial health of the business through facilitating revenue growth by maintaining customer loyalty and influencing client spend.

The disruptions companies observe on their activities have a direct impact on their ability to achieve all three of these objectives. For example, changes in regulation may impact operational efficiency and costs, technological advances may influence buyer behavior, an economic downturn may decrease customer spend and make it harder to retain current clients. Data shows that proactive contact centers lead their reactive counterparts in achieving all three of their top objectives:

Improving CX results and consistency

Figure 1 reveals that proactive contact centers achieve 20x greater annual improvement in customer satisfaction rates than their reactive counterparts (14.0% vs. 7.0%). They are able to delight their clients more easily and effectively than others by consistently tracking CX and operational data to monitor changes in customer behavior and consumer expectations. They then develop plans that adjust their activities to align with the evolving needs of their current and potential clients. In the next section, we’ll highlight the key building blocks that proactive contact centers use to do such monitoring, analysis, planning, and execution.

Figure 1: Proactive Contact Centers Enjoy Superior CX Performance Improvements

Happy customers reward proactive contact centers with their loyalty and increase in spend. Figure 1 shows that proactive firms enjoy 5.4x greater annual increase in customer retention rates (17.9% vs. 3.3.%) and 2.3x greater growth in client spend (11.1% vs. 4.8%) compared to their reactive counterparts.

Driving operational efficiency to control and reduce operational costs

When operating amidst economic uncertainty, business leaders aim to minimize risks by controlling and reducing costs thus maintaining the quality of their activities with minimum operating costs. In the contact center, this requires improving efficiency when delivering customer service. Efficiency is measured in various ways. Some of the most common metrics used to track and measure operational efficiency in the contact center include agent productivity, first contact resolution rates, service-level agreement (SLA) attainment rates, etc. Figure 2 shows that proactive contact centers outperform their reactive counterparts in year-over-year (YoY) improvement of each of these metrics.

Figure 2: Firms with a Proactive Approach Continuously Improve Efficiency

Adopting a proactive approach enables firms to boost efficiency. Instead of being caught off-guard by disruptions, proactive contact centers have already anticipated how their activities will be affected and have developed plans. As a result, proactive companies can act more quickly and efficiently to address disrupting factors. For example, in the early days of the COVID-19 pandemic, firms had to rapidly transition to a remote work model to continue serving customers while simultaneously observing new local regulations restricting working in a call center. Firms that already had remote work capabilities and plans to operate through a remote workforce were able to act more quickly to adapt to the changes impacting their work environment. Meanwhile, reactive contact centers didn’t have plans and weren’t agile enough to quickly adapt to a remote work model. They fell behind in agent utilization rates, agent productivity, SLA attainment, and ultimately observed poor CX results due to inefficient service delivery.

Enhancing the financial health of the business

Times of change can also be times of opportunity. Savvy firms recognize this and take the opportunity to outpace their peers through efficiency in service delivery and customer delight, ultimately enhancing their financial strength. The efficiency gains observed by proactive contact centers enables a reduction of service costs by 2.2x more than their reactive counterpart’s YoY (8.3% vs. 3.8%). In turn, they incur reduced financial risk from disrupting events (see Figure 3).

Figure 3: Proactive Firms Outperform Reactive Ones with Lower Costs and Greater Revenue

Figure 3 shows that the planning and preparation done by proactive contact centers also helps them grow their top-line revenue by 8.4% YoY, whereas firms that simply hope their business stays as-usual and only react when change happens, observe 1.1% worsening (decrease) in their annual revenue. This 9.5% gap between proactive and reactive firms indicates that proactive firms are more successful at anticipating changing business dynamics, analyzing how these dynamics will impact their activities, and determining strategies that can help them quickly adapt to such changes. Taking rapid and well thought out action allows these firms to pursue opportunities in increasing wallet share from existing clients and capture net-new customers who abandon competitors due to poor service delivery during times of change.

Don’t Get Caught Unprepared: How to Become Proactive

All firms have specific goals, but, while reactive firms only manage their activities in the context of the current business climate, their proactive counterparts continuously assess if business conditions will change. They formulate plans outlining how to maximize their ability to quickly adapt in changing conditions while simultaneously pursuing their goals. When formulating plans, proactive firms follow three building blocks that all firms should consider using to improve agility and adaptability in changing business conditions:

#1: Holistic real-time views of CX and operational data

It’s not always possible for business leaders to predict future events. For example, it’s not possible to predict if and when a hurricane will affect a call center in a specific region, or if a new regulation will alter the existing ways of doing business. However, firms can develop contingency plans for how to respond if a weather event affects their activities in a specific region. Similarly, when a new regulation is in the discussions phase, business leaders can monitor these discussions to learn related details, determine if and how it may affect their activities, and design plans on how they will respond should the regulation pass. These are processes contact centers can use to transform their activities from reactive to proactive when they don’t have exact data on when exactly a weather event, a pandemic or a new regulation will affect their activities.

Meanwhile, there are disruptions that happen both rapidly and over time that can be predicted by using existing CX and operational data. As an example, in the early days of the COVID-19 pandemic many people lost their jobs, were furloughed, or were uncertain about their financial wellbeing. This led to a sudden spike in customer requests for delayed payments across the board (e.g., credit card payments, mortgage payments, and other loans). Financial services firms that monitored the initial job loss reports and overall economic activity data were well-positioned to take a proactive approach. They enabled consumers requesting payment deferrals or loan forgiveness to do so through self-service interactions rather than through agent-assisted conversations. This proved to be important as they wouldn’t have had enough agents to handle the increase in customer requests without significant delays in customer response times.

Similarly, insurance firms tracking a major hurricane forming in a specific region can use this data to anticipate a spike in the number of property damage claims from clients in that region. Using this data, the insurance firm can increase agent staffing within the contact center serving clients in the region and also proactively direct clients to use self-service channels, such as the company website and mobile application, to file insurance claims. Figure 4 shows that proactive contact centers are far more likely to build and maintain a holistic and real-time views of both CX and operational data, which then gives contact centers and other business leaders tailored views of data, allowing them to anticipate potential changes that could impact their activities.

Figure 4: Empower Business Leaders with Holistic Real-time Views of CX and Operational Data

Additionally, Figure 4 shows that proactive firms don’t only focus on empowering leaders in the business. They also empower employees (agents) to do their jobs effectively regardless of how change may impact the business. This is accomplished by providing agents with a single view of CX and operational insights available through a unified agent desktop. As depicted in Table 1, these unified insights are often captured and available through the CRM system, making it easier for proactive firms to access relevant customer data through a single repository.

Proactive firms are more likely to use CRM and CX data management technologies

Source: Aberdeen, November 2020

Table 1 shows that proactive firms use database management tools to make it easier to cleanse and manage the data they capture across various channels (e.g., phone, email, social media) to build a truly unified view of CX insights. Integrating the contact center with CRM ultimately makes it easier for agents to access relevant customer insights. Whether agents are working remotely due to a pandemic, earthquake, or hurricane; or whether agents are needed to address a specific issue affecting many clients (e.g., product recall or service outage); they have the information they need to adapt to the circumstances while still meeting and exceeding client needs.

#2: Turn data into analytical insights

Data on market conditions and customer needs is invaluable for contact center and CX leaders. What truly separates proactive firms from their reactive counterparts is that, while the latter only has hindsight, the former has both a hindsight and a forward-looking view because of their data use. Specifically, this means that reactive contact centers manage today’s business conditions by using only historical and real-time data to observe what is needed achieve their goals in the current business environment. To do so, they use analytical tools such as business intelligence.

Proactive contact centers use the same process as their reactive counterparts in terms of observing how their activities align with their ability to achieve their goals in today’s business environment. However, they also analyze CX and operational data to anticipate future events, such as expecting an increase in insurance claims in a region that may be affected by a hurricane forecast or a worsening in labor market statistics (unemployment rates) that may help a mortgage services provider anticipate potential increase in late payment requests and delinquency communications.

It’s important to note that not every unexpected change means companies will be affected negatively. For example, despite a worsening of the world economic landscape in the aftermath of the COVID-19 pandemic, mortgage service providers have seen a drastic increase in demand for mortgage refinancing and new mortgage applications in the US due to historically low interest rates. As such, mortgage service providers struggled to respond to increased customer demand for services in that area. It’s vital for firms to not only use data to observe the current business climate but also to use call center analytics to anticipate how emerging trends, such as decrease in interest rates, an emerging weather event, etc., may affect their future activities.

Figure 5 shows that proactive contact centers analyze CX and operational data to reveal hidden trends that may impact their future activities. They also work with the IT leadership to ensure that the data they use to anticipate the likelihood of future business conditions is accurate and relevant. Along with studying data to uncover hidden trends through call center analytics, they also turn to voice of the customer (VoC) data captured through social media channels such as Facebook, Twitter, Instagram and LinkedIn. Specifically, monitoring customer conversations through social media channels helps expose changes in customer expectations, allowing proactive firms to adjust their activities in line with these changes. A company using a reactive approach would wait until the business results were affected by changes in customer behavior and only then try to uncover and solve for the factors that influenced company performance.

Figure 5: Turn Data into Actionable Insights through Savvy Use of Analytics

Data without analytics is like a car without wheels. It has the potential to take firms to their destination (goals)—but, in order for the data to be used effectively, it needs to be interpreted with the help of analytics.

Table 2 shows that proactive contact centers use a rich set of technologies to analyze data captured across all channels. For example, they use text analytics to analyze notes on the agent desktop, live chat conversations, and IVA interactions, while they use speech analytics to analyze phone calls and IVR conversations. Proactive firms also use business intelligence (BI) to uncover hidden insights that influence their activities. For example, a telecommunications services provider can use BI to observe changes in customer support requests in a region experiencing a power outage. They can then use this insight in combination with predictive analytics to anticipate future customer support requests in an area where the company is doing planned work that will lead to an outage. In turn, they can proactively communicate with relevant clients to minimize an increase in support requests. Additionally, they can adjust agent scheduling and encourage customers to use self-service if they experience issues related to a power outage.

Table 2: Proactive firms outpace peers in adoption (and use) of analytics & AI

Business conditions change all the time, making it daunting and impractical for firms to manually analyze CX and operational data for the purpose of deriving actionable insights. Instead, Table 2 shows that proactive firms use machine learning algorithms to analyze data. This helps to expedite time-to-information, allowing firms to reveal potential change factors quickly.

#3: Use analytical insights to proactively transform business activities

Extending our earlier car metaphor, the third building block that firms must establish in order to transform their activities from reactive to proactive is pushing the gas pedal and moving the car to its destination. In other words, having a comprehensive view of CX and operational insights as well as using powerful analytics and AI is only helpful when firms put analytics and AI-enabled insights into action. Figure 6 shows that proactive firms are far ahead of their reactive counterparts in leveraging data to anticipate future events and taking action based on that analysis.

For example, referring back to our earlier scenario of a telecommunications firm managing a power outage, we can see how AI can be used to automatically determine how a forecasted blizzard within an operating region may lead to an increase in power outages and a subsequent increase customer support requests. This analysis would then automatically trigger a process where clients residing in that region receive a text message, an email, or a prerecorded phone call noting that they may experience an outage and that everything is being done to address any interruption to their services. This kind of proactive approach is the reason why proactive firms are rewarded with customer loyalty and enjoy lower service costs. 

Figure 6: Use AI and Automation to Act on Analytical Insights in a Timely and Effective Manner

Figure 6 shows that proactive firms regularly rely on CX data, using it to build dynamic customer journey maps. These maps monitor changing buyer behaviors by using root-cause analytics to observe inflection points across various stages of the customer journey. For example, analysis may reveal that buyers are placing calls to the contact center to learn about the features of a new product the company just launched, and that the buyers are repeatedly referencing the same issue — an indicator that they haven’t received helpful answers to their questions. Using this data, the company would first react by giving agents information relevant to the customers’ issues. Second, it would use this insight when planning the next product launch, teaching contact center agents the relevant feature insights in advance to get ahead of anticipated buyer concerns.

Is your business tapping into the right data?

There are virtually endless ways to use CX and operational data to anticipate future business conditions. Ultimately, it’s the contact center leaders’ responsibility to make sure they understand the key factors influencing their activities and to use business data, call center analytics, AI, and automation together in an intelligent manner. For example, a financial services firm may be influenced by many factors: consumer income, general economic conditions affecting consumer income and overall banking activities, and relevant financial regulations and government fiscal policy. Unlike an insurance firm that must monitor weather events to predict potential increases in customer requests for insurance claims, a financial services firm doesn’t need to use that same combination of data, analytics, AI, and automation to be more proactive in its activities. It must instead focus on those factors noted above.

Brands with proactive contact centers will win the CX race.

If the way you currently manage your contact center activities is more reactive, then we highly recommend you prioritize implementing the building blocks noted in this article. Your firm will be transformed from playing catch-up to shifting market conditions to leading competitors in rapidly adapting to change. This will maximize your likelihood to ensure business longevity, create happy buyers, and reduce costs while at the same time growing revenue.

There’s no doubt, the race to deliver top CX is heating up. To win it, you’ll have to move from a reactive approach to a proactive approach in your contact center. Read more about why—and what it takes—in our , Proactive vs. Reactive: How Savvy Use of Analytics Helps Contact Centers Navigate and Adapt to Uncertainty. Download your personal copy now