The State of Contact Center Conversation Intelligence

Driving Contact Center Confidence

As inflation continues to rise and uncertainty rattles markets, one thing is clear: Contact centers are more important than ever and continue to be the heartbeat of a company.

Even as digital channels grow, 86% of consumers say they prefer to interact with a human being when reaching out to a company and 71% say they are less likely to use a brand if it doesn’t have human customer service representatives available.

Whether contact centers’ focus is on service, sales, or both, research reveals that factors like convenience, consistency, and friendliness are what keep customers loyal—and even willing to pay a premium. According to PricewaterhouseCoopers, customers will spend up to 7% more for car insurance if they’re given a great experience.

And often, it's that customer experience that sets a brand apart from competitors and retaining long term customers.

Doubling down on consumer experience is key. In order to do so, contact centers have increased their budgets, spending more than $24 billion in contact center software, with more investments coming. Yet, despite their efforts, contact centers are continuing to struggle: the current estimated cost of customers switching brands due to poor service hit $1.6 trillion, according to Accenture.

We surveyed over 300 contact center leaders to gather their perspectives on how their business operates, assessing the effectiveness of existing contact center technology, and their plans for the future.

Our survey revealed startling insights: Nearly one quarter of respondents consider the majority of their agents to be bottom performers that are negatively impacting both top and bottom line.

To no surprise, agent performance directly correlates to confidence in the future.

Overall, almost 50% of respondents do not feel very prepared for the future. Those numbers are exacerbated for companies with mostly bottom performers.

What's the upside?

There’s a clear path to improvement: When companies are able to leverage insights derived from frontline interactions and use them to fuel coaching programs and workflows, performance skyrockets and confidence improves.

Of the contact center leaders feeling "very prepared" for the future, 88% use conversation intelligence, compared to just 9% of those who do not.

(For the purposes of our survey, a conversation intelligence solution is defined as a service that transcribes and analyzes agent-customer conversations, and surfaces insights.)

In this report, you will find that companies already adopting conversation intelligence have seen significant benefits across their business, including improved agent performance.

Conversation intelligence is giving leaders the ability to chart and navigate a path through uncertainty as companies double down on both revenue growth and customer satisfaction.

There’s no longer a debate on whether conversation intelligence is worth the investment. For contact centers to improve performance and feel confident about the future, it’s not a question of if, but when.

-Swapnil Jain, Co-Founder and CEO at Observe.AI

‍

The State of the Contact Center

Contact center investments are growing

As companies continue to invest in understanding and optimizing what happens on the front lines, contact center software budgets have grown over the past year.

Technology is now being considered a strategic advantage, with 81% of surveyed contact center leaders reported higher software budgets this year compared to last year. Only 12% reported lower budgets.

Contact centers are embracing omnichannel--but voice/phone remains the frontrunner

Just as contact center budgets grow, so is the number of channels they're engaging with current and future customers, including live chat, email, social media, and SMS texting.

As the world increasingly becomes digital-first, consumers expect to engage with brands on their terms--yet phone and voice are the primary means of communication with 82% of contact centers engaging with customers via phone.

95% consider their ability to analyze interactions effective; few actually know

The many channels involved make measuring the effectiveness of conversations challenging. Just 16% of respondents are able to analyze and evaluate every single interaction, meaning the majority of respondents are leaving potential insights on the table.

Even so, 95% said they felt they were effective in their ability to analyze interactions--meaning a large portion of respondents are willing to claim effectiveness despite agent evaluation blindspots.

Higher volume of evaluations linked to increased effectiveness

While evaluating 100% of interactions may seem untenable, there's a strong correlation between the ability to analyze every interaction and effectiveness:

Of the organizations evaluating 100% of interactions, 75% consider their efforts to be "very effective".

As the percentage of interaction evaluation drops, so does their effectiveness. Only 53% of those evaluating 50-99% of interactions include themselves in that "very effective" group. The numbers drop even more precipitously for those evaluating only 10-49% with only 35% considering themselves "very effective".

For those evaluating just 5-9% of calls, percentage of respondents considering their efforts "very effective" drops to zero.

The ability to evaluate at scale is not only critical to confidence, it also drives more transparency, better coaching, and more strategic decision making.

Manual processes are common--even in the age of automation

One factor that limits contact centers' ability to analyze all of their interactions is that many are still relying on manual processes, which limits how many interactions they can reasonably analyze and learn from.

More than 20% of respondents use fully manual processes for transcript and call recording analysis.

About two-thirds (67%) of respondents use manual processes to analyze conversations (this includes those that use manual exclusively, and in combination with AI). Meanwhile, just 31% rely exclusively on automated solutions.

Contact centers continue to juggle multiple tools

The solution contact centers use to evaluate interactions vary in maturity, from manual spreadsheets to AI-powered platforms. Nevertheless, one thing is consistent: Juggling multiple technologies is the unfortunate norm.

62% of respondents use more than two tools for analysis, requiring operators to jump from solution to solution, opening the door for inefficiencies and inaccuracies.

Customer experience and satisfaction, revenue growth among top contact center KPIs

Evaluation of interactions is critical to understanding most, if not all, top contact center KPIs. Most commonly trackec contact center metrics being monitored include customer experience (55%) and satisfaction (58%), with over a third tracking revenue growth.

For most, success means strategic business impact

Overall, most contact centers perceive themselves as more strategic than tactical, monitoring and driving business impact such as customer satisfaction rather than tracking the number of calls per agent, for example.

However, many contact centers consider themselves a mix of both strategic and tactical, meaning their evaluation processes--and the technology they invest in--needs to be flexible and adaptable enough to analyze and evaluate a variety and potentially often-changing portfolio of metrics.

As you'll see in the next section, a contact center's ability to drive strategic impact is directly tied to agent performance, making both coaching and transparency high priorities for many. Unfortunately, the demands of the business continue to mount for contact centers--and many are struggling to keep up.

‍

Contact Centers Are Facing Increasing Challenges

Contact centers feeling unprepared for the future

Today, just half (52%) of contact centers feel "very prepared" for the future. Fortunately, there is a clear path to feeling more prepared. Our survey shows there's a connection between those that feel "very prepared" and those who consider their contact center to have high performers.

Of those feeling "very prepared", 61% said they had "mostly top performers" across their contact center, 4x more likely than those that said they had "mostly bottom performers".

It's no surprise, then, that contact centers are investing in formal coaching programs and technology to improve agent performance. We dive deeper into contact center agent performance in the following pages.

Nearly one quarter of contact centers say agents are mostly bottom performers

Bottom performing agents, in particular, can stand in the way of contact center success and preparedness. Unfortunately, 22% of respondents say their organization consists of mostly bottom performs with some average and some top performers. Only 43% of all respondents say they have mostly top performers.

Poor agent performance has strategic business implications

Poor performers have clear impact across both top and bottom line business KPIs, including poor operational efficiency and lacking revenue growth.

Negative impact of poor performance on business scales exponentially

The business impact of bottom agents on customer satisfaction is larger at larger organizations. For example, 42% of surveyed contact center managers at organizations with more than 500 employees report their bottom performers negatively impacting customer satisfaction, compared to 27% of organizations with fewer than 500 employees who report the same. The business impact of poor agent performance scales with the company.

Formal coaching is a top priority

This should come as no surprise, but those with formal coaching processes tend to produce higher performing agents--and companies are both prioritizing and investing in it with 69% of companies having consistent formal coaching processes in place and 59% considering it a top priority.

80% of respondents who say they have mostly top performing agents have a formal coaching program, 4x more likely than those that do not.

Of those with mostly top performers:

• 80% reported having a formal coaching process
• 19% reported having a casual, ad hoc coaching process
• <1% reported not coaching out agents

Conversation intelligence key to better coaching and agent performance

If better coaching leads to better performance and better performance directly impacts key business results, then the question is: How can companies coach better?

One answer: Leverage insights derived from front line interactions via conversation intelligence and use them to fuel coaching programs and workflows.

With Observe.AI, you can do all of that at scale--in one seamless platform.

‍

The Business Impact of Conversation Intelligence

Conversation intelligence a contact center must-have

Conversation intelligence has the potential to help contact centers overcome the challenges they experience today, particularly with regard to scaling up agent evaluations to analyze all customer interactions, and subsequently using that insight to power agent performance, coaching and quality assurance workflows.

Today, a majority (78%) surveyed organizations use a conversation intelligence solution. So far, adoption is consistent across industries, company sizes, and company revenues, with some industries (namely consumer technology, financial services, and healthcare) adopting the technology at a slightly higher rate.

Conversation intelligence adopters 20X more likely to feel "very prepared" for the future

The business impact of conversation intelligence is already being felt. Those with conversation intelligence are nearly 10X more likely to feel very prepared for the future than those without. Of those feeling very prepared, 88% use conversation intelligence while only 9% of those not using conversation intelligence felt very prepared.

Conversation intelligence adopters 2X likely to have top performers

Unsurprisingly, there's also a correlation between conversation intelligence adopters and companies with a high ratio of top performers to bottom performers. Those with conversation intelligence are twice as likely to have top performers, with 46% reporting primarily top performers compared to just 23% with primarily bottom performers.

Of companies with top performers, 82% use conversation intelligence.

Digital transformation and better coaching among top reasons for conversation intelligence adoption

There are a variety of factors that led organizations to adopt conversation intelligence. Keeping up with technological changes was the leading cause for adoption--a trend we see clearly as digital transformation programs began to rise--but other initiatives were important, as well.

Many turned to conversation intelligence to provide improved coaching to their team, relying on the technology to better shape their training tactics through data, and ultimately deliver actionable insights that improve agent performance. 42% also said that they adopted conversation intelligence to drive revenue growth.

The business impact of conversation intelligence

Of those organizations that have adopted conversation intelligence, the majority have seen improvements across various areas of their business. Contact centers that use conversation intelligence overwhelmingly agree that it has transformed their companies for the better, improving coaching, customer satisfaction, decision-making, and moving the needle on other key metrics as well.

‍

What's Next for Contact Centers?

The future of contact centers is conversation intelligence

In the next 12 months, 72% say conversation intelligence will help their contact center be more strategic in their approach to QA, coaching, and agent performance. Only 4% aren't using or are not planning to implement a conversation intelligence solution.

Today, more than one fifth (215) of organizations rely exclusively on manual processes to analyze quality assurance data, with only 16% of respondents analyzing every interaction. These gaps virtually guarantee contact center leaders are missing key opportunities to surface insights that fuel agent performance, injecting the possibility of poor performance and uncertainty across the business.

After all, despite heft investments being made across the board, nearly half of contact centers still feel only "somewhat prepared" or worse about the future.

So, let's review: How can leaders feel more confident about what's to come?

1. Start by investing in agent performance: Companies with top performers are 4x more likely to feel very prepared for the future.
2. If you want better performers, invest in coaching: 80% of respondents who say they have mostly top performing agents have a formal coaching program, 4x more likely than those that do not.
3. Conversation intelligence markedly improves a company's ability to coach: 94% of respondents agree or strongly agree conversation intelligence enabled better coaching.

In short, adopting the right technology can help businesses take on what's coming by using data-driven insights to fuel the agent coaching programs and workflows that matter.

After all, companies using conversation intelligence are 2x more likely to have top performers and 10x more likely to feel very prepared than those not using conversation intelligence.

Contact centers are only becoming more central to business success--the time to empower them with the right tools and processes is now.

Demographics & methodology

Zogby Analytics was commissioned by Observe.AI to conduct an online survey of 307 contact center leaders, with 35% of respondents from enterprise companies with over $500M in revenue. Using internal and trusted interactive partner resources, thousands of adults were randomly invited to participate in this interactive survey. Each invitation was password coded and secure so that one respondent could only access the survey one time.

Using information based on census data, voter registration figures, CIA fact books and exit polls, we use complex weighting techniques to best represent the demographics of the population being surveyed. Weighted variables may include age, race, gender, region, party, education, and religion.

Based on a confidence interval of 95%, the margin of error for 307 is +5.6 percentage points. This means that all other things being equal, if the identical survey were repeated, its confidence intervals would contain the true value of parameters 95 times out of 100. Subsets of the data have a larger margin of error than the whole data set. As a rule, we do not rely on the validity of very small subsets of the data especially sets smaller than 50-75 respondents. At that subset we can make estimations based on the data, but in these cases the data is more qualitative than quantitative.

Additional factors can create errors, such as question wording and question order.

About Observe.AI

Observe.AI is the fastest way to boost contact center performance with live conversation intelligence. Built on a 30 billion-parameter contact center large language model (LLM) and the most accurate Generative AI engine in the industry, Observe.AI uncovers insights from 100% of customer interactions to maximize frontline team performance and drive outcomes across the business, from more sales to higher retention and better compliance.

Leading companies like Accolade, Pearson, Public Storage, and 2U partner with Observe.AI to accelerate outcomes from the frontline to the rest of the business.