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Cost is killing innovation: it’s time to redefine connected services - Nicola Collister - Blog

Cost is killing innovation: it’s time to redefine connected services

It’s time for a rethink

I’ve worked in this industry for 26 years. A lot has changed in that time and much as it seems obvious, it’s vital that we try new things and constantly challenge to be better. The world is continuing to change and it’s not getting any slower. Gartner predicts that by next year, poor CX will destroy 30% of digital business projects. Thirty percent!

“Gartner predicts that by next year, poor CX will destroy 30% of digital business projects.”

What’s more, over a quarter (27%) of the world’s adult population was born between 1995 and 2010. They’re all adults now and have never known a world before the era.1995 saw the launch of Amazon, eBay, Hotmail, VoIP, PHP, SSL and Javascript and HTML 2.0, and even those technologies, that are still hugely important today, will feel antiquated to the 65% of those at school today who will be doing jobs that don’t exist yet (source: World Economic Forum: The Future of Jobs Report 2016).

We’re already in a world that will sooner swipe right than persevere with something that isn’t immediately easy to engage with. In a presentation I saw last year, I learnt that around 65% of people said they would rather stick their head down a toilet than get in touch with a contact centre. That’s some reputation we have when around 2/3 people feel that way, no matter how tongue in cheek the question. And yes, it’s far better to equip customers with tools to help themselves, but when they need something more, it really does need to be a cause for celebration and an opportunity to reaffirm a brand’s worth.

“2/3 of people would rather stick their head down a toilet than get in touch with a contact centre.”

Yet around 20% of customer contact is now outsourced in the UK (CCA Global Study). There is nothing inherently wrong in this approach, it provides brands with an opportunity to deliver service through specialists, where scale and diversity can help smooth out the overhead challenges of needing to house people in buildings and equip them with the right technology. 

The problem is that the drive for low cost servicing is ever present. Larger players seek to be the lowest bidder, putting technology between people and service to achieve the bottom line. Smaller players offer an approach that cares more but can’t compete with a technology offer. 

The squeeze on margins through the procurement process has jeopardised how people relate to service delivery, with disparate delivery creating a fragmented approach that makes no sense to the poor individual who decided to make that call instead of taking the head down loo approach.

“The squeeze on margins through the procurement process has jeopardised how people relate to service delivery”

Customers have become commodities and service a number on a balance sheet. And this cost game is killing innovation. 

Fundamentally, the traditional outsourcing model is broken.

Customers are not commodities. Service is not a number on a balance sheet.

Technology led approaches or an inability to invest are leaving customers out in the cold. 

Because the current market is defined by a lowest cost approach to providing service, this constrains innovation and value creation. The impact of which is now being felt by customers, who are frustrated their expectations aren’t being met. Customers that brands have worked really hard to acquire who then often find a significant mismatch with the brand promise, just when they needed it most.

“Technology led approaches or an inability to invest are leaving customer out in the cold”

Aspect’s 2017 Consumer Experience Index tells us that 66% (2/3rds) of US customers will pay more for a great service experience. And while the figure was lower for UK customers at 29%, we’re catching up. The same survey tells us that another 36% of UK customers will stop doing business with a company because of bad customer service, and that was an increase from 31% in the prior year (16% up).

And it’s not just about getting it right, getting it “extra right” increases brand favourability. Ipsos MORI’s 2017 Great Expectations report found that those who had a positive experience that was better than expected, were more than twice as likely to increase their brand favourability than those who had a positive experience that was in line with or worse than expectations. These surveys were done a couple of years ago, but I believe expectations will have only increased not decreased.

“Getting it extra right increases brand favourability two-fold”

The more competitive and rapidly changing the sector, the more at risk they are of leaking expectations. For example, airlines are five times more likely than public service to have experiences with competitors cited as a reason why a service encounter failed to meet expectations. The survey concluded that consumers’ expectations are influenced by a much wider body of prior experiences than before, beyond directly comparable sectors, and that this should mean there is more of a focus on liquid expectations in the future. Personally now I compare my train travel and the booking experience, to my experience of online shopping, I am simply doing stuff online. 

In other words, the tail is wagging the dog when it comes to service delivery, because service is the biggest driver of value. An opportunity for customers to connect with a brand, so make it a memorable one. 

“The tail is wagging the dog: service is the biggest driver of value”

So why do we continue to force bad business solutions onto customers? All they want are simple, responsive services, regardless of who they are chatting to or what they are chatting about, whether that be through voice or text. 

Service is the biggest driver of value: we need to reinvent responsiveness to create a new level of connectedness

The market is typified by heavily invested suppliers focused on channels (voice, email, chat) who promise a lot but deliver little in reality. 

“All people really want are simple responsive services”

But brands are wising up to the need for innovation, with Deloitte’s 2018 Global Outsourcing Survey telling us that 43% of businesses now want innovation as a key contractual deliverable from their outsourcing partner, a rate that has doubled in just two years. Furthermore, 37% of businesses are prepared to incentivise their partner to deliver; a reflection of the need for the outsourcing market to ‘up its game’ and release itself from the inertia of the previous decades.

In addition, Robotic Process Automation (RPA) is seen as a key disruptor in the market. A significant 62% of businesses said they are considering RPA to improve their performance. By contrast only 44% said they were exploring RPA to reduce cost, a consideration that didn’t even make the top 5.

So perhaps the tide is beginning to turn on the focus on cost, but is it happening fast enough and is it ultimately achievable when the bottom line is still so critical?

In 2018, Opinion Matters found that the top driver of emotional connection to a brand is being able to contact the company via any channel. Despite this, NewVoiceMedia’s 2018 Serial Switchers Swayed by Sentiment found that 48% of customers still think that calls are the quickest way to resolve an issue. Email, social media and chat come a poor second, third and fourth at 13, 11% and 9% respectively, which is a sad indictment of how much work the service industry still has to do to capitalise on the potential of digital channel integration and a far cry from consumer expectation. I am not surprised by these statistics, as most people I speak to say they resort to voice when they need to sort a problem out quickly. 

“48% of customers still think that calls are the quickest way to resolve an issue”

What’s more, as an industry, we have a terrible habit of measuring and “understanding” the wrong stuff, or not enough stuff, with more metrics than our brains can cope with. We do things ourselves that other experts (or machines) can do better.

And when we outsource we do it on a cost per person, per seat with AHTs, SLAs, KPIs, KFIs, TSAs and lots of other 3 letter acronyms that are impenetrable to regular humans and don’t really have that much bearing on how people feel. Remember, 48% of customers believe a call is the quickest way to solve an issue but around 65% of people would rather stick their head in the loo.

“We have a terrible habit of measuring the wrong stuff”

This lag in responsiveness, connectedness and innovation is a real problem. We are failing our brand clients and their customers and will only continue to do so when cost delivers the biggest points on a procurement scorecard.

Outsourced Contact Centre Industry Myths

Now we’re getting down to cases and it’s time to bust some myths.

Myth #1: It’s all about technology

Honestly, it isn’t. Is tech important? You bet! But is it what people buy? What people care most about? I’m afraid not.

When technology fails, accidentally or through a poor set up, people get frustrated. A chatbot that doesn’t understand or has no empathy is of no use. And people are often a decent judge of what they need – they don’t want to call you any more than you want them to call you (remember the 65% with their head in the loo). They don’t want to wait in a long queue, but if they’ve got a complex problem or can’t find what they need, then they need to talk. 

“A chatbot that has no empathy is of no use”

How you deliver through technology comes down to the insight you have drawn, from website interactions to frustrating calls. The bad stuff is gold if ever you want to make it good. 

Technology must, therefore, be agile and responsive, not big and lumbering. But technology is nothing without the people. Technology instead of people at the wrong time is a brand disaster.People matter, technology must be intuitive

Myth #2: Channel choice is critical

How many meetings or design sessions have you had on how to navigate customers to the right one? How many messages do you play in your IVR telling customers they could do stuff for themselves online (as if they don’t already know…)? How many on hold messages do you play saying your call is important to us…?

I know that people saychannel choice is critical, but the reality is that they will use whichever ones they think will give them answers. All at the same time.

“People will use whichever channel they think will give them answers. All at the same time.”

If they can’t get through on the phone, they’ll send you an email. Then when that doesn’t work they’ll start a webchat. Where it falls down is when channels and more importantly channel integration fails. It comes down to understanding the profile of the customers in question. 

One size does not fit all. 

People want answers, not channels.

Myth#3: People want experiences

Really? Even when they’re placing their grocery shop order, they’re having an internal dialogue about what a great experience they want? 

If you’re a destination or experience business, then yes, that’s what you’re there for. But I can guarantee that I’m not setting out to have a great experience when I’m buying my insurance, ordering groceries, or changing my utility company. I just want that to be EASY.

“I’m not setting out to have a great experience when I’m buying my insurance.”

People don’t care about “having experiences”, unless it’s a bad one. Then they care a lot and it’s not one they want to repeat. No doubt they’ll tell you. 

The whiff of a standard response is likely to set them on edge even more. And I’m afraid relentless offshoring has a significant impact as things are easily lost in translation, as well as certain types of queries having to be passed back to someone onshore, or in another site somewhere else. It’s just not joined up.

Disparate services delivered by different providers and the misuse of emerging technologies is likely to send them shouting about their non-seamless experience from the rooftops. Or on Twitter.

So I suppose, yes they do want a “seamless experience” but only because a non-seamless one is such a let down. Come on, it’s what they expect at a human level, not something to be lauded and commended. 

People want to be dealt with on a local, human level, easily and seamlessly. 

In short, people matter. Technology must be intuitive, you must provide answers not channels and deal with people on a human level, in ways that suit them best.

People matter

No matter what technology we have, and how we hang it all together, how we run businesses must all come back to one basic human idea that people matter.

“It must all come back to one basic human idea that people matter”

Whether those people are customers, clients, or our colleagues, they’re all people who respond to being treated well. Our job is to minimise their frustrations, surprise and delight. 

For our colleagues, that comes down to how we attract and employ them, how we reward them, how we involve them in developing our product and service, how it feels to be a part of Woven. After all our colleagues are on the front line, they represent us and they represent our clients. They take the flak when the going gets tough, they can make or break relationships, and they expect us to look out for them fairly and robustly in business. I won’t dwell on it here, but how we work with our people is of utmost importance to us at Woven.

Customers will pay for better service and how they feel when they’ve interacted with us keeps them doing that or has them telling the rest of the world why they shouldn’t either. 

“Customers will pay for better service”

And for clients, I want to be absolutely clear, we need to start talking about value, not cost. Because that’s where the biggest opportunities lie. “People based Procurement” would flip the current model and award points for the quality of service proposed and connection with a brand’s customers through initiatives and strategy. Those initiatives can be technological, commercial, process or people. Then come down to the bottom line, rather than starting at the bottom line. 

“People based procurement would flip the current model”

Because when the lowest bidder wins, everybody loses. 

In essence, this is why we’ve created Woven and what we hope to achieve. I don’t mind saying that we’re not there yet, and maybe we never should be, because if we don’t continuously strive to try harder to be better, to be smarter, to create new ways to deliver connected services, then we’ll have failed. Our whole business is built on the premise that we innovate, test, learn, deploy and then do it all over again, setting ourselves new goals and looking for new hills to climb, built on some key foundations:

We need to start talking about value, not cost. 

People, not technology.

Because customers are not commodities.  

And service is not a number on a balance sheet.

We’re not putting the first man on the Moon. We’re not developing the world’s first electric super car. We’re not sorting out Brexit...

But it’s most certainly time for a rethink. It’s time we redefined connected services.


We are Woven.

Convention making. Industry leading. Market defining.

Publish Date: April 29, 2019 1:25 PM

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