The UK Contact Centre Market in 2024

With the UK Contact Centre market evolving almost daily, I was looking forward the presentation from ContactBabel on their view of the Contact Centre market place.

ContactBabel is the leading analyst firm for the contact centre and CX industry and conducts regular research using surveys with 400+ UK contact centres and 2,000 UK customers.  In November 2023 Steve Morrell, Managing Director of ContactBabel presented the highlights from several of their insightful reports, revealing the current status of the CX market and where the research shows that it is heading.

These are my personal highlights from an informative presentation:

General Decline in Number of Contact Centres and Agents

Steve kicked off talking about the trend of declining number of contact centres in the UK expected over next few years.  Many centres are going virtual or integrating several separate contact centres.  Also predicted was a general decrease in agent numbers due to automation, but a few areas were bucking the trend and predicted to grow in agent number to 2026 including Transport & Travel, Public Sector and Housing.

Interactions by Channel

Whilst email currently makes up 15% of contact centre interactions (and may increase to 17% by 2026), it is then expected to start to decrease as organisations move to more dynamic channels and as web self-service improves.  Steve expects continued growth of web chat.

So what is driving investment in UK contact centres?

Cost pressures - Unsurprisingly cost pressures are still a major factor.  Cost per inbound call has risen 47% in past 5 years, partly due to significant rises in agent salaries since 2020.  Therefore reducing costs is a priority.

Operational Performance - Another factor impacting the drive to reduce costs is the steady rise in call duration since 2004.  However is should be noted that it may be a reflection of more complex calls as the simpler calls are being dealt with through self-service.  

Call duration is now seen as a less important metric than in previous years – but it should not be overlooked that longer calls mean less agents available to answer other calls and may impact call abandonment rates.  It is interesting to note that call duration is seen as less important by the customer than achieving an overall successful call.

Speed to answer and difficulty in recruiting / higher attrition of agents is also linked to increased call lengths.  Despite a return to a pre-Covid world the average speed to answer is 4 times higher than the historical norm, which again impacts call abandonment rates.

Customer Preference - Queue lengths and first-contact resolution are consistently stated to be the most important drivers for customers.

But we can see that the customer perception is that contact centres are not delivering on this:

Business Investments – The number of businesses showing a desire to compete on CX is growing each year, particularly the very large organisations.  Investments focused on improving CX are mainly being made in digital / automated channels.

Remote and Hybrid Working - Despite news stories about businesses forcing people back to the office, the contact centre industry seems to be planning for a remote / hybrid future, alongside the move to further self-service.

Key Objectives for Contact Centres

Steve feels that moving forward cost is not the only issue that will be impacting business decisions and that 3 keys objectives that UK contact centres want to achieve (and that are positively impacting the customer experience) are:

• Reduce call times without sacrificing quality or increasing headcount
• Decrease in number of repeat calls
• Improve self service to reduce inbound calls

Reducing Call Duration - Reducing call duration directly impacts queue lengths and CX, without increasing headcount.  Steve believes that significant savings can be made using AI including:

• AI can present summary of previous issue if applicable
• In-call AI-enabled agent assistance – next best action, correct information on single screen, pre-filled fields
• Post-call can be reduced by RPA, AI-generated notes

Decrease Repeat Calls - 20% of inbound calls are repeats, costing UK contact centres £6.7bn p.a, so reducing repeat calls is an immediate cost saving.  This also increased first-contact resolution, which is consistently the joint no.1 driver of CX (along with short queues).  

Steve highlights the causes of these and how they can be solved with AI and automation:

Call deflection through improved self-service - Complexity and need for reassurance are holding back automated services.  Steve notes, “the customer simply wants the reassurance of talking to a real person. The issue here is not whether the person could have successfully used self-service to solve their issue, but they had to talk to somebody despite the fact they knew it would probably involve more effort on their behalf.”

28% of customers state telephony is 1st choice of channel, yet 70% of interactions happen through telephony: they use it because they have to not because they want to!

Constant improvement in self-service and automated service is needed. Generative AI is a gamechanger in terms of understanding customer requirements but relies on being trained with correct information.

How Important is AI?

AI making a measurable positive impact on customer contacts as this graph shows:

Cost of a web chat is now around 51% that of a phone call.  In 2015, the cost was 73% that of a call.  Steve notes that AI should be seen as augmentation, not replacement, of agents.  Clearly contact centres agree on the importance of AI, as the survey results show 96% of contact centres concur, compared to 65% in 2018.

However AI yet to fully capture the imagination: more use cases and success stories are needed outside chatbots!

Key Takeaways

• UK contact centres are under unprecedented cost and operational pressures
• telephony is still no.1 choice for customers, but only because other channels are not delivering
• Most CX investment is in digital channels
• Businesses have strong desire to compete on CX
• Key business issues for contact centres that address CX as well as cost:
• Improve automated service
• Shorten call times without sacrificing quality
• Reduce repeat calls
• While AI is universally thought to be important, focus should be on solving the business issue

A very interesting report and the point that I feel is most important is

Only 28% of customers state telephony is 1st choice of channel, yet 70% of interactions happen through telephony

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So customers are willing and able to use self-service.  For the many it’s a first choice.  But they don’t.  Organisations need to provide self-service channels that deliver what the customer wants and they will use them!

Access the full ContactBabel reports here.

Or contact us or call us on 0333 6000 360 to find out how you can use AI and automation to provide self-service channels customers actually want to use!