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On this episode, we ask big questions about how customer loyalty is formed — and how AI can be leveraged to build stronger connections with customers.

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Explore the transformative potential of Contact Center-as-a-Service (CCaaS) solutions and learn how to navigate the evolving landscape of AI-driven customer interactions with this executive brief from Frost & Sullivan.

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Frost & Sullivan, a globally recognized market research and consulting firm, recently published an executive brief titled, The CCaaS breakthrough: Redefining customer interactions with AI. This comprehensive report identifies a number of emerging global trends, disruptions and new technologies shaping the contact center industry.

In this article, we delve into five major trends highlighted by Frost & Sullivan that are impacting contact centers. Read on to see how advancements in technology will reshape how contact centers enhance CX, drive agent productivity and equip their workforces with the right tools.

1. Rapid adoption of cloud-based technology platforms and architecture

One of the most significant contact center industry trends, according to Frost & Sullivan, is the shift toward cloud-based platforms. This refers to the use of internet-based platforms and infrastructure to deliver services traditionally handled by on-premise systems. Instead of relying on local servers and hardware, contact centers using cloud-based platforms can access a suite of tools and services remotely, hosted by third-party providers. These cloud platforms typically encompass everything from call routing and workforce management to customer relationship management (CRM) systems, making them an all-in-one solution for modern contact center needs.

According to Frost & Sullivan, seven key factors are driving rapid cloud adoption:

The end-of-life of existing system platforms: Many legacy contact center platforms are becoming outdated or are no longer supported by vendors. As these systems become less reliable and harder to maintain, businesses are increasingly turning to cloud-based solutions for contact center modernization. Today' cloud-based technology offers advanced capabilities and ongoing support without the need for costly replacements or upgrades.

The ability for premises-based organizations to add CCaaS in hybrid configurations: Businesses can combine the reliability of their current infrastructure with the flexibility and scalability of cloud-based services. This approach lets organizations gradually transition to the cloud without disrupting ongoing operations or requiring a full system overhaul.

New process automation and analytics capabilities: With AI-driven automation and real-time analytics, cloud contact centers can streamline workflows, enhance decision-making and improve customer interactions by predicting needs and optimizing agent performance.

Redesigned agent desktops: Having the ability to consolidate multiple tools and channels into a single, user-friendly interface enables agents to work more efficiently, offering quicker access to customer data and faster responses and ultimately improving the overall customer experience.

Digital transformation: Companies are looking to modernize their operations and deliver seamless customer experiences across digital channels. Cloud platforms are well-suited to support omnichannel services, allowing businesses to meet customer expectations in a digital-first world.

Richer integrations to third-party applications: Integration with applications such as CRM, marketing automation and ecommerce systems enables businesses to create a more connected and streamlined customer journey by pulling data from various sources to provide personalized and efficient service.

Advanced self-service applications: Applications like AI-powered chatbots allow customers to resolve simple inquiries without needing to speak to an agent. These tools reduce operational costs, enhance customer satisfaction and free up agents to handle more complex tasks.

One of the ways organizations are capitalizing on cloud technology is through the implementation of Contact Center as a Service (CCaaS) solutions. CCaaS is a cloud-based solution that delivers all essential contact center functions through a subscription model. This approach enables businesses to access advanced tools without the need for significant upfront investment in hardware or software. According to Fortune Business Insights, the CCaaS market is expected to grow from $6.08 billion in 2024 to $24.45 billion by 2032. This expected growth can likely be attributed to the scalability, flexibility and cost efficiency that these solutions offer organizations.

2. Constantly changing consumer behavior and preferences

Consumer behavior has undergone significant shifts, particularly in terms of how customers engage with contact centers. It's no surprise that changing consumer behavior and preferences made the list of key contact center trends to watch. As customers demand more personalized, seamless interactions, contact centers must continuously adapt to meet these evolving expectations.

For example, Salesforce's State of the Connected Customer report reveals that consumers interact with companies across an average of eight different channels. Additionally, 71% of consumers prefer using different channels — whether email, phone, in-person, online chat or others — depending on the situation. This underscores the need for businesses to offer an experience that allows customers to start an interaction on one platform and continue it on another without disruption.

Speed and responsiveness are also top-of-mind for the modern consumer. "We care about our time more than ever," said Jay Baer, keynote speaker, entrepreneur and author of The Time to Win: How to Exceed Your Customers' Need for Speed, during an episode of Questions for now, a TELUS Digital podcast that focused on building customer loyalty. Baer explained that brands that exceed expectations by responding to customer inquiries faster than anticipated can turn those customers into advocates. Baer's research also found that 50% of customers are less likely to spend money with a business if it responds slower than expected, and every year, these expectations for speed continue to rise.

In addition, research by Statista shows that 88% of customers now expect brands to have an online self-service portal. This reflects the growing preference for resolving simple issues independently, without speaking to an agent. As digital natives become the dominant consumer demographic, self-service options like online resources and automated solutions have become essential.

These are just a few examples of how shifting customer expectations will force brands to rethink their service strategies and adopt new technologies to stay ahead.

3. Increasing use of personalized automation using AI

Personalization has long been essential for brands looking to build lasting relationships with their customers, and this trend doesn't appear to be going anywhere anytime soon. A survey conducted by TELUS Digital revealed that over 60% of American consumers prefer a more personalized customer experience, even if it takes more time.

Recent advances in technology have significantly enhanced personalization capabilities. AI-driven automation, for instance, encompasses a wide range of applications, from chatbots to advanced routing systems and predictive analytics. Unlike traditional automation, which handles repetitive tasks using predetermined rules, AI-enabled solutions can analyze large volumes of data in real time. This enables dynamic, personalized interactions based on each customer's unique profile, providing more relevant and timely support. As a result, contact centers can offer a more tailored experience, reducing the need for human intervention in routine inquiries while improving overall customer satisfaction.

Bank of America's virtual financial assistant, "Erica," for example, has proven to be a game-changer in the financial services company's customer service since its launch in 2018. According to a release from Bank of America, "to date, Erica has responded to 800 million inquiries from over 42 million clients and provided personalized insights and guidance over 1.2 billion times." The assistant helps customers manage recurring subscriptions, monitor spending and handle inquiries like finding transactions or transferring money. Erica is especially effective at providing quick responses — 98% of clients receive answers within 44 seconds. And when further assistance is needed, Bank of America's Mobile Servicing Chat capability connects clients with a live representative who can answer more complex servicing questions.

4. Developing analytics and insights to drive business outcomes

Effective data analysis enables contact centers to monitor performance in real time, track customer behavior and identify patterns that can inform business strategies.

As Kory Lawszewski, vice president of global sales at TELUS Digital, pointed out in the report, 2024 CX Leaders Trends & Insights by Execs In The Know, sponsored by TELUS Digital, every customer interaction across various channels offers valuable insights that can be used to identify pain points and refine service strategies. "Review customer support call logs, interactions between your customers and your chatbots, replies on your social media posts, and anywhere else your customers interact with your brand," Lawszewski noted. By leveraging these insights, businesses can enhance their customer experience approach, anticipate future needs and make data-driven decisions to optimize service and efficiency. This feedback loop helps fine-tune processes, foster personalized interactions and ultimately drive higher customer satisfaction.

Analytics in contact centers typically fall into three main categories:

Descriptive: Focuses on analyzing historical data to understand what has happened, providing insights into past performance metrics like call volumes, customer satisfaction scores and average handling times. This helps contact centers identify trends and assess overall performance.

Predictive: Uses data models and machine learning to forecast future outcomes based on historical patterns. For example, it can predict call volume spikes, customer churn risks or the likelihood of resolving an issue during the first interaction.

Prescriptive: Recommends specific actions based on predictive insights. These analytics can be used to suggest how to allocate resources, optimize staffing levels or tailor customer service strategies to improve results.

AI-driven analytics are further changing the game by offering deeper, more actionable insights in real time. Traditionally, contact center analytics relied on historical data and basic metrics like call volume or average handling time. While useful, these insights were often reactive, providing a look at past performance without much predictive power. AI-driven analytics, however, change the game by enabling real-time analysis and predictive modeling.

Brands are already starting to plan how they can leverage the powerful benefit of AI-driven analytics. American Express, for example, is preparing to use generative AI to analyze customer feedback and inquiries gathered through its existing customer service channels. The goal is to focus on "predicting how our customers are going to perform over time, enabling better financial planning and decision-making," said Luke Gebb, executive vice president of American Express Digital Labs in a VentureBeat article.

5. Focusing on employee experience and engagement

In an industry where customer service excellence is the primary goal, investing in the well-being and engagement of agents is essential. When employees feel supported, valued and equipped to perform their roles effectively, they are more likely to deliver exceptional customer service. In fact, a survey by Harvard Business Review Analytic Services revealed that 55% of executives strongly agree that a great customer experience cannot exist without a great employee experience.

A strong employee experience not only benefits customers, but also improves key performance metrics, including revenue. Jacob Morgan, keynote speaker, futurist and author of The Employee Experience Advantage, found that employee experience is a combination of three factors: culture, technology and physical workspace. According to Morgan's research,  "experiential organizations" — those that scored highest in the three employee experience factors — see four times higher average profits and double the average revenue compared to those that fall behind in these areas.

To enhance the employee experience, brands can focus on providing agents with opportunities for growth, offering comprehensive training and development, as well as implementing recognition and reward systems for performance. However, investing in the right tools and technology that simplify employees' jobs is equally important. AI and automation are playing a pivotal role in helping contact center agents handle growing customer demand more effectively.

For instance, contact center AI tools such as agent assist bots can provide real-time support to human agents by offering instant suggestions related to customer queries, retrieving customer data and more. Meanwhile, contact center automation tools such as robotic process automation (RPA) and knowledge bases further streamline operations. RPA automates repetitive tasks such as data entry, freeing up agents for more complex interactions, while knowledge bases provide quick access to information, for both customers and agents.

In another episode of Questions for now, Nigel Devaraj, senior product manager, hyperautomation at TELUS Digital, noted that investing in the right tools to make it easier for your agents to do their job boasts a number of benefits, including reduced stress. "They're happier because they're not having to worry about these little mundane activities because we leverage automation to actually take care of those mundane activities for them, and they can really focus on the end customer service."

Another notable benefit is increased productivity, according to Chandrakant Binwani, former director of intelligent automation solutions at Automation Anywhere in the aforementioned podcast episode. "From an agent perspective, [automation] helps them with their productivity, with their experience. They can focus on talking to you, connecting with you, understanding your problems, simplifying your experience, improving your experience as well as simplifying and improving the experience of the [customer service representative]."

Future-proof your contact center operations

Trends like cloud adoption and AI-powered automation are key drivers shaping the contact center of the future. These innovations can help streamline workflows and resolve issues faster, leading to higher productivity and better resource allocation. Additionally, understanding trends in personalization, analytics and changing customer preferences allows contact centers to deliver more targeted services, ensuring that customer satisfaction remains high. Neglecting these developments can leave businesses lagging behind their competitors, while those that embrace innovation stand to gain a competitive edge by improving both the customer experience and their bottom line.

To fully capitalize on emerging trends, partnering with a customer experience provider, like TELUS Digital can be a distinct advantage. With nearly two decades of experience in the evolving digital CX landscape, our team of experts stay ahead of industry trends and best practices and can provide invaluable insights to help brands meet modern consumer expectations and embrace technological advancements. Reach out to our team of experts to see how we can help future-proof your operations and position your company to thrive in an increasingly competitive landscape.

Discover some notable contact center trends driving innovation in CX, from AI-powered automation to cloud adoption, with research from Frost & Sullivan.

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