HGS recently participated in a virtual roundtable discussion entitled “Leveraging Creative Contracts to Drive CX Transformation Outcomes,” sponsored by Everest Group and hosted by SVP, Business Development Chris DeLambo.
Everest Vice President David Rickard and Parikshit (PK) Kalra, SVP, Head of Client Solutions & Capabilities, served as panelists during the discussion. Read on for notable insights and discussion points shared during the 90-minute virtual event.
The event kicked off by discussing what digital transformation looks like for the CX industry. Here’s the current landscape and what’s on the horizon:
- In today’s CX world, “digital” is the buzzword. Everyone is selling digital solutions now, from improving websites to adding digital channels and automation.
- What’s important is how you make it work for your business—are you solving a problem, and are you driving desired results?
- Although digital transformation has been happening steadily for many years, the COVID-19 pandemic became a driving force for organizations to really focus on making it a priority.
- Senior executives know that customer experience is a differentiator in today’s market, so they’re always on the lookout for anything they can do to improve CX and brand loyalty.
Some attendees mentioned that although they’ve been able to transform significant portions of volume into digital/automated experiences, contracting with BPOs hasn’t evolved in the same way. Here’s how HGS is working to help change contracting:
- This discussion brings to light the many creative contracting options that are available to drive those better outcomes. HGS currently offers eight different innovative options, including possibilities such as a total cost of ownership model, a risk-free proof of concept contract, and outcome-based pricing.
- Risk is a big component of contracts these days, which makes contracting conversations more intense and challenging. But trust between partners is key. If you don’t have that trust, you should back out of the conversation altogether.
A number of clients have trusted HGS to get creative when it came to their contracts. Here are three client examples that PK shared:
“As we were pitching to a consumer electronics company, we offered an outcome-based model with baked-in self-service, which ultimately won us the business. Fast-forward a few months, and not only did we deliver what we had promised—a 96% resolution rate and 60% deduction in call volume—but we had established ourselves as a trusted, strategic partner, leading to the award of additional business down the line.
A credit card company gave us permission to change agent profiles when they weren’t meeting the metrics they wanted. As part of this risk/reward model, we’ve been able to deliver consistency and improve NPS by approximately 10 percentage points.
For another company that offers roadside assistance, we saw that their average handle time was 16 minutes. With a resolved transaction model that involved implementing 10 client specific mobile phone bots on the front end of the call, AHT dropped to 3 minutes.”
Other points of interest mentioned on the call include statistical research from Everest, such as:
- The CX outsourced market grew by 3-5% in 2020 despite the effects of the pandemic, which opens the door for driving more growth and digital transformation.
- Improved agent experience and customer personalization will help with that shift toward digital-first contact centers.
- When it comes to deal trends, contract extensions and renewals are becoming more and more common—in fact, 65-70% of deals were extended or renewed with existing service providers in 2019-2020.
- As digital CX increases, the required number of FTEs drops, giving BPOs the opportunity to present more machine-based solutions such as automation, AI, and analytics.
And finally, a few thoughts on pricing model trends and expectations for the future:
- Input-based pricing (per FTE, per hour, and per minute) holds the dominant share among commercial constructs in CX.
- However, digital transformation deals are causing the market to move toward outcome/output-based pricing instead.
- COVID-weary companies are looking for deals with a component of risk-sharing. That way, both BPO partner and client ensure achievement of business goals—both throughout the duration of the pandemic and as we look toward a post-pandemic future.