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The Gig Economy Transformed The Cost Of Hotels And Taxis – Why Not CX?

This is the first article in a series of four where I will be explaining the opportunities and value that can be achieved by exploring GigCX. In this article I will be exploring how GigCX affects the cost of your customer service operation.

Fixed costs. They are a problem for every business. Hotel chains have big, expensive buildings to maintain. Retailers have stores and stock sitting on shelves. Customer service companies have enormous aircraft-hangar-sized offices called contact centers.

The cost of maintaining and operating this infrastructure has to be paid before you can start talking profit. If your business faces a lean period then you still need to pay for all that infrastructure – that’s what fixed means. It doesn’t change. If you aren’t making enough to meet those fixed costs, then you are facing a bleak future.

Many corporate leaders have found that cloud-based services can switch a large amount of fixed cost into variable cost. Software and services, storage space on servers and processing power. All this technical infrastructure used to be purchased up front and located in the office – now most companies pay only for the storage they need as they use it.

This is why I believe that the customer service industry is facing a wave of disruption because of GigCX. Traditional contact centers have extensive fixed and ongoing costs for their buildings, power, backup systems, cleaning, and most of the agents are on 8-hour shifts. It’s not very agile and it’s all fixed cost – how can this be transformed into something variable and more efficient?

Think about the hotel I mentioned earlier. A hotel chain needs buildings. Buildings need to be maintained and cleaned. People need to be on the payroll to undertake all this work. All this cost has to be absorbed by your business if you want to offer a hotel where rooms can be booked by customers.

Compare that business model to Airbnb. They don’t own any properties yet over 2 million people spend the night in a room they booked on Airbnb every single night. A manager with a busy schedule could ask his or her company for a car and driver, or the same manager could just use Uber on a company account. Once again, it’s the difference between huge upfront and then ongoing fixed costs or just paying for service as you need it.

The consulting firm Everest Group has predicted that by next year around 25% of all customer service agents will be working on a gig platform. Companies that need to manage their customer service processes are waking up. Why pay for all those 8-hour shifts and physical contact center infrastructure when you could just pay for the customer service agents when they are helping your customers? GigCX transforms customer service operations.

Imagine if you could build a customer service strategy that did not have to finance a contact center, agents on permanent contracts and 8-hour shifts, plus all the associated support services needed to keep such a big operation on the road? What if you could pay for agents only when they are utilized in the same way as your cloud-based servers are only charged for when utilized?

GigCX makes this a reality. It’s possible to hire local agents at much less than they will cost if hired through a traditional BPO or contact center and this is not about pushing rates down so the agents feel undervalued – they are doing fine and they are local to your business, not halfway around the world. The reduction in cost is because your cost to deliver customer service no longer needs to finance the infrastructure and inflexibility of traditional customer service operations.

It is possible to reduce the cost of CX and also increase the quality of the customer experience at the same time, but it cannot happen using the traditional business model of a contact center. It’s time to learn from companies like Airbnb and Uber and to explore how GigCX could change the future for customer service – and your business too!

In my next article in this series I will be focusing on the opportunity for greater business agility offered by GigCX. Stay tuned because it will be published soon!

Check out our LinkedIn page for more ideas and information on GigCX and feel free to leave a comment here with your own thoughts or get in touch directly via my LinkedIn.