How CPG companies can enhance customer satisfaction while reducing the cost to serve

Balancing the need for superior customer experiences with the rising costs of contact center operations has become one of the most pressing challenges for CPG companies.
Delivering personalized, timely support drives loyalty and growth, yet without the right orchestration and tools, escalating service expenses can quickly erode profitability.
 

Touchpoint

Customer care leaders within CPG companies are facing rising call volumes and increased contact center costs at a time when resources – both human and financial – are in short supply. Customer self-service is the obvious way to square this circle: 65% of business leaders say they are investing in this technology. And this is fine with their consumers, 81% of whom reported that they want more self-service options. 

Many CPG companies are finding that Contact Center as a Service (CCaaS) technology is the fastest way of getting – and maintaining - access to the latest self-service options such as AI-powered chatbots, self-service portals, and video tutorials.  CCaaS typically involves a subscription-based model with predictable costs, eliminating the need for upfront investments in hardware and infrastructure and reducing overall costs.

 

When it comes to customer service, the twin ambitions of Consumer-Packaged Goods (CPG) companies – to deliver superior customer experience and to rein in escalating contact center costs – are increasingly becoming mutually exclusive.

The value of great CX is well understood: good customer service not only helps retain existing customers but also attracts new ones, boosting overall profitability and market competitiveness.

Delivering superior experiences helps CPG to foster stronger customer relationships, enhance brand loyalty, and drive repeat business. When customers receive timely, personalized support, it increases their satisfaction and trust in the brand, leading to positive word-of-mouth recommendations and improved reputation.

Excellent customer service can also help CPG companies resolve issues more efficiently, reducing the likelihood of returns or negative feedback. Furthermore, by addressing customer needs proactively, companies can gain valuable insights into consumer preferences, enabling them to refine products and tailor their offerings.

For customers, access to a live contact center agent is critical to their perception of what makes up a great customer experience. Recent research shows that almost half (48%) of customers said that speaking to a real person was the mechanism that made consumers feel the most understood and listened to (!). The same study found that speaking on the phone was the preferred means for consumers to communicate with brands (32 percent), followed by email (31 percent) – and greatly outpacing online chat (12 percent) and social media (8 percent).

But many companies, conscious of the high cost of customer agents compared with their digital counterparts, go to great lengths to prevent customers from being granted the human contact they crave – with predictably dire results for customer satisfaction. Additionally, contact center costs are being ratcheted up for a number of reasons.

Firstly, customers now expect CPG companies to provide seamless support across multiple channels on a 24/7 basis.  And, as customers expect more personalized interactions, customer care leaders need more sophisticated tools, data integration, and training for agents to deliver customized support.  At the same time, the demand for proactive customer service, where companies reach out to customers with relevant offers or preemptively solve issues, adds to the operational workload and costs for CPG companies.

As CPG companies expand globally, they need to provide customer service in multiple languages. Beyond language, providing culturally relevant customer support often requires region-specific teams, training, and localized processes, further driving up contact center costs. Rising labor costs, particularly in regions where contact centers are heavily staffed, are contributing to increased operational expenses for CPG companies.

The rapid growth of e-commerce has led to a higher volume of customer inquiries related to online orders, returns, and shipping. Managing these interactions efficiently requires more resources and technology. E-commerce growth also means handling a higher volume of returns and refunds, which adds operational costs to the contact center, particularly when specialized support is needed to manage complex return processes.

GenAI to the rescue?

Many CPG companies are turning to generative AI (GenAI) to square this circle. Often using Natural Language Processing (NLP), these AI-powered solutions understand and interpret routine customer queries in real-time, enhancing the customer experience by providing accurate and timely responses. Customers increasingly prefer self-service options, such as FAQs, AI-powered chatbots, and IVR systems. AI systems enable businesses to implement these options, allowing customers to resolve issues independently, which reduces the load on contact center agents.
However, when a customer gets into difficulty or has a more complex requirement, then human agents should intervene. In these situations, Automated Call Routing powered by AI ensures that customers are connected with the right agent or resource quickly, reducing wait times and improving customer satisfaction.

Research by McKinsey (!) suggests that as much as 80% of customer contacts could be automated using AI. A different study by Boston Consulting Group (BCG) estimates that, by offloading responsibility for handling everyday queries to GenAI-based tools, solutions like this could increase agent productivity by 30% to 50% — or more. And according to its survey of global customer service leaders, 95% expect their customers to be served by an AI bot at some point in their customer service interactions within the next year.

The downside to this solution is that implementing and training the Large Language Models (LLMs) on which GenAI depends is complex, expensive and requires access to skilled resources that are in very short supply. In addition, while AI and automation can reduce long-term costs, the upfront investment in technologies like chatbots, virtual assistants, and predictive analytics can be substantial. Additionally, integrating AI with legacy systems can require significant resources.

Bought-in, built-in

This is one of the drivers behind the rapid growth of the global market for Contact Center as a Service (CCaaS) solutions which analysts expect to grow from USD 6.08 billion in 2024 to USD 24.45 billion by 2032, exhibiting a CAGR of 19.0% (!). CCaaS is a cloud-based, subscription model that allows businesses to use third-party contact center software, streamlining customer touchpoints onto a unified platform to enhance efficiency and revolutionize customer satisfaction.

At a general level, CCaaS solutions address one of the most fundamental challenges facing CPG companies – breaking down the data siloes resulting from their large, complex and sometimes fractured operational footprints. CCaaS solutions consolidate customer data from many and varied touchpoints into a single platform and make this accessible to call center agents so that they have a unified view of their customers and a complete history of their interactions with the company.

More specifically, companies offering CCaaS are continuously striving to enhance services by building into their platforms intelligent AI systems for detailed customer insights, tailored interactions, and automation, ultimately optimizing efficiency, quality, and cost-effectiveness. These are integrated with advanced analytics systems to populate dashboards with pertinent data and empower users with real-time insights into customer experiences. These systems include:

• AI-Driven Customer Support: AI tools such as chatbots, virtual assistants, and automated workflows are becoming essential in contact centers. CCaaS solutions integrate AI to handle routine inquiries, provide self-service options, and enable quicker resolution of customer issues, reducing agent workload and improving response times.
• Automated Analytics and Insights: CCaaS platforms often integrate with AI-powered analytics tools that can monitor conversations, provide real-time feedback to agents, and deliver actionable insights into customer behavior.
• Leveraging generative AI for summarization: this helps contact center agents during and after customer interactions, enhancing customer experience and reducing post-call wrap-up time. Additionally, contact center managers benefit from AI-generated summaries of calls and trends, facilitating issue identification and targeted coaching.

Interestingly, research suggests that the overwhelming majority (94%) of contact center agents believe artificial intelligence will support them in their role, despite the perceived threat to jobs. The majority (57%) believe AI will help solve customer queries faster, provide them with more information on the customer (56%) and enable them to focus on more challenging tasks (56%), according to a study of 250 contact center agents in the UK (!).

From Consumers to Customers

At first glance, the desire of CPG companies to reduce rapidly escalating contact center costs while also improving customer service seems irreconcilable. At the same time, key trends such as the shift to cloud-based solutions, the rise of AI and automation, omnichannel engagement, and the growing importance of remote work are reshaping the contact center industry. 

In this context, CCaaS solutions are emerging as a silver bullet for CPG companies. They can use the AI services native to these solutions to automate the handling of routine inquiries and boost the efficiency of contact center staff. At the same time, moving contact center operations to the cloud effectively outsources all system maintenance, upgrades, and scalability to minimize the need for internal IT resources while significantly reducing the capital expenses related to on-premise hardware and software. These benefits can lead to a dramatically lower total cost of ownership.

In doing so, CCaaS resolves the seemingly paradoxical requirements for reduced contact center costs and enhanced customer satisfaction and supports CPG companies in transforming consumers into loyal customers.