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This $300 Billion Industry Has Been Outdated for a Decade. Here's How to Fix It. It's finally time to harness the power of tech to take care of customer service.

By Andrew Medal

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Neil Webb | Getty Images

Phone services, particularly call center customer services, have lagged behind the growth of the technology sector. As technology trends toward interactive and user-friendly interfaces, phone-based customer service remains a frustrating experience that continually disappoints.

The worldwide call center industry is estimated to be worth $300 billion as reported by Tech In Asia. However, inefficiencies plague both the customer-facing side and business back-end of the customer service model. Companies struggle to manage the incoming call volumes, leading to extended waiting periods and the proliferation of ineffective automated voice systems. Customers are often left with a terrible impression that can have a significant impact on their brand loyalty and view of the company.

Related: 10 Reasons Why Good Customer Service Is Your Most Important Metric

An industry that needs to evolve

First call resolution (FCR) and service level/response time are often-cited metrics (as reported by ICMI) within the call center space that can have tangible effects on customer satisfaction. Improved FCR can reduce costs by minimizing repeat callers, increase employee satisfaction and directly correlates to customer satisfaction. However, the model is outdated for achieving such metrics, and removing the need for repeat callers by trending away from phone-only communication with customer service representatives is becoming widespread.

The industry standard for response time is roughly 80 percent, as documented by Call Centre Helper, of calls answered within 20 seconds. For people who are all too familiar with customer service lines, this typically does not come anywhere close to when a problem is resolved, or a human interaction is reached. Callers are perpetually frustrated with the experience as the prevalence of automated systems with limited options have increased.

A study by Clarabridge last year highlighted how the problems with the call center model are felt on both sides of the telephone line. Despite the industry standard of 80 percent of calls answered within 20 seconds, 46 percent of the respondents in the study cited long wait times as the top issue with call centers. Conversely, 86 percent of agents say they deal with irate callers, either stemming from long wait times or problems with the product/service.

The notion that a large percentage of customer service activity is conducted via telephone is relatively disconcerting considering the proliferation of technology over the last two decades. The large design space of the internet and the emergence of communication apps should have easily improved the customer service experience over the last decade. This is not the case.

Some companies have attempted to transition away from the phone service model by utilizing social media platforms and direct messaging. These models are often in combination with phone service systems and remain in their early stages. Others have focused on enhanced training and metrics for callers with solutions like BrainX to personalize customer service rep training experiences. Despite this, the new models tend to focus less on user-friendly interfaces and more on building upon an existing structure.

Related: Steal These 4 Proven Customer-Retention Strategies

Integrating technology for a millenial-focused customer service experience

While many businesses have stuck with the traditional call center methods, some companies have begun building technical solutions to ease the process and improve customer satisfaction by emphasizing a younger, app-prone generational approach.

With some of this new tech, users can chat with customer service agents through SMS texting, audio files or even picture sharing -- formats that notify customers when a human agent is available while they work on other tasks. Demand-based engagement tailors the experience to the customers and problems with repetition are removed by the ability to make service choices at their own convenience rather than being forced to press numbers at given times.

Related: 25 Tips for Earning Customer Loyalty

The benefits of this new tech extend past the customer service component of the user to saving costs for businesses on the back-end. Time consumption is reduced by at least tenfold for action to be taken, and incoming call volumes can be slashed dramatically reduced. As a result, costs for training customer service reps and building call center infrastructure decrease providing more profit to companies.

For millennials, the popular applications and services are those with the most user-friendly interfaces and best user experience (UX) that customer service can offer. By transitioning away from a severely antiquated model of customer service, predicated on 1990's phone services, new tech is appealing to a younger generation of users and businesses looking to improve efficiencies.

Call center customer service has historically been a frustrating and time-consuming experience (think of all of the crappy hold music you've had to endure over a lifetime). If we can overcome the need for every customer service experience to be held through a phone conversation, we can do away with a customer service system that's been outdated for a decade.

At the very least, maybe companies can start using Spotify playlists for on-hold music (one can only imagine).

Andrew Medal

Entrepreneur & Angel Investor

Andrew Medal is the founder of The Paper Chase, which is a bi-weekly newsletter. He is an entrepreneur and angel investor.

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