Jeff Valentine is senior vice president of product at M5 Networks ShoreTel’s cloud division, and is responsible for bringing new M5 products and services to market.

Zor Gorelov, CEO of Speech Cycle, recently wrote an article in which he suggested that the call center “will cease to be the primary channel between companies and their customers. In its place, the smartphone will become the contact center of the future. He predicted this shift would happen by the end of 2012.

While there is no doubt that the rise of the smartphone opens up many new opportunities to interact with clients, for at least the foreseeable future, clients who need help are most likely to use that device to call customer support. (It is a phone after all.) Here are just a few of the reasons why the call center is hardly dead.

Reach

A phone number has (nearly) 100% reach. Everyone can call a number. On the other hand, a service app that offers customer support would not fare as well. According to one Comscore report, 11.2% of mobile phone users have an iPhone. So, if you build a customer service app for the iPhone, 88.8% of your customers won’t find, install, or use the app. They’ll just call. You could increase the reach (and triple your cost) by building apps for Android and BlackBerry as well. But even then, only 48.6% of smartphone owners use a downloaded application. This means you have to factor in how many of the roughly 50% of smartphone users who are inclined to run an app will be drawn to yours. Even if it's 50%, is it worth it?

Cost

It costs about $1 per minute for the average call center to service a customer. So, 1,000 customer calls lasting ten minutes each costs $10,000. The average cost of developing, launching, promoting, and maintaining a mobile app is about $30,000. Will such an app result in call volume decreasing by 3,000 calls in a year? Reducing calls by 3,000 in a year doesn’t seem nearly as likely if fewer than 12% of your customers can use the iPhone app. Of course, you could increase your cost to $90,000 by adding Android and BlackBerry. Then, the math only works if you can decrease your call volume by 9,000 calls.

Better, Less Expensive Call Centers

Recent innovations in cloud computing and unified communications have actually made a high-touch call center a more viable option than ever. Some cloud providers can deploy contact center functionality for far less than the old guard for a few reasons:

You don’t have to use dedicated agents anymore. Cross-trained workers can become agents “on demand” when call volume requires it, reducing the inefficiencies of having full-time call center staff. Call center agents spend an average of 49 minutes per day idle, according to Contact Babel, while knowledge workers will fill idle time with other work. This lost productivity costs approximately $12,500 per month for a 50-agent call center.

You don’t have to buy call center systems anymore. Traditional contact center solutions cost $1,200 to $1,500 per agent, plus installation, integration, and training. There’s also a charge of $300 per agent, per year, for maintenance. Using the 50-agent call center example and a three-year life span before the vendor stops supporting it, an on-premise system costs more than $140,000. In contrast, a hosted call center platform, for example, sells for $50 per agent, per month. It costs 35% less and requires no upfront capital investment. When you add the extra costs of IT administration for on-premise systems, the cloud-based option is an astounding 70% less expensive. Companies that want to offer live agent customer support can do so for less than ever.

The Bottom Line

The cost of providing high-touch customer service using the most important channel today — voice — won’t change just because people have smartphones. What would you do if your new digital camera didn't turn on? Search the app store for the digital camera manufacturer’s app, download and install it, register your camera, and then walk through a nice pictorial troubleshooting wizard? Or would you use that same phone to dial the toll-free number for customer support?

Image courtesy of iStockphoto, londoneye