Harvard Case - LiveOps: The Contact Centre Reinvented
"LiveOps: The Contact Centre Reinvented" Harvard business case study is written by Karan Girotra, Konstantinos Stouras, Serguei Netessine. It deals with the challenges in the field of Operations Management. The case study is 13 page(s) long and it was first published on : Oct 27, 2014
At Fern Fort University, we recommend LiveOps adopt a hybrid model combining the strengths of their existing virtual contact center with a limited physical presence strategically located near key customer segments. This approach will leverage LiveOps' existing technology and analytics while addressing customer service needs and building brand loyalty.
2. Background
LiveOps, a pioneer in virtual contact centers, faces a critical juncture. While their innovative business model has disrupted the traditional contact center landscape, they are encountering challenges with customer perception and operational efficiency. The case study highlights concerns regarding customer satisfaction with the virtual experience, agent turnover, and cost optimization.
The main protagonists are Jeff Sine, CEO of LiveOps, and Sarah Jones, a customer service representative, whose contrasting perspectives represent the core challenges: operational efficiency vs. customer experience.
3. Analysis of the Case Study
Strategic Analysis:
- Competitive Advantage: LiveOps' core strength lies in its technology-driven approach, offering scalability, cost-effectiveness, and flexibility. However, competition is increasing, with traditional contact centers adopting similar technologies.
- Customer Value Proposition: While LiveOps offers convenience and cost savings, customers are increasingly demanding personalized service and human interaction.
- Operational Efficiency: LiveOps' virtual model faces challenges with agent retention, training, and quality control.
Financial Analysis:
- Cost Structure: LiveOps' virtual model offers lower fixed costs but faces higher variable costs due to agent turnover and training.
- Revenue Growth: LiveOps needs to expand its customer base and increase service offerings to drive revenue growth.
Marketing Analysis:
- Brand Perception: LiveOps needs to reposition its brand to focus on customer experience and personalized service.
- Customer Segmentation: LiveOps should segment customers based on their needs and preferences to offer tailored service experiences.
Operations Analysis:
- Process Design: LiveOps should optimize its agent onboarding and training processes to reduce turnover and improve quality.
- Technology & Analytics: LiveOps needs to invest in advanced analytics to monitor customer sentiment, optimize agent scheduling, and improve service quality.
4. Recommendations
1. Hybrid Contact Center Model:
- Establish limited physical locations: Strategically located near key customer segments to offer in-person service and build brand loyalty.
- Develop a tiered service model: Offer virtual service for routine inquiries and in-person service for complex issues or high-value customers.
- Leverage technology: Integrate virtual and physical channels seamlessly to provide consistent customer experience.
2. Enhance Customer Experience:
- Personalize service: Utilize customer data to offer personalized interactions and proactive support.
- Invest in agent training: Develop specialized training programs to enhance communication skills and product knowledge.
- Implement quality control measures: Implement rigorous quality monitoring and feedback mechanisms to ensure consistent service quality.
3. Optimize Operations:
- Improve agent retention: Offer competitive compensation, flexible work arrangements, and career development opportunities.
- Streamline onboarding and training: Develop efficient onboarding processes and online training modules to reduce time and costs.
- Leverage analytics: Utilize data analytics to optimize agent scheduling, identify performance bottlenecks, and improve service efficiency.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The hybrid model leverages LiveOps' existing technology and analytics while addressing customer service needs.
- External customers and internal clients: The hybrid model caters to diverse customer needs and improves agent satisfaction by offering career growth opportunities.
- Competitors: The hybrid model differentiates LiveOps by offering personalized service and human interaction, a key differentiator in the competitive landscape.
- Attractiveness: The hybrid model is expected to increase customer satisfaction, reduce agent turnover, and improve operational efficiency, ultimately leading to increased revenue and profitability.
6. Conclusion
By adopting a hybrid contact center model, LiveOps can leverage its existing technology while addressing customer service needs and building brand loyalty. This approach will enable LiveOps to maintain its competitive edge, enhance customer experience, and drive sustainable growth.
7. Discussion
Alternatives:
- Fully virtual model: This option focuses on cost optimization but risks alienating customers seeking personalized service.
- Fully physical model: This option would require significant capital investment and potentially limit scalability.
Risks:
- Implementation challenges: Transitioning to a hybrid model requires careful planning and execution.
- Cost overruns: Establishing physical locations may increase operating costs.
- Customer resistance: Some customers may prefer the convenience of virtual service.
Key Assumptions:
- Customers are willing to pay a premium for personalized service and human interaction.
- LiveOps can effectively integrate virtual and physical channels.
- The hybrid model will result in improved customer satisfaction and agent retention.
8. Next Steps
Timeline:
- Phase 1 (3 months): Conduct market research to identify key customer segments and potential locations for physical centers.
- Phase 2 (6 months): Develop a pilot program with a limited number of physical locations.
- Phase 3 (12 months): Evaluate the pilot program and expand the hybrid model based on results.
Key Milestones:
- Develop a comprehensive business plan for the hybrid model.
- Secure funding for physical locations and technology upgrades.
- Recruit and train agents for physical centers.
- Implement a new customer relationship management (CRM) system to manage customer interactions across channels.
By taking these steps, LiveOps can successfully transition to a hybrid contact center model, enhancing its customer experience, improving operational efficiency, and achieving sustainable growth.
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Case Description
The case is about the emergence of the virtual contact centre, which employs a geographically dispersed workforce in the cloud. LiveOps' 'home-shore' business model combines the following innovations: (1) it allows agents to work when they choose to, but pays them only for the time they are serving customers, and (2) it is based on meritocracy, i.e., better performing agents get more work and are paid more. The virtual contact centre is evaluated against traditional contact centre solutions in the context of a relief operation helping storm evacuees connect with relatives in the wake of Hurricane Katrina.
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