When you consider that over the past year, poor customer service cost US businesses 75 billion dollars—a 20% increase from the previous year— it's little wonder that 66% of respondents actually prefer self-service systems to speaking with a brand representative. Small-to-medium business (SMB) leaders are at a critical decision point for defining their customer experience (CX) and service interactions. Is it better for SMBs to opt for technology partners who can bring scale and expertise to support their efforts, or is it more efficient to invest in an in-house solution?
The best CX tends to be convenient, responsive, and tailored to the individual. But, the growing number of customer service options makes this a constant challenge to achieve.
What style of customer service software technology is best for your business?
On-premises options present a lot of potential customization and data access for your team. This can be great for an SMB that wants to be dynamic and agile in developing their service portals. What's more, depending on your industry, some customers may feel more secure knowing that their data is housed on-site rather than with a third party. However, this can present a lot of up-front costs, including hosting the right equipment, hiring support staff, and maintaining your team and technology as you scale.
Alternatively, cloud-based software can provide a predictable and scalable hedge against financial risk while your business grows. The right platform-as-a-service (PaaS) partner can also often provide your business with exposure to new techniques, technology, and expertise more quickly than your in-house resources. This comes at the expense of some proximity to your data, and possible restrictions to customization or development, depending on your chosen software.
There are 3 key areas to consider when choosing between an on-premises versus cloud-based customer experience (CX) solution:
Customization and Support: The primary hidden costs of a CX software solution lies in scaling and maintenance. When calculating costs, think critically about how much your business plans to expand over the coming five years, and what internal overhead would be demanded to support that growth on-premises. It's also a good rule of thumb to consider that traditional software licensing will typically demand large-scale updates roughly every 4 or 5 years.
Security and Compliance: Understand how data security and regulation compliance relate to your software. In some cases, a large technology partner may be helpful for SMBs that must stay up-to-date on security and industry standards, while some niche industries might find that in-house teams are more capable of keeping your interactions secure and compliant. Being realistic about how much security and regulatory expertise you have in-house is helpful when comparing options, particularly for businesses working with customer conversations that include privileged information.
Integration and Channels: Customer experience has become a multi-channel venture. Many popular PaaS solutions offer-out-of-the-box integrations and tools that can make it easy to overlay customer service systems with your existing ticketing and communications technology. On the other hand, enterprise software packages can lead to paying for redundant or completely ignored services that you don't need. Consider your agreements or in-house tech stacks carefully to focus on paying only for complimentary services.
Ultimately, the best solution for your small-to-medium business is the one that enables your team to consistently delight your customers and helps them solve their problems quickly. This requires a nuanced understanding of your customers' expectations and preferences that requires consistent learning, responsiveness, and a willingness to change over time. But to control costs, it is vital to be realistic about how much growth, development, and maintenance your team will need to support over time.