Help Desk Startups and the Death of Outsourcing

Help Desk Startups and the Death of Outsourcing

Help Desk Startups are on the cutting edge of technology, leveraging AI and more to make a once costly strategy into a revenue generating well-oiled machine. However to truly understand why these changes have taken shape, let’s dig into the interesting history of Customer Service, Outsourcing, and the Help Desk Startups that are disrupting how businesses normally engage with cusotmers.

The Origin of Help Desks

In the 1950’s, consumerism was at an all-time high, the soldiers were home and babies were booming. Neighborhoods sprang up and demand for family-oriented-friendly homes were at its peak. Households were transformed and standardized as the quality of life for the growing middle class generated demand for entertainment, kitchenware, home appliances. Pre-war brands that survived the Great Depression were now the only manufacturers in their respective industries with little else competition. If you wanted a refrigerator, a toaster, a television, you only had a few brands to choose from, with some companies conglomerating multiple industries into their umbrella of products.

original customer service

 

Satisfying a customer was not a direct strategy for these brands. If your TV broke, there really wasn’t much you could do. They know that despite how upset a customer might become, there wasn’t much recourse, as their only choice was to continue purchasing from the same supplier.

As time grew and innovations continued to produce new goods, along with more international brands entering the US and other foreign markets, competition was starting to take hold. Finally these traditional pre-war brands and their counterparts had to look at how best to satisfy customers in order to keep them from turning to their competitors.

This is where Help Desks came from. In the early 60’s warranties and guarantees were shipped along with most major brand products, and with that comes a range of support staff required to answer any and all customer requests for returns, repairs, and refunds. At this time only mail-in letters and phone calls were taken, and the job was quite workforce reliant to handle large customer requests. But it provided stable jobs to a burgeoning middle class and it was the first attempt at customer satisfaction to keep them from falling into the arms of the competition.

Globalization and Outsourcing

Globalization took grasp of the world at large around the 80’s, right at the cusp of the invention of the internet. While it would be almost a decade before the internet even began to become a household commodity, global trade required cheaper manufacturing costs to supplement the large demand of goods abroad. Outsourcing manufacturing to Japan and later China at this time was one of the most popular methods due to cheap labor costs and large workforces.

So of course some genius along the line thought this method of using cheap labor and large workforces would most definitely apply to customer service and help desks.

Indian call centers

 

This is where India enters the scene in the early 90’s. Geographically center to the global economy, lax IT taxes, a skilled english-speaking population, and an education system that surprisingly leveraged early-computers had come together to create the ideal help-desk, then called call centers, paradise in the world. This all happening right when businesses in the west have been moving their paper-based businesses to computers, the need for tech support became ever-more present. The first call centers opened in India in the late 80’s, early 90’s, to support large companies like American Express, a range of banks, and more, to help computerized customer databases more adequately help customer service inquiries.

As the 90’s went on, Apple and Microsoft vied to put their products into the American household, sped up by the Dotcom Boom, soon consumer related electronics and software were on the shelves and in people’s homes. Now, call centers pockmarked the Indian landscape to support western consumers AND businesses, for even small manufacturers and software developers due to the low-low cost of keeping clients happy.

Bringing it Home

The Indian economy grew along with wages. This was happening when sentiment in the US about outsourcing became increasingly negative as those having been agents in the US have since lost their jobs to their Indian counterparts, an echo of the same sentiment about American manufacturing being moved abroad. However the issue of using cost-effective help desks still plagued businesses.

The approach was no longer about having cheaper customer service. Now it was all about having effective customer service.

In the early-to-mid 2000s young companies with a ton of promise, innovative ideas, and scalable products were popping up and making waves in traditional industries. Live chat on a business’s website helped a great deal in allowing customer service agents to handle multiple inquiries at once.

old live chat

 

A perfect match for the new American household gone online. It didn’t do much to sway companies from giving up on their investments overseas however. Live chat removed the stereotypical sino-Indian accent from customer’s ears, and the original rhetoric about outsourcing soon died down in lieu of the new live chat interactions. However cost was still an issue. These original live chat platforms were mostly built from scratch, bespoke for each business. Which means that they were often times clunky, and not exactly user friendly.

New help desk startups like Zendesk started reinventing how businesses interact with their customers. Live Chat moved to a SaaS model, and rather than providing the help desk service as an offering, these startups simply provided the software platform needed to wrangle up a few agents and get them answering questions very quickly. The platform plugged into most website HTML without issues, and soon the new norm took grasp in most SMBs and even some enterprises looking to do something new.

Live chat didn’t really change since it started, but now companies had the power to do with it what they liked. They could hire an outsourced workforce to man the new software, which some did, but others chose to hire locally due to the new easy-to-use UI, and it’s ability to integrate with other tools in the company, tying in multiple departments to help tackle customer issues.

This new system allowed for more upward mobility of customer service, taking a more technical role in the customer service process. Soon, India’s major call centers downsized, or outright went out of business. While IT support is still a prominent industry in India, the new economic growth has actually caused call centers in India to support their own customers at home rather than abroad.

The Age of Help Desk Startups

In the later 2000s and early 2010’s, the original Help Desk startup giants like Zendesk, Intercom, and Freshdesk have become more expensive over time, focusing on core Medium sized businesses. New help desk products have been approaching the market with new ideas and new technologies to steal the competition. While the original help desk startups still hold a large portion of market value, the issue of agent hiring costs still plague businesses today.

help desk startups

 

A new age is dawning on the customer service industry. New startups are starting to come out of the crevices with similar products like the original platforms. All the features are there, and thensome. However 2 major trends in both technology and user behavior are soon to provide avenues of success to those startups who are quick to deploy relevant tools to the market. These two major trends being Artificial Intelligence, meant to automate replies, and the shift of live chat from being based on websites to being through messaging apps.

The first of the trends, AI, started off as chatbots. Natural Language Processing transformed user language input into machine code that could be read, compared to a matrix of other terms which were also translated to machine code, and through some machine learning and comparisons of this code, the NLP can deliver the answer back to the user with some accuracy and speed. Daring enterprise businesses jumped to this method in order to cut down the cost of hiring customer support staff. After all, if your chatbot can answer your customer’s inquiries around the world instantly and at the same time, the need for staff diminishes exponentially.

At the same time social messaging via popular messaging apps like Whatsapp, Facebook Messenger, and WeChat has actually surpassed other mediums of communication. With this in mind, businesses have taken to social media to engage their customers and support them. By using messaging apps, the conversation became more personal, and soon most businesses were engaging at some level on social media and messaging apps with chatbots. The perfect mix, right?

Unfortunately, as beautiful an image it may be, chatbots still could not replace the tried and true method of having a human-to-human conversation. Chatbots took years to develop adequately for customer service use, laws against the use of chatbots for accessing sensitive customer information like in the medical & financial sectors were coming into place, and failures due to poor training or maintenance have now left a bad taste in the mouths of those that invested in it.

Furthermore, chatbots needed immense customization to be relevant customer service bots, which means there is no bot out there that can be copied and pasted into any business. Building chatbots is just not scalable, and so no major chatbot startup ever unicorned its way into the customer service market.

But that’s not the end of the road quite yet for AI.

The Age of Hybridized Messaging

Today, some help desk startups and chatbot agencies have noticed this recent decline in interest in chatbots. The idea is still a sound one, but the execution was not scalable, or reliable enough.

Chatbots, however, are only a certain kind of Artificial Intelligence. AI presents itself in a multitude of different ways. Facial recognition, voice recognition, neural networking, machine learning, and more. It’s the combination of these types of AI that could produce the right concoction that solves major problems for businesses. AI can still save costs on hiring customer service staff, and it won’t be with chatbots, it will be with hybridizing AI with humans.

AI Hybrid Customer Service

No, not like creating cyborgs. But by leveraging AI that observes and learns from human-to-human conversations. Help Desk platforms already provide the necessary features to enhance live chat, but 24/7 staffing and having enough staff to handle large volumes of chats still plagues businesses, but so do chatbot failures.

There’s a sweet spot in-between. By letting AI learn from conversations, the AI can then increase its confidence in understanding and knowing the answers, and with the knowledge, begin to step in for the agents. The more data it learns from, the more often it will automate answers. Thusly solving the issues of chatbot failures from poor training and maintenance.

The initial deployment of these hybrid AI help desk startups will be manual in the beginning. Agents still need to talk with customers. But as time goes on, the learning curve kicks in, and the AI will begin taking over more and more each day. By delivering a blank AI that learns from conversations, there’s no customization required. But the end product is basically the chatbot clients have always been looking for.

This new breed of help desk startups are now at a point where they’re scalable. By providing adequate AI to agents, scalability gets passed down to the businesses who use the AI. Scaling support, and not their staff.

To learn more about how you can leverage AI hybridized agents in your business, sign up for rocketbots, and let AI learn from your first 1000 messages for free.

Author
Robert Rafferty

Robert is a Growth Hacker enthusiast that’s joining Rocketbots as the Head of Growth. He helps Rocketbots in becoming the voice of all things conversation and is famous for wearing shorts to the office. A graduate of the College of Business at Florida Atlantic University.

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