Are Cloud-Based Call Centers the Next Hot Product for the SMB Market?

By Dan Baker

Good customer service is a strategic business lever. This is certainly the case in the telecom market. In many cases, the difference between the voice, messaging and data service is marginal, so high quality customer service becomes the edge for retaining existing customers and attracting new ones.

It’s the same for any vertical market: Quality customer service can improve a company’s corporate identity and drive business growth. But unfortunately, the issue for many businesses – especially small and medium-sized ones – is they are often priced out of acquiring modern call center technology, the starting point for a good customer service operation.

Or at least until now. I recently interviewed Doron Dovrat, CEO of Tikal Networks, an Israeli firm that designs and develops end-to-end telephony and contact-center solutions.

Tikal’s hottest product is a cloud-based call center that Doron claims “delivers the benefits of a large custom-built call center to SMBs at a much lower cost.” That’s quite a claim, but in the following interview Dovrat fully explains the economics of cloud call centers and his plan to enter the U.S. market soon and work with channel partners.

Dan Baker: Doron, pushing cloud call centers to SMBs is an intriguing idea. But how well is this idea taking off so far?

Doron Dovrat: You’d be surprised at the range of SMBs that have deployed our technology. We have communications service providers, industrial companies, government organizations, financial services companies, insurance companies and a range of others with anywhere from just a few to dozens of agents using our solution.

Now, I will admit that lots of SMBs are at first reluctant to take the leap, but we can easily demonstrate the benefits. I will give you an example. One of our customers is an insurance agency with 90 agents spread across multiple locations. They were working with an outdated call center system and inefficient manual processes. The company understood they needed to make a change, but were hesitant to move forward. The risk of interrupting businesses processes and losing revenue was a big concern. We assured the CEO that the deployment would be fast. We completed the installation, configuration and training within days. By day five we had their 90 agent call center in full production.

Our experience shows that many SMBs who do not have any contact center technology, whether they are conscious of it or not, are already operating contact center-related processes. At the very least, most have ad hoc processes and all dedicate time for dealing with customers, answering questions, scheduling meetings and so forth. Without a dedicated system or formalized business processes, these ad hoc activities are a hidden cost and even a burden to the business.  We are good at showing SMBs the huge benefits of moving to formal call center systems and can connect the benefits to the growth of their businesses.

DB: Why are you coming into the U.S. market and what are your plans for channel distribution?

DD: The U.S. is a huge market — there are about 20 million SMBs across the country and they drive around 50 percent of the U.S. economy.  Most of these SMBs are generally unaware that they can create a first-class customer contact operation of their own at an affordable price.

Our plan is to enter the U.S. market in the second quarter of 2015 with local partners and also sell direct via a do-it-yourself website. We figure that most of our partners will be companies who specialize in selling IT and related services to SMBs.

In the U.S., there are many outsourcing companies that provide call center services to SMBs. We will also be targeting these types of companies.

DB: What probably will be the biggest challenge selling cloud call centers for SMBs in the U.S.?

DD: It’s probably the mental block that says call centers are a luxury that only big companies can afford.  Many SMBs assume that call center solutions are expensive and require a large IT staff and budget.  With cloud technology, this is no longer the case.

At the same time, SMBs also underestimate how valuable first-class customer service can be to their growth.  Large enterprises and midmarket companies have the tools and budget to provide the kind of customer service that increases loyalty and provides a competitive advantage.  So by offering an affordable, cloud-based service like ours, SMBs can be in the position to compete against the larger players in their markets.

We think the must-have requirements for the SMB market in the U.S. are as follows:

DB: What are the advantages of going with a cloud-based call center solution?

DD: Well, due to their limited resources in both in the IT domain and staffing, SMBs are looking for solutions that are easy and intuitive to use, while being simple and cost efficient to implement and maintain.  Furthermore, small companies often cannot afford the upfront capital investment in equipment and the ongoing need to employ an IT team to maintain complex systems.  Cloud-based technology offers an attractive, affordable, subscription-based path to obtaining an advanced contact center.

An on-premises system, by comparison, is much less flexible because it’s highly dependent on the capacity of the local servers.  But with the cloud, if you decide that tomorrow that you need an extra 50 or 100 agents to support a new campaign, it’s very easy to provision.

Current Web architecture allows call center reps to easily work anywhere: in the office, at home or some any long distance or remote location without any restrictions.  And for the handset, you can use either an IP phone, a softphone installed on the PC/laptop, a smartphone or even a tablet.

The design of our system is very generic and not industry specific, which means customers enjoy the flexibility to configure their own workflow processes.  Full integration with CRM software or other internal or third-party systems is available.

And being in the cloud does not mean you sacrifice capability.  For instance, Tikal supplies a full dashboard and reporting capabilities.  The business can see how many calls are coming in, their average waiting times, list of abandoned calls, etc.  They get all the analytics they need to manage their call center operation correctly and efficiently.

DB: Thanks, Doron. You make a good case that cloud-based call centers are a big opportunity for SMBs.

DD: Dan, the secret to success in this market is educating SMBs that not only are sophisticated call centers within their reach, but also they can provide the same call center service a large firm can deliver at a very affordable price.  The gain in customer loyalty and satisfaction will move their businesses forward.

Dan Baker is research director of Technology Research Institute (TRI). He is also editor of the Black Swan Telecom Journal and Telexchange Journal.