New customer-care technologies have made it possible to maximize revenues, savings, and customer experience all at once. But to maximize competitive advantage, companies must be smart—and quick.

Until recently, the majority of the discussions around customer care focused on reducing labor costs by optimizing service levels, implementing lean practices, and achieving the optimal mix of offshoring. The increasing complexity of customer engagement meant few if any companies were equipped to pursue these goals while at the same time improving customer satisfaction and increasing revenues from their care interactions. However, with today’s highly discerning customer base, companies across industries realize that customer care has become a major contributor to their overall customer satisfaction and can serve as a competitive advantage in the market. The proliferation of digital-care capabilities—for example, web and mobile, interactive voice-response (IVR) powered by natural language processing (NLP), and behavioral routing, among others—has enabled companies to adopt a customer-first mind-set without giving up on cost and revenue targets.

The challenge for companies, today and in the future, is serving digitally oriented customers while finding ways to use customer care as a core differentiator. The contact center, a vital component in this strategy, must now focus on achieving performance excellence across all three key priorities: customer experience, cost optimization, and revenue maximization.

Five dynamics shifting the industry

Amid this ever-evolving landscape, McKinsey conducted a survey of customer-care executives to gain a better understanding of the factors that are shaping the future of customer care.1Our analysis identified five key trends that executives should factor into their strategies.

1. Inbound calls will decline in number or be eliminated

Frontline automation is rapidly changing the requirements of traditional call centers. In our survey, nearly three out of five customer-care leaders said that inbound call volumes will decrease in the next five years. Within ten years, 40 percent of respondents said the number of inbound customer-care calls will fall significantly, perhaps to zero. As digital channels handle more transactional requests, the remaining customer interactions will be more complex and account for the largest share of volume in traditional call centers. Meanwhile, more and more executives are becoming aware of the competitive advantages of a superior customer experience. Enterprises are therefore adopting service designs that emphasize simplicity and lower costs while reducing the need for agents to handle low-value calls (or low-value transactional activities) by directing traffic to digital and self-service channels. Striking the optimal balance between digital and human interaction will be critical going forward.

2. Digital-care channels are already the starting point for most customer-care interactions

Survey respondents said that in 2015, digital-care channels (such as web chat, social media, and email) accounted for 30 percent of all their customer-care interactions. By 2020, they believe that share will rise to 48 percent. One reason: the growing number of “digital natives” who grew up communicating over the Internet and expect digital care. As one executive noted, “Customers are demanding it.” Organizations will therefore continue moving forcefully to service and resolve their customers’ low-value transactions, inquiries, and problems through digital channels, including Internet robots, or “bots.” Over time and across industries, all such interactions will take place through digital channels. With the evolution of bots and virtual assistants focused on chat, such channels are poised to become the gateway and triage medium for all of today’s live telephone contacts. Apps on mobile devices already provide virtual assistants to help customers navigate self-service options or to route customers directly to the right agent queue. To develop an omnichannel strategy for customer care, leading organizations are focused on mapping the customer journey across digital and traditional interactions.

3. Large investments will be required to improve the skills of customer-care workers

As transactional calls move to digital channels, more complex interactions—such as cross-selling and upselling and financial advisory—will account for the largest share of volume in traditional call centers. The majority of survey respondents expects automation to replace not only more transactional interactions but also about 25 percent of the activities of even exceptional customer-engagement agents. Consequently, customer-care executives may need to develop teams of highly skilled agents able to handle more complicated, higher-value transactions.