Dick Bucci, Associate Consultant, The PELORUS Group
According to the newly released 2006 World Contact Center Recording Systems Market, published by The PELORUS Group, 2005 was another terrific year for call recording vendors. Global sales, at $550.5 million, passed the half-billion dollar mark for the first time. Revenue was up by 13 percent over 2004 and is expected to grow another 13 per cent in 2006 and top $620 million. PELORUS’s research addresses the contact center market only. Sales to public safety centers and financial trading floors are not included.
Several factors are driving revenue growth. Among these are growing adoption rates for VoIP and the power of analytics to extract valuable marketing information from archived interactions. The deployment of call distributors designed for Voice over Internet Protocol (VoIP) is driving leading call recording vendors to introduce new designs specifically architected for recording packet-based rather than circuit switched voice and data calls.
Recognition of the power of analytics is compelling call centers to replace legacy recording systems or add analytics modules to existing systems. Call archives contain a rich database with important insights to customer needs, behavior and vendor attitudes. When call records are merged with other databases such as tech support calls and customer account files and searched by key words or phrases, analysts can ascertain the success of promotional campaigns, incentive offers, and causes of customer churn. And unlike sterile statistics from customer surveys, researchers can hear what callers are actually saying and in what tone of voice. Although the investment in speech and data mining can be substantial, the information gained can be crucial to developing marketing strategies that result in stronger customer loyalty and more effective promotional methods.
The interest in analytics is also a factor in the sharp swing we have seen over the past three years to full recording compared to selective recording (quality monitoring). Extremely valuable customer insights lie buried in the vast storehouse of archived interactions that exist in every contact center. Until the advent of speech and data analytics it was very difficult and costly to sift through the literally millions of interactions looking for the golden nuggets that can help drive market share growth.
The past two years have been good for call recording vendors and 2006 will be another year of double-digit sales gains. However, growth will decline to the low single digits by 2009 unless vendors adjust market strategies for a new competitive environment. Post-Y2K replacements will dry up and demand will take on the complexion of a mature market rather than a growth market. In 2007, The PELORUS Group expects that between 65 and 70 percent of agent seats will be served by automated monitoring and the total agent population will stabilize, as advances in self service, particularly interactive speech, will mitigate the need for live agents.
To continue high sales growth beyond 2006, vendors will need to find new markets. One option is to become more creative in marketing to the small to mid-size contact centers where penetration is less than 50 percent in contact. In addition, they can extend use of recording and evaluation technology to other job functions that share many of the characteristics of cal centers with fewer than 200 agents. Several vendors now are working with their customers to use voice and data recording in certain back office functions and in departments like human resources, investor relations, and purchasing where it is important to have a record of what was said to whom.
This is the third annual report on the call center recording systems market published by The PELORUS Group.