It's easy to calculate the direct cost of losing a customer due to a negative interaction with a company, but the hidden costs of that customer sharing his experience with his immediate social network is often ignored.
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In many sectors (and perhaps most especially telephony, banking, and utilities) call centers have rapidly evolved from being a simple add-on, customer-facing service to an important differentiator. In effect, in a world of increasing price competition and internationalization, a customer's experience of a company's online or telephone service can have serious impact on its bottom line. And while it's easy to calculate the direct cost of losing a customer due to a negative interaction with a company, the hidden costs of that customer sharing his experience with his immediate social network is often ignored.
Even so, management focus has been on finding cheaper ways to achieve the same or better service performance results at lower cost. Typically these cost-saving exercises have seen the wholesale export of a customer service function to places where labor costs are typically lower. Organizations have also concentrated on streamlining the customer service process, through scripting or automation.
Despite these efforts the net impact on corporate performance and profitability seems to be negligible. Although process optimization or general cost-cutting exercises can impact the bottom line directly, they have little impact on a customer's experience and therefore do not generate the virtuous circle that customer service is meant to create. What organizations have failed to realize is that in attempting to improve call center processes, they have ignored the fundamentally interactive nature of customer service transactions. Concentrating on internal processes alone will undoubtedly achieve short-term cost advantages, but it ignores the quality of the interaction, and more important, the cost of variations in that quality.
Too often the customer experience is affected by inconsistent decisions, hand-offs between call center professionals and tedious escalation. Increasing costs and decreasing customer satisfaction is an unsustainable and painful operational condition. Better understanding of the decisional procedures of a call center, from which ultimately derives the outcome of customer satisfaction or dissatisfaction, together with better monitoring, training, and standardization of response could provide call center organizations with the level of customer service they have been striving for.
From Process to Procedure
Fueled by a number of process-based software solutions in which call center support is typically only part of a larger CRM package, current attempts to increase the performance of customer service functions center on managing the contact process and monitoring the quality of an agent's interaction with a customer. Consequently, performance monitoring is back-loaded as the feedback to the agent is given after the call is terminated. In the case of a sub-performance interaction, the cost in terms of customer dissatisfaction has already been incurred, in addition to the costs involved in the monitoring itself.
Typically, managing the performance of call center agents focuses on aggregate customer response processes as management looks for ways to cut costs. Focusing on processes, however, hides the real cost of poor performance at the agent-customer interaction level. Success of the interaction, resulting in customer satisfaction, will depend greatly on the agent's decisional ability: the level at which they are empowered to take action on behalf of the customer without interruption or without the need to confer with a supervisor or colleague. It is clear that increasing the decisional power of an agent will increase the chance of a positive rather than negative outcome to their interaction with a customer. This is true empowerment.
Increasing agent decisional power requires that the focus of the monitoring and business intelligence gathering side of the call center be on the development of procedures rather than processes, as it is at this micro-level that decisions are taken. In a call center that typically receives in excess of 1,000 calls per day, it should not be difficult to account for all possible customer queries and design and deploy the right procedures that agents can follow. Further, as these procedures can now be encapsulated in business-process flows, they enable the spread of query resolution best practices, thus cutting on the costs associated with back-loaded performance monitoring.
The Cost of Variance
In addition to the investment savings captured through the development of procedures, additional economies of scale can be captured through the elimination of quality variance. A customer's perception of a company is developed not through one-off interactions, but usually through the whole lifetime experience of their dealings with that company. Thus, the potential costs in terms of customer loyalty and customer advocacy of suboptimal quality performance also depend on the consistency of the agent-customer interactions. Gains during one transaction can be easily lost if the next interactive experience is a negative one: It does not matter if the first two contacts result in successful outcomes if the third does not. Consistency of quality performance is an important factor in ensuring overall quality of a customer service function.
At a time when organizations experiment with on- or offshoring, with aggregation or loosely coupled support networks, consistency is becoming more and more an issue. A procedural approach to managing call center response quality can again provide important cost economies of learning.
The process of developing a procedure-based call center is not prohibitive and actually positively impacts employee loyalty and retention, as agents feel actively involved in bettering customer relations. Further, as these procedures can be deployed through a Web-services framework, changes in these procedures can be propagated throughout the call center organization, regardless of the level of centralization. Because procedures are published and accessed through an agent's online support software, the level of training required is also minimal. The agent will at any given moment be faced with the latest procedure and follow the best possible course of action.
The feedback loop that in normal circumstances would require a large amount of a supervisor's time now becomes the responsibility of the agent itself, as he is empowered to suggest improvements to procedures. These improvements, when ratified, are then immediately propagated throughout the support function.
Towards Better Performance and Increased Customer Satisfaction
Mapping an agent-customer interaction into a business process flow, and therefore empowering the agent to make decisions based on the information he is provided with, will allow for not only better service response rates, but also increased quality of responses. Increasing customer satisfaction, loyalty, advocacy and turns a net overhead into a powerful competitive advantage.
About the Author
Jan Kolasinski is an independent change-management consultant currently working with SalePlane to focus companies on improving procedural decision flows rather than process reengineering to deliver higher operational and organizational performance. Contact her at email@example.com
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