How to Cut Costs With CX—and Prove It
Every week my analyst colleagues and I have calls with clients looking for answers to three critically important, interconnected questions: (1) How can I pick the most important customer experience (CX) improvement projects? (2) How can I convince execs to fund these projects? (3) How can I prove that the projects produced business results?
It often surprises them to hear that they can find answers to all of these questions in their contact center. That’s because contact centers hold a wealth of insights that can lead you to projects for cutting costs in quantifiable ways, which is a win for customers and companies.
CALLS, COSTS, AND CUSTOMER EXPERIENCE
Costlier customers often cost more because they have more problems. Those problems lead them to reach out to your contact center by phone, email, text, and social media.
Those contacts cost your company money to handle and resolve. When you track down and eliminate the root cause of the contacts, you make your customers happier, drive down call volume, and save your company money.
As a bonus, when you adopt this strategy you’ll produce results that are easy to quantify in terms of dollars and cents. This will let you create a solid business case that will thaw the ice around the heart of the most skeptical CFO.
HOW TO LEVERAGE YOUR CONTACT CENTER FOR CX IMPROVEMENTS
When customers reach out to your contact center, the center attaches metadata that identifies the reason for the contact, a process called “classifying a case.” A human agent can do the classification manually, or artificial intelligence can do it automatically.
Contact center systems can generate reports that total up the most frequent reasons for calls. That gives you a list of the most frequent problems. What’s more, contact center execs know the costs of calls (and emails, etc.). That lets you calculate the cost to your business of each type of customer problem—just multiply the number of contacts for that problem by the cost per contact.
Armed with this knowledge, you can scope projects to fix the most frequently reported problems.
FROM INSIGHTS TO ACTION
To make measurable CX improvements, first conduct root cause analysis to uncover the true source of each problem. Any good business process expert in your organization should know how to do that. If you can’t find an expert, it’s not hard to learn a simple but effective methodology, like the Five Whys, and then conduct the root cause analysis yourself.
Next, scope a project to address the source of the problem. Although projects might be different from each other—e.g., fixing a back-end process versus rewriting some customer-facing communications—they’ll surely be similar to other projects your company has done in the past. So cast a broad net across your firm and seek out appropriate skill sets for the heavy lifting. Then total up the number of person-hours and other expenses to estimate a total cost for a fix.
To bring this all together in a funding pitch, make an assumption about how many of the calls your project will eliminate for a given problem. It’s unrealistic to assume that you will get rid of 100 percent. So work with stakeholders to pick a safe number like 50 percent. Your goal isn’t to be right; it’s to agree on assumptions that none of the stakeholders will say are wrong.
Finally, multiply the total cost of all those calls by your safe number. That is your benefit. Because ROI = benefit – cost/cost, you can now forecast ROI. Notice that the only math you had to do to get here was addition, subtraction, multiplication, and division.
TAKE THE MONEY, RUN WITH THE PROJECT, MEASURE THE RESULTS
Once you have completed the project, wait a month and then get another report showing the number of calls for that case. This will tell you what percentage of the problem you actually fixed (which won’t be exactly 50 percent but won’t be zero, either). Through simple multiplication (number of calls times cost per call), you’ll be able to calculate and report how much money you saved the business.
You’ll want to monitor the situation over time to ensure that the problem doesn’t reappear, and also start looking for new problems. Remember that your call center is a gift that keeps on giving because new problems surface over time even as you’re working on your backlog of old problems.
Harley Manning is the co-author of Outside In: The Power of Putting Your Customers at the Center of Your Business. He has led the customer experience practice at Forrester Research for 21 years, where he is currently a vice president and research director.