Monitoring & Recording

To Benchmark or Not to Benchmark, There Is No Question

1 Jul, 2005

By: Dr. Jon Anton

It is not too much to say that benchmarking and its associated activities will, in coming years, be responsible for improving the lives of millions of contact center professionals, the satisfaction levels of hundreds of millions of customers, and the revenues and profitability of companies around the globe.

How can one process have such a widespread impact on the call center industry, its partners and its customers? The answer lies in understanding the process of benchmarking, the benefits it offers when implemented effectively, and the possibilities it opens for the future.

Let’s focus on benchmarking the process of how a customer interacts with a company to accomplish any of the following activities:

  • Ask a general question before buying, during the buying process, or after buying a product or a service
  • Ask the company to do something, like take an order for product, send a manual, or change an address
  • Ask for technical support to fix a dysfunctional product
  • Complain about a product or service and hopefully get some psychological help from the company’s representative

What is Benchmarking Anyway?

Let’s start by defining the word “benchmarking.”

Benchmarking provides contact center managers with key information that

  • gives them exceptional insight into their complex operations,
  • shows competitive performance vis-à-vis their peers, and
  • points the way to improvement initiatives that increase financial results while enhancing workplace operations and customer satisfaction.

Benchmarking is an essential, powerful and active ingredient of good contact center management. However, it must be combined with other processes and actions to reach goals such as enhancing operations, careers, customer satisfaction and company value.

In brief, benchmarking must be part of a value circle that includes the following elements: self-awareness, comparability to competitors, pinpointing opportunities, identifying improvement initiatives, post-implementation benchmarking and certification.

When implemented effectively, the key uses of performance benchmarking are:

  • better understanding of contact center process through established key performance indicators that guide management decisions
  • reducing bureaucratic barriers to change by spotlighting performance gaps, and stating the gaps in financial terms (i.e., dollars lost)
  • pinpointing the one initiative that commits a minimum of resources to achieve the maximum cost savings and improved quality

What Do We Benchmark?

Performance metrics for contact centers can easily be divided into those metrics that are efficiency-related versus those that are effectiveness-related. For instance, for an inbound call center, efficiency metrics would include:

  1. Calls per agent per hour
  2. Percent agent utilization
  3. Cost per inbound call

Examples of effectiveness-related metrics would include:

  1. Average speed of answer
  2. Average number of transfers
  3. Average time on hold

By measuring and recording these two separate and distinct groups of performance metrics, we are benchmarking both quality (effectiveness) and quantity (efficiency) to produce a balance scorecard comparison. If we do this for a large number of call centers in any one industry, we can actually show how a call center is performing using a benchmark performance matrix.

Why Benchmarking is Here to Stay
Contact center managers get the best improvements in operations, the greatest increases in customer satisfaction, the biggest boosts to their careers and the largest increases to their company’s bottom line when they make benchmarking part of a continuous improvement process, in which they are able to demonstrate measurable improvements in competitive performance quarter after quarter, year after year, by implementing improvement initiatives and performing follow-up measurements on those initiatives.

Benchmarking must lead to results in terms of best practices and profits, as shown by the metrics. Ongoing improvement initiatives are the vehicles for such success. With output and analysis in hand, you need to pick one or two areas for concrete action that will improve your metrics and results.

For example, benchmarking can be tied to two of the most important metrics your organization will account for: caller satisfaction and agent satisfaction.

Caller satisfaction is arguably the most important metric, correlating as it does with repeat sales and lifetime customer value. It is also a metric that traditionally has been measured in many different ways. As such, it has been less susceptible to strict apples-to-apples comparisons. But as benchmarking increasingly drives industry improvement, look for new creative ways that benchmarking will assist in measuring and subsequently increasing caller satisfaction.

Agent satisfaction has also jumped to the top of the list of concerns for managers. Paying attention to your agents and making them feel part of something bigger than just a row of computer stations is key to your success. Measuring their satisfaction and gathering their input is important and, properly done, provides a huge return on investment. Unfortunately, many companies use the same surveys to measure employee satisfaction across the entire enterprise. But the call center, as a “business within a business” needs its own employee satisfaction measurement tool, which can be provided through benchmarking.

Benchmarking can also lead to the following benefits:

  • Quantitative visibility into your operations
  • Comparability to competitors
  • Pinpointing performance gaps with a high degree of precision
  • Linking performance gaps to underlying processes
  • Identifying and quantifying improvement initiatives
  • Work-life improvement through targeted human resources initiatives
  • Career enhancement through certification programs
  • Shareholder value improvement

The best test of your improvement initiative is the follow-up benchmarking measurement. In most cases, contact centers will experience substantial, even dramatic, improvements in key metrics as a result of their well-targeted improvement initiative. Such results can be shown through documented return on investment, or an improvement to income (profits), or, even better, improved earnings-per share. The next step, of course, is to use the follow-up benchmarking results to determine your next focused improvement initiative.

Benchmarking Today
The tremendous value of benchmarking has been recognized by numerous associations, user groups, consulting firms and others, including industry champions in other countries.Consider the following:

  • Among publicly quoted companies, there is growing awareness that contact centers are a great, untapped source of revenue enhancement, cost containment and thus improved shareholder value. Even equity analysts are showing new interest in evaluating the competitive position of the contact centers of the companies they analyze.
  • Privately held companies are searching for ways to improve financial returns and are finding benchmarking to be a powerful tool in optimizing customer relationships and customer lifetime value.
  • Government contact centers are reacting to mandates that they benchmark their activities against the private sector and thereby find ways to improve services to citizens.
  • Contact centers in the education and not-for-profit sectors are also increasingly looking to benchmarking for feedback on their performance.

This awareness represents a major change from just a few years ago. Contact centers have traditionally been under-funded, under-appreciated and misunderstood by top-level executives and the world in general. But a renewed interest in call center professionals, sparked by notable benchmarking metrics, has focused attention on them and on supplying the tools necessary to help them achieve the respect and resources that they deserve. This exciting new spotlight on the contact sector is resulting in selective funding, training and technology for formerly attention-starved centers.

This revolution is also resulting in a new breed of contact center professionals. They are better selected and trained, better motivated and satisfied in their careers, more likely to satisfy customers and more likely to enhance the value of the enterprise overall. This “new breed” of managers wants objective, third-party information. It is easy to fall in love with great processes and advanced technology, and certainly they are important. But through benchmarking, performance metrics give a company better perspective on what’s happening, and can be the ultimate measure of real success, or real failure. Metrics, also called key performance indicators (KPIs), raise a manager’s awareness above the details, show the bigger picture and point the way toward value-building improvement.

But even today, there are customer contact centers that do not benchmark themselves on a regular, statistically sound basis. This is difficult to understand given the vast benefits. Many of these contact center managers have stated that they want to benchmark, but they have trouble getting approval through their management structure. Management may claim benchmarking is unnecessary because they feel it has never been needed before, because they don’t have time or budget to implement a new program, because they fear customer satisfaction and confidentiality could be sacrificed, or because they believe their center is incomparable to any other.

But it is becoming increasingly proven that benchmarking is an essential function for a properly managed customer contact center. The insights, efficiencies and aids to decision-making that are offered through benchmarking are so compelling that managers cannot do without the results, and still consider themselves in line with professional standards. And when the benefits are fully understood, benchmarking becomes a requirement for achieving customer satisfaction and is well worth the cost.