Spotlight on the State of Contact Center Maturity
1 Jan, 2007
By: Richard SnowBuilding call centers became very popular in the mid-80s as a part of corporate marketing strategies. The rationale was very simple; customers were calling the same company on lots of different telephone numbers and speaking to lots of different people. The whole process was very badly managed, not very efficient and, worst of all, customers weren’t getting very good or consistent service. By centralizing call handling in one place, companies hoped to address all these issues and also take the opportunity to try to sell customers more products or services.
Call centers have come a long way since those days --- or have they? There is lots of talk about call centers now supporting additional channels of communication (e-mail, fax, self- service via the Web) --- the now aptly named contact center, lots of talk about centers transitioning from being a cost to a profit center, and even talk now of centers becoming de-centralized --- the so-called virtual center. In 2006, Ventana Research carried out a global research project to discover how much of this is true in practice and whether indeed companies have plans to evolve their centers even further.
Responses from 850 senior managers responsible for managing contact centers around the world showed us that not as much has changed as we had hoped, but there are at least signs that cost and customer pressures are making companies take a serious look at how and where they need to change.
To judge the state of centers, we defined a four-level maturity model:
- Tactical: a basic call center, largely supplying callers with answers to queries on a limited number of subjects
- Advanced: a multi-channel, inbound and outbound contact center, providing a variety of services and focussed on improving customer satisfaction
- Strategic: a center used to differentiate the company by providing superior levels of service, including up-selling and cross-selling customers more business
- Innovative: a center used to deploy innovative services as an integral part of the total business, and concerned with identifying the root cause of why customers are calling to drive change across the company.
At first glance, the overall responses show a much higher level of innovation than we expected.
Closer examination uncovered some interesting insights:
- Countries outside Northern America and the UK have the highest levels of innovation:
- 38% Rest of World (RoW)
- 29% North America
- 19% UK
- The RoW is leading the way because:
- The centers are much newer and so have been built using the latest technologies
- They aren’t burdened with old ways of doing things
- More are outsourcers and they are run as businesses rather than as a “costly necessity”
- The outsourcers are used more to provide outbound marketing and sales.
- There is no identifiable pattern of maturity by size of company or number of seats in the center
- The main determinant of maturity is industry segment, as follows:
- Communication carriers 46%
- Outsourcers 35%
- Finance/Accounting 31%
- VARs/System or Network Integrators 31%
- Banking 29%
- Marketing/Advertising/Entertainment 27%
- Computer-Related Retailers/Wholesalers 26%
- Insurance/Real Estate/Legal 26%
- Education 22%
- Transport/Utilities 19%
- Manufacturing 14%
- Medical/Dental/Health 14%
- Wholesale/Resale/Distribution 13%
- State/Local Government 9%
Improving Contact Center Performance
The performance of a contact center depends on four factors: the interaction handling processes, agent performance, the technology deployed and how performance is measured. There is a clear difference between what more mature centers measure as opposed to the less mature, but overall this is one area that has not changed a great deal --- the old style measures still dominate.
The contact center manager’s job has never been an easy one; pressured on one side to cut costs and on the other to improve customer services and drive up customer satisfaction. It is therefore little wonder that the top four most popular Key Performance Measures (KPMs) all relate to how many calls are processed in a day. It seems this will never change. However, the more mature centers have realized that managing cost alone will not achieve the overall business objectives, and indeed to have a real impact on cost they need to monitor other measures that tell them how effectively the center is performing.
How agents perform is key to the overall performance of the center --- it often being said that “good agents can overcome bad processes and lack of technology, but the reverse is not true.” The most common way to monitor agent performance is through the quality- monitoring process, whereby supervisors or their equivalent listen to a very small percentage of an even smaller percentage of recorded calls and make a largely subjective judgment of how the agent handled the call --- hardly a rigorous assessment of this KPM.
From Cost to Profit Center
One of the most common drivers to improve performance is trying to transform the center from a pure cost center into a profit center. The rationale is that if centers are a profit center, they will monitor cost more carefully and they will attempt to sell more to customers, both when they call and through outbound campaigns.
But 64 percent of centers already have cost control as their number-one financial measure. The issue is that the most common cost-control measure is looking at ways to cut agent numbers --- make the call-handling processes more efficient, diverting calls to other, cheaper forms of communication (e.g., IVR), and introducing more customer self-service. All of these have a negative impact on customer satisfaction and, as a result, a negative impact on business performance. Few companies have yet to look at how to reduce the need for customers to call, which potentially would have the biggest impact on center costs.
Forty-six percent of centers already attempt to up-sell customers as a result of an inbound call. However, the story is much worse when it comes to any form of outbound campaigns. Twenty-six percent do attempt outbound marketing campaigns and 30 percent attempt outbound sales. The most commonly cited reason for these relatively low numbers is that agents aren’t given the necessary training or coaching to make them effective at this difficult skill.
The Center of the Future
People
The more mature centers have realized that agents by themselves will not be able to resolve all customer interactions because they don’t have the skills, don’t have the right level of qualifications, don’t have (or aren’t allowed) access to the required information or simply don’t have the time. These centers, therefore, plan to involve employees from around the company to handle a percentage of interactions. This will include people working in specialist business units within the company (finance, engineering, sales, etc.), people working from home or employees who are not office bound (service, sales, etc.). The “virtual” center will be born and the skill will be to route interactions to the person best able to deal with a particular customer and that interaction.
Process
Virtualization will also require process change. Centers have been very good at defining and then optimizing the in-center interaction-handling processes, e.g., a sales inquiry, a compliant, a request for information. What companies haven’t done well is put these processes into the context of the overall company processes. For example, customers are put through a “sales process” as they buy a product, but if the product doesn’t live up to the sales messages, then this results in calls to the center. If agents don’t have access to the original sales information, then they will not be able to effectively handle the calls. Within a virtual environment, even the interaction-handling processes need to be revised to take into account that if off-premises agents can’t resolve the interactions, there needs to be a hand-off process.
Technology
Technology has and always will play a major part in the performance of contact centers.
The more mature centers are also looking at their agent desktops. In 44 percent of centers, agents have to access two or more systems to resolve a customer’s interaction. Navigating around and between these systems takes time and takes the agent’s focus away from interacting with the customer. Nineteen percent of centers have therefore provided their agents with an intelligent desktop that allows them to use a single desktop for all interactions, sign in only once, navigate intelligently between systems (at the click of the mouse) without having to re-enter data, and to only see the data they need to see. All of this not only contributes to making agents more efficient and more effective, but it has also been shown to reduce agent attrition rates.
Measures
“If you can’t measure it, you can’t improve it.”
Getting people to change is one of the hardest things to achieve. One of the biggest truisms is that people become driven by their measures. Set the wrong measures and you get the wrong behavior. For example, set agents a maximum call duration time and they will always find a way to stay within it, regardless of whether or not they have met callers’ needs. So one of the fastest ways to change behavior is to change the measures.
One of the most pleasing insights is that companies are preparing to change the way agents and managers are rewarded, moving away from the traditional efficiency-based measures --- “did agents meet their target for calls handled?” --- to more business-related measures --- “did the center meet its up-sell targets to the targeted customer segments?”
However, two things still stand in the way. Only 34 percent of centers have deployed the technology that would allow them to derive these business-performance measures. Such measures need an aggregation and analysis of data from several systems, not just in the center, but from across the company, and few have the systems that allow this.
Second, we expect centers to remain under severe cost pressures. So while they cope with high volumes of customer calls, they will continue to struggle to carry out more marketing and sales. The answer has to lie in reducing the need for customers to call. Fifty-two percent of centers have deployed systems that allow them to identify the root cause of why customers are calling. Companies need to use this information to change the processes outside the center so the need to call is reduced, call volumes will go down and then managers and agents will have the time to ensure customer satisfaction improvement and thus, the subsequent increase in business is achieved.
Transforming customer contact from a cost center into a profit center is an ambitious goal, and it can’t be achieved through half-hearted efforts. As suggested, it will require investment in technology, but more important (and challenging) will be to change the perceptions --- of executives, center managers and agents --- of what the center should do and the goals set for it. The potential rewards are great for companies that commit to the change. For those that don’t, the prospect is stagnation and dissatisfied customers likely to take their business elsewhere.
