Cases in Call Center Management: Great Ideas (Th)at Work (Ichor Business Series)

Cases in Call Center Management Great Ideas (Th)at Work Richard Feinberg, Ko de Ruyter and Lynne Bennington ICHOR BUSINE...

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Cases in Call Center Management Great Ideas (Th)at Work Richard Feinberg, Ko de Ruyter and Lynne Bennington ICHOR BUSINESS BOOKS

An Imprint of Purdue University Press

Cases in Call Center Management

Cases in Call Center Management Great Ideas (Th)at Work

Richard Feinberg Ko de Ruyter Lynne Bennington

Ichor Business Books An imprint of Purdue University Press

Copyright 2005 by Purdue University. All rights reserved.

Printed in the United States of America

Library of Congress Cataloging-in-Publication Data Cases in call center management : great ideas (th)at work / by Richard Feinberg, Ko de Ruyter, Lynne Bennington. p. cm. ISBN 1-55753-342-3 (pbk.) 1. Call centers--Management--Case studies. I. Feinberg, Richard, 1950- II. Ruyter, Ko de. III. Bennington, Lynne. HE8788.C37 2004 658.8'12--dc22 2003026951

Contents

Preface Chapter 1

ix Introduction: Answering the call for customer driven quality: Overview of the call center industry

1

At any time...from anywhere…in any form: The emerging customer business partnership

7

The past, present and future of customer access centers (by Jon Anton)

21

Chapter 4

What do customers expect when they make the call?

33

Chapter 5

How to learn from these case studies

41

Section 1: Human Resource Management in Call Centers

43

Chapter 2 Chapter 3

Chapter 6

Agent recruitment (Randstad Callflex)

61

Chapter 7

Personnel recruitment (Viking Direct BV)

64

Chpater 8

Agent performance assessment (Creative Labs)

68

Chapter 9

Agent performance assessment (Vodafone)

75

Chapter 10 Agent training (Neckermann)

83

Chapter 11 Agent motivation (OHRA)

87

Chapter 12 Contractual issues (Interpolis)

92

Chapter 13 “Attract a friend. Connect with $1000. Any questions?” The quest for the next employee (Thomson Consumer Electronics)

97

Chapter 14 Developing new hires: The mentor program (Thomson Consumer Electronics)

100

Chapter 15 I don’t just want a job, I want a future (Transcom)

102

Chapter 16 Making current CSRs feel good, valued, and appreciated: Employee appreciation days (Thomson Consumer Electronics)

105

Chapter 17 Realistic job previews: Cutting turnover by 50%

107

Chapter 18 The culture of heroics (Transcom)

111

Chapter 19 Walk a mile in my shoes: Executives take a turn at being a CSR

115

Chapter 20 “Walls to calls in 60 days”—but how do we get CSRs? (MicroAge)

118

Chapter 21 Maybe we want them to leave: Sometimes turnover in our contact centers is good

120

Chapter 22 A different culture and a case of low turnover (SalesForce)

127

Chapter 23 Role stress in call centers: Its effects on employee performance and satisfaction

131

Chapter 24 Call center staff with special needs

139

Chapter 25 Listening variables in voice-to-voice service encounters: What part of listening don’t you understand?

141

Chapter 26 Voice-to-voice service encounters

147

Section 2: Operational management of call centers

157

Chapter 27 Capacity planning 1 (Hewlett Packard)

159

Chapter 28 Capacity planning 2 (Hewlett Packard)

163

Chapter 29 Organizing for capacity planning (OTTO)

167

Chapter 30 Outbound call response (R&M)

171

Chapter 31 Quality monitoring of calls may not mean that the caller is satisfied (E-Talk)

175

Chapter 32 I’ve got that old “IVR” feeling (Unisys)

178

Chapter 33 The burden of e-mail (Internet Shopping Network)

180

Chapter 34 Taking the error out: Web based customer relationship management (Thomson Consumer Electronics)

183

Chapter 35 Controlling your call volume and call time (Yellow Pages® Direct)

187

Chapter 36 Customer satisfaction and call centers in Australia

190

Chapter 37 Private insurance call center sales (PhoneDirect)

194

Chapter 38 Capacity forecasting (ABN-AMRO Bank)

198

Section 3: Strategic Management of Call Centers

203

Chapter 39 Location analysis (Mercedes-Benz)

221

Chapter 40 Service quality deployment (Robeco)

224

Chapter 41 Customer churn management (Vodafone)

227

Chapter 42 Call customization (Robeco)

233

Chapter 43 Autopsy of customer dissatisfaction

237

Chapter 44 Call center as profit center: Pay for product placement

243

Chapter 45 Call centers as product design workshops (GE Answer Center)

245

Chapter 46 Escalation of customer dissatisfaction: Identifying the top reasons and creating satisfied customers out of consumers (GE Answer Center)

247

Chapter 47 What is caller satisfaction related to? Justifying your call center (General Electric)

249

Chapter 48 If the phone rings....everyone answers it (Proflowers.com)

253

Chapter 49 Infomediaries: The next revolution (Capital One)

256

Chapter 50 One to one publishing (AudienceOne)

260

Chapter 51 1-800-call-before-you-install: Proactive customer satisfaction maintenance

263

Chapter 52 Increasing the share of the customer, not simply market share (RCI)

266

Chapter 53 The call center as means of creating customer loyalty (RCI)

268

Chapter 54 The case of the priority customer (Charles Schwab)

270

Chapter 55 A multilingual call center service (Centrelink)

274

Chapter 56 A customer loyalty program (SalesForce)

277

Chapter 57 Organizing for call center quality (Mega Limburg)

280

Chapter 58 Call center process re-engineering (ANWB)

284

Chapter 59 Call re-engineering (National emergency number)

290

Chapter 60 The case for benchmarking your call center

294

Section 4: Technology Issues

305

Chapter 61 Immaculate deception: The unintended negative effects of the CRM revolution

307

Chapter 62 Call center automation: When process increases mistakes and delay, there is only one thing to do (Accor Reservation Services)

318

Chapter 63 Call routing (CMG)

322

Chapter 64

Database management (Scoot)

326

Chapter 65

Keeping it simple: Call center automation (Xerox)

329

Chapter 66

Linking Australians to government services (Centrelink)

334

Chapter 67

Call center queues for minority customers (Centrelink)

338

Appendix: Resources that will knock your socks off

341

Index

353

Preface This book is about the ways in which the world’s businesses are transforming themselves into customer-driven organizations. While many experts, gurus and consultants would like to believe that the transformation into a customer-driven organization requires expensive and elaborate technology and consultation, our experience is that there is right now affordable technology, strategies, and operations available to all businesses of any size to accomplish the goal of total customer satisfaction. The call center is the center of a customer relations management strategy. It is clear that the commoditization of products and services requires instant and complete access to customers anytime, anywhere, and anyhow. The call center stands for a set of technology, people, and process strategies that any company can adopt quickly and cost-effectively. What is so “cool” about call centers is that they are easy to set up and operate. Maybe that is why they have been the centerpiece of the customer relationship management evolution. Indeed, as competition becomes more intense, no business can expect to remain competitive without providing consumers access to the call center. The call center represents just the beginning of access anytime, anywhere, anyhow to consumers. It becomes the first step for a company to becoming a living, breathing model of a 21stcentury company. Cases in Call Center Management represents an attempt to bring together experiences of companies in the U.S. and Europe of various industries as they have learned to use call centers as strategic weapons in the battle for customer attention, retention, and loyalty. Until now there has not been no easy source of case studies in call centers. U.S., European, and Australian academic researchers have basically ignored call centers. It is hoped that this collection of cases will shed light on the operation and strategic use of call centers to get closer to the customer and offer readers (both call center managers, directors, vice presidents and the like as well as executives and managers in other areas of business) insights not available from other sources. We believe that call centers represent actual business structures as well as metaphors for a coming revolution in business. Call center operations are a first step in the total availability of companies to customer access. We have operated business from a model that dates back to—well, who knows how old this model is! It is a vending model by which the relationship between the company and the customer is defined by a set number of hours the company allows customers to be in contact. If the customers wanted contact in an “off” hour, the company said, “TOUGH; call us another time.” Well, the Internet has changed the ix

x

Preface

expectations of customers. It is now a 24-hours a day, 7-days-a-week, 365-days-a-year world. More importantly the customer expects and requires that total contact by any means that they desire…live-in person, phone, Internet, wireless, kiosk…and who knows, maybe in 20 years telepathy. In any case the call center has become the focal point for phone contact and in many cases for wireless and Internet contact. Therefore, lessons in call center management can shed light on issues faced by new emerging contact modes. The ability of businesses in the future to create and sustain a competitive advantage requires a transition to the promise of call centers. The ability of a business to compete in the competitive world market will rest with executives who are creative and compelling enough to insist on and convince companies to invest in customer contact/access technologies and processes. Tomorrow’s winners will be structure management and strategy around total customer access and contact centers (today call centers…tomorrow call and web centers…the day after tomorrow.). Today call centers are the primary weapon/tool for accomplishing this. We hope that this book documents the improvements of business on all sides of the world as they do their business in service to the customer. We hope that each reader walks always with ideas on how to improve his/her operations as manager and strategist by looking at how normal and regular companies are doing it. The beauty of this book is that while the companies outlined and discussed in this book are good, they are not necessarily recognized as the best. Indeed, you probably have never heard of most of them. Your ability to improve your business should be evident from the fact that the companies and stories in this book are regular, common companies that might be right down the road from you. What they do is every bit as doable for you. Good fortune.

Chapter 1 Introduction—Answering the call for customer driven quality: Overview of the call center industry Key Words—history of call centers, importance of call centers, benefits of call centers, strategic value, growth of call centers

Probably the most urgent questions facing businesses that believe they care about their customers (after they have what the customer wants) revolve around: “What is great service? How can we provide it? How do we get better?” Many companies have reached the conclusion that the relationship with the customer should not end at the store door. These companies believe that customer access after the sale adds value to the transaction. Customer call centers have emerged as a leading weapon on this customer satisfaction battlefront. Call centers allow a company to build, maintain, and manage customer relationships by solving problems and resolving complaints quickly, having information, answering questions, and being available, usually 24 hours a day, 7 days a week, 365 days of the year. Indeed, it appears that customers now expect and demand telephone access to companies and manufacturers. Companies that have call centers as a focus of their customer satisfaction strategy may look like they really care more (and maybe even actually care more), differentiate themselves from the competition, and thus be in a better competitive position than a business only available at a store between 8 a.m. and 9 p.m. Call centers allow companies to achieve the promise established in the 70’s by the groundbreaking customer satisfaction research by TARP and supported by the growing customer satisfaction empirical and research literature of the 80’s and 90’s (see any issue of the Journal of Satisfaction, Dissatisfaction and Complaining Behavior) that a satisfied customer is more likely to repurchase, purchase more, and promote positive word of mouth and that if you solve a customer’s problem, he/she is more likely to make a future purchase than one who is simply satisfied Evidence of the growth in importance and ubiquitousness of call centers can be seen directly from the growth of the number of call centers (estimated by the Center for Customer Driven Quality at Purdue University to have been from 63,000 in 1996 to 85,000 projected in 2010) and the growth in their costs (34 billion in 1984 to over 81 billion in

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1995). In Europe the growth of call centers still is in its infancy. Total spending on call centers is about 10% of what it is in the U.S. According to a study by The Yankee Group (www.yankeegroup.com) there is reason to believe that the growth of call centers in Europe and Australia is about to explode because: •

Companies have begun to offer pan-European services.

•

Public attitudes towards demanding greater customer satisfaction are beginning to shift closer to that of the American consumer.

•

There are a number of models of call center excellence importable and imported from the United States.

•

Executives with extensive international experience and multi-national companies with U.S. divisions now know about the strategic value of call centers. Market studies by The Yankee Group and Data Monitor predict growth of Euro-

pean call centers to be 30% each year over the next 5 years (at least) accounting for 1% of all European employment. Almost all businesses in the United States and increasingly in Europe and Australia engage in telephone based sales, customer service, employee assistance, or other activity by telephone (and in the future by web). So, we believe that most businesses have a call/contact center (and many don’t know it). If they don’t have it they should have it. A business cannot guarantee that they will deliver exceptional customer satisfaction at point of purchase but they can guarantee that they can fix the problem—thus the call center was born. The call center industry has emerged as a vital link between customers and businesses. After the consumer is satisfied with products and/or services the call center has become the link between business and consumer. These centers range from small operations to massive operations employing thousands of telephone service representatives. Some believe that call/contact centers have to be large. Our experience is that while the large centers get a lot of attention, the real world is populated by call/contact centers that are so small that even CEOs of those companies don’t know they have a call center. A recent visit to a very large global brand powerhouse can illustrate this clearly. We spent three days visiting customer contact at this company. The contact centers ranged from 3 phones to 150 phones. Prior to our visit we asked the three senior executives responsible for customer service to list all their call centers and estimate the number of calls they get. They were so far off that it staggered us. They did not know about or recognize as contact centers tens of small focal points of

Chapter 1 Answering the call for customer driven quality

3

contact. Contact/call centers had sprouted up in response to company and market needs. These centers were in no one’s fold. They did not report to a central executive. They were purchasing systems, hiring consultants and responding without coordination or centralization. These same executives when asked if they had a need for call/contact center coordination responded NO. When it was all added up this company was taking over 2.5 million calls per year (we think there is even more). They were in the call/contact center business and didn’t even know it. Several forces have converged to make call centers an important strategic force for business and an appropriate arena for business and consumer research. First, the birth of the 800 toll free number made consumer access to companies cheap and easy. Subsequent advances in telecommunications technology have enabled businesses to handle volumes of calls that heretofore were impossible to deal with at a cost that made sense. Second, increased competition made it important for businesses to satisfy the customer better than the competition. The consumer was able to buy the same product or service in the mail, from a catalog, from TV, from a store, and now from the Internet. How was one business to differentiate itself from the competition? The call center emerged as the means by which a business could distance itself from the competition. The call center provided 24 hour a day contact, 7 days a week, 365 days a year and the means for a competitive advantage in the marketplace. Finally, the 1990’s emerged as the era of customer service. In Search for Excellence, Tom Peters and Robert Waterman’s bible about great companies, fueled a paradigm shift in the business world. Customer service was not simply spoken by consultants and academics but in executive boardrooms. The call center market is huge. As estimated by the leading call center magazines the industry is experiencing double digit growth annually and has grown from an estimated 34 billion dollar industry in 1984, to 80 billion in 1995, to 175 billion in 2000. The growth can also be seen in tracing the growth of call centers (see Table 1) and the growth of the 800 number (see Table 2). But most importantly, the growth of call centers reflects the growth in the significance of customer satisfaction for corporate CEOs (see Table 3). Indeed, the call/contact center has a role to play in 4 of the top 15 “key business priorities” of IT professionals (see Table 4) As CEOs and decision makers see customer satisfaction and customer relationships as top priorities they will be looking for ways to create and ensure top relationships with the customer; and the call center (contact center) is the primary weapon.

4


Advancing technology will allow an integrated and comprehensive range of customer contact points (from telephone, to e-mail, to Internet) that will allow companies to ascend to new heights in customer service and satisfaction. The impending marketing paradigm of “anytime, anywhere, anyhow” is built on the growth, simplicity and foundation of the call center—or customer access center.

Table 1 US Call Centers, Estimated 1999-2010

1999

Estimated number of call centers 73,000

Growth rate from previous year 20%

2000

75,000

5%

2001

76,000

1%

2002

78,000

1.5%

2003

79,000

1%

2005

79,000

0%

2010

85,000

7.6%

Center for Customer-Driven Quality – Purdue University

Table 2 Growth in “800” and “888” Toll-Free Service, (Calls in billions)

Chapter 1 Answering the call for customer driven quality

Table 3 Top Priorities for the Next Five Years Earnst & Young Survey of 750 CEOs

Table 4 Key Business Priorities of IT Professionals 2002 Survey Information Week

Given all the reasons why call/contact centers are strategically valuable, given that most companies have one, or two or three, why is “call center” a dirty word? “We don’t have a call center.” “I am not a customer service representative.” We think the

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notion that the call center is a dirty word reflects the general view and disdain for customers. We need a revolution. We need the CEO on down to make certain that everyone from the SAVP to the janitor recognizes that everyone has a customer. That if you are not serving your customer directly you are serving someone who has direct customer touch. And if you are not you should be out of there. Being in customer service should be held in the same esteem as any other major function in a company. When that happens the call center will emerge from the shadows and become the strategic force it is in the best companies.

Chapter 2 At any time…from anywhere….in any form: The emerging customer business partnership (written with Mike Trotter and Jon Anton) Key Words—customer access, importance of call centers, future trends, customer relationship management, service quality Customers will prefer to deal with those companies who are the most consistently accessible. Total customer touch at anytime from anywhere in any form. This ease of customer access to a company’s brand will be the critical element of global business strategy. Yet our research makes it abundantly clear that not all businesses use customer access as a key component of a business strategy. Of those that have customer contact centers, few of them deliver the strategic value possible from a contact center. Customer contact centers and Internet access seem to be developing piecemeal, not as central core of an overall strategy to allow customer access and deliver customer value anytime and anywhere.

Customer access is the new marketing paradigm The marketing engine that defines how we do business still works but it doesn’t work nearly as well as it needs to. In the future the winners will be those who provide customers with access throughout the enterprise. A single corporate brand to customers. A single corporate brand for employees to better serve customers. Customers will prefer to deal with those companies who are the most consistently accessible. Total customer touch at anytime from anywhere in any form. This ease of customer access to a company’s brand will be the critical element of global business strategy. It really is very simple. If you want people to solve problems right now give them right now information. And magically, if you want employees to create an enhanced customer experience (internal and/or external) give them the right information exactly when they need it. Current competition reduces products to mere commodities difficult to distinguish by design, function, and price. The emerging Internet paradigms are continually challenging a business’s ability to differentiate itself. And here is the point. It is the Internet developments that have made it increasingly clear that the total transparency of price,

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product, service, form, and function dictates that the core competency of the near future will be total enterprise accessibility. The battleground of access is a combination of bricks-and-mortar storefronts, the call center, and the Internet (avalanches of e-mail included). Access will define those companies who do it best because best is what customers are expecting and looking for and accessibility is what they want. If you don’t deliver consistently attractive accessibility someone else will. The call center has emerged as the strategic weapon of choice for customer access in businesses today. From our benchmark research (visit www.benchmarkportal.com for more details) we estimate that over 50% of all consumer-to-business and business-tobusiness interactions will occur through call centers and then the Internet within the next 5 years (Figures 1, 2, and 3). Incredible advances in the ability to integrate telephone and computer technologies with front and back office functions have made the call center the potent weapon in creating and maintaining long-term customer relations. What makes the call center so important is that it is affordable and available right now for use by both large and small businesses. The Internet is quickly becoming an allied weapon in this battleground for channel accessibility. (The issue of whether the Internet is an allied or alternative weapon is quite interesting. The business that treats them as complementary channels will just create more opportunities for capturing the market share and the share of the consumer. This is particularly true in a global strategy with countries in which telephonic availability is still minimal).

Figure 1 Consumer to Business Contact (the past)

Chapter 2 At any time...from anywhere...in any form

9

Figure 2 Consumer to Business Contact (the future)

Growth in “800” and “888” Toll-Free Service (Calls in billions)

Source: AT&T Corp Figure 3 The Growth of 800/888 Contacts

There are some very strong reasons why we feel accessibility is a central issue. But none is more important than the simple fact that lack of accessibility turns out to be the primary source of customer dissatisfaction and reason why consumers desert a company. Research at our Center for Customer Driven Quality at Purdue University has affirmed that over 50% of consumers who desert a company do so because of bad service experience (Figure 4) and bad service is primarily defined as an accessibility issue (Figure 5).

10 Cases in Call Center Management

In 1998, an article in the Harvard Business Review stated that “customer satisfaction rates in the U.S. are at an all time low.” It would certainly be depressing if all we have accomplished since the 1982 publication of Peters and Waterman’s In Search of Excellence was the addition of a customer service customer satisfaction statement in the mission statements of our Fortune 500 companies. Five years ago we would have been pleased to state that customer satisfaction is being discussed in the boardrooms and has a chance to become a part of a business strategy. Now this is not enough. Delighting is now a focal strategy. Every business, every executive, and every manager must assess how their “domain” contributes to customer value. Many companies have turned to customer contact center access as a means of delivering enhanced customer experience that results in increased satisfaction and the greater

Chapter 2 At any time...from anywhere...in any form 11

probability of long-term relationship. The nature and scope of how contact can make or break a future customer is most clearly seen in the experiences of all of us as we have tried to get some information and/or solve a problem after a purchase. When you speak to senior executives they will tell you that they spend their time trying to guarantee a compelling product and service experience because they want your money now and in the future. They tell you that they want to turn you into a disciple…so that you recruit 10 of your friends for their business. Well…after the following types of experiences you cannot convince me that they get it. “Your call is important to us. A service representative will be with you in approximately 690 minutes,” I was told as I tried to access one of our major airline companies. “Please call our 800 ### #### number if you have any problems with your new extraordinary digital telephone,” I was told as I tried to make a new phone answering machine work on a Sunday afternoon. Unfortunately that center is only operational from 9 to 4 p.m. East Coast time Monday through Friday. I just wanted the phone to work NOW. An access paradigm starts by understanding when and how customers touch your organization. Let’s concentrate on the 3 primary methods of access to most companies. These are the bricks-and-mortar storefronts, the telephone and the Web. Each of these access channels has its subset of methods and components as available tools for handling customer contacts. The most effective companies will offer their brand through any combination of all three access channels in an integrated way. This will require that the technology, people and processes be aligned to support the whole customer experience. This is not just buying the latest in technology and increasing the efficiency of the contact channel. It is rethinking the entire customer experience from the customer point of view and creating single mindedness in the people and processes that apply to the total customer experience. In order to support the total customer experience with information and intelligence at all points of contact, we are required to develop systems that can pull information from many differing databases. We require a technology platform that allows for real-time reporting to the business and immediate updating to the customer experience file. Our points of contact must be aligned with all databases. Finally, the people that work in all of the customer access channels (contact centers, storefronts and Webcenters) need to understand the value that is added at each and every point of customer contact. This requires a re-definition of the role of each person that is acting in one of these contact channels. As an example, storefront people need to be comfortable with the Web and the call center. They need to be aware of how each of these access channels operates. This will require that they have access to these other channels within the store. Consum-


ers perceive the company based on their experience with the channel they have selected to contact the company. Consumers expect a seamless experience. They expect to do whatever business they have if they contact the company in person…on the phone..or over the Internet. No story will need to be told twice. No problem will go unsolved. The customer will be proactively informed of any changes. No question will go unanswered. So, what does a company need to do? Many companies are rediscovering an old and proven concept, namely customer relationship management (CRM) which we define in modern terms as The seamless accessibility by internal and external customers to missioncritical company information by the integration of a company’s in-store, telephone system, e-mail, and Website touchpoints resulting in satisfying customer service and/or self-service for initial product purchases, targeted up-sells and cross sells, problem resolution and finally, the creation of customer loyalty, value, and profitability. 1. The organization must realize that this is not simply a technology purchase. This is not just pasting the latest electronic gizmo or switch or software onto your call center or Website. Technology only enables the organization to enhance the customer experience. Customer relationship management (CRM) is not a toolbox; it is a new way of seeing the customer and then using a set of tools to enhance the total customer experience. 2. This is a philosophy that requires the company to clearly define the customer strategy and the importance of information in the relationship with the customer. Long-term profit comes from doing business with a customer for a lifetime. 3. The company leadership must realize that all that they know today is outdated and that whatever they build tomorrow must be flexible enough to change with customer demand. This means companies must place all existing processes and beliefs at risk so that the new environment allows for freedom to challenge the existing methods and to develop new processes and technologies to enhance the customer experience.


4. All information systems must be opened to all of the customer contact channels and maintained to offer the most current customer information available. Marketing, sales, customer service and the people within the storefronts must all share one database that can initially be made up of many legacy systems and databases. However, over time the company must establish a comprehensive database. Realize that this database will take time to develop and implement and the benefit of having such a database will be experienced and realized long before the system is built. 5. Processes must be revised to support the new methods of handling customers. This requires all customer contact people, no matter which access channel they work in, to understand their role in the experience of the customer. Process design will be from the customer’s viewpoint and technical simplicity is the key attribute. The technical capability exists for a customer representative in a call center or a storefront sales associate to type in a customer’s name and get a complete record of every contact and purchase that a customer has had with the company in any period of time (even before the phone is picked up so an agent is ready to go). The technology exists for a call center representative to type in the customer’s perception of a problem and get a set of possible solutions with associated probabilities of reaching closure. This comes with a set of recommended questions which, when answered, develop a solution to the nth percent reliability. The representative, now not burdened with determining the solution, can attempt to cultivate that relationship with the customer that adds to the total consumer experience. This software will be based on neural network technology that will allow the software to meet immediate goals and to develop intelligence that will grow with experience. In a similar manner the director, manager, or senior executive will have access to cockpit-like analytical tools that will provide him/her enterprise-wide access to aggregate real-time information. So while the individual performance of a telephone service representative may not be important to her/him, the enterprise-wide customer issues being probed in the contact centers are an issue—and this new soft-


ware provides that information when requested in real time. 6. People working within the various customer contact channels will be required to undergo a set of training experiences (as needed to provide help anywhere at anytime—such as the extraordinary Spotlight system used by Avis to train their agents to assist customers in any of their countries at any time of the day or night) that helps them to fully value their role in the customer experience. This training is beyond the process changes. Management must look at the employee as the primary contact point, one that requires an investment in skills and a long-term commitment from the company. Employees will be given a very broad view of the customer and it is essential that the opportunity to use this information be leveraged to its maximum. 7. Metrics and measures must be developed specifically for the customer relationship management (CRM) environment. We cannot use the same old measures that were used in the individual access channels of the past. The customer needs to be at the center of the measures. Customers may not really care how long a call is, they want to be sure that when the interaction is completed they have what they wanted and needed. This doesn’t mean there are no metrics of productivity, however; one must be able to balance the needs for efficiency with the customer requirements for effectiveness. Handle time for each type of interaction is still a key factor but more so that the company can accurately determine the staffing levels necessary to serve the customer in all access channels. Imagine opening a retail store and not having the staff to serve the customer—you would not only alienate your customer, you would also burn out your employees. You don’t want any customer access channel to be understaffed to handle the customer demand. What gets measured and rewarded gets done. What gets measured and rewarded must be what is important to the satisfaction, purchase, repurchase and loyalty of the customer. For too long we have rewarded behaviors and outcomes that have nothing to do with the survival and growth of the company. A customer relationship focused organization may force a change in how we measure and reward.


Let’s start with a vignette that allows us to see the value of this integrated platform of people enabled by technology and process to deliver the highest quality customer experience. All telephonic—In this situation the customer experience is totally electronic and the requirement to interact with a live person is eliminated. It doesn’t mean that there is no access to a live person, it means that the customer has chosen to not use that access channel. The customer calls an 800 number and is provided a list of interactive voice response based selections. Upon indicating that they want to purchase something from a catalog that was received in the mail, they are asked to input their private ID number. This number instantly pulls up a history file that allows the computer to read and understand the types of contacts made and discover any issues that may be outstanding and provide the caller with feedback on these issues. The entire time that the caller is interacting with the computerized access channel, the various selections made are becoming a part of the history of the customer (or an in-depth understanding of how the top 80% of all interactions proceed using an expert system that learns and changes based on experience). After identifying the caller as an active customer, the system can establish that the existing address is correct and can actually make the changes on-line as the caller speaks their changes, thus insuring that the new address is updated before the call ends. If the caller wants a differing address to be the mailing address (in the case of a gift) the system can adapt to this need and build an individual mailing address that is different from the billing address. Once the system has established all of the basic transactional details, it can begin to allow the customer to make his/her selection. At the point that the purchase has been completed, the technology allows for the transaction phase (use of credit cards, checking inventory and indicating delivery dates) to be completed. Next, the system updates the inventory and indicates to the manufacturing operation if more units need to be made. All of the information is treated and delivered on a real-time basis. The accounting function is notified of the transaction and the accounts receivable function is updated. At the same time the customer is offered complementary products to their new purchase in a soft cross sell way. If they bought shoes, they are offered discounted socks and shoe trees. If they purchased a car, they are offered oil changes, tires, wax and wash jobs all at a discount through advance purchase. All of these complementary goods are offered through partners that have aligned with the primary vendor. Please understand that everything that the electronic process can do can also be done through the interaction with a live person


or on the Website of the company. It should be noted that at any point of the interaction consumers could opt out and speak to a live agent. Remember that all information is shared across all contact channels. This allows the same customer to contact the company through a different access channel and receive the same consistent enhanced customer experience. Our research is that consumers would prefer this scenario to live experiences equal to their current experiences. Now let’s look at a service experience that doesn’t involve a purchase. In this case we will use the Website as the primary point of contact. Internet-based—As the customer enters the company site to report a problem and find out what the company response will be, the customer ID number is captured. The system can tell if there are other outstanding issues and push information to the customer on their status while the customer is in contact with the company. If this is a new issue and the customer has no previous history, then the system will establish an account for tracking the history going forward. If there is a quick solution to the issue, the system will use its intelligence to respond with a simple answer. If the issue is complex yet part of the 80% of repeat problems and issues the system will ask questions guided by an expert system. At each question level the expert system will offer solutions at various levels of probability of solution (“Do you have sound?” “No.” “Do you have the red lead coming from port 1 going to the red lead of the speaker?” “No.” “We believe that we have the answer to your problem at the 99% level of accuracy…The solution is….”). The consumer works through these guided solutions until resolution or the system tells the consumer what to do next. If, however, the issue is complex the system will determine if there is a need for a live representative to get involved and at the appropriate time engage a person with the customer. The system allows for the company’s representative to review the issue and helps the representative find the best solution, then connects the customer via the Website. Having clarity on both sides before engaging the company representative ensures that the interaction will be productive for both parties and the time spent in resolution will be well invested. Once connected to a live person, either by phone or through a chat room, the customer can be treated as an individual. The representative has the opportunity to ensure that the customer is having her/his expectations fulfilled to the point that as the contact is completed the system helps the representative identify an opportunity to cross sell a product that the customer will find useful. It has been proven that the best time to up-sell is at a point that a problem has been resolved. Once again our research


shows that consumers would prefer this method to their current experience. Oh yes...both this Web based and the previous telephonic based system would be preferred by business because of the cost differentials per contact. We have looked at a couple of scenarios that allow us to see the value of the single, company wide information system. Such a system will always seem to be a huge undertaking. And, indeed, when defined as an expense it would be an awful lot of money. However, when seen as an investment the ROI is incredible. So companies must remember to keep the customer at the focus of the decisions and solutions. Systems must be based on processes and technology that allow for simplified customer relationship management. General Electric has over 200,000 products across 80+ industries but only one number to call with a question, problem, or concern whether it is about a jet engine, MRI machine, or a light bulb…and they do this 24 hours a day, 7 days a week, 365 days a year. The systems must be open and easily integrated. The news is that this version of the future is available with technology today (and it will only get better and cheaper and easier). The bad news is that having a single vendor that has all of the components seems to make sense; however, having all of the technology and processes tied to one company places the business at a risk of a single point of failure. Also, finding a single source for all CRM components will be limited. Finally, if a company chooses to use a single provider, they will not be receiving the best of each component in the broad field of CRM tools. Perhaps the most critical but undervalued aspect in creating total enterprise access will be the development of a layer of technology infrastructure called middleware. This middleware is critical for integrating the information now housed in separate and disparate databases. These databases grew independently and were not originally designed for integration. This “plumbing” does not get the attention it deserves. It is not glamorous or fashionable partly because it is difficult to get a handle on it and it represents separate and distinct territories each protected by herds of executives and workers who have a vested interest in its development and survival. Middleware is the bridge between these databases. It is the piece that prevents the customer from hearing “I am sorry but the system does not allow me to do that” (heard often at airline counters) or “I don’t have access to that database here” (heard often at banks), the kinds of things that frustrate consumers and drive them elsewhere. Why is it so hard for you people to get the order right?


Accessibility is clearly a business issue. Dell has recently moved past Compaq computer as the leading PC in the United States and Dell doesn’t sell a single computer in the store. Intel and Cisco will book more from direct Internet orders than all the business to consumer sales that have happened up until now. We can check inventory levels, place orders, and track these orders and delivery dates from these companies anytime we want to from our desk (as well as answer or have answered any of the questions we might have). Accessibility is a control issue. Our ability to track our FedEx and UPS packages gives us power (and satisfaction). Imagine my smile when the recipient of a report I sent FedEx claimed not to have received it and therefore my “bonus” for doing the work at that date would not be forthcoming, only to have me (while we were speaking) access the very signature that signed for the FedEx package exactly 1 hour before the due time (signed by this guy’s secretary). Can you all see the smile? Accessibility is not simply a marketing issue but an enterprise one. The story of how Avis trains its people better and more efficiently is the story of accessibility. Avis had the goal of consistent training across all employees anywhere anytime in the organization. Avis developed a system called Spotlight. This virtual multimedia learning center can be accessed in any of the 15,000 offices across 1,210 countries. After a greeting and motivational talk by the CEO and learning the basic Avis skill set, the new employee meets a customer who takes them through the most common problems (representing 80% of all the escalated customer dissatisfaction issues). There are multiple lessons of accessibility here. First, anyone in the organization has immediate access to training. Classes do not have to be scheduled. Trainers do not have to be trained. The associate in Asia can access the training as can an associate in New York City. This training is infinitely repeatable. But less obvious is the accumulation of customer information so that employees can know and learn from the top consumer problems, questions, and difficulties in an almost real-time process. While Avis is training to their specific situation the competition is talking about general issues of customer dissatisfaction/satisfaction. Accessibility of information has led to specificity of “attack.” Accessibility is an inventory issue. Accessibility between vendor, manufacturer and retailer will lead to automatic replenishment. The complex accessibility between Dell, FedEx, and many manufacturers results in FedEx’s managing a just-in-time delivery of all the parts needed to build that special PC that was just ordered today by the consumer. At the end of the day the system will tell us what we have on hand compared with


what we want. If there is a difference, the difference will be ordered and the system will learn about proper inventory levels so that differences will be less likely in the future. In other words, the system learns from its experiences today and adjusts for tomorrow. Accessibility is a retooling issue. Retooling a company for customer access is a reengineering of the technology and the people. Most importantly, whatever the bottom-line impact of accessibility is to running a better business, the effect on consumers is key. Accessibility enhances the customer’s total experience. Accessibility builds customer and employee relationships with the company that empower them to change the enterprise and the enterprise to change them. A market never bought anything. Customers do. Achieving legendary status among customers becomes the most formidable piece of marketing hype you can do. The “legend” of Nordstrom is not probably apparent in the treatment of all the people who shop in their 103 stores but everyone knows the legend. The legendary status of Nordstrom’s infuses every shopping trip with positive expectations, positive definitions, and positive self-fulfilling power. Accessibility will build your “legend” as it builds your brand. If you are selling a commodity you will lose. Anything a consumer finds indistinguishable will be found in side by side comparisons by Internet shopping agents. Unless you are controlling costs so that even at its least expensive you will be making a profit, you will lose. Consumers are finding accessibility as a differentiating brand value. Accessibility can create delight, the difference between the just satisfied and the “wowed.” And today is the differentiating opportunity. Those companies that are not thinking about total enterprise accessibility today will be thinking about it tomorrow. Those companies who are thinking about it today will be planning it tomorrow. Those who are planning it today will be creating it tomorrow. Those who are creating it will be implementing it. And those who are implementing it will be perfecting it. And those companies will be the winners of tomorrow.

Final word Customer access is everything. But first senior executives must agree that providing customers with a consistent, thoughtful and value added total customer experience at any and all touch points is vital to their retention and loyalty and future acquisition. Although we believe that in the end the invisible market place hand will direct the businesses which fulfill our vision for total customer and employee access to win, we will not be blind to the fact that even in free markets business decisions are ideological as


well as economically rational and logical. Thus to simply say that total access will happen no matter what businesses do is somewhat naïve. It is in that naïveté that the greatest executive challenge lies. Executives who sit back and expect the market to work and their organizations to tend toward what the market wants are fooling themselves. Things are not that simple. While we certainly believe that movement toward total access is happening and will continue to happen (with accelerating speeds in the near future), we also believe that decisions that executives are making right now are either improving or impairing the process. There will be winners and losers in your competitive race. The winners will be the ones whose sometimes difficult decisions put their organizations on the road to access now without being able to totally envision what that will mean for their organization. Success will be with those who make decisions and act today. This will allow their organizations to be moving towards a yet-to-be-defined level of enhanced total enterprise access for employees and customers, which will enhance the employee and customer experience, which will create loyal and long lasting employee and consumer relationships with your company, which means happy customers, happy employees, happy senior executives, happy shareholders, happy bankers, and of course, happy consumers. Rule #1 Access must benefit the consumer. Rule #2 If the access does not benefit the consumer or benefit someone who benefits the consumer…reread Rule #1.

Chapter 3 The past, present and future of customer access centers Jon Anton Key Words—customer expectations, call center trends, customer satisfaction, marketing communications, communications technology, future trends, access Customers have always wanted better access to the companies from which they buy products and services. My purpose in this chapter is to review how companies have responded to this demand for easy access. In this process, I will review customer contact behavior in the past, summarize what is happening in the present, and forecast what might be important as we move into the future and the new millennium. All companies are witnessing a globalization of their market space combined with a more information-hungry customer with more sophisticated pre-purchase and service information needs. In setting the stage for the discussion herein, it is important to begin by understanding why customers want, need, and even demand access to companies with which they do business. A customer’s desire for contact, or access, with a company can easily be summarized by the following four very basic information needs: 1. The customer has a question and needs an answer in order to proceed, i.e. “Where do I buy your product?” “What is the price?” etc. 2. The customer wants the company to do something, i.e. “Change my address,” “Send me a manual,” “Take my order for a new product,” etc. 3. The customer has a problem with the product and needs assistance and guidance in resolving the issue, i.e. technical support, help desk, etc. 4. The customer is emotionally upset with the product, and wants to know that the company will set the situation straight, i.e. complaint resolution and anger diffusion. As I proceed through this chapter, it will become evident that, whereas the number of different channels (also called customer “touchpoints”) open to the customer to reach the company have exploded, the reasons for customers contacting companies are still the same basic four listed above. By the way, all four customer needs can be rolled up into one word

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and that is “accessibility.” From research we have done, accessibility is the new corporate battleground. In the years to come, if you can be the most accessible company in your space, it will mean that you will literally “own your market.” More on this later. Some examples of the continually evolving and technologically diverse channels for customers to “reach out and touch” companies include the following: mail delivered by the post office; telephone, both toll and toll-free; electronic mail (e-mail); facsimile transmission (fax); fax-back (self-service fax); voice response unit (VRU); interactive voice response (IVR); electronic data interchange (EDI); automatic teller machine (ATM); kiosk; Internet (corporate Web sites); voice over the Internet (cyber calls); chat groups on the Internet; telephone bridges with hundreds of trunk lines; loyalty cards; and voice mail. The customer service call center has been the primary focus in the last ten years, but with the new channels of customer contact evolving, the call center is transforming into the company’s access center for all customer interactions. So, to summarize my introduction, I think we can safely say that there is a globalization of customers with the same basic needs for access to information. In addition, we have an exploding array of customer access channels, and we have the major challenge of integrating all of these potential customer touchpoints in a seamless and intuitive fashion for our customers. Let us begin by having a brief look at the last 20 years to see if we can learn anything from the experiences of the past so as to better direct customer access management in the future.

Chapter 3 The past, present, and future of customer access centers 23

The past Managing customer contacts has evolved logically through the following phases of major channel availability: 1. face-to-face customer contacts; 2. correspondence delivered by the Postal Service; 3. the telephone with toll calls; 4. the telephone with toll-free calls; 5. facsimile transmission of correspondence; 6. e-mail correspondence; and 7. the Internet and corporate Web sites (Figure 1 shows the evolution of some key customer access channels).

Figure 1 The evolution of some key customer access channels

The lessons we can learn from the past are 1. Customers greatly value free and easy access to mission critical information. 2. When new channels become available, companies are quick to offer them, but not so quick to staff them properly to handle the flood of customer contacts. Witness the blocked calls when 800 numbers were first offered, and the lack of response to e-mails in more recent times (see more later). 3. The addition of new channels does not replace existing channels of access to information. Customers prefer multiple touchpoints available at any time and for free.


The present Currently, companies in most industries are moving their existing low-tech customer service call centers from back office support to the front-line of the enterprise. In this migration, the call centers are being outfitted with the latest in high-tech hardware and software in both voice and data applications and, in addition, the focus is moving from mostly telephone calls to all forms of customer access including e-mail, fax-mail, kiosk, and the Internet. As mentioned earlier, multimedia customer touchpoints are evolving rapidly, and therefore the call center of the present is fast becoming the customer access center of the future. From estimates produced by analysis of data stored in the Purdue Benchmarking Datamart, the current distribution of customer-to-business contacts is shown in Figure 2.

Figure 2 Customer-to-business contacts in 1999

Driving this customer access center development is the growing awareness that managing customer relationships is a key driver of bottom-line profits. Today’s customers greatly value timely accessibility; in fact, the vision of the customer access center of the future is to allow customers access to information at any time, from anywhere, in any form, and for free.


This ease of customer access is fast emerging as the critical element of a global customer relationship management (CRM) strategy. In the not too distant future, customers will deal preferentially with those companies that are deemed to be the most accessible. Even CRM can easily be defined in terms of access to information: CRM is the seamless accessibility by internal and external customers to their mission-critical company information by the integration of a company’s telephone system, Web site, and e-mail touchpoints resulting in satisfying customer self-service for initial product purchases, followed by targeted intelligent up-sells and crosssells, and finally the creation of customer loyalty, value, and profitability. As the “lightning rod” for customer interactions, world-class access centers are the single point of contact for customers. Research conducted earlier at Purdue University estimated that over 50 percent of customer interactions would occur through the call center and the Internet by the year 2000. Fueled by tremendous advances in the integration of telephone and computer technologies, the access center has the potential for being the company’s most potent weapon for maintaining long-term customer relationships. For many companies, global competition has reduced products to mere commodities that are difficult to differentiate through features, functions, or price. Having reached parity where price and quality are the “table stakes” of doing business, the paradigm shift is definitely towards customer accessibility. Executives are beginning to recognize the potential of the call center and teleweb center as a significant revenue generator, perhaps one of the surest investments they can make in enhancing and creating customer value and bottom-line profits. Return on investments made in customer accessibility is seldom less than 100 percent in the first year, and frequently even more if customer lifetime value is included in the equation. The cost and performance of a customer access center can be critical to its success. From reviewing the industry data, one can conclude the following: Spend too little and perform poorly, and your call center becomes a business liability that consistently drives away customers and creates market damage. Conversely, spend too much and over-perform, and your call center again becomes a financial loss to the company. If you spend efficiently and perform effectively at a level just better than your competitors, your call center will most likely be a profit center for the company, i.e. getting, growing, and retaining customers.


Herein lies the challenge and the primary reason to benchmark your accessibility metrics against not only the best-in-the-world, but also your most direct competitors, i.e. best-inclass. Currently, the most comprehensive study on customer access center performance is the Purdue University Benchmark Datamart with over one million data points on worldwide center performance issues. For more information, visit the Web site at: www.benchmarkportal.com.

The future As we move into the new millennium, many issues are impacting the customer access center. Customer demand for easy access to information is increasing rapidly, and simultaneously, technology solutions are springing up everywhere to assist center managers to improve their ability to handle the new levels of demand by information-hungry customers. Considering the trends in customer behavior regarding access channels, I would forecast the future distribution of contacts to be as in Figure 3. For many companies, just re-engineering their infrastructure to handle the new and rapidly growing channels of e-mail and the Web will consume all of their budget and staff for the next two years. In the sub-sections that follow, I have highlighted what, in my opinion, are the top strategic solutions that will drastically change the customer access center of the future.

Figure 3 Customer-to-business contacts in 2005


Voice of Internet Protocol (VOIP) In the future, Web-enabled centers will allow a customer to visit a Web site, enter the key data typically asked for by the customer service agent at the beginning of a call, and to then place the call via the Internet instead of over traditional phone lines. New technology will also allow the customer to see the customer service representative that they are dealing with through the Internet. This brings back the feeling of personal customer service. This futuristic call center will enjoy the luxury of correct information provided directly by the customer, reduced talk times, shorter average speed to answer, and superior customer service. Further advantages of VOIP are: the agent can see where on the Web site the customer has already been; the agent views the same screen that the customer has on his/her desktop; the agent can move his/her cursor on the customer’s screen for giving specific directions; and the agent can push additional pages of information directly to the customer’s desktop for discussion, education, and selling. VOIP will drastically change the customer access center for the future.

IVR and voice recognition When you call most businesses today, the first thing you hear is an IVR, not a live person. IVRs are the interactive recordings that allow the customer to make selections to route them to the specific customer service representative who will most likely be able to provide them with the special information that they seek. While there has been much controversy over the automation of customer service the benefits clearly outweigh the drawbacks for both the customer and the provider. Recently, IVR technology has moved from just being a fancy answering machine to a full-fledged voice recognition system, where the computer provides a very realistic “conversation” with the caller. The new voice recognition equipped IVRs now have the capability to convert textto-speech with a large vocabulary of speech recognition. Our research studies indicate that customers prefer speaking to the IVR system rather than keying in their selection with the keypad on the telephone. IVRs can also provide Web callback, fax back, and look-up features. In Figure 4, I am forecasting a major increase in the use of IVR for self-service now that customers can actually talk to the computer.


Figure 4 shows that IVR usage had reached a plateau of about 38 percent of calls handled in the years before the introduction of voice recognition IVR systems. After the new voice-based technology was introduced, the growth of customer self-service could go to over 70 percent. Figure 4 The percentage growth of calls handled by IVRs

Database engines and knowledgeware Database marketing allows you to focus your offering to the individual customer and to provide enhanced customer service. To retain high value customers, you are able to provide the customers with the specific services that they want. For instance, it would not add customer value to try to “sell Pampers to a bachelor”. This requires a great deal of quality information about the customer that may reside in several different systems like billing, shipping, and call center databases. The best way to manage all of this data is to store it in a data warehouse. A data warehouse is a database system built to store mass volumes of historical data for fast analysis and reporting. The data stored in a warehouse is a conglomeration of data entered into each of the different systems a company may have. Too often the data stored in a warehouse are hard to extract for customer analysis and profiling. Data mining allows you to logically group customers according to specific characteristics that will allow you to provide specialized or enhanced customer service. Many of the electronic commerce operations currently doing business via the Internet rely on data mining to keep the customer current on new offerings based on their historical buying patterns. Amazon.com, the largest reseller of books on the Internet, currently employs this data mining strategy. This is done by not only analyzing the purchases made by the customer but by also analyzing the purchases made by other customers with similar interests or purchases. With all of this information gathered on the customer, the class and level of service can easily be prioritized based on the history and value of the customer.


E-mail management software E-mail continues to be a customer favorite for contacting companies, yet companies are only reluctantly building the response systems for these e-mailed customer contacts. In Figure 5, it can clearly be seen that even when the customer’s e-mail gives a clear “buy signal” 32 percent of the companies never responded at all.

Figure 5 Response time to a “buy signal” sent by e-mail

And again, in Figure 6, it is even more clear that companies do not respond to an emailed complaint in 47 percent of the cases.

Figure 6 Response time to a complaint sent by e-mail


Not to worry though, help is on the way. There are now ten or more companies that offer e-mail management and automation software that will greatly automate the e-mail handling process, and also give the customer the 24-hour (or less) response time that they expect. In fact, if we compare mail sent through the Postal Service to mail sent by e-mail, and handled by some of the new e-mail management software, I predict that the cost will decline significantly (see Figure 7).

Figure 7 The cost in dollars to handle customer mail. Source: White Paper by Sonja Van Vleet at www.benchmarkportal.com.

Typically, the cost to handle a letter sent through the post office is about $30 when all the handling costs are included. In Figure 7, the cost inflection is the mass introduction of e-mail management and automation software. E-mail has the tremendous advantage of handling customer issues asynchronously, thereby allowing more time to send the customer’s email to the one individual most able to handle it. Plus, customers are much more willing to wait as much as 24 hours for a complete response.

Value-based caller routing Companies are learning to segment both their customers based on value and their frontline agents based on call handling skills. Value-based segmentation allows you to route the call without going to the queue if it is a high-value customer. For instance, with the airline that I fly most (over 100,000 miles per year), if I call from my home or office telephone, they obviously know and recognize my number (through ANI), and send me to a live agent with no waiting in the queue. If I go down the hall and use a pay-phone, the number is not recognized, and I am immediately in a long queue waiting for the next available agent. This is an example of value-based routing.


Skills-based routing allows you to have specific customers handled in the time you specify and by the customer service agent with the correct call handling skills and knowledge. Skills-based routing is not a new concept in the call center industry, but when combined with value-based routing, i.e. routing your most valuable customers to your best agents, the combination can be a powerful new strategy to keep and grow your best customer.

Computer-simulated training The days of standard classroom training have been replaced by computer-based training (CBT) and Web-based training (WBT), and now the very latest technology, called simulation-based training (SBT). SBT takes computer-based training a step further by providing training on the complete customer transaction. The ideal new hire in a call center would be one that has all of the experience of your best customer service agent. SBT now allows you to do this by training your future agents using actual call examples. This replaces the roleplaying used in many training programs. Role-playing used to be the only way to see how the representative would react to different customer situations. The SBT training modules are easy to create and administer. They allow the customer service agents to complete a self-evaluation and to review the areas in which they were not comfortable. This also allows the customer service agents to learn at their own pace. Some new hires will pick up skills quickly, while others may take a little longer to grasp all of the complex concepts involved in effectively handling calls.

Computer telephony integration Computer telephony integration (CTI) combines ANI (automatic number identification) and DNIS (dialed number identification service) to retrieve the calling customer’s record from the corporate database, and then provide the agent with a “screen pop” that identifies the caller and fills the screen with the essential information. This allows for the automated processing of complex customer transactions while integrating multiple call center technologies. The benefits of CTI are very clear. The agent saves time by not having to ask the customer for basic information at the beginning of the call, nor does the agent have to ask the customer what their previous calls were all about. CTI provides a “screen pop” of caller information to the agent simultaneously with the call (i.e. voice and data transfer). This allows your agent to focus on the customer and to provide superior customer service.


Middleware Perhaps the most critical and undervalued segment of your company’s technology infrastructure as you move towards enterprise-wide access to information is likely to be a layer of software known as middleware. When it comes to integrating corporate information from disparate databases that were not necessarily designed originally as compatible data sources, middleware can provide the magic key. This middle piece of the technology is currently unfashionable, known by technology vendors, rather unflatteringly, as the “plumbing” that enables information held in different formats to be integrated and presented to the call center agent in a consistent format. Middleware acts as a smoothing layer or bridge across databases, breaking your front-line agents out of scenarios such as “I’m sorry, that information is in our sales ledger, and I do not have access to that database from here”—the kind of scenario that frustrates customers and sends them elsewhere.

From

To

Calls

Contact transactions

Anonymous customers

Customer segmentation

Call handling

Customer profiles

Voice

Cyber calls

Agent productivity

Agent profitability

Individual channel management

Integrated channel management

Proprietary data

Shared data

Call center

Enterprise center

Personal service

Self-service

Cost center

Profit center

Customer access center trends. Reprinted with permission, International Journal of Service Industry Management

Chapter 4 What do customers expect when they make the call? Key Words—customer expectations, quality assurance, empathy, agent empowerment We preach listening to the customer. We spread the gospel of customer driven quality. Yet when you look at our world no one really asks the customers what it is they expect when they call an 800 number. How can we be so short sighted? What can be more important than knowing what the customer wants from a call before we design and try to deliver customer service/satisfaction? The answer is nothing. Before we embark on the actual cases we feel the need to talk about the consumer, because after reviewing all these cases we were struck by how so many of them are predicated on making the call center a more efficient and effective place. But all that we ever do in our centers has got to be based on what the customer wants. So here is what we know! To serve the customer right and effectively, contact employees need to know what customers desire. In the case of face-to-face encounters, people can create quality perceptions relating to physical characteristics of the contact employee and the environment where the service takes place. Interaction by telephone restricts the evaluation of the service delivery to such extent that consumers will solely have to base their perceptions on the interpersonal traits of the contact employee. Although the importance of understanding customer expectations in voice-to-voice encounters is obvious, there is little guidance from the research literature as to what customer expectations are with respect to contact employees’ behavior during these voice-to-voice encounters. In the eyes of the customer, what aspects characterize a truly service-oriented call center representative (CCR)? What do customers expect from a CCR during a voice-to-voice encounter? There is a clear need for answers to these questions. Therefore, the objective of this section is to develop an instrument for measuring customer expectations with regard to voice-to-voice encounters.

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The research project Research setting An empirical study was conducted among Dutch respondents that had previously contacted a call center. They had to at least remember one recent occasion of talking to a CCR. This was necessary to ensure the respondents’ ability to provide a well-based opinion on the characteristics that they would like the CCR to possess from experience and not from expectation. From the literature on service quality and service recovery, fifty-three items were generated to measure the 13 service attributes as requirements for truly service-oriented CCRs. Items measuring the attributes were developed specifically for this study on the basis of 15 personal interviews with customers. All fiftythree items were accompanied by a seven-point Likert-type scale ranging from 1 (= completely disagree) to 7 (= completely agree). A number of items were reverse scored in order to detect response bias. Two questions were added to gain insight in respondents’ demographic information. One question was added for respondents to indicate the number of times per month respondents usually contacted a call center and one question was added to gain insight into the preference of whether customers wanted to talk to either male or female CCRs. After the questions were generated from the customer interviews, it was pre-tested on a sample of 30 respondents. By administering the pre-test, we could ensure that the attributes measured in the study reflected actual interactions and expectations from customers when dealing with CCRs.

Data collection Data was collected by means of personal interviews. A random sample of Dutch respondents in several cities in the Netherlands was asked to fill out the questionnaire. On average, it took the respondents about 15 minutes to fill out the questionnaire. Other data collection methods such as mail surveys and telephone surveys were also considered, but collecting the data by means of personal interviews turned out to be the best option for the following reasons. A mail survey would have been very time and cost-inefficient and risky, because of the lack of control over the response rate. Conducting the research by phone might bias the results, since the respondents have to imagine a situation where they call a service number and not a situation in which they are called by a CCR, which can resemble a telephone survey.

Chapter 4 What do customers expect when they make the call? 35

Sample description Two hundred and eleven people participated in our study. Of the 211 returned questionnaires, 5 questionnaires had to be withdrawn from the sample because of mistakes in filling them out and insufficient answering patterns. As a result, 206 usable questionnaires formed the effective sample size. For the purpose of using statistical scale identification techniques (like factor analysis), the final number of observations did not entirely meet the minimum of 5 respondents per item to be analyzed, which is normally used as a rule of thumb in data analysis (Hair et al., 1998). Nevertheless, a preferable sample size of 100 observations or larger was easily met. Our sample could be characterized as follows. Forty-six percent of the respondents were male. The average age of the respondents was 32.6 years and ranged from 17 to 75 years. A cumulative 27.7 percent of the respondents were people between the ages of 21 and 23 years. Regarding the frequency of contact between respondents and CCRs per month, the results showed that 93.1 percent of the respondents fell into the lower bound of answering categories (less than 1 time per month and between 1 and 4 times per month). Of this 93.1 percent, 43.8 percent of the respondents had contact with a CCR less than 1 time per month, and 49.3 percent had contact between 1 and 4 times per month. Only 2.0 percent of all respondents tend to encounter a CCR more than 10 times per month. Male respondents tend to have slightly more experience with service encounters over the phone. Fifty-three percent of the respondents specified to have no preference for the gender of the CCR at all. Of the 47 percent that indicated some preference, 33.5 percent indicated preference for a female CCR and only 13.1 percent showed preference for a male CCR. More specifically, 46.3 percent of the male respondents showed a clear preference for a female CCR. Only 8.4 percent of the male respondents and 17.1 percent of the female respondents indicated a clear preference for male CCRs. Of the female respondents, 60.4 percent indicated no preference and of the male respondents, 45.3 percent had no preference for the gender of the CCR. In conclusion, people who indicated a clear preference for CCR gender prefer to talk to a female CCR.

Exploratory analyses / Scale purification The sample was randomly split in half. First, one half of the data was used to determine the actual number of dimensions underlying the construct. The other half of the sample was used for validating the measure that resulted from the analysis. A suggested


technique for purifying the measure, factor analysis, was used in order to determine the actual number of dimensions underlying the construct. Our following step in the scale development process consisted of an exploratory factor analysis to gain insight in the dimensionality of the scale. The optimal solution, based both on interpretability and statistical measures, was formed by a fourfactor model. For each of the four factors, we also assessed the reliability. The four factors that resulted from our analyses are presented in Table 1. Based upon the interpretation of the items that load on these scales they were labeled respectively adaptiveness, assurance, empathy, and authority.

Discussion The results of this study help to create a picture of customer expectations of CCR behavior in voice-to-voice encounters. Four sub-scales showed to be of major importance in this regard. This implicates that it is in the interest of both researchers and managers to focus on these scales and their underlying dimensions. Customers hold certain expectations about their prospective voice-to-voice interactions with CCRs. Since these expectations are likely to determine how customers evaluate the quality of the service firm, it is in the service firm’s interest to know what these expectations are. This study provides a measurement tool that gives an indication about these expectations and meets the urge for practical research in this regard. Accordingly, the fact that the subscales embrace eight specific service aspects from the traditional service encounter literature indicates the generalizability to the voice-to-voice service environment. Up until now, the literature has been slow in gaining insight into customer expectations with regard to voice-to-voice service behavior, and in this regard, this study contributes to the existing customer service encounter literature. The first scale, labeled adaptiveness, incorporates different service attributes. Just as in other sorts of service encounters, customers clearly expect CCRs to adjust their behavior to the customer, handle interpersonal situations, and adapt to various situations. CCRs are expected to be competent and skillful and therefore, able to help the customer. Furthermore, they should not be afraid to deal with various situations during an encounter and must be capable of assessing the customer’s constitution and of using language to the level of sophistication of the customer accordingly.


Table I Final scale model retrieved from exploratory factor analyses Scale

Items

Reliability (Cronbach’s α)

Adaptiveness 1.

Treating different questions should be no problem for the

0.71

CCR. (ADAP1) 2.

A CCR should be able to adapt to each and every situation. (ADAP2)

3.

A CCR should take my level of knowledge into account when answering a question. (CUSA3)

4.

A CCR should be able to remain calm and friendly even when I am angry. (COMP1)

5.

When I have a problem, I like the CCR to help me define the problem more specifically. (COMM3)

6.

I find it important that a CCR is able to help me with each and every question. (EMPO1)

Assurance

1.

When I have a complaint, I like the CCR to explain where

0.70

this complaint comes from. (EXPL1) 2.

I like the CCR to explain each and every step he or she takes to answer my question. (EXPL2)

3.

When I have to be transferred, I like the CCR to explain why I have to be transferred. (EXPL3)

4.

A CCR has to give me the feeling that my information is used confidentially at any time. (SECU1)

5.

I like the CCR to inform me on anything that my information will be used for. (SECU3)

Empathy

1.

I like the CCR to imagine what I am going through when

0.63

calling with a complaint. (EMPA1) 2.

I like the CCR to give me the feeling that I am a special customer. (EMPA2)

3.

I like it when I notice that the CCR treats my question as an important one. (EMPA4)

Authority

1.

It disturbs me when a CCR has to leave my question unanswered because of lack of authority. (EMPO3)

2.

It disturbs me that my call has to be returned because the CCR is not allowed to answer my question. (EMPO4)

0.60


The assurance scale focuses on aspects related to security and explanation. CCRs that provide clear information to the customer about the procedures will comfort the customer and take away uncertainty. Furthermore, the customer does not only expect that the firm he/she calls will handle his/her customer information discreetly, but also that the CCR will assure him/her that the information will be handled confidentially. The empathy scale indicates, like in other sorts of customer service encounters, that empathy is important in a voice-to-voice service encounter. A CCR must be able to empathize with the customer’s emotions and/or situation and to give the customer the feeling of not being a number for the firm. Obviously, customers dislike it when they get the feeling they are being treated as not important and that their problems are not taken seriously. The label of the final scale, authority, is generated from the findings that customers expect CCRs to have the authority to deal with their various problems and questions. The items loading on this scale indicate that customers find it disturbing if a CCR is not authorized to solve the customer’s question or problem.

Implications for call centers In order to manage well, managers need to ensure that the measurements accurately portray what management wants to be measured. The effective management of high quality voice-to-voice service delivery could be tampered by the absence of a valid measurement instrument. The evidence of good validity and reliability associated with the four-scale model suggests that this model could be a useful service management tool in the future. Several managerial implications can be drawn from the results. Firstly, the four-scale model, including the eight service encounter attributes and related items, can be used as a basis for internal performance and quality measurement and externally for perceived and desired quality measurement. Internally, the attributes of the scale-model can be used for monitoring purposes. In most call centers, management monitors the quality of the conversations between CCRs and customers by listening in, audiotaping conversations, and/or mystery calling. Often checklists containing quality attributes are used for consistent evaluation. Our four-scale model and eight attributes can serve as the basic model for these checklists to monitor customer-based service quality. Furthermore, management can give weightings to the different attributes when evaluating conversations. In a relationship management conver-


sation for instance, attributes like adaptability and communication style are more important than in a conversation in which the customer asks for a brochure in which time is considered more important. Future research is necessary to determine the relative weightings for the different conversation types. Externally, the attributes of the fourscale model can serve as the basis for a built-in caller satisfaction survey. By doing this, the firm is able to determine how the CCRs perform on these eight important attributes. Secondly, the adaptiveness, assurance and empathy scales account for a major part of a CCR's skills. These skills can partly be taught. Training and education programs must be designed to improve the CCR skills on these attributes. Examples of programs that can improve these skills are programs on product-, computer-, procedures-, and company knowledge. This knowledge is necessary to improve the competence shown and/or (procedure) assurance given by CCRs. For example, if a customer calls to get information about what products the firm sells, it is important that the CCR has enough knowledge about the different products and if not, where he/she can find the relevant information in his/her computer. If subsequently requested, the CCR must also be able to provide further information on the advantages of the products and give advice on what products suit the customer’s situation best. Then, if the customer wants to order a product, the CCR must know what the ordering-, delivery-, and payment procedures are and assure a delivery time. Furthermore, training on motivation, dealing with aggression, stress management, and customer orientation can improve the CCR’s skills in his/her contact with the customer. In such training programs, the CCR learns to deal with unexpected situations like how to deal with furious customers. Thirdly, the authority scale clearly indicates the customer's preference for CCRs that have decision-making power. Customers like competent CCRs who are able to help them out with each and every question or problem. When CCRs are well trained and have access to product- and customer- information databases so that they possess the ability to cover almost every question and complaint, it has been shown that customers would also prefer that CCRs have authority to use the information themselves without needing to gain management permission. Finally, the resulting attributes of the scale model that are presented here can serve as useful input for recruitment and selection purposes. Assessments like personality tests and role-plays can be designed in such a way that they test among potential


candidates for present levels of adaptiveness, assurance, empathy, and the ability to deal with authority. Abbreviations in brackets refer to the original set of 13 dimensions: selfefficacy, adaptability, empathy, time, communication style, reliability, perceptions of commitment to service quality and satisfaction, empowerment, staff attitude, explanation, competence, security and knowing the customer, which was our point of departure for this study.

Chapter 5 How to learn from these case studies In the next 4 sections you will encounter stories of call centers in Europe, Australia and the United States. You can read all you want from textbooks about how to do this and how to do that but in reality, the best teacher of how to run a call center is by experience. We have found that field trips to call centers are always worthwhile learning experiences. Thus we have recreated our trips to hundreds of call centers by telling you little stories about some of them. Each story represents something that we think you would want to know about. So this is what we want you to do. As you read any single chapter/case make a mental note of the following: What can I learn from this? There has simply got to be one idea that you can glean from a section. You should be able to come up with one idea from any/and/or all of these chapters. As you read the chapter one idea that you can use to make your call center more efficient, more effective, and more fun. When you find that one thing, write it down immediately and then you really do not have to read anymore of that chapter (if you want a doctor’s note excusing you from reading the rest of the chapter we will write you one). If you can come up with one idea from each chapter our job is done. Section 1 (for those of you keeping score, you have just finished Section 1, it, and so we won’t tell you what it is about) is about human resource management (HRM) in call centers. Despite all the technology that is used in call centers, employees are the key ingredient for delivering service excellence. In this section we present cases that cover HRM aspects like agent recruitment, training and motivation as well as performance assessment. Section 2 deals with some of the important day-to-day operational issues that call center management faces. The cases in this section demonstrate how call centers are dealing with employee capacity problems, the complexity of coordinating various access channels and measuring caller satisfaction. In section 3 the focus is on the more strategic matters of call center management. This means dealing with external and internal threats and opportunities. We address the role of the call center in customer relationship management and its impact on

41


the company’s market share. Making a measurable impact on the performance of a company certainly helps create support and opportunities within the organization and this makes the life of a call center manager a lot easier. The cases presented in this section show that in order to perform well, a call center needs to be organized well. This varies from putting the call center on the organizational chart to re-engineering call handling within the call center. In Section 4 we discuss the implementation and use of technological tools in the call center. Central to an effective call center is the intelligent use of information and communication technology. The case in this section demonstrates how various companies are using various technological tools to make call center life easier. Finally, we conclude our book by offering a number of additional resources that are available free of charge (some maybe not so free) to those that are interested in even more proven ideas that may help to improve your call center operations.

Section 1 Human resource management in call centers

Without any other considerations, the size and phenomenal growth of the call center industry necessarily makes human resource management (HRM) important. For example, it has been estimated that around 3 percent of the working population in the United States is employed in call centers, while both Australia and the United Kingdom have about 2 percent of their employed workforces involved in this industry.1, 2 But there are at least five other reasons why HRM in call centers is important: 1. HRM in call centers has been related directly to customer satisfaction; 2. HRM practices can directly affect profitability both positively and negatively; 3. Upwards of 60 percent of total costs in a call center may be related to labor; 4. There are many inherent and unresolved tensions in terms of the people selected for call center work and their subsequent management, particularly in respect to the conflicting demands of quantity and quality; and 5. HRM in call centers has come under the spotlight due to criticisms leveled at the working conditions in many call centers.

Many of these issues will be addressed here, but first, the argument that we should be able to dispense with the people (the human resources) almost totally should perhaps be dealt with. Some argue, with the advent of interactive voice recognition and other sophisticated technologies including the growth of the Internet and digital TV, that customers will be able to completely by-pass call center agents to perform their transactions. Accordingly, it was sug1

No reliable data are available for Europe. See Belt, V., Richardson, R. and Webster, J. (2002) Women, social skills and interactive service work in telephone call centres, New Technology, Work and Employment, Vol. 17, No. 1, pp. 20-34. 2 Kinder, T. (2001) The use of call centres by local public administrations, Futures, Vol. 33, pp. 837-860.

43


gested that in the United Kingdom, numbers in this industry would reduce as much as 40 percent3 by 2004. But it was also acknowledged that the numbers would be likely to increase by about 25 percent before this reduction commences. So although many call center jobs may face some degree of technological displacement over the longer term, it will not occur immediately, and, if customer relationship management becomes the new mantra4 as we will argue later in Section 3, live voice communication is not going to disappear. The competition from possible replacements has been less than satisfactory,5 so call centers (or at least contact centers which may be broader than telephone voice-to-voice contacts) are here to stay for the foreseeable future, meaning that so, too, are the human resource management issues. The structure that will be used to overview HRM in call centers will be to first consider the composition of call center workforces, to describe the various perspectives on the working environment of call centers, the CSR skills required, the HRM indices of concern in call centers, recruitment and selection of call center agents, conditions of employment, training, strategies to manage the human resources, and then some comment will be made on best practice. We will then provide many practical case studies to show how a wide variety of call centers have addressed a wide variety of HRM challenges, before summarizing the topic.

Composition of the call center workforce It has been suggested that up to 91 percent of call center workers are women.6, 7 Some believe that women are better suited to telephone work because they have more appropriate social skills, are more empathic, intuitive, tolerant and have better team skills. This also reflects the fact that women have traditionally been highly represented in white-collar clerical and administrative work. Men tend to be employed in call centers that require technical expertise such as in high technology environments, e.g. computer sales and service.

3

OTR (Organisation and Technology Research) cited in Rose, E. (2002) The labour process and union commitment within a banking services call centre, The Journal of Industrial Relations, Vol. 44, No. 1, pp. 40-61. 4 Tsuji, B. (2000) Has the internet killed the call center star? C@ll Center CRM Solutions, Vol. 38, No. 2, pp. 82-84. 5 Sargent, M. (2001) Customer service is the name of this game, Communication News, Vol. 38 No. 2, p. 54. 6 Richardson, R. and Marshall, J.N. (1996) The growth of telephone call centres in peripheral areas of Britain: Evidence from Tyne and Wear, Area, Vol. 28, No. 3, pp. 308-317. 7 Belt, V., Richardson, R. and Webster, J. (2002) Women, social skill and interactive service work in telephone call centres, New Technology, Work and Employment, Vol. 17, No. 1, pp. 2034.

Section 2 Human resource management in call centers 45

The age range varies across call centers with some call centers seeming to prefer younger workers because they believe that they can mold their attitudes to work if they have not already picked up bad habits from other work environments (see chapter 22), while other call centers can see the benefits of more mature workers. For example, one research study8 found that the average age of agents was 31 years, which was considered to be relatively young, and interestingly, this study also found that older workers were more satisfied (consistent with the research on job satisfaction in older workers generally). Therefore, the policy of showing a preference to the young may not be “good business”. Moreover, in some countries it is unlawful to discriminate on the basis of age9 so this may not be an option anyway. The working hours in this industry tend to vary more than most. Part-time work is quite common because it is believed that people cannot work productively for more than about 4 hours constantly on the telephone but training costs are pushing managers more towards longer hours and full-time workers. Notwithstanding these changes, call centers can provide flexible work opportunities for students and for those with family responsibilities allowing them to work shifts to fit in with their other responsibilities and interests. The industry can also provide transitional employment for those who have been away from the workplace for some time. Often overlooked is the fact that call centers can provide suitable employment for people with some physical disabilities as can be seen on our case study in chapter 24.

The working environment of the call center Just as the definitions of the call center vary, so do the contrasting metaphors that have been used to describe call centers and their working conditions. For example, while call center industry publicists present “exciting images of centers staffed by co-operative team working employees ‘smiling down the phone’ and talking to customers in a relaxed and professional manner in comforting regional accents”,10 opposing images are

8

Frenkel, S.J., Tam, M., Korczynski, M. and Shire, K. (1998) Beyond bureaucracy? Work organization in call centres, The International Journal of Human Resource Management, Vo. 9, No. 6, pp. 957 - 979. 9 In Australia, it is unlawful to discriminate in employment on the basis of any age, as it is in a few states of the USA; and across all states of the USA it is unlawful to discriminate against those who are over 40 years of age. 10 Bain, P. and Taylor, P. (2000) Entrapped by the “electronic panopticon”? Worker resistance in the call centre, New Technology, Work and Employment, Vol. 15, No. 1, pp. 2-18.


conjured up by the metaphorical expression “battery farming or free range?”,11 based on the analogy between call center operations and egg farming. Other powerful negative descriptions that have been used include the “electronic panopticon”,12 “the sweatshops of the twentieth century” and assembly line production. Others simply describe a noisy warehouse-sized space filled with identical shoulder-height cubicles in which a bored (and boring) unhelpful operator is force-fed customer inquiries. (I recently asked an agent if I was talking to a real person or a machine as his voice sounded so machinelike that I was unsure whether I could ask a complicated question!) One very graphic description comes to us from a now defunct Australian call center in which the average length of employment was three months—compared to an industry average of 16 months13. This business was officially known as “One.Tel” but was called “One.Hell” by its workers! However, while these metaphors present vivid images, some have argued that they exaggerate the reality and, as such, may be unhelpful. British writers have provided a more neutral description of the organization of work in call centers: Each agent sits at a “turret”, with a headset, keyboard and computer monitor. The turrets are generally grouped in clusters. Agents tend to be separated from colleagues in the team by some form of low partition, but with easy access for consultation…At the heart of the call center is the automated call distribution system … not only is the call automatically transmitted to the agent, but so too are the records of the customer, often along with a flashing message instructing the agent to try and sell a particular product during the call, based on a computer generated individual customer profile… The agent has targets to meet, often linked to performance-related pay…the pressure is to keep taking calls. There is also little time to recover from an awkward call or from “customer rejection”.14

11

Crome, M. (1998) Call centres: Battery farming or free range? Industrial and Commercial Training, Vol. 30, No. 4, pp. 137-141. 12 Bain and Taylor, op. cit. 13 O’Rourke, J (2001) Call centre One.Hell of a place to work, says union, The Sunday Age, 28 January, p. 7. 14 Pp.102-103 of Richardson, R. and Marshall, J.N. (1999) Teleservices, call centres and urban and regional development, The Service Industries Journal, Vol. 19, No. 1, pp. 96-116.


In some centers, agents are expected to spend as much as 95 percent of their day “signed on to the phone”.15 But one thing is very clear about call centers and that is that they are not all alike— they vary considerably both within companies and across companies, and in the variety of work performed (e.g. whether inbound versus outbound calls are the focus, and in terms of the depth of knowledge required by agents, and certainly in terms of their HRM practices). Many of the problems for staff have been created by the technology and the obsession with efficiency over effectiveness and quality service. It has been found that some call center agents can serve up to 465 customers per day, each taking about one minute, while others, at the high value end, may serve only 30 customers.16 Not surprisingly, the focus on quantity and the production-line approach has a demoralizing effect on staff but little is left to chance, and although it is argued that the organization is in full control and nothing is left to the discretion of the agent,17 the evidence suggests that this statement needs tempering as employees and managers often find ways of subverting or circumventing systems, as we shall see later. In most call centers, at any point in time, supervisors can see what an agent is doing either visually or via their computer monitors which list every agent, what they are currently doing, the number of calls they have taken, the number of calls in their queue and the length of time taken on calls etc. The time taken between calls is also measured—this is called white space, as is the time taken in comfort (toilet) breaks. If an agent is taking too long on a call, the supervisor can listen in to determine what the problem is. An agent can never be sure if the supervisor is listening in or taping a call. (Having said this, although the potential is there for taping to occur, it is time-consuming and appears to concern agents less than was previously thought. Most feel that they are told in advance of any taping,18 according to British research, but this does not necessarily apply across all call centers.) While some agents are concerned by taping, especially if their private conversations are taped, other agents have indicated that they

15

p. 3 of Kinnie, N., Hutchinson, S. and Purcell, J. (2000) ‘Fun and surveillance’: the paradox of high commitment management in call centres, International Journal of Human Resource Management, Vol. 11, No. 5, pp. 967-985. 16 Batt (2000) cited in Taylor, P., Hyman, J., Mulvey, G. and Bain, P. (2002) Work, organization, control and the experience of work in call centres, Work, Employment and Society, Vol. 16, No. 1, pp. 133-150. 17 Gilmore, A. (2001) Call centre management: is service quality a priority? Managing Service Quality, Vol. 11, No. 3, pp. 153-159. 18 Lankshear, G., Cook, P., Mason, D., Coats, S. and Button, G. (2001) Call centre employees’ responses to electronic monitoring: Some research findings, Work, Employment & Society, Vol. 15, No. 3, pp. 595-605.


would like all of their calls taped so that if ever there is a problem they will have the evidence to show that they have done the right thing. Reader boards are displayed throughout some call centers to indicate the daily statistics, the number of calls waiting and the time being taken per call. These reader boards are sometimes used to encourage competition between teams. In other cases, lights flash at operators if they are taking too long on calls or if there is a back-up of calls in the queue, with different colored lights coming on to show the length of the back-up. Due to converged remote access technology, operators are also able to work from remote sites such as their home with the same level of access to the technology as they would have in the call center, which sounds fine in theory, but the practice of people working remotely has even further issues in respect to occupational health and safety, issues of preserving confidentiality and privacy, lack of opportunity to socialize with other workers, maintaining skills and product knowledge and so on.

Skills required of call center workers As mentioned above, the type of work in call centers varies considerably but there are certain skills and characteristics generally required of call center employees. These include keyboard skills, a customer focus, a flexible attitude, high energy, commitment, team skills, speed at handling calls, speed at processing, voice maturity, relevant language skills and an easily understood accent, ability to acquire product knowledge quickly, and an ability to handle calls in a quality manner. The ability to provide sustained telephone contact through a shift and provide emotional labor without burnout or stress is obviously very important, although the measurable characteristics able to predict which people are able to do this still elude us. Some firms like to have experienced operators whereas others prefer to hire those with little or no work experience as indicated earlier.

Human resource management (HRM) performance indices There are a number of very troubling HRM indices in call center management. These include high rates of absenteeism, e.g. absenteeism levels in the UK range from 4 to 20 percent.19 In Australia, the Australian Service Union has attributed the cause of high

19

Barnes, P.C. (2001) People problems in call centres, Management Services, Vol. 45, No. 7, pp. 30-31.


rates of absenteeism to rude customers, call monitoring/recording, unsupportive managers and a need for more training.20 Other areas of high cost for call centers are the excessive turnover rates and the costs of workers compensation claims, so we will examine these in turn.

Turnover In the United Kingdom, it is suggested that the turnover rates vary between about 19 and 38 percent, whereas in Australia the average turnover rates vary between 5 percent in regional areas (where unemployment rates are very high) and 35 percent in the large cities (where the unemployment rate is about 6 percent). In the U.S. reports from retail and healthcare show that turnover averages more than 30 percent, but rates of up to 150 percent have been reported21, 22. Purdue’s Benchmark Study of Call Centers found that this could even rise as high as 300 percent (This particular call center shall remain nameless to protect the guilty). Reasons for high labor turnover have included: •

Work intensity and lack of variety, as previously described.

•

Stressful work environment and arbitrary, unrealistic productivity quotas.

•

Hostile customer attitudes—this may be due to a variety of reasons including having to wait for long periods before their call is dealt with, but also customers have often been required to provide some of the service themselves, by responding to a series of demands that stream their inquiry to the right person(s) by selecting from a menu of operations and associated numbers, even though few of the options ever seem to relate to most people’s inquiries. If they are lucky and they choose correctly, and in some cases remember their PIN number (where that is required), they may not have to wait for a long time; otherwise they will need to endure company advertisements, depressing radio news broadcasts or music incongruent with the service being sought. Predictably, when the operators or customer service representatives take calls they can be faced with angry or frustrated customers.

•

Lack of career development opportunities—structures tend to be fairly flat, so unless the call center is part of a much larger organization, or growing very fast,

20

Anonymous (2001) Call centre training videos, Industrial and Commercial Training, Vol. 33, No. 1, p. 5. 21 Gustafson, B.M. (1999) A well-staffed PFS call centre can improve patient satisfaction, Healthcare Financial Management, Vol 53, No. 7, pp. 64-66. 22 Wallace, C.M., Eagleson, G. and Waldersee, R. (2000) The sacrificial HR strategy in call centers, International Journal of Service Industry Management, Vol. 11, No. 2, pp. 174-184.


then severe constraints are imposed in trying to address this issue. (See our case studies addressing this issue in chapters 8 and 15). •

Tight labor markets with better reward packages available elsewhere especially in call center “hot spots”—the average cost of staffing a call center is, depending upon which study one accepts, somewhere in excess of 58 percent of total costs23 but possibly up to 80 percent, so savings in this area for businesses can be significant.

•

Inadequate training—training appears to vary from one day to 6 weeks of initial training, although most call centers appear to provide on-going training, mostly focused on product knowledge and customer service.

•

Lack of authority to resolve issues without management or other approvals.

•

Poor internal communications.

•

Poor management attitudes and lack of interest in agent views.

•

Shortcomings in the human resource and other support given to line managers.

•

Lack of feedback on individual performance, which is surprising given that so many metrics are used in this industry.

•

Unsocial hours.

•

Absence of staff retention policies.24

•

Hot-desking. While turnover is costly, it can sometimes be more costly not to have turnover if one

has employees who are not productive. See chapter 21, which provides a guide to analyzing turnover. The Xerox case study in chapter 65 shows how one company actively manages turnover; it only hires agents from employment agencies for 3 years at time because it is believed that they will not be useful beyond this period!

Occupational health and safety issues and workers’ compensation (insurance) Stress is one of the major occupational health and safety problems in call centers. This is not surprising given the nature of the work. For example, the term “empathy dis-

23

Kinder, T. (2001) The use of Call Centres by local public administrations, Futures, Vol. 33, pp. 837-860. 24 Barnes, op. cit.


tress” has been used to describe the consequence of agents trying to respond constantly to people in difficult personal situations.25 One Australian survey, admittedly conducted by a union, found that 88 percent of call center workers suffer stress, with 83 percent taking up to 10 days sick leave per year.26 A further 5 percent were found to have taken 25 days or more in sick leave due to stress. Another 1998 study reported that stress levels in call center agents are higher than those in coal miners! The reasons for the experience of stress have been attributed to electronic surveillance and monitoring, timed breaks, target setting and a pressurized work environment. It is interesting that length of time in the job appears to make a negative difference for workers—that is, the longer they are in the job, the more likely it is that they will suffer stress.27 The most recent research on the subject of trying to explain emotional exhaustion and withdrawal has focused on four clusters of variables that managers might like to consider: the nature of the job and the work environment; social support provided; personal dispositions and assessments; and demographic variables such as age, gender and employment status.28 Our case in chapter 23, “Role Stress in Call Centers: Its Effects on Employee Performance and Satisfaction,” provides further detailed analysis of this topic, and examines the role of leadership in this context. Apart from stress, other occupational health and safety problems in call centers include physical health problems such as musculoskeletal disorders, eye problems due to prolonged VDU use, hearing damage from the continuous use of headsets, and voice loss. Thus the UK Call Centre Association has published minimum standards of practice to address the occupational health problems associated with call centers. Notwithstanding this, it has to be recognized that call centers are at the forefront of the process of automation and intensification of office work and that this will undoubtedly create human resource management issues. Attention needs to be paid to lighting, air quality, and temperature; and staff must be given occasional breaks throughout the day in conjunction with stretching exercises. Good ergonomics can reduce rising claims in respect to musculoskeletal disorders such as carpal tunnel syndrome. Prevention is essential not only for worker wellbeing but such injuries have been found to account for $1 in every $3 spent on workers’ com-

25

Gustafson, op. cit. Anonymous, op. cit. 27 Deery, S., Iverson, R. and Walsh, J. (2002) Work relationships in telephone call centres: Understanding emotional exhaustion and employee withdrawal, Journal of Management Studies, Vol. 39, No. 4, pp. 471-496. 28 Ibid. 26


pensation (insurance claims), and such injuries result in more absence from work than any other workplace injury, with a median of 25 days.29 However, it should be said that the environmental and ergonomic conditions provided for employees in most call centers are better than those provided in traditional offices,30 and in respect to those call centers we studied, considerable effort has been invested in trying to make the work environment as positive as possible. For example, in one call center studied, the staff are given time for craft type activities, in another the managers pipe an herbal scent through the air-conditioning system and also allow the staff to decorate the environment. In both of these examples, although the “feel of the working environment” differed markedly, ergonomic furniture was provided and the employers purported to spend a great deal of time and effort on being a call center “employer of choice.”

Worker resistance Although the call center environment was initially seen as one in which supervisors had perfect control of workers this has not proven to be the case. Researchers31 have reported that there is a variety of ways that agents can respond to the oppressive environment of call centers. As we have seen, many agents simply leave permanently while others take sick leave of one kind or another. Some participate in strike action e.g. the Verizon strike in the USA. Others manipulate the measurement system. For example, it is not unheard of for agents to simply appear as if they are taking calls but not actually actively be engaged on a call; some simply cut the connection in call centers where performance is measured on the basis of the number of calls taken per period. Call center workers can also make choices about how to perform their allotted work (with enthusiasm, detachment or indifference) or in some cases they can concentrate on processing work versus answering phones. Staff can appear to be answering phones but actually be sitting there “mouthing words” somewhat like fish, while continuing to either process work or

29

Rudnik, S.D. (2000) Improve your call center with an ergonomics makeover, C@ll Center CRM Solutions, June, pp. 86, 88, 90. 30 Richardson, R. and Marshall, J.N. (1999) Teleservices, call centres and urban and regional development, The Service Industries Journal, Vol. 19, No. 1, pp. 96-116. 31 Knights, D. and McCabe, D. (1998) What happens when the phone goes wild?: Staff, stress and spaces for escape in a BPR telephone banking work regime, Journal of Management Studies, Vol. 35, No. 2, pp. 163-194.


have a rest;32 they can cut off calls that are proving to be difficult for one reason or another, or they can “require” frequent toilet breaks.

Recruitment and selection of call center agents Having considered the typical issues in call center HRM, we now need to examine the recruitment process to determine how this might be used to minimize the problems. The first problem for many call centers is how to actually recruit people in sufficient numbers to meet their needs. Some centers have opted to outsource this task, leading to new agencies being created to meet this need. We describe one such agency in our case study on Randstad Callflex in chapter 6, which focuses not only on recruiting but also on selection and training of personnel for call centers. Another interesting example is that of Viking Direct (chapter 7) in the Netherlands, which decided to recruit personnel from across the border in Germany such that people could live in one country and work in the other. Language and accent of agents become issues in many parts of the world (reference to this can be seen in our case of R & M, in chapter 30), and in fact, in some cases call centers are located specifically in an area that is likely to provide people with the appropriate spoken accent (and one that will be acceptable to the customer base). In some cases call centers are located to take advantage of both time zones and cheap labor, and personnel are trained to speak with particular accents, e.g. in India. No matter which method of recruitment is used, though, the costs are generally significant. Thomson Consumer Electronics has dealt with this issue creatively by using their existing personnel as recruitment agents, as described in chapter 13. The underlying philosophy of using your own staff as recruiters is that they are unlikely to refer people to you that they would not be happy to work with or to refer people who will lower productivity levels, as this may reflect badly on them. Therefore, they are likely to refer good recruits. In the case of Thomson Consumer Electronics the staff member is actually paid a “success fee” if the person is hired and completes 90 days. (No cost-benefit analysis has been performed on this strategy but anecdotally it appears to work.) Just getting people to think about working in a call center is seen to be one of the challenges in recruitment, so apart from this example, other firms have tried taking their recruiting activity directly to where people are likely to be found such as shopping malls—see the case 32

Knights, D. and McCabe, D. (1998) What happens when the phone goes wild?: Staff, stress and spaces for escape in a BPR telephone banking work regime, Journal of Management Studies, Vol. 35, No. 2, pp. 163-194.


study in chapter 20 of MicroAge, which used a flashy advertisement in a local newspaper and much fanfare. Employment seminars were held so that applicants knew what a call center did. Videotapes and other types of realistic job previews (RJPs) such as the “open house sessions” held by Viking Direct have also been used quite effectively (see chapter 7). RJPs can reduce selection costs as recruits screen themselves out once they understand what is involved in the role. There is some evidence that RJPs can assist in reducing subsequent turnover in those who have been through the process. The message for most call centers is that greater creativity in recruitment is probably needed, at least in some areas. One of the often forgotten sources of suitable personnel can be those with special needs, especially those who are not ambulatory. As already mentioned, the case study that we have entitled Workplace Diversity (chapter 24) provides some examples of people with physical challenges who have successfully worked in call centers, with a relatively minor amount of modification required and comparatively modest associated costs. If you can recruit a good worker and one who is more likely to stay than most workers who have greater choice in respect to employment options, then the small outlay could provide outstanding value. Similarly, home-based workers might be considered—the technology is available to integrate these workers; monitoring is certainly easier to do than for most other types of work; and the market is relatively untapped (see Otto, which used 75 home workers, in chapter 29). How, though, does one select the right candidates for a dedicated call center? Some large firms that exist beyond the call center, e.g. the Ford Motor Company, have decided that all new recruits to the firm must serve a period of time in their call center, so there is less emphasis on directly recruiting for this function. But in most call centers specific selection criteria are used, although it has to be said that in some cases, minimal selection criteria exist and there is a high use of contingent labor and student and part-time workers. In other cases, there is apparent sophistication in selection criteria and processes. Typically the focus has been on utilizing the so-called “big five” personality measures: extraversion, agreeableness, conscientiousness, neuroticism and openness to new experience. Often, though, an inherent conflict exists in the mismatch between the type of recruits call centers think they need and the type of work that is actually provided for the recruited agents. For example, many will argue that they need skilled, semi-professional workers with strong interpersonal skills who really enjoy communicating with people, whereas the work provided is generally routinised, repetitive and provides few opportunities for people to use their social skills and competencies. They also look for enthusiastic people who like to use their initiative yet most call centers have purposely restricted


the amount of discretion that agents can use, and in fact, many any script what they are allowed to say to customers. It has been argued that there are no traditional indicators such as labor market institutions, qualifications or formal skill hierarchies for call center agents so detailed procedures for selection are required. Not surprisingly therefore, the type of procedures used in the selection process might often be considered more suited to high level-positions rather than to people who typically stay in their jobs for relatively short periods of time. One example provided in the literature is that of Telebank, a British firm that has about 500 agents handling about 20,000 calls per day,33 which uses underlying assumptions about the required personality characteristics and has a detailed selection process. This includes a job and person specification, application forms, telephone interviews, role-plays, two person structured interviews, reference and credit checks. The yield ratio has been reported at about 3 percent, which tends to indicate that it is an expensive activity. The focus is on identifying personality traits (described as positive attitude, sense of humor, and enthusiasm), verbal communication skills (described as fluency, rapport, warmth, tone, pitch and energy) and, to a lesser extent, technical skills (described as keyboard, numeric and navigational abilities). Neckermann Versand AG, on the other hand, looks for empathy, listening capabilities and basic computer skills, as shown in chapter 10. Our experience tends to show that hiring for talent and training for skills is the way to proceed. In fact, the general view seems to be that technical skills can be taught whereas attitude cannot be, at least not to the same extent.

Conditions of employment The conditions that are offered in contracts of employment obviously vary across countries and firms, and will to a greater or lesser extent be constrained by the industrial relations climate. For example, Interpolis hires its workers on what they call “min-maxcontracts” such that there is a range of hours people may be required to work (see chapter 12). Some allow their personnel to work fixed hours; others insist upon everyone sharing the various shifts that are required to meet the customer requirements. Interestingly, pay levels have been found to have little influence on retention to leave the job. More important are long-term prospects, promotion and training opportunities, and leadership, but this is not to say that competitive pay levels are not important.

33

Callaghan, G. and Thompson, P. (2002) We recruit attitude: The selection and shaping of routine call centre labour, Journal of Management Studies, Vol. 39, No. 2, pp. 233-254.


Some centers offer “career structures” whereas most see their call centers as providing only flat structures with a maximum of three or four levels including that of the manager. In these cases a “sacrificial HR strategy”34 is adopted—managers of these centers do not appear to believe that there is anything that they can do about issues of motivation or boredom or turnover, so they simply work on the assumption that these issues will arise and plan accordingly (again, see chapter 65, on Xerox). Others assume that these problems will arise but offer other benefits to their personnel such as education, training, and perquisites (e.g. employee appreciation days at Thomson Consumer Electronics; see chapter 16). Some centers only recruit from within for other than base level positions, e.g. see the Salesforce case study in chapter 22. Transcom has created a career ladder of success that provides a different approach (see the Transcom 1 case study, chapter 15), as has Creative Labs, in chapter 8. It is interesting to note how important training, promotion opportunities and career structures actually are to people. You may have thought that pay levels were what was most important but research has found that that long-term prospects, promotion, training and leadership tend to be more important to most call center workers than pay levels—the assumptions must be that your firm is paying at relatively competitive levels and that a basic threshold of pay has been exceeded for workers to meet their reasonable living expenses. Some have re-engineered their operations, which has led to a greater empowerment of call center personnel which is more satisfying to call center agents and appears to have produced successful business results also (see the OHRA case study in chapter 11).

Training Given the high turnover rate in most call centers and changes in product range or sales promotions in call centers focused on retail products and services, training is an ongoing requirement. However, advances in technology have tended to reduce training costs as product and process knowledge and customer information have become imbedded in the systems available to the agents. Training varies considerably across call centers, but Telebank, referred to above, provides a six-week training program devoted to communication skills, products and systems. The first four weeks are spent in a training room, while the final two weeks are spent under supervised work.

34

Wallace, Eagleson and Waldersee, 2000.


The major emphasis in training is on what they refer to as social competencies— managing a conversation and managing oneself. For example, they are taught about the conversation cycle and the eight elements of conversation—exchanging ideas, using the first person, stating intention, giving attention, duplication, understanding, acknowledgement and providing conversational space. Trainees are taught to distance themselves from any anger displayed by customers and to learn to calm situations. Listening in to calls and taping of calls then occurs to allow for coaching of trainees. Vodafone trains around 18 aspects for better contact with customers, as we describe in chapter 41. Our case Listening variables in voice-tovoice service encounters in chapter 25 actually provides research based information to guide trainers on the specific importance of communication and listening behavior, while this same section also points to further research on voice-to-voice service encounters that can guide trainers on the “four scale” model. Neckermann has a very structured training/career progression process (see chapter 10). It has connected its training to its career development program, which makes a lot of sense. As mentioned above, some surveys have reported staff as stating that they need more training, particularly on call center systems. Mentoring is a process that may assist. In chapter 14, Thomson Consumer Electronics provides an example in which mentoring has apparently reduced the time needed in training and improved quality, and has had a beneficial side effect for the mentor.

Management strategy Just as call centers have been transformed from the days when operators had rotary dial telephones, index cards and pencils, to predictive dialing, automatic call distribution (ACD), visual display unit (VDU) and speech recognition software, it has been suggested that an evolution in management strategy may also be necessary. The early strategies adopted by call centers, emphasizing control and efficiency at the expense of employee stress and turnover,35 appear to be past their use-by date, if they were ever successful. One approach to ameliorate some of the problems in call centers has been to adopt self-managing teams. This form of organization has been compared to mass production and TQM and, interestingly, an increase of 9.2 percent in sales performance has been found after adjusting for the time spent in team meetings; and these improvements have stood the test of 35

Wallace, C.M., Eagleson, G., and Waldersee, R. (2000) The sacrificial HR strategy in call centres, International Journal of Service Industry Management, Vol. 11, No. 2, pp. 174-184.


time.36 In this case, teams were involved in goal setting, problem solving and learning but these activities did not detract from the power and advantages offered by the technology. In other words, one did not negate the other. We know, too, that the focus is moving from agents handling the maximum number of calls to customer relationship management approaches, but a manager from Accenture has suggested that the evolution has been from an initial cost-centric approach that moved to a service-centric approach and more recently has progressed to an agent-centric approach.37 He argues that this is necessary to avoid the high turnover rates; it places enormous value on retention of agents after the large investment in recruiting, selecting and training them has occurred. Part of the agent-centric approach is to allow agents to work from home which he argues is a powerful incentive, saves on commute time, improves morale, increases productivity and efficiency, and provides agents with greater flexibility. However, it is acknowledged that this approach is really the most applicable for specialized high quality agents who have required extensive training. In chapter 22, one Australian call center (Salesforce) that provides outsourced services to a variety of large companies has adopted management systems and practices which to date have overcome many of the problems of high turnover—they describe it as their “3F Formula,” which represents fun, focus and fulfillment. Ninety-five percent of the staff is full-time, which differs from many other call centers, and if staff perform well, they know that there is a career path for them. This is for three reasons: first, the organization is growing very rapidly; secondly, supervisors and managers are recruited from within the organization; and thirdly, this is already a very large call center business. They have found that external recruitment to this environment has been unsuccessful due to the unique culture that has been established. Wal-Mart has identified that customer service representatives need to feel some ownership over the policies that apply in their setting, that they need to feel appreciated and that they have a future, so chapter 18 outlines some points that should be taken into account when trying to create the right kind of culture to motivate workers in call centers. The Transcom 2 case study provides an example of how a call center has used a mission statement, stories and strong corporate symbols to motivate workers. Other firms do things like have the executives spend time doing the job of the call center agents (see chapter 19, Walk a mile in my shoes).

36

Batt, R. (1999) Work organization, technology, and performance in customer service and sales, Industrial and Labour Relations Review, Vol. 52, No. 4, pp. 539-564. 37 Fadia, A. (2001) Transform your call center using remote home agents, Customer Inter@ction Solutions, Vol. 20, No. 1, 2001, pp. 60-63.


Measurement of worker satisfaction is one way of trying to ascertain what is happening in the minds of employees. Vodafone, an award-winning call center, has found that to ensure that their workers are happy and motivated there are a number of things they can do, including having a contact person, involving employees in issues, and having project groups, information sessions, and especially further education (see chapter 9).

Best practice Overall, best practice in call centers, from an HR perspective, is said to include “appropriate induction processes; use of competencies and assessment centers; regular evaluation of individual and group performance to identify strengths and weaknesses; use of trained development advisors to listen to agents concerns and provide one-to-one coaching; personal development plans; appropriate benefit packages with bonuses linked to quality of customer service; and the introduction of additional tiers of organizational structure to motivate and aid preparation for promotion.”38 Recent research from the Netherlands has also suggested that there are two clear and relatively independent paths for call center managers to influence both role stress and job satisfaction.39 Role stress was found to be affected by empowerment and autonomy, which is to say that if an operator does not have the power to solve problems and answer questions for callers they are likely to have role stress, whereas it was competence that was found to directly influence job satisfaction. Leadership consideration was found to affect performance and intention to leave. Turnover, however, was not influenced by performance which means that call centers may in fact end up with the poorer performers remaining, which can cause real problems. Another research finding of interest is that employees are more satisfied with their jobs when call centers have less than 50 staff.40 The same study found that the best call center operations (based on better customer satisfaction ratings and higher customer loyalty indices) are non-unionized but that there is greater variability in performance across non-unionized operations than across unionized operations. The issue of satisfaction has also been examined in respect to the unionization of the workplace and, in a study that included call centers in the USA, Australia and Japan, it was found that agents were more satisfied when the union was 38

Barnes, op. cit., p. 31 De Ruyter, K., Wetzels, M. and Feinberg, R. (2001) Role stress in call centers: Its effects on employee performance and satisfaction, Journal of Interactive Marketing, Vol. 15, No. 2, pp. 23-35. 40 Miciak, A. and Desmarais, M. (2001) Benchmarking service quality performance at businessto-business and business-to-consumer call centers, Journal of Business & Industrial Marketing, Vol. 16, No. 5, pp. 340-353. 39


considered to be relatively strong, whether or not they were union members.41 How businesses can use these two different aspects on information relative to the desirability of having a unionized workplace is difficult to see, because the effects are inconsistent on preferred outcomes for management. The former finding may influence choice of location; that is, if a business thinks it can be a top performer it might be better thinking about setting up in a country where the level of unionization is low. What weighting this should have in the decision-making is yet to be determined. The importance of human resource management in call centers cannot be overestimated as it can be related directly to customer satisfaction, and profitability. However, it is also important to point out that not all call centers are the same and certainly not all conform to the stereotypes of call centers generated by the various but powerful metaphors used to describe call centers.

Conclusion Human resource management is part of the strategic challenge. The people side of the business cannot be overshadowed by the technology as up to 80 percent of the costs of call centers relate to the human resources and we know that there is strong connection between employee satisfaction and customer satisfaction. The challenge for managers is to make broad ranging improvements to employee related practices42 so that the graphic metaphors can be avoided. However, what managers are faced with at present is a capital intensive industrialization of service sector work, in which highly intensive, repetitive and routine work is carried out in an environment with enhanced levels of electronic surveillance that facilitates control and discipline of workers in relatively flat and limited organizational structures.43 Enormous challenges flow from this. Issues such as facilities, training and salaries can be dealt with by larger budgets but the really tough issues to deal with include how to make routine tasks exciting, and how to provide personal and professional development, rewards and career options for employees.

41

Frenkel,S.J., Tam, M., Korczynski, M. and Shire, K. (1998) Beyond bureaucracy? Work organization in call centres, The International Journal of Human Resource Management, Vol. 9 No. 6, pp. 95-979. 42 Miciak, op. cit. 43 Ibid.

Chapter 6 Agent recruitment CASE: Randstad Callflex Key Words—agent selection, agent hiring, temporary workers, testing for CSR skills, recruitment

Company background Randstad Holding NV (http://www1.randstad.nl/Werkgever/randstad/3.1.1.html) is a large international supplier of employment services to businesses. The essence of all services is expertise in the labor market that makes it possible to provide personnel and skills to organizations, allowing them to operate more decisively and efficiently. In 1997 the Randstad Group attained revenues of more than NLG 7 billion and net income of NLG 257.8 million. On a daily basis, Randstad places more than 173,000 people. Operations are conducted through a network of more than 1,100 branches, more than 400 of which are outside the Netherlands. Randstad branches currently operate in the Netherlands, Belgium, Luxembourg, Denmark, Germany, France, Switzerland, Spain, Great Britain, the southeastern United States and Canada. Company headquarters are in Diemen (Amsterdam). In 1998, Randstad opened a subsidiary especially for the call center sector. Randstad Callflex, as it is called, has its headquarters in Utrecht and in Limburg with branches in Maastricht, Heerlen and Venlo. The reasons for Randstad to open a special subsidiary for call centers are a fast growing call center market and the complexity of laws and regulations with regard to employment of (temporary) personnel. The goal of Randstad Callflex is to provide tailor-made solutions for call centers with respect to recruiting, selecting and training of personnel.

The problem From a human resource point of view, call centers can be considered as special. Call centers need a flexible workforce with certain skills. Randstad Callflex, as a provider of temporary staffing, can provide its client with such a workforce. The challenge for Randstad Callflex is to recruit and train temporary staffers that can be employed with

61


the various call center clients. An additional challenge is to recruit temporary staffers that can be fit into the client’s organization and match the client’s culture.

The solution As soon as a call center approaches Randstad Callflex for the recruitment of temporary staffing, Randstad Callflex will, in consultation with the client, describe and define a job profile. This job profile is used to search for the right candidate. To attract possible candidates, notice of the vacancies is spread through word of mouth and advertising. Advertising is done in close collaboration with the client. The advertisements have to have a certain standing because the client's image is involved. Next to these activities the Randstad Callflex database and the database of the entire Randstad organization is used. In the framework of the social security law and unemployment benefits law, people who have a social or unemployment benefit are obliged to be enlisted or registered with a state employment bureau. The employment bureau often advises unemployed people to register with a temporary staffing organization. Because Randstad Callflex has to deal with this specific group, Randstad Callflex has developed a recruitment procedure. This recruitment procedure is not only applied to people with a special benefit but for all applicants that consider working in a call center. The recruitment procedure, of course, is different for each client. When recruiting and selecting people for call centers, Randstad Callflex first organizes a meeting in which the company and the work is explained. This happens twice a week for a group of 10-15 people. This meeting can be seen as the first filter where the candidates decide for themselves whether the company and the work is suitable for them. The next step is a selection interview. In this interview Randstad Callflex is checking the candidate's motivation, skills, flexibility and approach towards customers. The selected candidates then will proceed to an assessment test. The assessment test includes a personal interview, a telephone and typewriting test and testing the stress durability of the candidate. Randstad Callflex and the client together perform the assessment test with the candidates. The selected candidate will be offered a temporary contract with Randstad Callflex for a half-year period. If the client is content about the candidate, the candidate is offered a 2 year contract with the client.

Chapter 6 Agent recruitment 63

Normally, the client sets up its own training program. However, Randstad Callflex can also take care of the training of personnel. Randstad Callflex has developed a Call Center Academia located in Utrecht.

The result The increasing demand for call center personnel and the changes in the national labor laws like the flexibility and safety law put an enormous pressure on temporary staffing agencies to supply call centers with temporary staffers. In this respect Randstad Callflex has set up a pilot project to train and support candidates who do not have the right qualifications. By training them on the requirements the candidate will gain selfconfidence. Because of this increased self-confidence, these candidates have a greater possibility to pass the qualification test successfully. The need for temporary call center personnel is not restricted to Europe. In the U.S. a number of firms have emerged that promise pre-qualified and trained personnel to staff a call center. This outsourcing of the human resource function saves time, effort and trouble.

Commentary Given the fact that many call centers still suffer from considerable employee turnover, it is of absolute importance that would-be agents are carefully selected and trained. Having a balanced and systematic procedure for recruitment in place helps a great deal in finding the best man or woman for the job. Partnering with an outsourcing professional may save time, money and energy. Whether it is one person or 1000 people new customer service representatives must do the work in the process and manner expected. Work processes must be clear. The sudden departure (or death) of workers should not mean that no one can do what is necessary or that new procedures need to be discovered. Work flow and work process should be documented. Anyone should be able to fill in whenever necessary. With documented workflows managers know what is happening and can make strategic decisions regarding how many people are needed and who should do the work.

Chapter 7 Personnel recruitment CASE: Viking Direct BV

Key Words—agent hiring, personnel selection, recruitment, multilingual agents

Company background Viking Direct (http://www.viking-direct.co.uk) is a mail-order company for office equipment. It sells almost anything needed in an office-related environment, from cartridges to calculators and from chairs to sophisticated copiers. The company’s origin lies in the US, and it has operations all over the world. Only a couple of years ago, the outlet in Venlo, the Netherlands employed 35 people. Recently, however, Viking Direct has grown enormously and the outlet in Venlo now has around 435 employees, of which 300 work in the call center. In their Euregional call center in Venlo, the Dutch market, the German market and the Dutch speaking part of the Belgian market are served. The call center agents take orders and put them through to the distribution warehouses, handle customers’ questions about the products and send information about their products to their customers. Most of the call center agents work full-time. They all have their own personal workstation. As we write this, Viking Direct has +/325 call units and another 150 units will be added in the near future.

The problem The biggest problem the call center manager faced recently is the challenge of finding enough (international) personnel to keep up with the high growth rate. In the call center, there was a great need for native Dutch and German speaking people. In the beginning of the growth phase, problems were experienced in finding enough German personnel, as the larger part of Viking’s customers are German. When firms place an order with Viking, customers call a German toll-free telephone number, and are connected with a German-speaking agent of Viking Direct in Venlo. Native German speakers are therefore considered essential. The problem however was how and where to find them.

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Chapter 7 Personnel recruitment 65

The solution To address the problem, Viking started a campaign just across the border with Germany (in Nordrhein Westfalen) to attract new, German-speaking personnel. Since Venlo is located virtually on the border with Germany, prospective employees could work in the Netherlands and live in Germany. Several steps were taken to fulfill Viking’s needs. First, Viking advertised in many local newspapers and regional magazines and other media to make as many people familiar with their name and the company as possible. Secondly, the “Arbeitsamt” (employment agency) in Germany was contacted. Since unemployment is relatively high in Germany, many people are looking for jobs. The Arbeitsamt tried to contact German people who were looking for a job with the idea of working in the Netherlands. Temporary employment agencies (especially those specializing in the call center business) are, in contrast to, for example, the Netherlands, not very popular in Germany, therefore Viking went to the official employment body. Another institution called the (Deutsche Angestellte Akademie) DAA is giving possible candidates training and courses about working in a call center. One of the possibilities for Germans is to follow the course for call center agent. This course takes 2-3 months. When people have contacted the Arbeitsamt for a job or have already followed the course for call center agent, Viking knows that they are seriously looking for a job (in a call center). Viking then invites those people who have showed interest in their company for an interview, and suitable candidates are selected from the interviewed group. But even though some of them have already followed the course for call center agent, they will still have to complete the internal training program like every other agent starting at Viking. A third way of attracting people was to organize “open house sessions” at Viking’s office, to give prospective employees the opportunity of seeing for themselves where they would be working if they would want to start at Viking. So only people who have already contacted Viking, either through applications, advertisements or the Arbeitsamt, were asked whether they would be interested in visiting the company. The visit is performed in groups of around 7-15 people. This way, they get an excellent opportunity to ask questions and see other call center agents in practice, or listen in on calls. At the end, they can fill in an application form or have an interview right away, or go home and think about it for some more time. These “open house sessions” were mainly organized to save Viking time. The interviews (and/or applications) resulting


from these sessions are usually with people who are seriously interested in working there. The time spent in interviews is thus spent in a more efficient way. A final way of letting people know about Viking Direct was through job fairs, where Viking has a chance to present itself to Dutch and German applicants.

The result These actions have been very much worth the effort, given the fact that Viking has managed to increase the number of German employees by 60%. They have fulfilled their goal of finding new people by a major part. Additionally, they have now learned how to go about attracting new people from Germany when necessary. However, this does not mean that the call center manager can sit back and relax. Viking Direct’s office in Venlo is still growing and they are still expanding the number of call units. This means that as long as they continue to grow, the need for new people will continue to exist. And developments move so fast that other challenges arise frequently. One of these challenges for the future is to try to find more Belgian people to work in their call center, since Belgians speak Dutch with a different accent than the Dutch people themselves. This is supposed to create better acceptance among the Belgian customers. However, this may not be an easy job, since Viking foresees that, in general (as in the Netherlands), it will become harder and harder to find new personnel to work in their (or any other) call center.

Commentary It appears that finding qualified people is a universal issue. If we might be preachy for a bit our observations suggest that call centers are too passive in acquiring talented individuals. It is almost as if call centers sit by the telephone waiting for the best people to call them. Unfortunately at 52 I am still waiting for that cute redhead to call me. It didn’t happen 36 years ago, 35 years ago, 34 years ago—or today. Many call centers are still waiting for that best CSR to call them and will be waiting next year, the year after, and the year after that. In our visits to hundreds of call centers we can make the following observations about the best call centers: 1. Hire for personality and train the necessary skills. Call centers spend so much time looking for individuals who have the skills of call cen-

Chapter 7 Personnel recruitment 67

ter/customer service that they miss a talent pool who would become exceptional employees given the chance and training. 2. Empower current employees to hire new employees. In our daily lives we interact with grocery clerks, retail personnel, and any number of strangers who serve us or interact with us in some way. Some of these people can be immediately identified as people who might do well in our call centers. All employees should carry a business card that says, “You seem to be the kind of person who might do well at our customer access center. We would like to take you to lunch to explore possibilities of working for us.” A phone number will allow the person to make an appointment with human resources. We wait for potential employees to come to us, but we should find employees where they live and work.

Chapter 8 Agent performance assessment CASE: Creative Labs Key Words—training, employee motivation, leadership, employee evaluation, functional and dysfunctional turnover, what do employees want, employee development, retention, turnover

Company background Creative Labs (www.creative.com) develops, manufactures and markets a family of multimedia products for personal computers. Multimedia represents a whole new way of communicating information, based on the integration of the communication industries—broadcasting, telecommunications and publishing—in a computer. At work and at home, multimedia promises a completely new way to learn and communicate. Creative Labs has been a pioneer in the multimedia revolution, starting with the introduction of the first Sound Blaster audio card in 1989, through to the launch of its latest digital video products, the Video Web Cam and DVD Drives. Creative Technology Limited (CTL) is the corporate headquarters for Creative Labs and is located in a major industrial business district in Singapore, where most of the Research and Development is carried out. Creative Labs Europe (CLE) has its European headquarters in Ruscombe, UK. The European Operations and Technical Services Centre (EOTC) is based in Dublin, employing over 400 people. This operation is responsible for: • Product Development; • Manufacturing; • Customer Service; • Technical Support.

The problem Historically, within the European Operations and Technical Services Centre, a problem of low staff retention existed. This was due to low advisor esteem as a result of wide

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Chapter 8 Agent performance assessment 69

variations in levels of pay and the lack of a visible career path. This reduced overall motivation caused friction between advisors, limited growth for individuals, and inhibited successful teamwork.

The solution Creative Labs (Europe) Operations and Technical Services Centre implemented an Advisor Progression Scheme to recognize advisors’ performance, experience, technical knowledge, linguistic skills, technical qualifications, and length of service. Under this Advisor Progression Scheme, advisors are paid according to their abilities and qualifications, and have the opportunity to progress from one level to the next after six months, conditional on satisfying certain criteria. There are three different progression levels for technical support advisors within Creative’s Advisor Progression Scheme. These levels are as follows:

Technical Support Advisor-1 (TSA1) This level would typically be a new hire, either promoted from within Creative with no previous call center experience or a new employee hired externally, with 0 to 12 months relevant experience. The core duty of this position is call handling, with particular emphasis on dealing with the less complex call types.

Technical Support Advisor-2 (TSA2) This advisor is typically a TSA1 with 6 months’ experience in Creative’s Technical Services Centre, who has completed a successful probation period and meets the specific performance criteria necessary to progress to TSA2. This level may also be used for new hires with 12–24 months’ relevant external experience.

Technical Support Advisor-3 (TSA3) This level Advisor is typically a TSA2 with 12 months’ experience in Creative’s Technical Services Centre at this level, who meets the specific performance criteria necessary to progress to TSA3. This level may be used for new hires with 24 to 36 months’ relevant external experience. This level is a senior position within the Centre. They can make decisions, within a defined framework, relating to end-user support issues and without Team


Leader approval. They get involved in project work and act as mentors to less experienced advisors. To progress within the structure, employees must pass a progression assessment at each stage (see sample Progression Form). These progression assessments cover three main areas, which include: 1. Technical assessment; 2. Customer handling skills; 3. Call handling skills.

An advisor must be able to show a high level of competence within each of these areas, and is assessed on his/her overall performance. The assessments are designed to reward advisors who have developed technically and who do a good job, on a day-to-day basis, on the phone. The assessments are challenging, and not all advisors pass them the first time. This has the impact of giving real value to the progression system, by recognizing that those advisors who do pass are really at a more senior level. Those advisors who pass receive a change in job title, a salary increase (3% for TSA1 to TSA2 and 5% for TSA2 to TSA3), and more opportunity to get involved in project work. Those advisors who do not achieve the progression are encouraged to work hard and repeat the assessment after 6 months.

Salary structure Within the Technical Services Centre there is base salary for entry level advisors. This base salary is carefully benchmarked bi-annually within the industry, to ensure that it is competitive. On top of this base salary advisors may qualify for additional premiums. • Language premiums are payable to those advisors who achieve near-native fluency in one or more European languages which are used in the TSC to support customers. The advisors must pass three tests—verbal, reading, and written. • A technical qualification premium is payable to those advisors who have specific technical qualifications which are relevant to the department (e.g.,


Computer Science, IT or Business). For those advisors who do not possess the qualifications, the company funds external training courses or education programs, which will help the advisors within their roles. Where the relevant qualification is achieved, the premium is then added onto the advisor’s salary. In addition to the above Advisor Progression Scheme, each advisor’s performance is reviewed annually and depending upon his/her performance, a salary increase may ensue.

The result With this approach the Advisor Progression Scheme makes the salary system in place for advisors transparent, rather than cloaked in mysteriousness. It details the basic salary structure and the additional premium payable for technical qualifications and languages. It spells out what advisors must do to achieve progression within the Technical Services Centre. This has resulted in a clear understanding on the part of the advisors, and hence has increased trust between the management team and the advisors. This in turn has led to higher motivation and more commitment by the advisors, improved team involvement, participation, and a happier working environment.

Commentary The issue (problem) of employee motivation is one of the most important for call centers. It is not only a call center problem. We face it in our largest retailers (Wal-Mart), our smallest one store retailer, our large and small corporations and the university. The bad news is that there is no simple solution to the problem. The good news is that there is help. First we know what is important to employees. Knowing what is important is the first step in this battle. If you know what is important then you can try to provide that in the context of the work. National surveys in the U.S. show that CSR’s want 1. To feel in on things 2. To be appreciated 3. A future


Let’s talk about feeling in on things. CSR’s want to know why and what and how and where. They don’t want decisions simply thrust upon them. They want to be involved and feel they are a more important part of the machinery than simply a replaceable bolt. When things happen you want them to be able to say “Hey what do you mean their decision? That was our decision.” Meetings, newsletters, one on ones, education are all parts of the menu of things you need to do to make them feel in on things. CSR’s want to know why the call center is important. What is the big picture? How come the CEO never mentions the call center? Second, feeling appreciated. I know they get a paycheck and should do the work. But we must find a way to tell them they are appreciated. This is not simply instituting a step system like Creative Labs in this case but an every day, every week kind of thank you for doing your job. Finally, CSR’s want a future. Whether it is a future in the same position they are in or a future in different positions, they want what they are doing to count for something. Career paths, further education, ability to develop and interview in other parts of the organization, and respect are all parts to the solution to this problem. The key to most of the motivational issues is the frontline supervisor. It is the frontline supervisor that implements these things. If the frontline supervisor does not believe that feeling in on things and being appreciated are important then it won’t get done. If the frontline supervisor believes these things are important but does not know how to do these things or does not have the tools and resources to do them, it won’t get done. Studies of turnover at Purdue show clearly that the number one reason why they leave is the lack of support from the frontline person. The number one reason why the frontline person doesn’t deliver is because the organization does not reward them for spending their time patting the CSRs on the head and telling them what a good job they are doing (so they do not do it).


Assessment for Progression within Technical Services Centre Advisor Name

Statistics

Team Leader Name

Start Date

_____________

Daily Average

Target

Talk time Manned time Call logging Calls answered Call observation

Review Due_______________ Review Date____________

Performance Metrics Exceeded For progression to TSA2 Time Keeping & Attendance Communications Skills Customer Satisfaction Team Working/Relationship with others Flexibility/Adaptability Knowledge of Policies & Procedures Positive Attitude Adherence to schedule No Disciplinary Action For progression to TSA3 only Requires little supervision Initiative/creativity Organization/time management skills Coaching/mentoring skills Technical specialization Skill in handling difficult calls Performance Indicators Comments

Achieved

Not Achieved


Advisor Signature Date

__________________

Team Leader Signature Date __________________

Technical Ability Overall Mark Passed

Not passed Score

N/A

Passed

Not passed

N/A

Passed

Not passed

Technical Assessment Outcome

Probation Outcome 1->2 2->3

Progression Outcome Team Leader Signature ____________________________ Db checkDate__________________ Manager Signature ____________________________ Db check Date__________________ HR Signature ____________________________ Db check Date__________________

N/A

Chapter 9 Agent performance assessment CASE: Vodafone Key Words—customer satisfaction, employee satisfaction, conversation quality, agent motivation, employee motivation, performance assessment, testing

Company background Vodafone (http://www.vodafone.org) is one of the world’s leading telecommunication operators. In order to be able to provide excellent service to its Dutch customers, various call centers have been installed in the Netherlands. Vodafone’s call centers provide multiple services. It includes the Customer Service department but also Number Information and Through-connect services. Vodafone’s Customer Care center is a call center with locations in Maastricht, Eindhoven and Amsterdam. In total, divided over these locations, there are 700 persons working in 250 seats for customer care and they received 6.1 million calls in 1998.

The problem The telecom sector is one of the more (maybe most) competitive business arenas. Vodaphone is just one of many choices for mobile phones and networks in the Netherlands. Switching operators is relatively easy for customers in this market. Loyalty is difficult to realize. Therefore, Vodafone asked itself: what can we do to keep our customers loyal to our company? To find the answer to this question, Vodafone conducted research that looked into the main drivers of customer loyalty in the mobile communications market. The result of this research showed that the main drivers were: 1. The perceived quality of the network, and 2. The perceived quality of customer care. The perceived quality of the network is difficult to manipulate because given today’s technology high quality networks are easy and common. Network quality has

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become a commodity (similar across all carriers). The technical improvements in the field of telecommunications are of such a nature that the differences between the different operators have become relatively small. The second driver, the quality of the customer care, therefore became more important as a determinant of customer loyalty. And this is a people issue. In order to heighten/improve their customers’ loyalty, Vodafone came up with a plan to further secure their customer care service.

The solution Vodafone determined that the quality of their Customer Care depended on two separate pillars: conversation quality and employee satisfaction, which led to customer satisfaction, which determined customer loyalty.

Customer Care

Conversation quality

Employee satisfaction

Customer Satisfaction

Customer Loyalty

So what is conversational quality? How do you get consumers to perceive that they have just engaged in a high quality conversation? What the research told Vodafone was that conversational quality was not about the technical knowledge the representatives (agents) have, but about the way they handle customers on the telephone. Technical knowledge serves as a basis for the agents, but does not necessarily make the agents provide better service. The agents’ attitude is


at least as important as the ability to solve a problem or to answer a question. The question is: HOW is this done? The quality of the conversation is very important. Do the representatives answer the customer’s question in a direct and correct way? Vodafone’s Customer Care division was already known for its good service, but they figured that even good service can always be improved at certain points. Still extra effort had to be put into the quality of the conversation, in addition to the know-how of the agents. Vodafone has set up 18 aspects for better contact with the customers. Here are some examples of these aspects: •

Always begin conversation with: “Good morning/afternoon, Vodafone Customer service (/ Number information), my name is–, how may I help you?”

•

Show empathy towards the customer. For example: “I am so sorry that your phone is not working, I understand that this must be very inconvenient for you. Let me see how I can help you solve the problem.”

•

Rephrase the customer’s question, or make clearer what is meant, for her and for you.

•

Give explicit answers.

•

Check whether the customer is pleased with your answer.

•

Good and correct closure of the conversation.

•

Do not use technical jargon when speaking to the customer.

•

Explain when and why you put someone on hold, and thank the customer for waiting while taking her back.

•

Avoid silence or mumbling.

•

When connecting the customer to a number, announce this in a proper way. All of the 18 aspects are shown in Table I and Figure I below. Table 1 shows

the scores on each of the 18 aspects in numbers, and Figure 1 shows us the relations between these aspects.


% Of AGENTS WHO PERFORMED THIS ASPECT ACCORDING TO THE STANDARDS

18 ASPECTS (NUDO = Number information and connections) (DVB = Connections) (MAKS = Marketing and Customer Service) Opening nudo Silences nudo Jargon nudo Correct dvb Mumbling nudo Present time nudo Closure nudo Opening maks Accentuate maks Feeling summary Contents summary Explicit answering Asking questions Goal clarity Procedure clarity Put on hold Check for satisfaction Closure maks Total

72% 84% 96% 91% 86% 92% 88% 61% 83% 61% 54% 78% 88% 45% 87% 43% 17% 90% 73%

Table 1

Quality Customer Care Total Closure maks

Opening nudo Silences nudo Jargon nudo Correct dvb

Check for satisfaction Put on hold

Mumbling nudo Present time nudo

Procedure clarity

Closure nudo

Goal clarity

Opening maks

Asking questions Explicit answering Contents summary

Figure 1

Accentuate maks Empathy


Employee (agent) satisfaction is measured too. Vodafone found that happy and motivated employees transfer their enthusiasm to the customers. Employee satisfaction was at first measured every 6 months when Vodafone had just started up, but now that the company is operating on a mature level, the satisfaction will be measured once a year. From previous research it became clear what employees wanted. A higher salary is not always the answer. So what has been done as extra incentives to keep employees happy? •

Employees like to have a contact person that they can address directly so Vodafone introduced teams and team leaders.

•

Employees want to be (and are) included in the quality issue.

•

Representatives are the closest to the customer, so they are the ones to indicate what the feelings of the customer are, and they are glad to; so Vodafone asked them about their opinions regarding customers.

•

Project groups were made with representatives and other Vodafone employees to create a sense of responsibility among the employees. This resulted in representatives training each other and thus building team spirit.

•

“We Care” is the name of the actions taken to socialize the group. Ex.: Reps. are given photo cameras to make a report of how they spent their holidays, and to share the resulting pictures with colleagues.

•

Vodafone holds information meetings every 6 weeks to discuss different work related subjects.

•

If you promise something, make it come true!

•

Give people the appreciation they deserve. It appears that the two main things employees want is to be appreciated and to

receive possibilities for further education. With all these measures, the quality of the customer care delivered by Vodafone’s call center has increased even more.

The result The personnel at Vodafone’s Customer Care center are happy with the attention given to them. Since representatives do not sell anything directly, it can become difficult for them to see what the results of their own actions are for the whole company. But at


Vodafone, the representatives know how important customer service is and how important their role is in keeping customers satisfied and loyal. That is why they are motivated to work in the Customer Care center. And they are able to bring this motivation and enthusiasm across to the customers. On the other hand, it can be concluded that the customers appear very satisfied with Vodafone’s service, since Vodafone is still growing in the Dutch telecom market. And Vodafone is giving the customer important reasons to stay loyal. There is ample proof of Vodafone’s performance in the call center market. Vodafone Customer Care has won the Grand Prix for Excellent Service (awarded by Teleperformance). Mr. Frank Spangenberg was elected “Call Center Manager of the Year,” and additionally, Vodafone recently won the Pieterman & Partners Call Center Trophey.

Commentary In this case the relationship between employee satisfaction and customer satisfaction is made explicit. This is the principle of the so-called service profit chain, which represents the chain of events that starts with providing service to your employees resulting eventually in an improved bottom-line. Put more simply, happy employees lead to happy customers and vice versa. The loyalty issue is quite interesting. Ten years ago, vendors could differentiate themselves with products and services. Today they are dealing in a commodity business, the products are interchangeable, the services are the same, and the prices are the same. I had the fortune to listen to one of the European wireless companies define their strategy as trying to enlist more customers than they lose in a three month period. I could not believe my ears (if I owned the stock I would have sold it immediately)…they were not interested (or had given up) in keeping customers. They accepted a defection rate and as long they kept on signing up new customers, they declared it a victory. At some point, they will run out of new customers and their defections will exceed their acquisitions. At that point, it will be over. Of course, the current executive crop will have cashed out so they do not really care. They care about getting new customers because it is easier (lower price) than figuring out why customers leave and what could be done to keep them. If you ever want to demonstrate the importance of loyalty to your people do the following. Have a large pitcher of water ready. Ask for a volunteer and give them a paper/Styrofoam cup to hold. They represent the business. The water that you slowly fill the cup with represents the growth of customers in your


business. At some point if you keep all the customers that enter the business the cup overflows and you have to expand. However, what happens if you poke small holes in the cup (using a pencil point)? The water leaks out. For each hole, the water leaks and as long as you increase the water pouring from the pitcher into the cup you can maintain a level of water in the cup. (Acquisition equals defection). However, if you keep on poking holes (losing customers) you cannot pour the water (acquire new customers) fast enough…or you run out of water (run out of customers). Loyalty is crucial. If employee satisfaction is so important Vodafone probably made a mistake in reducing the frequency of measure. For something important, a year is quite a long time. If it took you a year to figure out that you were heading in the wrong direction you would be lost a long time. Certainly employee satisfaction measurement is time consuming and expensive. However, if it is tied to customer satisfaction and loyalty—it is your business to measure it frequently. There are a number of other interesting issues illustrated in this case: 1. What gets measured gets done. If something is important measure it. If you do not measure it, employees will conclude that it is not important and they will not do it (as well). 2. As a result, it is crucial to find out what is important. This is not simply getting executives around a table and guessing what is important. In our experience, this is almost guaranteed to get the wrong answer (The most dangerous management activity turns out to be talking to ourselves). This is also not drawing conclusions from focus groups (I don’t care how many you do). Focus groups represent types of thinking but not representative thinking. We once did some focus groups for a chain of pizza restaurants. Although we warned them that drawing conclusions and making strategic changes from the focus groups is not warranted (it’s dangerous) they listened and heard Cheese. They concluded that customers wanted cheese—that’s what they said. So they rolled out a cheese program—lots and lots of cheese. Unfortunately, at some point there is too much cheese and you lose adhesion. When the cheese loses adhesion, it slips off the pizza and into the lap. Pizza sales began to decline because satisfaction declined. They called us back and yelled at us. And even though we showed them where we said that you


could not draw this conclusion from the focus group, executives like the simplicity of focus groups and more likely than not draw strategic conclusions from the focus groups. 3. Finding out what is important and what is quality is almost the issue. You can have important and high quality attributes but they might not be related to behaviours that relate to money. High quality slide rules (for those of you who do not know what a slide rule is ask someone over 45) used to exist (they made excellent slide rules and they looked cool also) with very cool colors and magnified sights, but at some point customers stopped buying slide rules because…because of calculators. This is in way of illustrating that quality for quality’s sake is not important unless quality is related to the acquisition, purchasing behaviour, loyalty, and wallet share of the customer. The reasons why customers stopped buying slide rules are crystal clear. But can you believe that no slide rule company saw this coming and changed their business? Instead of changing they spent money on quality improvements and went out of business. Quality is an issue if it is related to sales and profit. 4. Management by guess is folly. If this is your mode of operation…flip coins, get a magic eight ball (www.magic8ball.com), hire a psychic but do not waste time by thinking that you know the answer. There is an answer and it lies somewhere on the customer side.

Chapter 10 Agent training CASE: Neckermann Key Words—skills training, career path, call center service quality, contingency planning, customer service department, distributed workloads, computer based training

Company background Neckermann Versand AG (www.neckermann.de) is one of the leading European mailorder companies in consumer goods and has subsidiaries in 11 countries. Hulst, the Netherlands was chosen as the location for logistics, marketing, and customer service because of the geographical position of Hulst in relation to the two countries. For the Netherlands the call center and the marketing department are situated in Terneuzen. The Neckermann call center focuses on two main issues. The order department and the customer service department are located there. The customer service department handles customers’ requests that vary from warranty information to informing customers about the correct operation of the product.

The problem Both the order department and the customer service department require specific and very different information and skills. Neckermann offers career planning for every agent. This career planning starts for the agent at the order department and ends in the customer service department. The challenge is to train the agents so that they are able to handle orders or to assist customers that call the customer service department with a great variety of questions.

The solution A personnel officer and a supervisor from the call center perform the screening of the applicant. The prospective agent is screened for three basic skills. These skills are not so much focused on knowledge and experience but on empathy, listening capabilities and a basic level of computer skills.

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For the skills necessary to perform the tasks at the order department and customer service department, Neckermann has set up an internal training and career development program. Everybody that is hired for Neckermann enrolls in a training program. The content of the training, half-days for a period of two weeks, teaches the agent the systems of order taking and order processing used by Neckermann. The agent starts at the order department taking orders from customers. Each order-agent is monitored and performance evaluated during the first six months at the order department of the call center. If the results of the monitoring and evaluation are positive, the order-agent will proceed in training to become a sub-agent. A sub-agent takes order-calls but also is engaged in customer service. The sub-agent isn’t fully authorized to take every customer service call. The training the order-agent receives to become a sub-agent will take three weeks during which the agent is following training and working in the call center at the same time. For at least one year the sub-agent is involved in taking order-calls but also answering customer service requests by customers. The next step for the sub-agent is to become a full customer service agent. To become a customer service agent, the sub-agent will have to apply for a vacant customer service job. If there is a vacancy the sub-agent will have to undergo a psychological test. Passing the test will result in a four-week training during which the subagent is trained for customer service agent. The training and career planning is set up in such a way that each agent can take order-calls. The ability to take calls all through training periods allows the ability to handle peak calling times (for example, when the catalog is sent out). Order taking has a very high priority within Neckermann. If a very high peak is encountered, customer service agents are switched to order taking. This can result in a possible decrease in service level on customer service calls. Next to the order department and customer service department there is also a technical support department. However, the people answering these calls are hired separately and trained separately. People have a secondary or tertiary technical degree. They receive continuous training because technical specifications and features of products are changing rapidly.

Chapter 10 Agent training 85

The result The possible decrease of the service level in the customer service department when a peak is encountered in the order department is of an increasing concern. This is also due to the increasing amount of calls that is experienced after the distribution of the new catalogue. At present Neckermann is finding a solution for this problem by outsourcing order-calls to an outsource company in Breda. This company will have the same equipment and will be able to process the order-calls in the “Neckermann” way. The agreement with this outsource company, which has multiple clients, is that if Neckermann’s overflow is routed to the outsource company, the outsource company will have to give priority to these calls. With this solution, Neckermann can handle every order-call adequately without a possible decrease in service level in the customer service department.

Commentary This case illustrates the necessity to map out a skill assessment procedure on an individual basis and to tie in individual skills development with personal career development. Although we all like to believe that our agents are intrinsically motivated to provide good service to the customer, it often happens that this only comes into play once the agents’ extrinsic needs have been satisfactorily addressed. Designing a career structure with a salary system to match, based on assessment of performance, is good for employee performance and attraction. After all, who likes to turn into a dead-end street? There are other issues here: In a high training environment (due to skill level needed or high turnover), it is crucial to figure out what can be automated. Training the same thing over and over again is very expensive. We estimate that as much as 75% of all training can be automated to computer. The call center industry is actually blessed by some very sophisticated and effective computer and CD training. Computer and CD training has quick payback and offers a level of consistency that cannot be achieved by people training. Eliminating the human cost of one to one or group human training allows you to focus and concentrate on some very specific and important training that cannot be achieved in any other way—or reduces costs, which higher level executives always like. There is a strong relationship between effective training and turnover. Welltrained CSR’s feel more confident and that confidence leads to more effectively doing


their jobs. It leads to greater employee satisfaction. Good training leads to employee perception that the company considers them important. One of the hidden benefits of good training is the ability to distribute workload. We have visited a number of centers where the ability to do the work seems tied to an individual. When that person is sick or goes on vacation the work stops. How can a company allow this to happen? Training allows work to be distributed because more than one person knows how to do it. The ability to distribute work turns out to reduce the need for outsource protection for demand spikes. The ability to distribute work is actually a very important trend in effective call center management.

Chapter 11 Agent motivation CASE: OHRA Key Words—social interaction, agent empowerment, flexible scheduling change, metrics, leadership

Company background OHRA (www.ohra.nl), founded in 1925, is a Dutch insurance company. OHRA is a direct seller, meaning that it does not make use of agents to sell its products. Instead, OHRA keeps in touch with its customers through direct mail, telemarketing, personal contact (OHRA shops) and now the Internet. For the telephonic contact with its customers, OHRA uses a call center. OHRA offers every product in the insurance and financial services business, varying from life insurance to health and car insurance, and from mortgages and loans to pensions. OHRA’s call center is divided into two separate parts: sales call center and customer service call center. The call center of sales takes care of providing product information to callers, setting up quotations and contracts, calling potential customers in case of no response, and telephony research. The customer service call center is only in use for existing customers and has the following functions: service information, report of damages, payment, sales, complaints and telephony research. There are about 120 agents working in OHRA’s call center. The number of telephone calls, both inbound and outbound, has more than doubled over the last seven years. In 1990, the total number of inbound and outbound telephone calls was 440,000. At the time of writing up the case, it exceeds 1.5 million (and is growing). Sometimes, when special activities have been planned by the marketing department, a part of the call center activities are outsourced, in order to make sure that the normal calling activities do not suffer from the extra inbound or outbound calls. This way, OHRA does not have to hire additional personnel, but can use the personnel from the hired call center. OHRA does, however, give the agents from this additional

87


call center some “OHRA”-training, to make sure that the difference with its own call center agents is as small as possible.

The problem An important problem that OHRA has been facing lies in the area of social interaction for the call center personnel. This can be divided into 2 sub-problems: 1. Management issues: OHRA has developed strict rules for the agents in order to ensure quality of the service to the customers. Under older management systems agents came in late and were not always in their seats answering calls. Now call center activity has to start at 8:00 a.m. every day and goes on until 9:00 p.m. Customers do not have to wait with their calls until the personnel has had a chance to wake up or drink a cup of coffee. The development of these rules in what was a weak management environment created employee dissatisfaction and problem behaviors. 2. Limited responsibility and regulation possibilities for the call center agents: the agents were supposed to listen to what the customer had to say, to give the customer information or to write a memo to the back office department. They were not allowed to solve problems by themselves or make decisions of their own before contacting someone. This was very unsatisfying for the call center personnel, because they never saw the result of their own actions. Besides that, it was also frustrating, since they might have known the answer to the customer’s question, but were just not allowed to deal with it themselves, decreasing job satisfaction.

The solutions 1. OHRA defined somewhat flexible norms to give the agents more freedom without sacrificing a lot of the strict time schedule. The guidelines now say that a call center agent should spend between 60 % and 70 % of their time on the phone. They have 10 % of their time for personal care. Further, coffee breaks are of course allowed, but have to be

Chapter 11 Agent motivation 89

taken in consultation with their colleagues and at flexible times. Lunches are taken in three shifts, but in a way that an agent can still go to lunch with a (small) group of fellow workers. 2. To give the call center agents more responsibility and to make the process of selling insurance more efficient, OHRA has made it possible for the agents in the sales call center to solve problems and make flexible decisions directly while on the phone with the customer, and to enter any changes into the system themselves. In addition, the agents now have the possibility to set up contracts over the phone right away. When customers call and ask for insurance, the contract can be made up and sent to the customer immediately if the customer would like to. Of course, it is also possible to make up a quotation over the phone and to send it to the customer right away. The agents no longer have the need to connect every call to the back office, since they can now deal with most of the questions themselves. Additionally, OHRA does not have to wait until mailed quotations are sent back to them. Using additional mail to get intermediate papers to the customers is also not necessary this way. This change in policy meant that the agents had to change too: they had to receive additional training. However, they also had to change personally. They had to be able to deal with more responsibility.

The result At the time of writing up the case, this additional activity for the call center agents of sales proved to be an enormous success. Taking car insurance as an example, we can see that OHRA has at this point in time already made 60% of its sales by direct contracts over the phone and the other 40% by means of quotation. These two ways of selling by the phone are very different:


Two Different Proc-

Quotation

Direct contract

* Customer calls OHRA * Receives sales info from agent by phone * Quotation sent to customer by mail * (follow-up phone call) * Application form sent to customer * Acceptation by customer * Policy (sent by mail).

* Customer calls OHRA

esses in the OHRA call center:

* Receives sales info from agent by phone * Policy is made up directly and sent to customer by mail.

At the moment 25% of total sales are by phone following the new short way of direct contracts. It is clear that this change in selling is a success. There has been a great improvement in efficiency. In addition, the customers are satisfied too. The next step will be to create the same possibilities for the other call center.

Commentary The days when call centers were staffed with agents that just had to adhere to very strict scripts are long gone. This case demonstrates that applying the principles of employee empowerment can have a positive effect in the call center. By increasing agents’ responsibility and learning how to deal with higher levels of autonomy, agents actively contribute to the bottom line, and our research shows that this has a positive impact on job satisfaction, organizational commitment and employee turnover. Change is difficult. The ability (or inability) to accept change is not something specific to call centers. Change management is a specialty and the costs of getting experts to help you manage change more than balances the costs of what happens when employees do not accept the change and sabotage the effectiveness that exists. This case probably illustrates one of the most important rules of leadership. This is not a leadership book but leadership is not really complicated. Follow these five rules and the workers will follow. This case illustrates rule number one—tell them what you expect. We have found that most CSR’s want to do what is right but they simply do not know what that is. Rules tell employees what you expect. If you tell employees what you expect then not delivering that is either because they don’t want to (fire them) or can’t (train them).

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The other four rules are equally important: Rule #1 Tell them what you expect. Rule #2 Train train train…so they can do it. Rule #3 Reward them. Rule #4 Give them feedback…steering. Rule #5 When they have done what you expected reward them…again. That is how important reward is.

Chapter 12 Contractual issues CASE: Interpolis Key Words—HRM policy development, staff planning, staff compensation, once and done, first call resolution

Company background Interpolis (www.interpolis.nl) is large insurance company of the Netherlands. Interpolis has three main target groups: end-consumers, the small and medium sized businesses and the agricultural sector. Since 1997, Interpolis stopped using intermediates/agents to report insurance damage claims. Instead, Interpolis now allows consumers the opportunity to report damages immediately and directly to the insurance company instead of indirectly via intermediates/agents. For this purpose, the call center “Damage-claimservices” has been established. This call center not only registers the reports of damages of the customers, but also (and this is very important in customer service) immediately deals with the needed actions to refund the damages, and all this occurs preferably in one telephone call (“one-stop-servicing”). The department called “Damage-claim-services” is the call center that deals with the reports of damages by the end-consumers. At this point in time, 70% of the damage reports are dealt with immediately by the agents. These agents are called “damage advisors.” They are given a lot of training and they are very knowledgeable about the products offered by Interpolis and about the ways of dealing with damage reports. The other 30% of the damage reports, which need special expertise, are transferred to the back office. There are +/- 120 agents working in this call center with 74 working places. The call center is open from Monday to Friday from 8:00 a.m. until 8:00 p.m. and Saturdays from 9:00 a.m. until 5:00 p.m. Beyond these times, the calls are answered by an external helpdesk, in order to give the customers the possibility to reach Interpolis 24 hours a day.

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The problem The call center “Damage-claim-services” is one of the showpieces of Interpolis. The work process in a call center has specific demands on the employees (the agents) and on the management, but it also has special technical demands. It is important to recognize that the work offer (call load) in a call center is determined for the largest part by external factors that cannot be controlled. In order to react to these factors, a lot of flexibility is demanded of the agents, the management and the organization. Running a call center demands a special approach to human resource management. When the call center was founded, the same working conditions that applied to the other Interpolis departments also applied to the call center agents, even though both groups have very dissimilar working conditions. Interpolis therefore needed to make a distinction between the working conditions of the call center employees and the other employees. This distinction could be best made by reformulating the HRM policy, like the conditions for employment, that concentrated on call center agents. The following had to be taken into consideration before reformulating the HRM policy for the agents. A well-running call center makes it possible to achieve high productivity and reach a high service quality. The degree of customer satisfaction is crucial in the bonding of the customers to the company. The call center agents are in direct contact with the customers. The degree of employee satisfaction is therefore also important for the degree of customer satisfaction. Clearly, Interpolis thought it necessary to formulate a new HRM policy made specifically for the call center employees, keeping in mind that this might also have an effect on customer satisfaction. However, what was needed to accomplish this goal?

The solution It was clear that the HRM policy of the call center of Interpolis needed reformulating. In this reformulating, the following three areas of HRM were given special attention in order to fill the needs of the call center employees: employment contracts and working conditions, opening times and schedule planning, education, coaching and career planning.


The first subject, employment contracts and working conditions, is very important in combining the agents’ wishes with those of the customers. The workload in the call center is very fluctuating. It must be possible for management to schedule the damage advisors (agents) on varying times. The employment contracts of the agents have to support this kind of flexible scheduling. The agents are appreciated for their customer focus, flexibility and stress resistance. In order for the employment contracts to reflect the Interpolis employment conditions, the following actions were taken: Introduction of min/max contracts Setting up working conditions for min/max contracts Setting up a flex pool of students These min-max-contracts exist in various forms, based on the amount of hours worked per week, like 12–20, 20–30 or 32–40. This would mean in the first case that an agent would be scheduled for 12 hours a week, but had to stay stand-by once every two weeks, or could be asked to work extra in busy periods, up to 20 hours a week. On the second item, opening times and schedule planning, the customers’ wishes come first. This implies 24/7 occupancy, but the nightly part of these hours is outsourced to a third party. The service level has to be as high as possible, however. All employees are scheduled in at varying work times, because they have a joint responsibility towards the customer. Opening hours of the center have been increased on Saturdays from 9:00 a.m. until 5:00 p.m. (previously 9:00 a.m. until 3:00 p.m.). However, the needs of the agents are not forgotten. Working schedules are always planned four weeks ahead. The agents can reserve “two day parts” in one week permanently. But other free time has to be announced 4 weeks ahead. The third and last point is education, coaching and career planning. The number of agents working at the center has to be scheduled so that the high quality standards can be met all the time. When there are too many people planned in, some agents will have idle time, while when too few are planned in, the workload will rise. Additionally, the turnover among call center agents is relatively high. So extra attention has to be paid to the job description of damage advisor in the call center. This function is not a starting position but a responsible job, for long-term employment. The bonding of the agents with Interpolis is reinforced by means of education possibilities, personal coaching, teambuilding and an attractive work environment. The HRM policy

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also allows for personnel planning programs, like pro-active recruitment to avoid personnel shortages. These three areas of HRM were combined in the new policy for the call center. This policy is based on five areas of attention or pillars. Each pillar consists of objectives and activities. These pillars are: staff facilities; education, coaching and career; working times and rewards; communication and commitment; quality of service delivery; and result-oriented working.

The result This new HRM policy has created more clarity for the call center employees as to where they stand and what their rights and obligations are. The call center employees have had ample opportunity to participate in the formulation of this HRM policy. They were asked for their opinions and they had a chance to react to the plans of management. The success of this new policy can be seen from the following. The call center employees who had an old employment contract with fixed working hours were not obliged to open their contracts and change them into a new contract. But most of the call center employees with these old contracts did do this anyway and accepted a new contract as it had been set up (with their help) by the new policy. This clearly shows that these employees were satisfied with the new contracts and that the need for flexible work hours does not have to be an obstruction to motivating employees. Giving your employees a chance and listening to their wishes is an essential part in running a call center with a motivated work force.

Commentary This case shows that companies should fine-tune their HRM policy to the special needs of call center agents. One means of developing a tailor-made call center strategy may be to benchmark and learn from peer group call centers. Principles of HRM in call centers have been well documented in numerous benchmark studies; the challenge is to integrate that with company legacy policies.


The Interpolis business model suggests that there are levels of expertise and service that are untapped in your centers: How many calls are passed on to someone else? What is the percentage of first calls resolved? How many calls could be resolved at the front line but the rules require further permission? Increasing the percentage of calls that can be resolved at the front line contact saves time, saves money, increases employee satisfaction, decreases turnover and increases caller satisfaction. What is interesting here is that we find that 95% of calls that need to pass on for approval are decided the same way by the front line person given the authority to do so…so why not let them do it? The money you save more than makes up for a mistake that they might make. Finally we feel the need to emphasize the absolute importance of “once and done.” It is the single greatest predictor of caller satisfaction.

Chapter 13 “Attract a friend. Connect with $1000. Any questions?”: The quest for the next employee CASE: Thomson Consumer Electronics Key Words—employee turnover, hiring incentives, program evaluation, recruitment

Company background Thomson Consumer Electronics (www.thomson-multimedia.com) is a large multinational company that manufactures TV’s, satellite decoders, DVD players, camcorders, home audio systems, telephones, and many accessories. Thomson’s well known brand names include RCA and GE.

The problem Finding, attracting, and retaining effective employees is one of the challenges calls centers face. People don’t wake up in high school or college one morning and say, “Hey I want to work in call centers.” They find call centers through ads, chance, and most likely friends. So Thomson Consumer Electronics has a brochure that screams, “Attract a friend. Connect with $1000.” Thomson Consumer Electronics in Indianapolis has an ongoing program founded on the assumption that friends don’t let other friends miss a good opportunity. They offer $1000 for every referral they hire. If that referral is offered, accepts a position and completes 90 days, the referee will receive $1000. This very simple and elegant approach is based on a couple of very well founded assumptions. First, who best than a current employee knows who would like the work? Their selection of a friend is based on a belief that that friend will enjoy the work and is well suited for the culture. Second, by having been referred by a friend there is a certain conflict in the candidate when he or she begins to have feelings about not liking the work. Social psychological forces actually work to the advantage of the company in helping convince the new employees that they like what is happening to them. In addition the referee has motivation to work with and make the person they re-

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ferred feel happy and important. Then there is the $1000. Clearly $1000 speaks to many employees. Thus this simple program works on many levels. It gets new employees (the intended goal). It may be a better (or at least as good) screening technique as other employment screening tests. It rewards current employees who feel really good because they received $1000 and because the company is telling them that they are important, and it wants other people like them.

The results The success of the program is clear to Thomson although there was no ongoing measurement system to accurately assess the success (or failure) of the program. Yet if you talk to executives they believe it works.

Issues Clearly paying $1000 to current employees should theoretically be an incentive for current employees to look for friends and acquaintances that might be interested in working. At the same time there are a number of really important questions that Thomson cannot answer.

1. Foremost is whether the program really works. The fact that employment applications or hires is up during the program does not necessarily mean that the applications and hires would not have been up anyway due to some other issue (economic downturn, closing of a local factory plant, general conditions that have raised employment applications and hires in the region). To spend thousands of dollars without knowing the implications and efficacy of a program is a bit silly. 2. Let us say that Thomson spends $25,000 to get 25 new employees in a quarter. Since they are probably not reducing the amount spent to attract and hire in other areas the central issues are: a. Do those hired through the program stay longer than other hires? b. Could the money be used for other programs that could lead to more and better hires?

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c. Could the money have been used to better retain employees who left and created the need to have positions filled?

Commentary Getting the right people to work in the call center is a problem now and in the future. People (unless they are very strange) do not wake up in the morning and say, “I want to work in a call center.” Creative recruiting will always be important. It turns out that the best people to find people are the people who work in your jobs—if the call center jobs are good. If the jobs are not good then you have a bigger problem. Like many things in business there is not a “research ethic” at Thomson. As a result, Thomson doesn’t really know if this works. That they think so is not good enough. Measurement leads to the ability to analyze success or failure. Evaluation should be a programmed part of any initiative, yet it is, in our observation, missing in many programs in even the best and most sophisticated companies. We would even say there should be a “Program Evaluation” Officer whose only function is to plan, implement, and report on the success and/or failure of initiatives. Senior executives making decisions without that type of information are guessing. Finally, what is nice about this program is that it taps into the best people to know who would work well in call centers—those who work there.

Chapter 14 Developing new hires: The mentor program CASE: Thomson Consumer Electronics

Key Words—mentoring, motivation, empowerment, turnover How do you bring a trainee or new hire to full productivity as well as increase their loyalty and commitment to the company while making your current employees feel more valued and attached to the new hire? Sounds impossible? Not to Thomson Consumer Electronics (www.thomson-multimedia.com), which instituted a very simple but extremely successful mentor program.

Program description Here is how it works. Each team leader in the center picks their best CSRs and gives them a new title—“Mentor.” These best agents take the new hire after training and sit with them and work with them in the new job. They take them to lunch. They take the new hire from training to reality. They feel an attachment to the new hire and thus visit with this person throughout their career at Thomson.

Results The results of the mentor program have been impressive. It has cut three weeks off the old training time. It increases the speed at which a new hire is fully productive. It used to take 6 weeks, and now it takes only 2. It has increased productivity not only of the new person but also of the mentor, who feels special psychological pressure to really be good to deserve the new title. The quality of the new hire is better quicker. It has reduced turnover significantly—to only 2% per month. That translates into direct cost savings.

Commentary One unanticipated side effect has been the effect that the mentor program has had on the person selected as mentor. That person feels special. It is a reward to be a mentor,

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not only for the psychological designation as one of the best in the center but it gets them off the phone for the time they are spending with the new person. No money is needed to pay these people extra. The reward feeds the most important things that CSRs really want—feeling appreciated and feeling in on things. Then there is the non-quantifiable but clearly important team building aspect to this. The mentor and the mentee are always part of the same work group. Thus a new hire is not a “they” but a “we” immediately. They are accepted in the group because they are hanging with the best in that work group. They are “vouched for” immediately. The mentor/mentee relationship gives them credibility they could not have had so quickly another way. This cohesiveness of the team is furthered by the selection of the mentor by the team leader/manager. The work group is empowered, enabled, and cohesive. Leadership of the group is thereby enhanced. Talk about a win-win situation. There is no loser here. The team wins. The mentor wins. The mentee wins. The company wins. What a program!

Chapter 15 I don’t just want a job, I want a future CASE: Transcom Key Words—employee motivation, career ladder, turnover, what do employees want, reducing turnover

Company background Transcom (www.transcomusa.com), an outsource call center operation, was founded in 1994. The mission of Transcom is “To establish and enhance profitable relationships between clients and their customers, one at a time, around the clock and around the world.” With 4 call center operations in the US and 10 call centers in Europe, Transcom does inbound and outbound teleservices, IVR, Internet services, broadcast fax, e-mail processing, and consulting. In 1998 Transcom was named the fastest growing provider of teleservices by Call Center Solutions Magazine after experiencing 340% growth in one year.

The problem Turnover at call centers is abominable. The high levels of turnover (50% to 150%) reflect the fact that “we just don’t get it.” These high levels of turnover have bottom line impact in a number of ways. There is the direct cost of replacing CSRs. It is estimated that the replacement cost of a CSR is about $8500. The loss of 200 CSRs per year costs you $1,700,000. Do the math for your company. But this is just a crude estimate. The costs are probably higher than that. The loss of a good CSR is more than the loss of an ineffective one. There is significant productivity lost, as there is a loss of morale in the CSRs who stay. No matter what formula you use or calculation you make, turnover is a costly phenomenon for call centers. What does this mean? Well, first let me say that not all turnover is bad. The loss of CSRs who are inadequate and will never be above average is desired turnover. Ultimately if these CSRs can be replaced you are saving money. Keeping CSRs who

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are dissatisfied is costly in lost productivity of those around them. So some turnover must be encouraged. What do CSRs want? What programs might be available to you, of low cost, that might keep the good agents?

The solution The very first thing you must do is come up with some calculation of how much your turnover is costing you and some baseline rate of your turnover. Until you do that you cannot make judgments about investments for it is only when you have a sense of what turnover costs you that you have the ability to make a decision on how much you should invest. Next is to understand what is fueling the turnover. A survey of people who have left will give you some indication. Be careful here. Our research shows that exit interviews are inaccurate. Even ex-employees are reluctant to give you the real reasons for their dissatisfaction. Use an outside agency to collect this information. Part of the dissatisfaction of agents and their subsequent turnover stems from the reality that they will never make a lot of money. As a result the minute a slightly higher paying job comes along they may be gone. One solution might be to build in automatic increases based on length of time in position. The result may be that agents stay longer but the chances are that you will keep some of those who would have left the company (the amount must be of some significance). More importantly, in conjunction and maybe even superceding salary, our research at the Purdue University Center for Customer Driven Quality and the Maastricht Center for Research in Services with salary increases, CSRs want a future. CSRs want to know that there is a worthwhile future for them. More often than not there is no future for a CSR. Once a CSR always a CSR. Transcom has created a career ladder of success. This career ladder is a progression of job titles and job responsibilities that CSRs can look forward to if they stay with it long enough. The CSR has something to look forward to other than the same thing for 15 years. Increasingly if we want CSRs to stay for some period of time (longer than 6 months in some companies) we need to invent or develop a ladder of successive positions that allows a CSR to develop. In addition there has got to be a way for CSRs who perform well, and stay a length of time, to move on. At NationsBank call center managers complain that their


best people are stolen by other areas. In fact, these call center managers should count their blessings. When a CSR is promoted to another part of the organization a couple of things happen: A message is sent to all current and future CSRs that being a CSR does not have to be an end in itself but is part of a career. It creates allies throughout the organization. Instead of being an isolated vestige of a large organization the call center is a place where many of the directors and vice presidents have started and built a career.

The result Creating a ladder of success is a win (organization), win (call center), win (CSR) proposition. Turnover is minimized. Employee morale is maximized. Employees not only have a job but a future.

Commentary 1. Most call centers do not know what their turnover rate is—whether their turnover is low or high compared to some reference group—and what it is costing them. 2. Knowing what turnover costs annually is the only way to justify investments in retention. The goal of any program should be based on keeping agents you want to keep and getting rid of those who lower productivity. CSRs want a future. Managers want a future. Anyone wants a future. Create a center that provides it. The role of the supervisor of the center is to make certain that those in the center who want to move elsewhere can do so. The message to CSRs is clear—you can become something by starting in a call center. The message to the organization is equally clear—there are people of value here. The center is a valuable part of this organization. A message is sent to all current and future CSRs that being a CSR does not have to be an end in itself but is part of a career.

Chapter 16 Making current CSRs feel good, valued, and appreciated: Employee appreciation days CASE: Thomson Consumer Electronics

Key Words—employee motivation, appreciation days, quality of work life, reducing turnover, leadership

In surveys of what CSRs want in their jobs surprisingly money is not the most important goal. (Not that it is completely unimportant). It turns out that CSRs want to feel appreciated, number 1. The work is hard enough. The role of CSR might be one of the most stressful jobs there is. No money is enough to compensate for the stress. But appreciation can let the CSR know that the company appreciates what they do. There are many currencies of appreciation. Managers and supervisors must be trained to deliver thank yous in person and in writing on a regular basis. Managers should have 7 forms of stationary to send thank yous to CSRs. Presidents and CEOs should send personalized thank you notes to CSRs on the anniversary of joining the organization or for a particular job well done.

Thomson Consumer Electronics Thomson Consumer Electronics (www.thomson-multimedia.com) goes one step further by periodically having employee appreciation days that center on the “stuff” that they sell. VCRs, TVs, and Satellite Systems are part of the RCA product line. Employees are shown appreciation by being able to purchase the “cool stuff” at a discount. Some of the stuff is outdated inventory. Some of the stuff had defects so it could not be sold to the public (dents and scratches). The employees don’t care because they can get a price on the “cool stuff” that makes it very worth their while. It might also be added that the company benefits by clearing out discounted merchandise quickly and efficiently. Thus the real consumer population will only have the higher margin new and perfect stuff.

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The company holds this during company times and schedules employees to the “tent.” There is entertainment, food, and stuff. It was thought that employees would spend unreasonable amounts of time away from their desks but it has not worked out this way. Employees feel special and privileged to have this opportunity and their “guilt” at getting such a good deal from the company propels them back to work with a new vengeance. Employees can also buy company shirts and mascots (Nipper and Chipper for all you RCA fans). Thomson Consumer Electronics also has other employee appreciation days. On holiday carnival days where executives serve employees, employees play carnival games including dunk tanks with their managers sitting in the chairs. Music and food are available. Thomson has created these days during particularly stressful times, also showing you don’t need a real occasion to understand that employees need to feel appreciated and have stress relief.

Commentary Paying attention to the quality of life in our work places has very large payoffs. Quality of life in call centers is not something that we should leave to chance. Who is responsible for the many ways that we should show employees we appreciate what they do? If no one is in charge then it is being left to chance. Travelers pay thousands of dollars for spectacular experiences on a cruise. If the cruise ships just said, “we are providing the room and the boat, what else do you want?” they might never have a repeat vacationer. No…cruise lines realize that the nurturance and entertainment and the appreciation of customers cannot be left to chance. They have social directors. Businesses should have a director of employee appreciation. In a 365 day, 7 day a week, 52 weeks a year work environment one employee appreciation day might not be enough (unless it is a really big day). Employee appreciation can be strategically planned throughout the year but particularly during the stressful peak weeks so that employees get a sense that the business really cares about them. And maybe the business will really care about them.

Chapter 17 Realistic job previews: Cutting turnover by 50% Key Words—employee turnover, job preview, realistic job preview

Not many high school students get up in the morning and say, “Hey…I want to be a customer service representative.” Neither do many college students. Call center operations and management does not seem to be a glamorous profession. Even if potential recruits believe they might like the job the stress and strain of actual call center management and practice scare many individuals away. Unfortunately this turnover is very costly.

Turnover in the call center industry Turnover is not something to take lightly or take for granted. Nor is turnover something that you should simply accept as part of the call center industry. Turnover is a costly and negative phenomenon that may be responsible for up to 50% of the costs of your center. This means that decreasing turnover can have a significant effect on your bottom line.

The cycle of success Employees form the foundation for the cycle of success in your call center. When a call center suffers from high levels of turnover its productivity suffers. Inexperienced CSRs cannot do as much work, they make mistakes, waste time, and take up supervisor and team leader time. They increase the burden on existing CSRs.

Turnover in the call centers Purdue’s Benchmark study shows that annual turnover was 34% for part time and 26% for full time CSRs in 1999. For some organizations there was a 300%+ turnover rate. Using estimates and data from the Purdue Benchmark it costs you approximately $6400 to recruit, train, screen, and hire new CSRs. ($6400 per agent is the average, for you the cost might be more—or less). Once initial training is over it takes on average 2 months before the level of productivity of the CSR is at goal.

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Turnover is an extremely costly and seemingly uncontrollable problem for call centers. Why else would call centers allow between a 30% to more than 100% turnover of their employees each year? Because of the costs inherent in employee turnover, any effort to understand and reduce employee turnover will have direct and indirect positive effects on a company’s bottom line. The search for the antecedents of turnover stem from the belief that if one understands turnover one can take steps to reduce it. Understanding the reasons why desired employees leave the company and then taking steps to select better employees or eliminate the causes of the departure is beneficial to both the company and other employees. Companies benefit by saving substantial amounts of money for hiring and training new workers. Current and potential employees also benefit as turnover adversely affects morale and productivity levels. When viewed in this light not only are the costs of turnover clear but the positive effects of understanding how to reduce turnover are clear.

The facts of turnover in call centers 1. The costs associated with turnover are large. In the supermarket industry the costs of turnover average 48% of net store profit. By reducing turnover 50% a food retailer can increase profit by 25%. 2. 80%+ of turnover is voluntary. Most of this turnover happens in the first 6 months. 3. Turnover rates are highest for part time workers. 4. The indirect cost of turnover is probably higher than the direct costs. 5. There are no quick fixes or magic potions to combat high turnover.

Reducing turnover by realistic job previews One of the main weapons in the fight against turnover is the realistic job preview. Since one of the main reasons why people leave an organization is that the job is not what they expected it makes sense to give potential agents and managers a realistic job preview so that they can make a choice before they get trained rather than work while dissatisfied for 3 months and then quit because they are so dissatisfied.

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We have encountered three ways that realistic job previews have been conducted in call centers. Each represents a potential program for call center human resource operations. 1. Internships/co-ops/practica: High schools, community colleges, technical colleges, and universities are all looking for opportunities for their students to get involved in projects. These interns can be from the engineering or computer area (they can help you with systems) or the liberal arts areas (now this is just a joke so don’t get angry) who need a future and have no clue. The technical or community college and high school hold fertile fields for you as students are looking for the kind of substantial jobs and career futures that many call centers actually hold. The thing about internships and practical experiences is that it is a tryout for all involved. You get an educated, motivated work force and you are contributing to local programs and education. These are winwin situations. The key to using an internship program as a recruiting tool is to have a structured, meaningful experience that is enriching. If the job is by nature not meaningful or enriching all the internship will do is convince the student that this career is not for them. 2. RCI (www.rci.com) is a travel time-share exchange company. The first part of their 4-step interview process is a video presenting a realistic job preview. RCI has created an 8-minute videotape that depicts the job of customer service representative in their call center operation in the best light possible. At the end of the tape the applicant has an opt out choice. At this point there is little time and effort or cost involved in screening the applicant. The real costs start when the applicant decides after seeing the realistic preview that they are still interested. 3. Probably one of the most innovative ways to create a talent pool for call centers is to make the call center a required part of corporate training for ANYONE that is hired. Ford Motor Company used to require all new trainees to serve 6 months in the call center. Not only did this allow for a continuous pool of very bright and talented people to work in the call center; it allowed for the recruitment of bright people who find that they really want to stay in that area instead of other areas. But the indirect effect of this job preview is probably even more important


to the company. No one who goes through a call center experience will ever take the customer lightly. After hearing 6 months of problems and issues the company employee will always be thinking about how what they are doing will affect the company. And maybe more importantly, the call center becomes an integral part of the company rather than an appendage way, way away from the heart and soul of the company. The call center and its management are known to all the people in the company, some of whom will be VP and higher in 10-20 years. Ulysses Learning Corporation (www.ulysseslearning.com) has created a brilliant and sophisticated job preview called sales mentor, coaching mentor, and service mentor. They are one example of realistic job training packages for the call center industry.

Chapter 18 The culture of heroics CASE: Transcom

Key Words—symbols, corporate culture, legend, company image

General background Companies exist in reality and then again in legend. Sam Walton (of Wal-Mart fame) is famous for walking down Wall Street in a hula skirt after challenging his executives to make Wal-Mart the first 100 billion dollar retailer. It worked and Sam’s picture has been used in corporate training and corporate legend ever since then. What he stood for and what Wal-Mart stands for is forever ingrained in that picture. To settle a marketing dispute in the Dallas area Herb Kelleher, CEO of Southwest Airlines, entered the ring and arm-wrestled his competitor, winner taking all. No courts, no lawyers, but millions of dollars of free publicity and a living legend that serves the company on so many levels in so many ways. People who work at General Electric have stories of Welchisms that serve to teach and communicate key principles of the GE corporation. The story about Nordstrom’s once taking back tires even though Nordstrom’s never sold tires tells employees and customers something very important about what the company wants to be. (As a matter of fact this story never happened—it is myth—but the cool thing is that even if it never happened it is a good story and works to tell everyone what Nordstrom’s stands for). Stew Leonard (of Stew Leonard’s Grocery fame) had his story engraved in a 10ton granite rock outside his stores: Rule 1: The customer is always right. Rule 2: If you think the customer is wrong reread rule number 1. These rules (which by the way work well in relationships…your partner/spouse, wife, husband is always right. If you think they are wrong reread the first rule) tell customers and employees what decision needs to be made. Stew Leonard says that employees and customers now all smile when they enter the store. Indeed, Stew Leonard Jr. recalls a story in which the produce manager argued with a customer about some strawberries and was taken by the arm by the customer to “read the rock” (If you are ever in the Connecticut area you need to go explore

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Stew Leonard’s). For those of you interested in this area, Peg Nauhauser has a book (Corporate Legends and Lore, published by McGraw Hill) and a video (Kantola Productions) about this very issue. Legends or story telling appears to be an important way to communicate corporate values and identity. Their images and themes have power to increase productivity, implement change (“Who moved the Cheese”), motivate employees, and consumers.

Company background Transcom (www.transcomusa.com), an outsource call center operation, was founded in 1994. The mission of Transcom is “To establish and enhance profitable relationships between clients and their customers, one at a time, around the clock and around the world.” With 4 call center operations in the US and 10 call centers in Europe, Transcom does inbound and outbound teleservices, IVR, Internet services, broadcast fax, e-mail processing, and consulting. In 1998 Transcom was named the fastest growing provider of teleservices by Call Center Solutions Magazine after experiencing 340% growth in one year.

The problem Transcom has a high excitement, intense work environment. There are high expectations for the front line employees. These high expectations are matched by high rewards and high levels of training. Yet to develop “an employer of choice” Transcom has some easily dismissed yet extremely important programs that make the difference between their success and failure in attracting, retaining, and educating employees. CSR work is hard. In a sales oriented company like Transcom getting CSRs to go beyond the “script” to make the sale is difficult. How does a company instill a corporate culture that maximizes going above and beyond the call?

The solution Mission statements are communicators of corporate mission and identity. The development and execution of a strong mission statement clearly helps all employees, particularly new ones, understand the essence of the organization (see the end of this chapter for a step by step guide to creating a mission statement). Certainly a mission statement helps but it is not always enough. You can reinforce that mission statement time and time again. But more likely organizations that have a

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strong corporate culture have symbols and images that reflect the environment that they want to create. For example, at Wal-Mart you hear stories of Sam Walton that create and reinforce the kind of workplace that Wal-Mart wants to be. The truthfulness of these stories is not the issue (I have no reason to believe that these stories are not true). What is at issue here is that these stories inspire. These stories encourage heroics. These stories serve as the foundation upon which Wal-Mart has grown to be the largest retailer in the world. Transcom uses an obscure but quite elegant short story by Elbert Hubbard called “A Message to Garcia.” This small but quite appropriate story for the kinds of cultures we would want to instill in our workers is about loyalty to work, about trustworthiness, honor, values, and not giving up. The story takes place in a time of war; a young officer is entrusted to take a message to a commander in a remote area. The story weaves a tale of choices, the type of personality that gets things done despite obstacles, and relentless dedication and attention to goal until the goal is accomplished. This is an inspiring “can do” tale (http://www.retroactive.com/artsncrafts/garcia1.html or http://hightechbiz.com/pub/messagetogarcia.htm). In using this story as a foundation for their training Transcom is at once inspiring employees who might look upon their call center job as uncomfortable and increases their accountability. What is interesting about Transcom is not that they use this story as the foundation of corporate culture building but that it is reinforced by a couple of awards that they build into monthly meetings. They have a Wall of Fame consisting of people who best exemplify the officer in “A Message to Garcia.” The heroics of these people translate in very direct ways to what people can do in a call center environment in this organization. They have an “Honor Roll of Error” and a “Blue Angels” Award. The Honor Roll of Error celebrates the employee who had the most interesting and creative “screw-up.” This legitimizes people who try but don’t quite succeed. The message is clear and simple. You can try things. If you fail so what? You might actually be recognized for it. The “Blue Angels” recognizes those who go above and beyond the call. Both of these honor and celebrate the accomplishments of individuals and teams in a way that supported and legitimized the path of “A Message to Garcia.”

The results These awards and recognitions are extraordinarily smart and insightful. The Transcom executives understand that the difference between the ordinary and the extraordinary is


not simply a selection issue but an individual and collective choice of behavior. People can choose to be innovative, extraordinary, helpful or simply plain. These awards not only reward and therefore make more likely the behaviors that the executives want to recognize at Transcom but send a direct and not so subtle message to all who work there. So the next time a CSR has a choice about doing something unique with a higher than average potential to fail they may take that chance instead of opting for the safe, risk free decision. The next time the going gets tough the more likely it is the story will play in their subconscious and maybe, just maybe, help them do more than they thought was possible. The direct impact of this is not measured or quantified. The indirect effect is seen as you talk to the employees and executives of the organization. Like any good blueprint the story provides a path through some of the best and the worst times an employee has in a company.

Commentary If you have a legend use it. If you want a legend create it. There is a great documentary about Stew Leonard’s (unfortunately I have never seen it for sale). In this Stew is interviewed and tells how they get many visitors to the store who spend time taking pictures of the products and the displays. Stew makes a face and in his best serious voice tells us that they don’t get it. The success of Stew Leonard’s is not the stuff, he says, but the people. “They should be taking pictures of the people.” That suggests that you should be spending more time making heroes of your people than almost anything else. What percentage of your time is spent encouraging heroic acts? Probably low, given what we see in our site visits. Finally, if your center was a story what story would it be? “The Little Engine That Could”? or one of the many Dr. Seuss books that have messages (Butter battle Book, Oh the places you’ll go, Yertle the Turtle) (just about the best book on leadership ever)? Why don’t you create a myth? Pick a story. Pick a book that represents what you want to become—and then become that.

Chapter 19 Walk a mile in my shoes: Executives take a turn at being a CSR Key Words—leadership, job rotation, managerial support, work distribution, turnover

I remember having a job running a machine that put ink in pen ink cartridges. It was a dirty, noisy and very boring job. Every week or so I remember one of the top executives would walk around the factory with another “suit.” Never a “hello how ya doing,” nothing. I learned a very valuable management/leadership lesson in that job. The workers are always watching and resentful in some way that they are working and the suits are sitting around (now that I am a suit I know that I don’t just sit around but I work also. OK, for those who know me know I don’t wear a suit but why ruin a good story?). The telephone service representative (TSR) or customer service representative (CSR) has a very stressful job. Call after call, problem after problem, day after day. You have got to do it faster. You have got to do it better. We will be listening in and then coaching you in order to ensure customer satisfaction (Yeah right—coaching). Next day the same thing. Call after call, complaint after complaint. It is not easy. It is very stressful. How can management relieve that stress and give CSRs a sense that management cares and knows what they are going through? It turns out that it is not difficult. Marriott has a program in which executives take a turn being frontline personnel for the day. This is no minor exercise for Marriott but a strategic example of showing all employees how valuable they are and sensitizing large office isolated executives, some of whom may never have worked in the hotel, to what the frontline people face. The concept has been turned into a television show on the Discovery Channel, Now Who’s Boss. In the first of the series the CEOs of the California Pizza Kitchen works as hosts, dishwashers, pizza makers. The CEO of Loews Hotels learns what it means to clean rooms and be a doorman. The CEO of Club Med cleans the beach, maintains the property, and entertains guests. An executive at Universal Orlando learns what it is to be a character, run a ride, be a maintenance person, hawk at a carnival

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booth. The CEO of Estee Lauder works in the distribution center, makes lipsticks, works on a department store floor. In each case we see clearly that CEOs may not know what the work really is and how the experience leads to insights and sensitivity. A similar series on PBS, Back to the Floor, is available on tape or DVD.

Transcom Transcom (www.transcomusa.com) calls their program “Walk a Mile.” Once a year all Transcom executives VP and higher spend a day working the phones under the watchful eye of all the CSRs. The benefits of such a program are, well, obvious.

Results 1. Showing employees that you are one of them, even if only for a day, says to them that you care. Calculating the value of showing employees that you care is almost incalculable. 2. Executives sensitized to the stress and strain of being a CSR will never take that position for granted again. Now their decisions become meaningful. Now the decisions can be made understanding in some way that it will affect the CSR. 3. The “we/they” gap will be lessened. There will be a common bond between executive and CSR that cannot be built another way. 4. Now when a CSR work issue is raised the executive will have a clearer understanding of why the CSRs say what they are saying. 5. The cohesiveness of the organization is enhanced. This cohesiveness has a huge payoff on many other areas of the working environment. From the quality of the decisions to their implementation, cohesiveness increases commitment, which increases creativity. If we want our CSRs to be innovative and creative we must increase commitment and trust. Walking a mile in their shoes can accomplish that. 6. When demand is particularly busy executives who have had call center experience can fill in.

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7. No one can ever say again that you don’t understand what the call center does. 8. You may never look at the call center again. You may see new and innovative and really useful things for the call center to do because now you know what they do. We are in no way saying that one day on the job can change the organizationally imposed (necessarily so) gulf between CSR and management…but it can’t hurt and may lessen the gulf.

Chapter 20 “Walls to calls in 60 days”—but how do we get CSRs? CASE: MicroAge

Key Words—employee recruitment, mall intercept method, selection, recruitment

Recruitment in an era of full employment becomes very problematic. So much so that availability of employment turns out to be a central feature in any location formula. So does lack of employees become a reason for leaving a location? Recruitment for an ongoing operation presents one set of problems. Another set of problems exists when a new center is being opened and it has to be staffed quickly. This was the position MicroAge found itself in as it built a new center.

MicroAge MicroAge (www.microage.com) has three large call centers (500+ seats) in Las Vegas, Nevada; Phoenix, Arizona; and their newest one in Santa Maria, California. They pride themselves in being able to go from walls to calls in 60 days. This strategy fits their very fast growth. In order to fuel this fast open, MicroAge cannot wait for potential CSRs to come to them—they must go where the people are. The mall is where most people are. To quickly staff their new call center MicroAge opened a storefront in the busiest mall in the Santa Maria area. They blanketed the local newspaper with a flashy ad. They involved local dignitaries. Their job fair was at the storefront and on the first day they gave out and collected 860 applications. They gave employment and job seminars so those applying knew what a call center was and what it did. They narrowed the 860 applications to 250. They scheduled follow-up interviews at a local college. They then screened and interviewed the 250 applicants and offered a job on the spot. No mess.

Analysis Finding people to staff our chairs is the most significant problem call centers face. The technology is easy—the people aren’t. If you are going to wait for potential employees

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to find you, you may be waiting, waiting, waiting, and waiting. MicroAge discovered one of the important facts of life. If the gold won’t come to you, go to the gold. The people are at the mall so why not do a hiring fair where the people are? Not only will you attract people who, having seen the newspaper advertisement in the paper, come to the mall for you but also you will attract people who happen to be at the mall. The mall is pleased because anything that brings people into the mall means shopping and eating dollars. The mall gets a fee from the business. The call center is happy because “walls to calls” in 60 days means nothing if it is not “calls to people.”

Commentary Personnel recruitment via newspaper advertising only may no longer work. Particularly not, if the competition is also using the same channels. Call centers should try to think of innovative ways of recruiting people. Look to other lines of business for inspiration. The employee recruitment problem has been around for a long time. And it has already been solved in numerous ways. Recruitment is a serious issue. That is why you should study the best companies. Disney, Four Seasons, and SAS are all extremely successful. What do they do and how can you adapt their methods for your situation and goals? Every year Fortune Magazine list the best companies to work for. That article is full of interesting and informative ideas about what companies are doing to hire and keep employees. Be careful—you may submit an application. We actually believe that you could select the right people in 30 seconds. But that assumes and presumes that you know what makes a successful and effective employee. You would know this if you profiled the successful and not so successful employees. In that difference lies insight into selection and training.

Chapter 21 Maybe we want them to leave: Sometimes turnover in our contact centers is good Key Words—employee turnover, functional and dysfunctional turnover, good turnover, bad turnover

Since we are talking about turnover it is important that we make clear that there is more to the turnover problem than most call center and business executives are considering. Turnover in our contact centers is clearly a costly problem. Addressing the problems and issues of turnover in contact centers with a broad general stroke is actually quite easy: Find out why employees are leaving and institute programs that eliminate, minimize or compensate for those reasons. Eliminating turnover is an easy goal to understand and an easy goal to state. But like many things in life the simplicity is very misleading. It is misleading because some turnover is bad but some turnover is actually quite good. Your goal should never (that’s right, never) be the wholesale elimination of turnover. The more strategically effective goal should be to eliminate the turnover of only those people you would want to keep. The traditional classification of turnover is depicted in Table 1. Cells 1 and 2 represent individuals who do not leave our call centers. On an annual or quarterly basis they have their annual review and they are classified as performing positively or negatively. At some point those who perform negatively are fired. However there is a large percentage of turnover consisting of employees that you really want to leave anyway. Programs to eliminate turnover have the effect of keeping these people. Programs instituted to eliminate turnover should actually allow and even encourage these ineffective, unwanted employees to leave. The depiction of this in Table 2 expands Cell 3 in Table 1 into 2 categories: turnover of otherwise effective employees and turnover of employees who are marginal or negative employees. You want to encourage the growth of Cell 4 and discourage the growth of Cell 3.

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Table 1 Traditional Classification of Turnover Organization’s evaluation of individual Individual’s evaluation of organization

Positive

Negative

No turnover

Employee remains (Cell 1)

Employee fired (Cell 2)

Turnover

employee quits (Cell 3)

Programs developed to effect the wholesale elimination of turnover may actually keep those who you really want to leave (Table 2, Cell 4) and may have no impact on those you want to keep (Table 2, Cell 3).

Table 2 Functional/Dysfunctional Classification of Turnover Evaluation of Employee High Quality

Low Quality

No turnover

Employee remains (Cell 1)

Employee fired (Cell 2)

Turnover

Employee quits – dysfunctional turnover (Cell 3)

Employee quits – functional turnover (Cell 4)

The emphasis should be on the strategic control of employee turnover, not its elimination. The turnover of effective employees is dysfunction for a call center. Losing effective employees costs money, decreases productivity, and makes it more difficult to go from good contact center to extraordinary contact center. The good em-


ployees are leaving. We want to keep effective employees. This is the turnover that we want to concentrate on. We want to find out why effective employees are leaving and keep them without affecting the rate of turnover of the ineffective employees. The loss of ineffective employees, however, is functional to the call center. The departure of an ineffective employee eliminates the need for an organization to fire him or her. The loss of ineffective employees allows the call center to hire more effective employees that can improve productivity. Our programs should let, even encourage, ineffective employees to leave. Most conceptualizations of turnover do not make this strategic distinction. There is no focus on identifying turnover of effective employees as it differs from turnover of ineffective employees. And this distinction is quite important because the reasons why effective people leave are significantly different from the reasons why ineffective people leave. By not identifying this strategic difference there is no recognition of the potential benefits of turnover to the call center. But probably more importantly, by not recognizing the difference between the two types of turnover you run the risk of instituting policies that actually increase the likelihood of keeping people you don’t want and decreasing the likelihood of making people leave you don’t want. Turnover can be an effective management tool. If encouraged correctly, it is the means of ridding an organization of employees who have been missed by whatever administrative procedure exists to get rid of poor employees. Turnover is a tool that eliminates ineffective employees that would eventually leave but haven’t yet and makes employees leave that will simply not be caught by current administrative procedures. There are simply a large percentage of employees who are not overly disruptive or inadequate but marginalize productivity and have a negative impact in the work environment (by bringing other more effective employees’ work down) but will not be caught by weak systems or by weak supervisors. We should not have systems where employees who do not produce hold on to their jobs for 5 years while those who are successful effectively hold on to their jobs for half a decade. Functional turnover consists of low quality employees who voluntarily leave (Table 2, Cell 4). Turnover of these employees causes relatively little disruption. Indeed, the effect of this turnover on your center is quite positive. The other employees who clearly know these people to be negative and not working productively are quite happy to see them go. These inadequate employees have probably been bringing the


organization down. I refer to these individuals as “black holes of negativity”, for not only have they not been doing good work they have probably been complaining and increasing the probability that good workers are unhappy and not working to potential. These employees represent the unproductive aspects of employment. They have slipped through the cracks and have not been fired. Their negativity has not reached the point and their negative performance has remained under the radar screen or our human resource systems are not set up and/or not sensitive enough to catch these people. Often our supervisors are too timid to eliminate these employees. Or more likely, our organizations have weak systems so that they live in fear of lawsuits. Whatever the case, when a poor performer leaves the organization voluntarily it is a cause for celebration. This is the turnover you want. This is the turnover you want to encourage. You do not want to institute any program to reduce turnover that makes it more likely that this group of employees will stay. Dysfunctional turnover (Table 2, Cell 3) involves effective workers the organization would really like to keep but who leave. These are skilled, contributing members of the call center. They are valued assets. They are models for other employees. They are mentors and educators. Their loss has a significant impact. This is the turnover the call center wants to avoid. Their issues in leaving are fundamentally different from the issues of ineffective employee turnover. Turnover of effective employees is dysfunctional to the call center because it involves members you want to keep. This is a very costly part of turnover that you want to control. Programs and initiatives developed to reduce turnover, based on a wholesale definition of why people leave, more than likely actually increase the amount of this turnover. When effective employees see programs that allow the ineffective employees to stay and actually seem to encourage them, they are likely to have increased dissatisfaction. Traditional turnover views turnover as cells 3 and 4 in Table 2 combined, overlooking the benefits of functional voluntary turnover (Cell 4, Table 2). The lack of differentiation between cells 3 and 4 inflates the estimated costs attributed to the turnover phenomenon. Determining the positive effects of turnover (Cell 4) leaves the true detrimental turnover (Cell 3). Separating the ineffective from effective employees will reduce the estimated cost of employee turnover. Wholesale interventions that maximize the probability of reducing both functional and dysfunctional turnover together are somewhat misguided. Why in the world would you want to institute a policy that increases the likelihood that those people stay


who you would rather see leave? Strategic intervention that reduces the turnover of effective employees must be handled independently from those programs that actually try to increase the turnover of the ineffective employees. Is the functional portion of turnover large enough to warrant separate consideration? Are reasons for functional and dysfunctional turnover different? Our review of employee practices in call centers can be summarized as follows: 1. Our estimates are that 50%+ of those who leave are ineffective anyway. Let them go. 2. Our estimates are that of the 50% turnover of effective employees, over 40% of that turnover is controllable. 3. Turnover in call centers is not invariably negative. The costs of turnover are generally inflated because a good proportion of those who are leaving are people you want to leave. Their replacements are generally better employees than those they replace. We estimate that turnover costs are inflated by 25% because of a lack of analysis. 4. Who makes up the ranks of functional turnover and dysfunctional turnover depends on position. Functional turnover appears to be highest (“functional” meaning people you want to leave anyway) and occurs most frequently at the TSR/CSR level (lower level newest employees) and least at the supervisor and managerial level. 5. The reasons for functional and dysfunction turnover seem to be different. Caution is needed here. The research that has led to this conclusion has been limited and does not come from a representative sample of call centers. However, our findings are that 30% of dysfunctional turnover (the turnover of people we do not want to leave) is controllable, strategically avoidable. A large proportion of turnover from those we would like to leave is also controllable. Unfortunately the controllability results in these people staying longer. Our estimates are (remember this is an educated guess with limited research) that when interventions are implemented to decrease turnover, 75% of those who


were thinking of leaving (and we would like to see go) stay longer. Most of these people do eventually leave but they stay longer. 6. Dysfunctional turnover—turnover of people we want to stay—is primarily a result of the failure of middle management to show appreciation for work done, provide tools which make the work easier, and foster an environment which supports the work, and helps employees feel “in.” Functional turnover is generally because of reward issues. Since most staff retention programs seem to be based on raising salary and rewards, it is no surprise that these programs then keep the people we want to see leave. 7. There is obvious merit, then, to analyzing turnover into its functional and dysfunctional components. It is not enough to look at “stayers” and “leavers” and try to discern why leavers leave in the hopes of developing programs and interventions that keep them. Such attempts are likely to keep the leavers you want to leave as well as those you really want to stay.

If you are looking for questions to ask: Does your turnover reduction program keep more ineffective than effective employees? What are the reasons why effective employees leave? What are the reasons the ineffective employees leave? Are the reasons why effective and ineffective employees leave different? Is there a set of initiatives that keeps the effective and still allows the ineffective to leave?

Commentary The observations made in this chapter reflect a radically new approach to the phenomenon of employee turnover. When proactively managed it can actually be a tool that call center managers may use to create a more balanced workforce in the center. Proactive turnover management begins by collecting data. Few call center managers


take the time to collect this data and turn it into actionable information. Many go on to just hire new agents, no matter how difficult that may prove to be. They get trapped in what we call the “leaking bucket deadlock”. Proactive turnover may help turn a disadvantage into an advantage. In times where a balanced employee base is hard to reach, this may prove to be important.

Chapter 22 A different culture and a case of low turnover CASE: SalesForce Written with Caz Hosking

Key Words—employee recruitment, call center culture, turnover

SalesForce (www.salesforce.com) has Australia’s largest single site outsourced call center facility with about 800 employees located in four buildings on the one site in Melbourne, and another 400 employees located in either Brisbane, Sydney, Adelaide, Perth, or Kuala Lumpur or Auckland. The organization is perhaps broader than some call center operations in that it handles inbound customer development, strategic and tactical sales—both inbound and outbound—and tactical door-to-door selling. The case study focuses on the culture and management philosophy of the organization. This call center operation handles approximately 65,000 inbound and outbound telephone calls per week for over 30 client organizations.

Problem Most turnover occurs just as CSRs/TSRs are reaching some acceptable level of competence and productivity (2-15 months). In Australia, Martin Conboy, the director of Call Center Research, has indicated that there is an inverse relationship between attrition rates and unemployment rates such that in large cities, such as Melbourne, where the unemployment rate is approximately 6%, the turnover rate in call centers is approximately 35%, whereas in country areas where the unemployment rate might exceed 14% the attrition rate is typically around 5%. The additional cost factors associated with high turnover include higher personnel administration costs, increased advertising and other recruiting fees, perhaps problems in meeting service demands, opportunity costs for management, and significantly, greater training costs. Training costs are far greater than ever before due to the increasing complexity and range of functions being handled by call centers, and as technology applications take the routine work out of many jobs, the more sophisticated duties remain, requiring greater skill sets. Therefore, when

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SalesForce was established it needed to adopt management systems and practices which would obviate this potential problem. The highly successful management philosophy will be described.

Solution SalesForce has developed a unique culture that they describe as their “3F Formula”. It represents fun, focus and fulfillment. Fun is seen as an essential ingredient in maximizing efficiency and effectiveness. Making work more enjoyable can be shown to produce favorable outcomes such as helping to motivate, stimulate and encourage individuals to communicate while reducing boredom, fatigue and conflict. Focus, the second “F”, is about ensuring that while an essential ingredient of the workday is fun, this is only to encourage the fulfillment of the responsibilities and objectives of any given moment. As such, employees are empowered to take initiative and to contribute significantly to ensure focus. Fun and focus are seen to contribute to doing a good job which leads to recognition and self-fulfillment, and the culture aims to ensure that all parties—client, caller, employee and employer—believe that they are being fulfilled. How was this achieved? The reputation established by SalesForce has meant that it rarely needs to advertise for staff; a constant flow of referrals and resumes are received each week providing a rich database for any recruitment activity. Comprehensive recruitment and selection processes are conducted in-house; external recruitment consultants are not used. When recruiting, SalesForce is looking for appropriate attitude, skills and knowledge. Two or three telephone interviews are conducted by different managers and shortlisted applicants are then interviewed in a group of 10 to 15 people. Preliminary decisions are then made prior to a final telephone interview. Ninety-five percent of the staff are full-time which also differs from many other call center operations. All staff know that if they perform well there is a potential career path for them in the organization for two reasons: first, the organization is still growing very rapidly at approximately 20% per year, and second, supervisors and managers are recruited from within the organization. External recruitment has only been tried a couple of times and has not been successful, as the unique culture which tends to challenge convention can be confusing or intimidating to the uninitiated. It is believed that people have to have commenced their working lives in SalesForce to really understand, appreciate and feel comfortable in the environment.

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Staff are recruited into an environment which is uncharacteristic of Australian work environments: not only is it non-unionized, but staff are able to dress very informally, bold bright décor is apparent and offices are not prevalent—the managers and team leaders sit with the teams of agents. One market observer described the environment as a young environment in which the staff become “emotional stakeholders”. There are no flashing signs informing staff about call demand but staff performance is monitored and one-on-one meetings are held fortnightly to review performance. There is no formal annual performance appraisal process as staff are constantly provided with feedback. Formal induction training uses skilled trainers and state-of-the-art interactive computer technology. Training and coaching undertaken by team leaders and dedicated coaches is ongoing but operates on a just-in-time basis. Each agent has a dedicated workstation which they are able to personalize; similarly teams are able to decorate their workspace to reflect the prevailing team spirit, current objectives, most recent achievements or with some appropriate identification to their corporate client. The approach to quality management incorporates a commitment to continuous improvement, staff empowerment, teamwork and a process referred to as “chairs in” management methodology. This process allows any member of a team to call a “chairs in” meeting to disseminate ideas and to assist in problem solving in a quick and efficient manner. To address issues of stress and absenteeism, SalesForce infuses tea tree oil through their air-conditioning, subsidizes influenza inoculations and retains the services of a roving masseur who provides deskside mini-massages for staff.

Results SalesForce has achieved an annual turnover of less than 5% within the telephone operations of the business, which, when compared to the figure of 35% which reflects call centers within 1 kilometer of this complex, is remarkable.

Commentary The culture which has been created in SalesForce is unique and has been highly successful. One of their global clients is currently encouraging them to commence operations in Europe in the early part of 2000. SalesForce has aggressive expansion plans and while other large operators in Australia are global UK/US based companies that


have imported their operations to the Australian marketplace, SalesForce is now exporting its unique call center and company formula further abroad. For whatever reason, SalesForce focuses on what we have determined to be the two most important issues for a CSR. Our research shows that CSR’s want to be appreciated and want to be involved. SalesForce executes on these factors. It is one thing to talk about making employees feel in on things and feel appreciated; it is quite another thing to do it day after day and week after week. It is fascinating to visit centers and ask executives (the people that should know) what their turnover is. The predominant answer is “I don’t know.” If you don’t know, you think it’s not important and it’s probably ignored.

Chapter 23 Role stress in call centers: Its effects on employee performance and satisfaction Written with Martin Wetzels Key Words—role stress, employee satisfaction, turnover This case summarizes the results of an empirical study that was undertaken in a major call center in the Netherlands. Although, if call centers are supposed to gather consumer intelligence and create customer satisfaction, the most common metrics stress many of the things which are counterproductive to these goals. The most common metrics stress the importance of short response time (answering phone calls quickly), waiting time (do not allow the consumer to wait in the queue too long), and employee productivity (how many calls can a TSR (telephone service representative) close in a given period of time). In general these would appear to conflict with maximizing customizing services to the customer. The conflict between these common metrics and the customer service, satisfaction, and information gathering goals may create what is called role stress. In practical terms the conflict of the call center manager and employees can, at their very essence, be stated in this way: Should I make certain that the customer is maximally satisfied or should I try to get as many calls answered as quickly as possible? In fact, it has been argued that the customer service position is one of the ten most stressful jobs in today’s economy. In general, role stress has a negative impact on job satisfaction, organizational commitment, and employee performance. Since role stress may severely impede the return on call center technology investments and qualified employee retainment, it seems important to simultaneously examine antecedents of role stress and its effect on call center employee attitudes and performance.

Call center role stress Role stress occurs in employee jobs that involve direct customer contact whether in the context of a face-to-face or a telephone service encounter. Role conflict and role ambiguity are the two key components of role stress. Role conflict is “... the simultaneous 131


occurrence of two (or more) sets of pressures such that compliance with one would make more difficult compliance with the other.” For call center personnel, expectations of the organization, the supervisor or team-leaders stressing operational efficiency may clash with the demands of customers who want problem resolution or satisfaction. In many instances supervisors focus on technology to speed up the process of customer interaction, not realizing that a critical element of call center employee performance is the level of satisfaction based on meeting customer expectations. Furthermore, call centers are typically a setting in which electronic performance monitoring takes place and recent empirical work has shown that this is a major factor of job stress. Role ambiguity occurs when a person does not have access to sufficient information to perform his or her role as a service employee adequately. Role ambiguity may result from the fact that the call center employee is uncertain about the supervisory expectations or from the fact that they do not know how their performance will be evaluated. Thus role ambiguity and role conflict in call center representatives should be reflected in differences in job satisfaction and organizational commitment such that higher levels of role stress (conflict and ambiguity) should lead to lower job satisfaction and lower commitment. These, in turn, should lead to poorer job performance and increased job turnover.

Causes of call center role stress The antitheses of role stress (role ambiguity and role conflict) are empowerment, competence, and leadership. The greater the perceived empowerment the less the role stress. Employees that experience a work-specific sense of competence are more likely to assume an active orientation with regard to their work and hence will experience lower levels of role stress. Autonomous employees feel that they have the responsibility and the power to make things happen. Many operational aspects of a call center actually create pressures that reduce the probability of employees to feel empowered. In many call centers there has been a strong emphasis on the role that information technology plays in guiding employees through customer interactions, by selecting the appropriate path for them to follow through so-called 'screen pops' containing communication scripts. The rigid focus on technology may lead to role stress. Empowered employees are free to fine-tune service regulations contained in scripts in order to meet or exceed customer expectations.

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The influence of empowerment in terms of reducing role stress may be rendered ineffective if it is not accompanied by supervisory leadership behavior that recognizes and awards employee authority and competence. Therefore, leadership has frequently been identified as a determinant of role stress. Two dimensions of leadership have been identified; leader-initiated structure and leadership consideration. In a call center setting, leader-initiated structure pertains to the way in which a supervisor guides employees, provides explanations, monitors calls and stimulates employees to perform better. This dimension explicitly focuses on goal/task-specific issues. Leadership consideration is how a supervisor supports the social and interpersonal relationships of workers. Leadership consideration is thus primarily oriented towards creating good relationships with workers. There is substantial empirical evidence on the impact of the leadership dimensions on role stress. A negative relationship between initiating structure and role stress has been reported. Task-specific input from supervisors clarifies roles, goals, and expectations, allowing followers/workers to know exactly what is expected. Lower levels of leader-initiated structure would lead to greater role stress. In a similar manner to how initiating structure is related to role stress and role ambiguity, leadership consideration reduces role ambiguity. Considerate behavior by supervisors, for instance acknowledging excellence in performance, indirectly clarifies roles by rewarding what is expected.

Consequences of call center role stress Job satisfaction has often been associated with lower levels of role stress. Job satisfaction is a person’s evaluation of the job and the work environment. Job satisfaction represents the attitude or knowledge structure that encapsulates workers’ feelings and beliefs about the nature of their job and the organization. Since the literature is clear that job satisfaction is strongly related to job performance we would expect that there is a negative relationship between role stress and performance. Role stress has also been found to affect organizational commitment. Organizational commitment is “the strength of an individual’s identification with and involvement in a particular organization”. Organizational commitment can be characterized in terms of three components: (1) a strong belief in and acceptance of the organization’s goals and values, (2) a willingness to exert considerable effort on behalf of the organization and (3) a strong desire to maintain membership of the organization. Several


meta-analytic studies have consistently found a negative relationship between role ambiguity/role conflict and organizational commitment. Employees that have strong identification and involvement with organizational goals and objectives will understand expectations and take responsibility better than employees who lack the motivation or knowledge to act. Finally, employees who are committed to their organizations will perform their jobs with the interest of the organization at heart. Several authors found positive correlation between organizational commitment and performance and job satisfaction. Even in very boring and plain jobs (e.g., mop making) a committed and dedicated workforce shows greater job satisfaction than non-committed workers in similar jobs. The most obvious manifestation of poor commitment is the intention to leave. Less committed employees have been found to be at high risk of turnover. Moreover, intent to leave is correlated with actual turnover. Figure 1 summarizes what we expected to find in this study.

Research setting In order to test these notions our empirical study was conducted among call center employees of a large insurance provider in the Netherlands. The insurance industry was selected as a research setting because in this industry direct customer contact is a crucial factor for firm performance. The firm used in this study employs approximately 1200 employees with annual sales of approximately $1.5 billion. The call center studied consisted of 350 (mostly part-time) agents. The call center provides enhanced customer service or is a direct distribution channel supporting both inbound and outbound marketing activities. The call center is used to streamline the process of applying for insurance or to ensure compliance with sales guidelines.

Results of study Consistent with our analysis there was a relationship between empowerment/autonomy and role ambiguity/role conflict. No relationship was found between empowerment competence and role stress (ambiguity and conflict). However, employee competence had an indirect effect on job satisfaction such that the greater the perceived competence the greater the job satisfaction. Empowerment in the form of autonomy, not competence, then, is the significant causal agent in the reduction of role stress in call center employees.


While leadership concern for subordinates did influence job satisfaction it did so directly and not through role stress. The greater the concern for workers the greater the job satisfaction. Leadership initiation of structure did not influence role stress or job satisfaction. Both role stress ambiguity and role stress conflict had a significant and negative relationship with job satisfaction. When role stress increased, job satisfaction decreased. Role stress (ambiguity and conflict) was not negatively related to organizational commitment. As predicted, job satisfaction was positively related to job performance and negatively related to turnover intention. Call center employees satisfied with their jobs performed better and were more likely to stay. Organizational commitment, however, was not related to job performance (committed employees were as likely to be satisfied as non-committed employees) but it was strongly and positively related to turnover intention. The more committed the employee is to the organization the greater the likelihood of staying in the organization.

Commentary The results of this study help develop a picture of the workings of a call center. In the larger picture the call center is much like any other organization with employment roles that span boundaries. Role stress affects job satisfaction, which in turn influences job performance and turnover intention. Yet the deterrents to role stress in the call center are not completely as they have been found to be in the literature. Both empowerment/autonomy and competence have been found to counteract conditions for role stress. We found that while autonomy reduces role stress and leads to job satisfaction, competence has no direct impact on role stress. If we go back to the discussion about the nature of the call center we can understand this relationship. The call center is a vibrant environment in which the customer service representative must handle more transactions that have increasing complexity, with higher consumer expectations. In this environment, empowerment/autonomy is clearly seen as influencing role stress. That is, not having the power to achieve solutions, solve problems, answer questions is clearly stressful as a “role issue”. At the same time empowerment competence, having the training and skills to answer the questions, solve the problems, feeling in control of anything that is and can be asked, feeds directly into job satisfaction but does not affect role stress. In a managerial sense this is actually quite opportune. The ability to have


well defined channels to influence both role stress and job satisfaction in direct ways gives the call center manager the ability to construct finely tuned managerial programs and interventions that are in harmony with each other. Thus role stress and job satisfaction can be monitored and interventions developed simply because the manager will know whether the issue is autonomy or competence. Surprisingly, leadership had less impact in the model than one would have been led to believe from the literature. First, initiating structure was absent from the model. While past literature has identified the leader’s ability to structure tasks as a crucial element of effectiveness, no evidence of that importance was found here. Indeed, the call center may be such a structured environment (particularly with the scripting and menu driven formulas that most customer access management systems employ) that leaders do not have to initiate structure at all. And actually this is quite fortunate also. If call center managers know that structure is taken care of by the nature of the call center operation, they can concentrate on that part of leadership that really makes a difference—concern for the telephone and customer service representative. Their job, after selecting good employees, is to foster, maintain and create environments that reflect concern for the employee. Of interest but not directly related to the point of the study, there was no relationship between job performance and turnover intention. Employee turnover is generally considered to be a costly phenomenon (the cost of training, the cost of recruitment, the cost to other employees’ productivity). Like many other generalizations the cost of turnover has important boundaries. Not all turnover is bad. (We call this distinction functional versus dysfunctional turnover.) Functional turnover is turnover of employees you really would like to get rid of. There are a percentage of employees in any organization who because of mediocre but not disastrous performance “hang on”. This mediocre performance has a high cost to the organization (low individual performance and maybe more importantly, negative effects on other, and high performance individuals). The indirect evidence from this study is that job performance alone is not related to turnover intention. Poor performers may be just as likely to stay as good performers. Thus call centers may be at a risk for high levels of hidden poor performers who have low commitment but will not leave the organization because of poor performance. What we are left with then is a picture of an organization (call center) that is not so different than other organizations but is different in some ways that make management of call centers more focused and easy to understand. Customer service


representatives who feel they have the autonomy to perform their jobs have lower role stress that leads to greater job satisfaction, higher performance and lower intention to leave the organization. The simplicity of this path and the general correspondence to what has been found in organizations in the past (in general form) replicates what we know. At the same time, the path to job satisfaction is much clearer in the case of call centers—competence and autonomy are independent and influence different aspects of employee function, feeling, and performance. This makes call centers a unique research environment worthy of study and illuminates some very practical ideas on the management of this environment (which will be discussed in the section below).

Theoretical and managerial implications Our results also suggest a number of managerial implications. First of all, empowerment/autonomy seems to have a relatively strong impact in terms of role stress reduction. One important implication seems to allow employees the freedom to influence pace, working method and sequence of tasks in dealing with customers. While an increase in autonomy could be implemented at the level of the individual employee, it has been shown that increasing autonomy at workgroup level by means of selfmanagement work teams has significantly decreased employee role stress. Developing empowerment/autonomy could be done at three levels; (1) strategic (i.e., general conditions of work, such as working hours, shift systems), (2) process (i.e., change processes such as service quality improvement by reducing response times) and (3) operational participation (planning, scheduling, determining standards). Secondly, we found that both competence and leader consideration have a direct impact on job satisfaction. Therefore, it seems necessary to cultivate the skills of call center agents by investing in training and personnel development. This is especially important as many call centers are a high technology work environment. This should be complemented by creating a supportive atmosphere in which meaning and direction are created through effective formal and affective informal communication by management. Finally, job satisfaction is a significant determinant of both job performance and (directly and indirectly through organizational commitment) turnover intentions. Management of call centers should undertake steps to increase job satisfaction among their employees, as it negatively affects turnover intentions and turnover poses a serious threat to continuity in call centers. In stressful work environments, it has been emphasized that job rotation, whereby employees switch jobs and learn about different duties and responsibilities,


and reinforcement of employees’ faith in their own competencies and skills are particularly useful in increasing job satisfaction. Employee recognition by management as well as strengthening employees’ confidence in their competence through task-related training programs may be the key to keeping high performance call center employees.

Chapter 24 Call center staff with special needs Written with Andrea Jaegar Key Words—workplace diversity, technology, disabled agents The nature of call center work may make call centers uniquely able to provide opportunities for individuals with special needs. The examples below demonstrate the ability of the call center environment to accommodate the working needs of people with disabilities. Each of the examples concerns real people working in real call centers. The first three examples relate to staff with visual impairments, and the final example is of a quadriplegic staff member. Persons A, B and C are visually impaired staff members who had been employed in other sections of a customer services organization from 3 to 7 years. Due to counter work, the need to be constantly moving around, the problems in working with paper rather than with the computer and telecommunications, and/or a feeling that having to read forms at the counter was taking too much extra time, each staff member sought a transfer into the call center. Person D is a quadriplegic who works part-time and was also working in another section of the organization. In the case of A, B and C, to perform the necessary duties some or all of the following equipment was provided (depending upon the assigned duties):

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A larger monitor

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Zoom text

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Document holder

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Lamp and magnifying glass

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Telescope

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Large calculator

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Smart label printer

D required extra equipment in the form of a frame to enable suitable placement of the keyboard. Macros have been written for the staff member to reduce keystrokes.

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Other assistance required by D is provided by a consultant whose services are provided privately. For all four staff members, it is easier within the call center environment to receive assistance with enquiries, training and equipment than in the rest of the organization. In the call center they are allocated one location and their workstations are set up in accordance with their particular needs. In the case of A, B, and C performance is similar to that of other non-visually impaired staff. D is performing at the required standard taking into account the fact that extra time is required for “after call” work, and the personal career assists with some duties.

Commentary These cases demonstrate that without considerable extra expense people with disabilities can work well in the call center environment. Attempts to determine the extent to which physically impaired individuals are working in calls centers turned up no centralized database of information about that. Yet the possibility that call centers can serve some greater good and greater purpose ought out to be explored. There may be federal money to assist centers in hiring the disabled. There may be many disability organizations interested in promoting this. In an era where hiring and keeping good people is difficult it may turn out that disabled individuals are good and loyal agents.

Chapter 25 Listening variables in voice-to-voice service encounters: What part of listening don’t you understand? Written with Martin Wetzels Key Words—listening behavior, customer satisfaction, intention to call again Most call center activity is voice to voice. Yet very little is known about what characteristics of voice lead to positive and/or negative perceptions in consumers’ evaluations of a call center experience. In this chapter we present the results of a research project.

Conceptualizing perceived listening behavior Listening is a set of interrelated activities, apparent attentiveness, non-verbal behavior, verbal behavior, perceived attitudes, memory and behavioral responses. The study of group communication and listening behavior has identified three components of listening behavior: (1) attentiveness, (2) perceptiveness and (3) responsiveness. Attentiveness reflects the extent to which customers receive verbal and nonverbal cues from call center agents during the telephone service interaction. Verbal cues consist of language stimuli, enabling listeners to give consideration, frequently by using affirmative words such as “yes” and “go on”. Non-verbal cues reflect the occurrence of what has been called ‘paralanguage’, which includes vocal qualities (i.e., voice characteristics like pitch, rate and volume), vocalizations (i.e., sounds conveying meaning such as groans and moans) and voices segregates (i.e., pauses and fillers such as “um” and “ah”). Paralanguage is particularly important because it is frequently associated with a speaker’s physical personality and gender characteristics, emotional state and even credibility and sincerity. In general, verbal cues carry a large part of a message’s cognitive content, whereas non-verbal cues reflect affective commitment and involvement.

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A second component of listening behavior is perceptiveness. This mainly cognitive activity reflects the listener’s attempt to understand the message by assigning meaning to the verbal and non-verbal messages that are transmitted by the speaker. During a voice-to-voice service encounter a customer can perceive whether a call center agent is actively attempting to understand the message that is conveyed. By means of training and (computer) scripts and heuristics, call center agents can retrieve information from knowledge schemes and in this way facilitate interpretation of the message sent. In addition, a number of signals may be used to convey understanding of the message. For instance, asking for more details and rephrasing the message to check for the right interpretation are some of the ways we convey perceptiveness. A third component of listening behavior is responsiveness. This indicates the level of understanding or agreement between the call center agent and the customer. A call center agent’s verbal and non-verbal feedback helps the customer to determine whether the message has been received, interpreted and evaluated in the appropriate manner.

An empirical study In order to test these notions our empirical study was conducted among call center employees of a provider of mobile telecommunication in the Netherlands. The call center provides customer service (such as number and account information and connect services) over the phone and sells mobile telephones and accessories by means of telesales. The company has three 250-seat call centers which handled 6.1 million calls in 1998.

Questionnaire design A questionnaire was designed containing constructs measured with multiple item measures. Each of the items pertaining to the focal constructs as presented in our conceptual model (see Figure 1) was accompanied by a five-point Likert-type scale ranging from 1 (= completely disagree) to 5 (= completely agree). In Table 1 below the measurement items that were used in our study are shown.

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Attentiveness Satisfaction Intention to Call Again

Perceptiveness Trust Responsiveness

Figure 1: Conceptual Framework

Table 1: Results Confirmatory Factor Analysis Construct Attentiveness

Items The agent did not make an attentive impression.* The agent used short, affirmative words and sounds to indicate that (s)he was really listening to me.

Perceptiveness The agent asked for more details and extra information during the conversation. The agent continually attempted to understand what I was saying. The agent paraphrased what had been said adequately. Responsiveness The agent offered relevant information to the questions I asked. The agent used full sentences in his/her answers instead of just saying yes or no. The agent did not recognize what information I needed.*


Trust I believe that this company takes customer calls seriously. I feel that this company does not respond to customer problems with understanding.* This company is ready and willing to offer support to customers I can count on this company to be sincere. Satisfaction I am satisfied with the level of service the agent provided. I am satisfied with the way I was spoken to by the agent. I am satisfied with the information I got from the agent. The telephone call with this agent was a satisfying experience. Call Intention I will very likely contact this company again. Next time I have any questions I will not hesitate to call again. I would not be willing to discuss problems I have with this company over the phone.*

Results It appears that attentiveness is a direct driver of encounter-specific evaluation, whereas perceptiveness is primarily related to trust which is a more relational outcome variable. Attentiveness is a sign of interactional involvement by the agent. As such, it is the listening dimension that is most closely related to the perceived quality of the process of the remote service encounter. Arguably, attentiveness, inferred from the presence of both verbal and non-verbal sounds, appeals by establishing a bond between customer and service provider from an affective perspective. As a result, customers may feel cared for. This is especially the case when a customer contacts the call center with a hidden agenda (e.g., a need for attention, somebody to talk to). Since satisfaction has an affective side to it, it seems plausible that attentiveness is related to this customer evaluative judgment. Perceptiveness, on the other hand, appears to be related to the relational consequence of trust. This part of listening behavior involves cognition aimed at assigning meaning to the message that is sent by the customer and digging deeper

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to come up with root causes behind questions and/or problems. This underlines the notion that when a customer feels that an agent understands and interprets the question or problem correctly, the agent will be perceived as knowledgeable and being able to provide a solution or information again in future occasions. Finally, the fact that the responsiveness dimension of call center agent listening behavior is related positively to both satisfaction and trust underscores the relative importance of this communication skill. A company’s response, which could be related to outcome quality of the service encounter, is frequently what customers are looking for in contacting the firm. In addition, we find a significant association between satisfaction and trust. This emphasizes the importance of satisfaction as a mediating construct and suggests that satisfaction with a specific service encounter may be regarded as a building block for customer trust.

Commentary Our results also suggest a number of managerial implications. Since listening is an essential communication skill in voice-to-voice service encounters, our results seem relevant to call center managers and supervisors. Listening is a skill, it can be taught, learned, improved and assessed, for instance by role-plays. Comprehensive training programs should take all three dimensions of listening behavior into account. First of all, with respect to attentiveness call center management should be prepared to invest time to learn about customers. Agents should be trained to be sensitive and focused on customer needs, the reasons why they called and the hidden agendas or purpose behind the call. In many call centers there is still an extreme emphasis on productivity and efficiency-related performance models are used, which instigate agents to rush calls to completion. Secondly, in relation to perceptiveness it seems important to increase the agent’s knowledge base in order to better be able to assess customer queries. Modern information tools containing scripts and cues and (listening) skills-based routing may assist agents in improving perceptiveness. Thirdly, responding can be improved by training agents to be more adaptive and align their communication skills in accordance with the specific wishes of the customer and based on perceived information about the nature of the relationship. Again, developing an efficient communication strategy involves an elaborate


knowledge structure of customer problems, queries and behaviors and the contingencies that link specific behaviors to specific circumstances. Fourthly, it seems advisable to develop a listening tracking system to monitor employee performance. Understanding listening behavior at the dimensional level enables companies to measure and quantify employee behavior and use that knowledge for improvement and training. Tracking performance over time will enable call center management to achieve an insight into which behavioral aspects relate to customer evaluations of individual service encounters and which aspects are likely to transcend to effecting longer-term customer commitment.

Chapter 26 Voice-to-voice service encounters Written with Arjan Burgers, Cherie Keen and Sandra Streukens Key Words—service delivery, customer expectations, service quality

Call centers deal with both the telephonic voice-to-voice and voice-to-technology (interactive voice response) contact between the customer and the firm. For consumers, the evaluation of a service often depends on the evaluation of the “service encounter” or the time the customer interacts with the firm (Bitner, 1990). To serve the customer right and effectively, contact employees need to know what customers desire. In the case of face-to-face encounters, people can create quality perceptions relating to physical characteristics of the contact employee and the environment where the service takes place. Interaction by telephone restricts the evaluation of the service delivery to such an extent that consumers will solely have to base their perceptions on the interpersonal traits of the contact employee. What are customer expectations with respect to contact employees’ behavior during these voice-to-voice encounters? In the eyes of the customer, what aspects characterize a truly service-oriented call center representative (CSR)? What do customers expect from a CSR during a voice-to-voice encounter? A search of the research literature turned up 13 potential attributes in a voice service encounter that might be important.

Self-efficacy The employee’s belief that he/she is competent to execute the required activities related to the job is referred to as self-efficacy. This premise is also expected to be an important determinant of CSR performance as CSRs work in a highly technological environment. CSRs who feel comfortable working with telecommunications and computer technology will probably provide better voice-to-voice service than CSRs that do not feel comfortable working with that technology.

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Adaptability Adaptability, also referred to as flexibility, reflects the CSR’s ability to adjust behavior and to handle interpersonal situations. It is important that the customer perceives the employee is doing something special for him/her, whereas the activity may be routine from the employee’s point of view. In call centers, scripts are often used to help CSRs in their conversation with the customer. If the scripts are too rigid and if CSRs are not allowed to deviate from the scripts, adaptability may suffer and lead to a decrease in the level of service quality a customer perceives.

Empathy Empathy is a characteristic that can be defined as the ability to provide the customer with “caring, individualized attention”. It is the ability of the CSR to show the customer a level of personal involvement. This means treating the customer in a way that shows that the CSR cares about the customer. Communications of responsiveness and assurance create a more personal atmosphere, which is expected to be appreciated by customers, especially in longer, high-level contact service encounters. As voice-tovoice service encounters are high-level contacts, empathy is expected to be an important CSR attribute in long voice-to-voice contacts, like contacts to build and maintain relationships.

Time Time is the speed with which the customer complaint or wish is resolved. Time is seen as an element of trust, which is an important variable of relationships between buyers and sellers. It is important that customers do not feel pressured, but also not be held up longer than they wish to be. In the call center context, time is considered an important variable of performance. Talk time, handle time, queue time, wrap up time and hold time are all metrics that are used by call center management to measure call center representative performance, i.e., satisfaction. Among others, the objective for management is to minimize costs, i.e., minimize talk time and minimize wrap up time. This may be conflicting to the customer expectations about time in a voice-to-voice service encounter, in which the CSR is expected to take a reasonable time span to listen to the customer’s problem in order to help him/her in a consistent way.

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Communication style Communication style refers to how the CSR handles the way in which the customer is expressing his/her service needs. There seem to be two types of communication styles: convergence and maintenance. Convergence refers to a communication style in which the CSR adapts his/her “tone-of-voice” in accordance with the CSR’s impression of the customer. In a maintenance style, the CSR displays no effort to adapt to the customer’s needs. This is also expected in the voice-to-voice service context in which similarity is probably largely determined by the communication style of the CSR, as physical appearance is not relevant. This may mean that CSRs sometimes have to adjust the language for different customers, for example, increasing the level of sophistication with a well-experienced customer and speaking simply and plainly with a novice.

Reliability This item refers to the service employee delivering on promises dependably and accurately. Reliable CSRs are expected to keep their promises and be trustworthy. Trust is an important “building block” of relationship quality. In voice-to-voice encounters, trust is expected to be a critical component of customer expectations of the CSR’s behavior. As there is little other contact than verbal language, customers must take the CSR literally at his/her word. In contrast with service encounters like e-mail or fax in which the customer has “something on paper” or face-to-face services encounters in which the customer and the service employee have “physical contact”, the customer in a voice-to-voice service encounter is, for a major part, dependent on the reliability of the CSR, which can only be expressed verbally.

Perceptions of commitment to service quality and customer satisfaction This attribute reflects the customer-perceived commitment of the employee to provide maximum service quality and to satisfy the customer. Commitment is an important relationship variable. Therefore, we expect that in voice-to-voice encounters, with the purpose of building or maintaining relationships, commitment becomes increasingly important.


Empowerment Empowerment is the authority the frontline employee possesses to service the customer.

Staff attitude Are the service provider’s employees perceived as friendly and considerate when they deal with the customers? Aspects like having a bad day or being tired can have an impact on the attitude of the CSR and consequently on the quality of the service delivered. Since CSRs must deal with phone calls for most of the day, when a difficult or extremely angry customer calls in, there is little time for the representative to “cool down” before he/she must continue with the next call. This sometimes results in the representative dealing with the next customer(s) with a poor attitude.

Explanation A critical (dis)satisfactory service encounter incident is the frontline employee’s response to a complaint of the customer. Customers, when they call in for a complaint or for information, usually want the truth in identifying what happened and why the events occurred. The content or explanation of the response has an impact on the customer’s (dis)satisfaction. Clearness and truth of the explanation are thought to be important to customers. When complaints do arise, it is usually the CSR’s responsibility to explain it to the customer. If there is inadequate information, based on lack of technology or resources, it will most likely be attributed to the CSR, although it affects the entire firm’s image. It is important that CSRs are trained on these aspects and have access to information to provide the correct explanation to customers.

Competence Competence means that the CSR possesses the skills and knowledge necessary to perform the service delivery. In a voice-to-voice service encounter context, CSRs must possess the required knowledge about the products and/or services that the company offers, but also the skills to perform the multiple activities that are required to execute the job. Typical skills that a CSR must possess are a pleasant voice on the telephone and the ability to perform multiple activities at once (e.g., listening to the customer, searching for information, and inputting customer information into the database). These


skills are partly innate and can partly be trained. The required basic knowledge of the services offered and technology used can be obtained via training and experience, while other personality traits are innate in the CSR and cannot be attained through training.

Security Security can be described as the “freedom from danger, risk, or doubt”. The customer must have the feeling that his/her dealings with the organization are confidential. Since most customers are aware of the extent of information which a firm collects and has access to about them, CSRs have to acknowledge this and act accordingly by spotting (imminent) customer uncertainties and taking these away. This is especially important in call centers in the financial industry and other industries that have extremely sensitive data about the customer. On the other hand, security also deals with the issue that customers want to make sure and feel secure that the information they have received from the CSR is correct. If they doubt that this information is true, it can also cause problems in the perceived quality of the service delivered.

Knowing the customer Understanding the customer’s predicament deals with the CSR making the effort to understand the specific customer’s needs. This means that the CSR must learn how to read customers to identify what they require and what they expect from the contact, listen to the customer closely to identify what the customer wants, make each customer feel like an individual, and recognize which customers are loyal and have a high lifetime value to the firm. In summary, the literature review yielded 13 potential attributes. In the process of creating a scale model representing the desired voice-to-voice characteristics, questionnaire items had to be generated to measure the selected attributes. The following section will describe the empirical study to develop the scale model.

An empirical study In order to determine which of the potential attributes are important to customers a survey of Dutch consumers who had called an 800 number was completed.


Discussion The results of this study help to create a picture of customer expectations of CSR behavior in voice-to-voice encounters. Four factors turned out to be of major importance to consumers in this regard. Adaptiveness incorporates different service attributes. Just as in other sorts of service encounters, customers clearly expect CSRs to adjust their behavior to the customer, handle interpersonal situations, and adapt to various situations. CSRs are expected to be competent and skillful and therefore able to help the customer. Furthermore, they should not be afraid to deal with various situations during an encounter and must be able to assess the customer’s constitution and adjust his/her language to the level of sophistication of the customer accordingly. Assurance focuses on aspects related to security and explanation. CSRs that provide clear information to the customer about the procedures will comfort the customer and take away uncertainty. Furthermore, the customer does not only expect that the firm he/she calls will handle customer information discreetly, but also that the CSR assures him/her that the information will be handled confidentially. Empathy, like in other sorts of customer service encounters, is important in a voice-to-voice service encounter. A CSR must be able to empathize with the customer’s emotions and/or situation and to give the customer the feeling of not being “a number” for the firm. Obviously, customers dislike it when they get the feeling they are being treated as not important and that their problems are not taken seriously. Authority is generated from the findings that customers expect CSRs to have the authority to deal with their various problems and questions. The items loading on this scale indicate that customers find it disturbing if a CSR is not authorized to solve the customer’s question or problem.

Commentary First, customer contacts to the call center happen for a variety of reasons, which leads customers to have different expectations of the service. This research did not discriminate between situations where, for instance, a customer called because he or she had a complaint and situations where he/she had a general question. One could argue that an angry customer, who calls with a severe complaint, likes to see different aspects in a CSR than a customer that calls with a general question. The level of requested empathy shown by the CSR could differ substantially in these two situations. Therefore,


the results should be interpreted with some caution. Future research could take this situation specificity into account, when taking this particular research one step further. Secondly, it should be noted that the study did not take international differences in customer expectations into account. The results were solely based on perceptions of Dutch customers, which mostly experience less than four voice-to-voice service encounters per month. This indicates that the generalizability of the results to industry and international situations is not guaranteed. As an increasing number of companies set up pan-European call centers, future research could focus on cultural differences that determine customer expectations about CSR behavior. Thirdly, this study was solely based upon the customer’s expectations of voiceto-voice service encounters, indicating that the use of Interactive Voice Response (IVR) technology and other types of technologies (or a possible combination between voice and technology) were precluded from this research. Taking the rapid increase in use of “voice-to-technology” service techniques into account, future research might want to include these types of techniques when furthering research on customer’s expectations regarding remote service delivery. In order to manage well, managers need to ensure that the measurements accurately portray what management wants to be measured. The effective management of high quality voice-to-voice service delivery could be impeded by the absence of a valid measurement instrument. The evidence of good validity and reliability associated with the four-scale model suggests that this model could be a useful service management tool in the future. Several managerial implications can be drawn from the results. Firstly, the four-scale model, including the eight service encounter attributes and related items, can be used as a basis for internal performance and quality measurement and externally for perceived and desired quality measurement. Internally, the attributes of the scale-model can be used for monitoring purposes. In most call centers, management monitors the quality of the conversations between CSRs and customers by listening in, audio taping conversations, and/or mystery calling. Often checklists containing quality attributes are used for consistent evaluation. Our four-scale model and eight attributes can serve as the basic model for these checklists to monitor customerbased service quality. Furthermore, management can give weightings to the different attributes when evaluating conversations. In a relationship management conversation for instance, attributes like adaptability and communication style are more important than in a conversation in which the customer asks for a brochure, in which time is


considered more important. Future research is necessary to determine these relative weightings for the different conversation types. Externally, the attributes of the fourscale model can serve as the basis for built-in caller satisfaction survey. By doing this, the firm is able to determine how the CSRs perform on these eight important attributes. Secondly, the scale’s adaptiveness, assurance and empathy account for a major part of skills. These skills can partly be taught. Training and education programs must be designed to improve the CSR skills on these attributes. Examples of programs that can achieve improvement in these skills are programs on product, computer, procedures, and company knowledge. This knowledge is necessary to improve the competence and/or (procedure) assurance given by CSRs. For example, if a customer calls to get information about what products the firm sells, it is important that the CSR has enough knowledge about the different products and if not, where he/she can find the relevant information in his/her computer. If subsequently requested, the CSR must also be able to provide further information on the advantages of the products and give advice on what products suit the customer’s situation best. Then, if the customer wants to order a product, the CSR must know what the ordering, delivery, and payment procedures are and assure a delivery time. Furthermore, training on motivation, dealing with aggression, stress management, and customer orientation can improve the CSR’s skills in his/her contact with the customer. In such training programs, the CSR learns to deal with unexpected situations such as how to deal with furious customers. Thirdly, the scale authority clearly indicates the customer’s preference for CSRs that have decision-making power. Customers like competent CSRs who are able to help them out with each and every question or problem. When CSRs are well trained and have access to product—and customer—information databases so that they possess the ability to cover almost every question and complaint, it has been shown that customers would also prefer that CSRs have authority to use the information themselves without gaining management permission. Finally, the resulting attributes of the scale model that is presented here can serve as useful input for recruitment and selection purposes. Assessments like personality tests and role-plays can be designed in such a way that they test among potential candidates for present levels of adaptiveness, assurance, empathy, and the ability to deal with authority.


Scale of important factors Scale

Items

Adaptiveness 1. Treating different questions should be no problem for the CSR. (ADAP1) 2. A CSR should be able to adapt to each and every situation. (ADAP2) 3. A CSR should take my level of knowledge into account when answering a question. (CUSA3) 4. A CSR should be able to remain calm and friendly even when I am angry. (COMP1) 5. When I have a problem I like the CSR to help me define the problem more specifically. (COMM3) 6. I find it important that a CSR is able to help me with each and every question. (EMPO1) Assurance

1. When I have a complaint, I like the CSR to explain where this complaint comes from. (EXPL1) 2. I like the CSR to explain each and every step he or she takes to answer my question. (EXPL2) 3. When I have to be transferred, I like the CSR to explain why I have to be transferred. (EXPL3) 4. A CSR has to give me the feeling that my information is used confidentially at any time. (SECU1) 5. I like the CSR to inform me on anything that my information will be used for. (SECU3)

Empathy

1. I like the CSR to imagine what I am going through when calling with a complaint. (EMPA1) 2. I like the CSR to give me the feeling that I am a special customer. (EMPA2) 3. I like it when I notice that the CSR treats my question as an important one. (EMPA4)

Authority

1. It disturbs me when a CSR has to leave my question unanswered because of lack of authority. (EMPO3) 2. It disturbs me that my call has to be returned because the CSR is not allowed to answer my question. (EMPO4)

Section 2 Operational management of call centers

Operational management in call centers is all about making service level ends meet on an every-day basis. In attempting to achieve those objectives, various operational issues need to be addressed, such as how to plan for an optimal staff capacity, setting performance standards for the various access channels, how to assess whether the technology and agents meet those standards and probably a zillion other things. For many call centers resources, the sky is not exactly the limit. Therefore, it is essential to match up the means with the end of getting the job done. Capacity forecasting and planning is at the heart of the call center planning process. It is all about determining staffing levels and other resources so that service levels can be met in the most cost-effective way. Capacity forecasting is the prediction of the future workload on the basis of historical data trends and past experience. Whether on an hourly, daily, weekly or yearly basis, forecasting enables call center management not only to set appropriate staff levels, it also forms an important input for the annual budget, HRM policy and technology requirements. The first two cases in this section provide proven illustrations of the intricacies of capacity planning techniques used in call centers. Both show that the mining of historical data is an important source of information that companies need to explore. Subsequently, we present two cases that demonstrate how the HP Company determines its base staff levels in their pan-European call center. In such a setting, this means taking into account cultural differences with respect to, for instance, lunching habits across Europe. The next case, featuring catalogue retailer OTTO, discusses the issue of capacity planning in the context of multiple access channels. This company outsourced part of its call center activities and was very successful in doing so. Once staffing and resources have been carefully planned, several on-the-job operational issues may arise. In this chapter we have included a number of cases that reflect a number of challenges that any call center manager may face. For outbound calls, a major problem is declining response levels. The R&M case illustrates how a market research agency’s call center is trying to come to terms with this problem. In any call center quality and productivity monitoring is an essential activity to ensure that the agents meet company standards as well as customer expectations. However, all too frequently the emphasis is

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placed on the former, whereas the customer perspective is neglected. In the E-Talk case a software package is introduced that may assist call centers in achieving a balanced performance assessment. In the next chapter, we pay attention to one of the most cited sources of irritation for callers, IVR, and introduce how Unisys has created a piece of technology that may take away some of the horror associated with access channels. In addition, the Yellow Pages Direct case introduces the technology of “auto call drop in” which makes the transfer of a call to an available agent after a waiting period much more effective in high volume call center environments. Since more and more customers are using email to reach companies, an automatic email response system increasingly is a must-have. The Internet Shopping Network case discusses how advanced technology may help call centers deal with the increasing burden of email response. The Thomson Consumer Electronics case takes it one step further. It features the development of an expert system designed to explore the possibilities of web-based customer relationship management. Supposedly, the overall objective of the implementation of the aforementioned technologies is to make the call center more efficient and effective. One way of proving this impact is to use trend data that is available internally. Another way is to benchmark call center performance against other call centers and see your call center’s position relative to a peer group. In “The Case for Benchmarking Your Call Center” we describe how benchmarking may be used as a tool for operational improvement. Ultimately, the performance criterion that really matters is caller satisfaction. Nevertheless, there is relatively little known about what determines caller satisfaction. Moreover, benchmark results have consistently shown that only a minority of companies are using caller satisfaction as a performance assessment criterion. First, we discuss the results of a study that was conducted in Australia that attempts to identify customer values and irritants when customers contact a call center. Caller satisfaction is a complex phenomenon. Sometimes for the benefit of operational measurement it may be useful to focus on a specific agent behavior or attitude and evaluate how this contributes to the formation of caller satisfaction. Therefore, we summarize the results of a study that was designed to assess the impact of agent listening behavior on caller satisfaction and trust and ultimately the intention to call back again in case of a problem. Finally, most companies have implemented call center operations because they are convinced it will ultimately contribute to the bottom line. Therefore, in the chapter’s last case, “PhoneDirect: Private Insurance Call Center Sales,” we convincingly demonstrate that the call center indeed contributes to a conversion of contacts into actual sales.

Chapter 27 Capacity planning 1 CASE: Hewlett Packard 1 (this case was completed prior to the HP Compaq merger) Key Words—employee staffing, cross-cultural differences

Company background Hewlett Packard (www.hp.com) is an international company that produces computer supplies and medical equipment. Hewlett Packard was the first to establish a pan-European call center in the Netherlands. At this time, HP’s customer care center in Amsterdam is functioning for Europe, the Middle East and Africa. It provides customer support for all of HP’s computer-related products. It serves 19 countries and 11 languages. Calls are received by the Customer Care Reception department, which serves as the first line for all the incoming calls. Then the caller is connected to either the Consumer Products department or the Commercial department (for business customers). There are 650 people working in Hewlett Packard’s customer care center. Almost 50% of the workers are non-Dutch, and employees come from various countries. The official language of the center is English. The Planning and Research Department of the customer care center has the responsibility for planning the call center personnel. Continuous research in the call center is needed to keep track of the wishes of the customers and employees.

The problem In order to properly run such an internationally oriented customer care center, many variables have to be taken into account. If you want to plan agent staffing efficiently for every department, you have to try to accurately forecast the calling volume. But since people call to Hewlett Packard in Amsterdam from so many different countries, HP needs to match demand with agents from different countries who speak the appropriate languages. Most of the agents speak two languages sufficiently fluently to answer questions on a telephone, but some agents can be planned in for even more lan-

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guages. How does HP forecast the daily call flow for the different products in order to properly manage the scheduling of different agents?

The solution To give an indication of the variation in call volume from the different European countries for one HP product, an overview is given of the average call volumes from 6 different countries on one day for the DeskJet department. This can be seen in Figure 1. The figure shows that in southern European countries (Spain, Italy and France), lunchtime is highly valued, and this obviously implies two things: around lunchtime, fewer customers will call from these countries because they are busy eating. Your own employees, however, also want to have their lunches around this time. Additionally, these lunch times vary among countries. According to figure 1, the French people start having lunch at around 12:30 p.m., followed by the Italians and last are the Spaniards who start at 2:00 p.m. and do not feel the need to rush on to finish up.

Figure 1

Chapter 27 Capacity planning 1 161

In the northern European countries (the Netherlands, Germany and England), however, lunch is not taken as seriously, and the respective change in call volume is not as spectacular. But when planning the agents who can work in (more than) two languages, these differences in call loads can lead to problems. In order to better forecast the call loads for the next days and weeks, Hewlett Packard’s planning and research department has established a forecasting model. This is shown in Figure 2. ‘CAL Rate’ stands for Customer Assistance Level-Rate. This rate serves as a factor that keeps track of the relationship between actual shipment units vs. actual calls, and forecasted shipment units vs. forecasted calls. Of course, the call volume forecast is subject to many other influences, like trends and seasonal influences. With the above forecasting model, a call forecast is made for every country separately, including average expected call length, the country language profile, percent of outbound calls, percent of outsourcing (depending on the product mix and kinds of customers), (country specific) holidays etc. The next step in this planning process is to determine the “agent resource” or the work profile of the agents. People from different countries may have different working habits. Other agent-related aspects that have to be considered are: *peak load, *not ready time, *log-in time, *opening hours (concerning the planning of the shifts), *trainings, *service level objective, *agent groupings (in product or language groups).

Actual shipment units

Actual calls

forecasted shipment units

CAL Rate

Other influences (like new products) Figure 2

forecasted calls


Call Forecast Call Profile Work Profile

Erlang C. forecasting method

Required number of Agents

Using their own forecasting method for the number of inbound calls, in combination with the Erlang C. forecasting method for the required number of agents, gives HP an indication of how many people have to be planned in for every department to make the call center run effectively.

The result The planning & research department has become familiar with the forecasting method used. For the already established HP products, experience shows how the agents have to be planned in. But when a new product is released, this method is used to try to accurately forecast the number of agents needed per country to be effective in helping the customers with their (new) questions.

Commentary The case illustrates that cross-cultural differences do exist and how a company can make efficient use of those differences in terms of employee capacity planning. It proves the rationale for centralizing operations in case a number of smaller but diversified markets have to be serviced. As far as we know there have been no studies on what happens when call centers merge. Yet given the current economic climate and the reality that call center growth within our larger companies is a bit out of control there will be an era of call center consolidation. Knowing the dynamics and the dos and don’ts of managing this change would seem to be interesting and of interest to professionals.

Chapter 28 Capacity planning 2 CASE: Hewlett Packard (this case was completed prior to the HP Compaq merger) Key Words—call forecasting

Company background HP (www.hp.com) was founded in 1939 by Bill Hewlett and Dave Packard. Today Hewlett Packard is one of the world’s largest computer companies and producer of test and measurement instruments. More than 29,000 products are used by people for personal use and in industry, business, engineering, science, medicine and education. The company makes networking products, medical electronic equipment, instruments and systems for chemical analysis, handheld calculators and electronic components. Headquartered in Palo Alto, California, the company employs more than 120,000 people, of whom some 69,000 work in the United States. HP has major sites in 28 U.S. cities and in Europe, Asia, the Pacific Rim, Latin America and Canada. HP sells its products and services through about 600 sales and support offices and distributorships in more than 120 countries, and through resellers and retailers. HP Customer Care Centers provide technical information via telephone directly with online agents trained to assist with set-up, configuration, start-up and troubleshooting of HP products. HP Customer Care Centers can help to solve hardware issues with HP products and, if necessary, initiate the appropriate service procedures. HP has three major Customer Care Centers around the world. The Customer Care Center that serves Europe, the Middle East and Africa is located in Amsterdam.

The problem The Customer Care Center in Amsterdam serves a very large geographical area that reaches from Finland to Saudi Arabia. It means that HP can expect a huge number of calls originating from every possible place within this part of the world. Therefore it is essential that HP can forecast the amount of calls in order to avoid waiting times for the

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customer. The challenge HP has faced is to forecast the amount of calls reaching the Customer Care Center.

The solution The HP Customer Care Center in Amsterdam has to take care of calls originating from 19+ countries and 11 languages. It is obvious that when creating customer loyalty it is crucial that waiting time is avoided as much as possible. For HP it is essential to be efficient in handling the calls from customers. HP has discovered that there is a clear link between units sold and calls. To forecast the number of agents needed to handle the calls, HP starts to calculate the call volume based on historical data and using the so-called “customer assist level”.

Actual Units Sold

Forecasted Sales CAL-rate1

Actual Call Volume

Forecasted Call Volume

(CAL-rate)1.

The above figure shows the relationship between historical data, actual units sold and actual call volume, from which the CAL-rate is calculated. Subsequently the rate combined with forecasted sales results in the forecasting of the call volume. Apart from the volume it is necessary to distinguish the call profile. The call length, language profile and the nature of the calls are needed for the determination of the call profile. By language profile we mean the typical cultural influence on calling behavior. It is known that a Spaniard preferably calls in the morning because of his siesta in the afternoon whereas a Dutch customer calls during the whole day with a dip during lunchtime. In addition to call volume and call profile, the forecast department takes into account the work profile. The work profile gives insight into the number of agents in training, leave, etc. These three ingredients, forecasted call volume, call profile and work profile, are used to forecast the number of agents needed on a specific day of the week. 1

CAL-rate = customer assist level rate

Chapter 28 Capacity planning 2 165

The result To reduce the number of agents needed, HP uses the information gathered from customers to improve the products. In the customer database HP stores every problem and solution that has been reported by the customer. A support engineer analyzes the data in the customer database and reports to R&D to improve HP’s products. In the case of HP launching new products, the R&D department has direct access to the customer database, without the intervention of the support engineer. The R&D department, if HP launches new products, assists the Customer Care Center and receives an immediate impression of the questions raised by customers and can take instant action to improve the product and prevent future calls. The second issue in this case is actually subtle. The HP call center in this case is a critical component of a total business strategy. Engineering and marketing use the information in the call center to help them. When units of a company get information from a call center that they cannot duplicate elsewhere a couple of good things happen. The call center becomes an integral part of the organization. The call center is just not this set of phones somewhere in Arizona (or in this case Amsterdam). The call center is important. So instead of executives saying no or shaking their head with no understanding you have, “What do you mean you want to close the call center? The call center gives me.....” The more the information you have can help others, the more strategic your call center becomes. What do you have that others want? What do you have that others need but don’t yet know they want? If you are waiting by the phone for those strategic areas in the business to call you, wait on (I remember waiting and waiting and waiting and waiting for the red headed girl I met in sociology class to call me...never did happen). Your skill as business executive is in understanding the nature of the business well enough to know what the potential is for your information all over the business or what potential exists for information if you ask one more question. Then you take that in a nice package and show your peers or superiors what you have and why it is good. It will be interesting to see if and how the effectiveness of this operation is helped or hurt by the merger. Stay tuned.

Commentary There are two really important issues in this case—forecasting demand and strategic use of call center information.


The forecasting issue has no “best” answer. There are some pretty sophisticated algorithms and formulas to predict demand. There are any number of books and seminars on this topic. Just type in call center call forecasting into Google and look at all that you have—147,000 possibilities. Clearly demand should be tracked and monitored so that you know the history of demand on Mondays and Fridays, in October and in December. Barring all other issues history is the best teacher. Call centers must be tied to sales and marketing so that call centers know beforehand what is new and coming out. CSR training and meeting the needs of new product support and service are critical.

Chapter 29 Organizing for capacity planning CASE: OTTO Key Words—capacity planning, outsourcing

Company background OTTO (www.neu.otto.de) is an independent mail order organization belonging to the internationally operating company OTTO Versand. OTTO’s activities originated in Germany in 1949, but by now, the concern has spread to many countries (the Netherlands, Belgium, France, Great Britain, Austria, Switzerland, Spain, Hungary, Japan and the USA). OTTO has been active in the Dutch market for over 15 years and has grown considerably since. OTTO offers mainly clothing, but also products for household use, by means of catalogues. Customers can order by telephone, in writing or by fax. In Holland, 80% of the orders are by telephone and 20% in writing. Yearly, OTTO’s Dutch call center deals with +/− 2 million inbound calls and up to 1.5 million outbound calls. OTTO uses a total of around 143 agents. Of these, 75 are “home-workers”. These are people working from their homes, but are logged into the main server of OTTO. They have the same working units in a specially furnished room at home. Incoming calls are first routed to the home-workers, and the overflow is then routed to the office call center agents. At the office, there are 30 additional inbound places, 8 places for call blenders, and another 30 for outbound callers. These places are used depending on the call volume. The call center agents for inbound calls enter the orders into the database. The outbound agents monitor customers’ satisfaction with the OTTO products or give extra incentives to customers for buying additional products. The catalogue appears twice yearly (June and December). Next to these main editions, there are also, during the whole year, several special catalogues, aimed at a more precise target group. OTTO’s first and most important target group is women. This results in a marketing approach specially targeted for the different types of women customers.

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The problem OTTO’s calling capacity looks as follows during one year:

Figure 1

OTTO did not have enough work for the agents in the white period, where there was no outbound activity and low inbound activity. This raised problems with OTTO’s personnel. The agents did not want to be contracted for just a few months in a year, with unemployed periods in between. Since most agents worked or wanted to work on a full-time basis, what could OTTO do to overcome the low capacity in the months with no outbound calling?

The solution To solve this problem, two years ago, OTTO came up with the idea of forming an extra business unit, called “Support Marketing Services”. This business unit was supposed to put out on contract the call center services of the OTTO call center in its low periods. This way, most of OTTO’s call center personnel would be able to stay under a full-time contract during the whole year. This would solve the problem of the surplus of staff in the white periods the Figure 1. This would raise agent job satisfaction. Additionally, OTTO would be making money selling their experience and expertise. Support Marketing Services was meant to be a full service call center, meaning that, next to inbound and outbound call center services, they can also provide database-management, direct marketing activities and (the fulfillment of) logistical support.

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The result So, how have the Support Marketing Services worked until now? It has been a big success, seeing that they had no trouble at all finding assignments to perform with their call center. However, the service of Support Marketing Services became so popular, due to the reputation of OTTO’s call center, that they also had to perform assignments during OTTO’s peak capacity periods. So OTTO had to hire extra people to provide the extra capacity. This is also shown in Figure 1. At this point in time, the call center’s activities are divided as follows: Inbound:

90% OTTO 10% SMS

Outbound:

50% OTTO 50% SMS

This success was not expected. OTTO has had to use an external call center to outsource their own OTTO-activities, in order to be able to perform the SMS assignments as instructed. They were able to make more money performing assignments for others than it would cost them to outsource their own call center activity. But this is not supposed to happen very often. The call center’s main focus is, and will still be, to work for OTTO itself.

Commentary This case illustrates the tremendous growth that call center activity is undergoing in Europe. This growth might serve U.S.-European business partnerships in areas of call center technology, management, and services. Europe is a large untapped (relatively) market for U.S. call center related companies. For U.S. companies looking for European expansion there are a couple of agencies devoted to helping. The Department of Commerce in the U.S. has a set of agencies that provide information and assistance to help U.S. businesses set up in Europe—<www.export.gov> and <www.its.doc.gov>. Many individual countries have separate agencies usually tied to consulates. For example, the Netherlands Foreign Investment Agency (www.nfia.com) is particularly interested in the call center industry. You may have seen them at those large CRM/Call cen-


ter shows. Canada, India, and Utah all have agencies to promote development and location of call centers in their areas. The issue of outsourcing is of course one that interests us. OTTO’s approach to outsource when demand exceeds supply seems to simply be good business sense. Five years ago we would have been reluctant to recommend outsourcing but today for your easy calls outsourcing makes a lot of strategic and financial sense. If your demand exceeds resources, first use self-service options to better control demand and if that does not quite do it, outsourcing certainly should be compared to expansion. “Home working” seemed to have attracted a lot of attention a couple of years ago. Call center work seems remarkably appropriate for “home working”. Somewhere along the way companies have lost their interest in exploring this option.

Chapter 30 Outbound call response CASE: R&M Key Words—outbound call response, caller convenience

Company background R&M (www.randm.nl) is a full-service market research bureau with locations in Maastricht and Heerlen. The location in Heerlen is used for the practical research part and is called R&M Data. Full-service means that they take care of every aspect of the research, from intake all the way through to the presentation of the results to their clients. R&M has been in business for almost 30 years now and has around 40 full-time employees. In addition to these full-time workers, they also make use of some 800 pollsters (enquêteurs), who do “fieldwork,” and +/− 300 freelance call center agents. The agents have a great deal of freedom in dividing their own working time. R&M has 50 call units in Heerlen. The call center is mostly occupied by outbound calling. Most of R&M’s assignments have to do with performing research among the final consumer of a client’s business. This immediately implies that most of their calling is done in the evenings. However, next to these private respondents, a small part of the research is done under professional respondents (businesses).

The problem R&M’s greatest problem is the recent decrease in respondent response. This decrease in response is due in part to the negative image of market research companies brought about by the enormous growth in telemarketing companies. Telemarketing companies or direct marketing companies are usually trying to sell something, and market research companies are only asking for people’s opinions of or experiences with certain products or services. The result is that people are less willing to cooperate in (telephone) research because they are afraid someone is going to talk them into buying something. The result of these developments is that R&M has had to put more effort in one research project to reach the same number of respondents; this implies a need for more

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calling time, a need for more addresses, and a need for more agent-working hours. This means higher costs and a longer research period.

The solution •

R&M is working hard to differentiate itself from direct marketing companies and to change the image of marketing bureaus in general. The following actions are being taken: R&M is a member of several national market research associations. Nationally, radio and TV commercials are used by these associations, to make people aware of the importance of consumers’ opinions on products and services. “Uw mening telt” (your opinion counts) is the name of the campaign that is meant to increase the response to market research among consumers. R&M is also a member of the NVMI (Nederlandse Vereniging voor Marktonderzoek en Informatiemanagement) and the VMO (Vereniging van Marktonderzoekbureaus). NVMI and VMO are professional associations with codes of conduct.

•

R&M is trying to use different introduction sentences in a telephone conversation, to make clear right at the beginning what the purpose/goal of the telephone call is. These sentences are of course dependent on the kind of research that is done. Example: when performing research for a ministry, the conversation could be opened with: “We are calling in the name of the ministry for Housing, Regional Development and the Environment (ministerie van VROM) and we would like to ask you…”.

•

Another aspect is to give the respondents at the beginning of a call the assurance that they are not trying to sell something to the respondents. It is also very important to give an indication of how long the call will take and to keep this promise. The respondents know then what is expected from them and can decide to participate or not.

•

To improve the internal training program at R&M, supervisors have been appointed to guide the call center personnel. These supervisors can listen to the conversations which the agents are having with the respondents. When there is a problem, they can help solve it on the spot. They also select candidates for a “brush-up” course in the most important skills needed. Overviews of individual agent response are now used to monitor individual performance. These overviews

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can discover problems or can be used to (re)motivate personnel when response is going down. •

R&M tries to focus on the best times to call respondents. When performing research among professional respondents, the calling has to be done during office hours. However, when performing research among individuals, the best time to call is usually at the end of the day. R&M’s policy is to try not to call during dinnertime. But this is becoming harder and harder. Dinner is served somewhere between 5:00 and 8:00 in Holland. These hours make calling in the evenings a difficult mission. However, young people 20–30 years old eat later in the evening because they are working enthusiastically on their jobs, and they do not have as many commitments as older people with families. Besides, sometimes only calling in the evening hours could yield a biased sample of respondents needed.

•

R&M pays more attention to possible accents. Many of the people that work in the call center are students who live in the southern part of the Netherlands, and speak Dutch with an accent that may sound strange to people from the north of the Netherlands. So R&M checks whether the people from the south can put on a “call center” voice or whether they can speak without a disturbing accent.

•

Another solution to R&M’s problem is to use (as much as possible) the same agents on the same research assignments. This is not always possible, however, due to the fact that the agents work on a free-lance basis. R&M is trying to get the agents to work on the same assignments when possible, because experience in the same research assignment can be an important point in keeping up response rates.

The result Whether there is a difference in response as a result of the before mentioned actions is difficult to quantify because R&M does not do research on this issue. However, R&M does detect a difference from the situation before these actions: people’s attitudes change when they know what they are up against and why they are cooperating. Response appears to be increasing again.

Commentary Respondent help for legitimate research work is important yet harder to get. The consumer backlash in the U.S. (which will be coming to Europe) includes “no call” lists. In


the no call list, consumers opt out of telemarketing and any company caught disobeying the list can be fined (of course the political reality in the U.S. has it so that telephone companies and not-for-profits do not have to use the no call list). In any case things will continue to get worse if you are an outbound caller. Actually the consumer reaction to getting calls is about as bad as potential employees’ reaction to working for an outbound telemarketer. They are not seen as desirable jobs even in the pecking order of call center work. We all have a vested interest in eliminating abusive companies from our midst. We are all painted by the same brush and so how you treat your caller is a reflection of what they expect from me. R&M’s approach to the problem is quite impressive. They have thought seriously about this and have taken pleasant yet strong steps to handle it. Their deliberate and strategic countermeasures are impressive given the low level of responsibility that we see companies in the U.S. taking. Our research is very clear that consumers will fill out surveys if they believe there is something in it for them. There is an excellent book by Seth Godin called Permission Marketing. The Internet will become the mode of choice in the future for all customer contact. VOIP (voice over Internet) is here. You should be experimenting with VOIP or at least chat functions over the Internet. If your customers are not ready for this today they will be next year. Our research shows clearly that if you give customers something for their time they will be glad to help. In the past customers answered the questions and that’s it...nothing for them. We are not just talking about money...although money is OK (if you take the money you would have to spend on respondents who do not answer and split it across all who do there is a nice bit of incentive to get people’s cooperation). But what we find is that customers don’t really want $5, they want to feel in on it. What did you find and how did they compare? What product/company are you working for and can they have a sample? What was the decision and how was it made? If you can send customers feedback (although when you tell them that you will send them this information they do not believe you, so you better do what you promise) we find they say they are more likely to do it again after feeling in on it. There is a need for your organization to support our professional associations. The Direct Marketing Association in the US and its equivalent organization in the European countries are working in your best interests.

Chapter 31 Quality monitoring of calls may not mean that the caller is satisfied CASE: E-Talk Key Words—call monitoring, customer satisfaction Most modern call centers have clear and sophisticated call monitoring. A quality assurance person listens to the call in real time and fills out an evaluation form on the computer (or paper) as she/he listens. The report is shared with the CSR and coaching or reinforcement techniques applied. These techniques assure us that calls move towards some level of quality. What they do not tell us is whether the customer has been moved to an acceptable level of satisfaction. Most call centers have paper and pencil (or PC or Web) based forms that quality control personnel fill out as they listen to the call (or a tape of the call). Common categories like listening and determining the solution, implementing the solution, tone, basic procedures are rated from excellent to needs improvement to unacceptable and an overall quantitative score given. Most call centers have not yet understood the distinction between monitoring agent performance and monitoring the customer experience. Just monitoring the conversation between a telephone service representative and the caller might leave you with the impression that a call was handled well (or maybe not) when it might actually have been a disaster for the customer (or maybe a great experience). Monitoring the agent might lead to having a call center with great agent performance but poor customer caller satisfaction.

What happens in the typical call center According to the Purdue University Benchmark Study of Call Centers, 86% of all call centers have some sort of CSR monitoring. Quality monitoring has been geared toward measuring specific agent quality. Creative and quite sophisticated methods and systems for monitoring agent performance are in existence. These systems are simply outstanding—for what they do. Some

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tape calls and Quality Agents rate the calls and those ratings go into bonus systems for the agent, evaluation and training for the agent. Some systems monitor the call in real time and CSRs can have real-time or later time feedback on those calls. But in none of these systems is the quality of the consumer experience monitored as a measure of CSR performance. Consider the customer who has tried to get through 6 times. Each time she has gotten stuck in the almost unending IVR loop. They have waited in cues each time before being abandoned or abandoning the call. The time they finally got an agent they were on hold in queue 8 minutes. Before they started talking to the agent that is being monitored they were handed off to three CSRs. Is the excellent agent performance indicative of an exceptional customer experience? Of course not.

The case of E-Talk Teknekron Infoswitch (now called E-Talk) is a company with a leading package of call monitoring systems and procedures. E-Talk (www.e-talkcorp.com) is the leading provider of CTI recording solutions for call centers. They have specialized in quality recording systems for call centers. Their autosurvey added the customer component. Callers have the option of participating in a survey before the call gets to an agent. If the caller agrees the system automatically records the call then conducts the survey and transfers answers and the experience itself. This allows association of variables in the experience to caller satisfaction.

Commentary New technology helps call centers monitor and identify problems that lead to caller dissatisfaction. These integrated systems measure how many times the caller has been transferred, how long they have waited, in addition to voice conversations and agent data screens, all saved in a data base system to be called up in total later on. It is therefore possible to not only monitor the call but trace the complete consumer experience. Quality of the call is not a measure of satisfaction (at least not necessarily). Emphasis on quality misses the point most of the time. Just what about a call leads to customer satisfaction? Work at Purdue University’s Center for Customer Driven Quality has found that the number one determinant of caller satisfaction is resolution on the first call. The implication of this is that call centers can stop all their quality measurement,

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training, and hocus-pocus and just focus on what is important to the customer (resolution on first contact), and customer satisfaction ratings will be the reward. We believe that monitoring quality will fall into obsolescence as customer satisfaction monitoring becomes more common. We really are interested in customer satisfaction and one can measure that directly. Most quality measurements are many steps removed from the customer. Focusing on customer satisfaction will clearly become the central issue.

Chapter 32 I’ve got that old “IVR” feeling CASE: Unisys Key Words—interactive voice response, IVR, self-service

When National Discount Brokers existed, this is what you heard when you dialed their 800 number: Press 1 if you are interested in the nearest store, press 2 if you have a compliment, press 3 if you have a question, press 4 if you have a problem, press 5 if you are still listening, Press 7 if you want to hear a duck quack. (And it really did.) IVR—the cost effective and automatic response systems are driving customers out of your hands. What was once thought to be the solution to overcrowded call center queues is now dreaded by consumers. Instead of creating satisfaction IVR’s are creating dissatisfaction.

The Unisys solution Companies are finding the next evolution in IVR technology. Using natural language, consumers can receive automated responses to their problems and information about a company’s products and services quickly and efficiently without the pain and horror of the IVR wait. Unisys (www.unisys.com) has created a Natural Language Speech Assistant toolkit to create a system that matches key words in the consumer response to natural voice answers to questions and problems. Companies are finding that they can shed some of the calls to automated responses by using natural language systems that skip the never ending numbered choice trees of IVR’s.

Commentary Determine the top 10 reasons why customers call. Can any of these be answered automatically? Since these top ten represent generally 75% of all calls, the ability to use a natural language based IVR system for some of these calls means that you can increase the productivity of the live agent and increase the satisfaction of customers because they get their answer without pressing 1 and 2 and 1 and 4, in a very cost effective way.

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But don’t waste consumers’ time. Weed the options down to their essence and do the most popular ones first. How many times do I need to call CVS and be asked “if you want to renew your prescription press 1”. I have been doing this for 2 years now; they are wasting my time. Assume at this point that most people are calling to renew— inconvenience the other people. In doing depth interviews with customers it is clear that they are not anti-IVR. IVR’s still have their place. In fact, IVR’s could be more prominent if they were designed better. What consumers appear to object to are programmed IVR paths that lead to nowhere, that do not have the answer required (and only finding out about it 3 minutes into the pressing) or that have no way out or back. It is very clear that there is not enough money to keep up with demand for contact. Whatever we will be able to gain in efficiency by better management and technology will not even come close to what we will need to keep up. In addition, if you are waiting for some CEO to give you an unlimited budget to grow out your centers to get ahead of demand, well, please, please, please, email me her/his name (I certainly want to talk to them and maybe work for them). I recently sat down with a CEO whose first question to me was, Unless you can help me keep up with demand don’t talk to me. What can I do? I had the answer (and unlike many other times in my life I was prepared to say it)—SELF-SERVICE. Not the IVR miserable kind of self-service but a modern natural language problem-solving self-service. Our estimates are that anywhere from 25% to 75% of the most common questions and problems can be solved to a high level of customer satisfaction using currently available self-service technologies. I just saw a demonstration of a state of the art natural language system. I heard a computer generated system “talk-down” an irate consumer and helped them solve whatever their problem was. This computer recognized the level of anger and after mitigating the anger solved the problem. At the end of the interaction, the consumer was clearly confused because she asked, am I talking to a computer or a person? In either case thank you. Wow. Eliminating 25%+ of calls requiring human contact (and more and more as the systems are designed to a company’s specific needs) will save so much money that you will do a better job with the real problems, you will eliminate the points of pain, and you will have resources to build any functionality and get any new technology you need. All this and probably increase overall customer satisfaction. This day is here. I have seen it.

Chapter 33 The burden of e-mail CASE: Internet Shopping Network Key Words—e-mail handling, automatic response, self-service

Customers want and expect quick turnaround when they e-mail your company. At best, if the customer gets no response he/she can only conclude that the company is inefficient and doesn’t care. At the worst, the customer will defect to another company or not give your company the chance to fix a problem, answer a question, or sell something. When I order at Amazon.com I get an immediate e-mail confirmation of my order. When the books ship I can get an e-mail confirmation of that also. If there is a problem I get an e-mail notice of the problem. If I have a question I have to wait only one hour for some response, even if it is “we will look into the problem.” The answer has always been within 24 hours. When I order coffee from Starbucks or flowers from Aloha Fresh Flowers I get the same quick response and reassurance. Reassurance is of course the key word here. If e-commerce expects to attract new but suspicious customers, reassurance at all stages of the process is essential.

The case of The Internet Shopping Network (ISN) ISN (www.sell-free.com) was one of the first Internet sites selling brand name consumer goods. After going online in 1994, ISN found that they could not keep up with the inflow of e-mail even if they could be committed to continuous hiring of people who would do that. It was simply too expensive. After trying to develop their own internal systems to accomplish the simple goal of responding to e-mail quickly and effectively they selected the eGain (www.egain.com) solution. ISN customers get auto acknowledgement. This simple act cut e-mail messages by 20% since it eliminated the redundant e-mail messages from customers who were not certain that their original email was received. Prior to eGain, supervisors at ISN would log on each morning and individually route the e-mail to the proper person/office. Using eGain allowed the development of simple decisions rules for automatic routing. In addition, prior to eGain customers received e-mail responses from different CSR’s each time they sent a message. With

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decision based routing, the same customers could receive e-mail responses from the same set of CSRs. CSR efficiency and effectiveness improved because eGain created many tools for the CSR. Bookmarks of popular answers, macros for “hands free” responses, automatic suggestions, and search tools help the CSR find the answer to an uncommon problem. This has accelerated response times to the consumer. The bottom line results experienced by ISN have been impressive. Hiring was decreased as efficiency was improved. Average response times were cut 50%. CSRs respond to 95% of all e-mail with 24 hours. Operating costs have been reduced 60%. ISN also reports that at the bottom line customer satisfaction has improved and repeat business increased.

Commentary For the call center, an automatic system that automatically acknowledges, responds, and checks is going to be essential. One such system has been developed by eGain (www.egain.com). Their system is a complete contact management system customized to the way your call center and CSR operate. It has automatic acknowledgement assuring customers that their e-mail has been received and a response is on the way. Automatic responses save CSRs’ time and provide quick and easy responses to the most probable questions and problems. Using artificial intelligence and keyword recognition, eGain can even deal with multiple responses to multiple keywords/questions. It also protects against automatic response loops where an automatic vacation notice or acknowledgement stimulates another acknowledgement by the company. This is one of many companies that have emerged to control e-mail access. For each of these companies the point and the path are clear. Consumers e-mail a company because they are interested. Consumers expect to have some response within 24 hours. Beat that expectation and consumers are pleased. Miss that expectation and feed a developing image of a company that does not care. What is interesting about this case is how a simple issue like e-mail turns out not to be such a simple issue. There are networks of connections between and across the systems of a company on the feeding of and caring for customers. Sometimes when you change one others change for the good. When the one you change is the fundamental foundation for the whole business, everything may change for the good.


The Internet Shopping Network is no longer with us (in its original form). After being bought by the Home Shopping Network it died a fast death and then was sold to some unknown group. What was supposed to be the largest mall in the world (on the Internet) fizzled. And therein lies the tale that is important. From all of our observation they had excellent customer contact. They were available 24/7, and they had excellent customer contact by phone and the Internet. They had everything they needed for success except one thing…customers. If your core business is not compelling, then you will not be selling. If customers do not know about you, you will not be selling no matter how compelling your contact infrastructure. It doesn’t matter if callers got in on the first ring. It doesn’t matter if the call center is in the top 3 percent of everything we measure call centers on. If your core business is not compelling, it is not selling. The ISN is an object lesson in opposition to the idea that “if you build it they will come.” The contact center is just part of an overall strategy that starts with making customers aware that you have compelling products and services they want and that they (the customers) should give you their money for it.

Chapter 34 Taking the error out: Web based customer relationship management CASE: Thomson Consumer Electronics Key Words—call center automation, expert system, self-service

The issue of how we communicate with customers is complex. The 800 number based customer relationship management leaped over mail based CRM because of its immediacy. Consumers had a question, so they called an 800 number, spoke to a trained expert in answering questions, got the answer and went merrily on their way, satisfied and loyal to the company. There are only two problems with this: 1. It is very expensive. 2. It depends on people.

No matter how much training or how much scripting has been developed there is still error in the system. In a 500-person call center there are 450 different ways that the same question and problem is being handled. The answer and problem resolution depends on expensive, moody, inconsistent, forgetful, and unmotivated service representatives (sometimes).

Thompson Consumer Electronics Thomson Consumer Electronics (www.thomson-multimedia.com) has begun a case based expert system approach to CRM that will allow CSRs to be more consistent, more effective, more efficient, more competent and more productive. And maybe more importantly they are setting themselves up for the inevitable and unstoppable move toward a web based system of customer relationship management.

The system The product is called Knowledge Base by Inference. It allows the breakdown of any call or issue into a series of questions developed by the experts for that particular issue 183


and problem. These are the questions and associated answers that the very best expert would go through to identify the problem or issue and provide an answer. Company experts arrange the questions, their loops and leads, and answers. These questions and answers are displayed on the CSR’s screen as the CSR keys in the code/key words in a description box. As the CSR works through the questions, action results appear on the screen with accompanying probability levels. These probability levels reflect the confidence the experts have programmed in that the problem has been correctly identified and the answer is now clear. Companies can program solution response at any level of confidence. Let us say that after a series of questions the answer appears with a 90%+ score. Click on that and the CSR has the answer to the problem and communicates it to the customer. Let’s look at an example: Screen one shows the CSR identifying the problem as a “sound problem” with a VCR. The questions that appear are the 4 questions that need to be asked (identified by the experts) in order to arrive at the problem and then the solution. The CSR does not have to guess or rely on memory. The CSR does not have to ask inappropriate or irrelevant questions. The CSR appears to be an expert because the best experts have written these questions. Screen two: Following a question about whether it is sound and picture the CSR is prompted to ask about whether the problem is tape specific or general. Screen three: This screen shows that the consumer has tried another tape and the problem of having picture but no sound persists. At this point the Results screen shows that the most likely problem is a loose cable connection.

Benefits The benefits of this case based expert system approach are clear. The most common problems can be easily identified. The experts in your organization can script the best approach for dealing with each of the common problems. These scripts tie into followup questions and tie into solutions. The CSR does not have to guess. The CSR does not have to be trained for solving problems only or handling the system. The CSR will no longer be giving bad advice. The CSR will close more calls on first contact. The CSR will be handing the customer off less frequently. The CSR will feel confident, enabled, an expert himself or herself, and have less stress, which will result in lower turnover.

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Results Thomson Consumer Electronics has begun implementation of this system. In one test of the system talk times for a complex digital satellite system have been reduced by 33%, the average 12-minute call has become an average 8-minute call. This is a bottom line savings that pays for the system very quickly. Probably the greatest benefit of this system is that it is easily transferred to an Internet site. The customer can work through his or her own problems. The case based approach to customer relationship management is the precursor for phasing out many costly 800 number calls and allowing customers to answer their own questions and fix their problems. The expert system allows TRSs to better serve customers. It builds their confidence and allows CSRs to become better at serving a much broader range of problems and questions than they were before the system.

Commentary It still amazes us that companies don’t understand the nature and benefits of an expert system approach to solving problems. We visit centers with very well trained CSRs who idiosyncratically help customers. There is nothing wrong with idiosyncratic and personality driven problem solution and information giving but it has the potential to lead to very inconsistent treatment. More importantly it has the potential to leave dissatisfied customers. The essence behind expert systems approaches is that you have phenomenally talented individuals working for your call center. These people satisfy and solve customers’ questions and problems better than others. The point of expert systems approach is that you are packaging and bottling that expertise to share with all. If someone found the fountain of youth you would hope they would bottle and package it and share it with others. By studying and analyzing the manner in which the “best” handle calls and solve problems you can package and bottle that. Their questioning and solutions can be turned into programs for the CSR to use when he or she identifies a particular problem. Do CSRs stray from the programmed script? Of course. But at each step of the way the probability of a solution can be determined. At each step of the way you are more assured (than you are now) that customers are getting consistently excellent information and solutions and treatment.


The real power of an expert system is the potential for self help in a web based interaction. Dell’s use of forums and knowledge databases eliminates potential calls to their call center. Whatever that percentage actually is, it would be increased if consumers believed that they could solve their problem. Can you guarantee that your webbased expert system can solve a problem? Push the people with this problem to the web. Dell has actually taken this one step further. By creating and maintaining forums Dell helps consumers solve the problems themselves. Consumers ask other users questions that they cannot find answers for in the knowledge base. Other customers answer the questions and solve the problems. Dell takes these solutions and turns them into answers on their knowledge base. They also use the information in the design of future projects. In talking to call center managers and agents there is a fear that the CSR will begin to feel like a robot automatically following a script, and CSRs fear they will enjoy their job less. The result seems to be the exact opposite. Not only do CSRs not feel like robots but also the rise in their confidence level is significant. That rise has some very positive side effects. Now they know they can solve the problem well—no surprises, no anger on the part of customers. For the company the real benefit comes when you can siphon off 20% of your callers by shifting them to a web based solution. “Your call is very important to us but all our agents are busy helping other customers. If you have a problem with sound on your computer please go to our web site and the sound self-help area. We are 95% certain that we can guide you through the solution to the problem and if not we will give you a special phone number to call that gets you through right away, no waiting.” Twenty percent (at least) of your base will try this and if you do it well, and it works, they will be eager to try it in the future.

Chapter 35 Controlling your call volume and call time CASE: Yellow Pages® Direct Written with Jeff Woolcock and Tim Wade Key Words—call routing, waiting time Yellow Pages® Direct is an Australian national operator assisted business referral service. Hours of operation are 7am to 11pm, 365 days a year. There are 2 call centers, Box Hill in Melbourne and Upper Mt Gravatt in Brisbane. Call volumes are currently around 140,000 per week. The average call length is 75 seconds and the target is to answer 90% of all calls within 25 seconds.

Problem When incoming calls were queued the caller would typically hear music and regular recorded voice announcements (RVA). When the call had progressed through the queue to the point of being delivered to an agent, the music and RVA would cease and the caller would hear a ring tone while the agent’s phone was ringing. Agent answer times would typically vary between 2 and 4 seconds before either the agent answered the call, or the call was re-directed to another agent. In such a high volume environment, small savings in transaction time potentially extrapolate to large cost savings in both staff and communications costs. The issue of delays is potentially very significant in this environment because the calls may come from anywhere around Australia yet the caller only pays the cost of a local telephone call and the organization bears the additional telecommunications costs. The challenge, therefore, was to both control and reduce the time it took to answer each call once it was delivered to an agent.

Solution The opportunity existed to replace manual call pick up with “auto call drop in” (ACDI). ACDI essentially removes a level of agent control by delivering a new call to the agent immediately after each call is completed. In a sense, the agents are “force fed” their workload.

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Introduction of ACDI was anticipated to reduce ring time by an average 2.75 seconds. Over the course of a year, utilizing the current 140,000 calls/week, this would equate to 5561 hours, or 2.85 full time staff. The benefits predicted included increases in productivity, better service levels, a more consistent service to callers, a reduction in the risk of repetitive strain injury (occupational overuse syndrome) and cost savings. The potential disadvantages included increases in agent occupancy beyond recommended industry levels, increases in agent stress levels or burnout, and possible increases in attrition rate. The implementation was carefully staged such that a pilot “auto call drop in” with selected agents occurred. Agents were selected from a single team and the pilot monitored by a single team leader. The team operated during the core business hours when incoming calls were most frequent. The agents selected were the more experienced of the team and were considered high performers. The pilot group performance was carefully monitored and feedback from the agents sought. Then ACDI was piloted with an even larger group from which feedback was sought, and full implementation occurred on majority acceptance.

Results Figures 1 and 2 show the impact before and after the major May 7 1998 implementation of ACDI on wait time and an associated cost saving.

Commentary The implementation saw an immediate decrease in ring time which corresponded to a sizeable cost saving. While some staff did not like the incoming call tone that sounded through their headset to signal a call being delivered, others found it a more efficient means of using available technology to make their job easier. The cost saving allowed additional staff to be recruited which in turn further increased service levels and thus reduced occupancy. Occupancy rates obviously have an impact on stress levels so this aspect must be interpreted positively even though there may not be measurements to support this. As far as attrition was concerned, it is difficult to attribute the implementation of the ACDI initiative to staff departures without a thorough controlled study, but attrition rates did not increase or decrease significantly over the change period or shortly thereafter.

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It costs money, real money, to lower the number of rings before picking up. You need to hire more staff (if you want to keep quality and satisfaction high). You need to determine whether it is worth it.

Figure 2. The introduction of ACDI on 7 May translated into significant cost savings. This chart shows the daily cost of just the ring time of agents’ phones halving after ACDI implementation.

Chapter 36 Customer satisfaction and call centers in Australia Written with Jame Cummane and Paul Conn Key Words—customer satisfaction, human services

Despite the ubiquity of call centers there is very little known about what determines caller satisfaction. In Australia, the largest call centers exist within the human services arena. For service organizations call centers represent effectiveness and efficiency. More customers can be serviced at any one point in time, and, with customers taking at least part of the responsibility for the streaming of calls (by selecting a preference from a predetermined menu using the telephone keypad), fewer staff are necessary. Fewer service centers with less space for customers should be needed, leading to a concomitant reduction in management staff and further cost reduction. (Alternatively, more, but smaller, in-person service centers with less staff might also be provided.)

Disadvantages of call centers Notwithstanding the finding about perceived service quality of call center contact, customer satisfaction levels with face-to-face services have been found to be significantly higher than with call center services in the human services arena. The reasons for this are not always clear but it is possible that call center technologies may not be well accepted in some cultures. Even if the “culture” has adopted telephone or other technologies and there is no waiting for the customer, not all customers may wish, or like, to interact with services providers via modern technology. For example, research in Australia has shown that up to 60 percent of customers still prefer to deal in-person rather than via telephone. A further disadvantage may be the difficulty in building customer relationships without face-to-face interaction. It has been argued that the voice is “leakier” than the face—meaning that our true emotions are more likely to be picked up through voice only, so, if this is correct, a further level of complexity (or possible opportunity) is created for managers of call center services.

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The human services context The context for this study is a major government human services provider. There is very little published research on the experience of customers with human services (or public welfare) agencies so there is limited opportunity to compare satisfaction with the call center mode with other methods of service delivery.

The organization: Centrelink Centrelink (www.centrelink.gov.au) is a one-stop shop that provides services in the following areas: retirement; employment; youth and students; families and children; disability, rural and housing; and multicultural services. Its activities include assessment, information, referral, payments and brokerage in human services. Seventy-eight different payment types are managed along with 300 million contacts per year with over 5 million customers. In addition to 23 call centers staffed by approximately 3,000 people, it has approximately 400 service centers and another 20,000 full-time equivalent staff across Australia. Objective measures of the operation of the Centrelink call centers indicate that in 1998–99, 17.87 million calls were handled by the customer service officers in call centers, averaging 67,942 calls per day. It should be noted that this does not include those calls successfully completed or terminated by the Interactive Voice Response Unit, which amount to approximately 5,000 calls per day (or 1.21 million calls per year). During 1998–99 the average wait time was 205 seconds and the average talk time was 232 seconds (Centrelink Call, 1999). The most common complaint about the overall service provision of the agency was busy telephone signals from the call centers. There is a need, though, to balance the customer perception of busy signals with the reality of accessing the call centers. For example, in April 1999, a period of very intense demand, nearly 66 percent of customers successfully contacted the call center on their first call attempt; and overall 77 percent made contact in three or less call attempts.

Results Although the difference in ratings between satisfaction levels with call center services and office-based services was statistically significant for practical purposes, the difference was quite marginal ( x = 5.37 versus x = 4.90). The range of average responses across the variables was 4.2 to 6.0 on the 9-point scale. The lowest average rating was for “respectfulness of staff” and the highest rating was for “staff friendliness”. In terms of


where most improvement was needed, customers indicated a desire for improvement in access once they had been connected to the recorded message ( x = 6.8) and improvement in accuracy of information ( x = 6.6). Improvement in access (once connected to the recorded message), however, did not reveal itself as a key variable affecting the global measure of call center satisfaction. Important areas arising from more sophisticated statistical analysis of the data (on satisfaction) were expectations of quality service, rating of the staff and satisfaction with the service center. An additional consideration was the impact of customer satisfaction on loyalty: 43 percent of customers indicated that they would try an alternative operation if one became available and 36 percent indicated that they were unsure about whether they would try another provider. In attempting to determine which variables most affected loyalty a number of analyses were performed, but an insufficient amount of the variance could be accounted for, e.g., a multiple regression which considered variables such as access, quality expectations, satisfaction with the call center service and rating of staff revealed only one significant variable—rating of staff, but this only accounted for 4 percent of the variance. Figure 1 plots satisfaction level against loyalty. Those who indicated “yes” were those who would switch to another provider should one become available. It can be seen that there were large numbers who were unsure as to what they would do faced with a choice, probably because they did not have access to information about switching costs (including whether any less value might result in terms of confidentiality, delays in payments etc). Qualitative data on what callers valued and what they found to be irritants is displayed in Table 1 below:

Table 1: What is valued and what irritates when dealing with call centers Values reliable follow through respect and mutual trust understanding and caring staff prompt efficient service easily accessible open and effective communication personalized/individualized service reliable information

Irritants lack of personalized/individualized service having to wait on the telephone uncaring communication getting the “runaround” the complexity of the telephone system unreliable information and service

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Figure 1: Call center satisfaction and loyalty

Commentary The data point to a number of interesting things. First, customers are less satisfied with the call center service operations than they are with the more traditional office based (inperson) services. There is no clear pattern between loyalty and satisfaction. We have grown up in this industry believing that there is a one to one relationship between satisfaction and loyalty—there isn’t. This does not mean there is no relationship—only that we cannot go on assuming that satisfied customers always repurchase and dissatisfied customers switch. The qualitative data shows quite clearly that the values and irritants provide almost mirror images of each other, which provides insights for improvement efforts. The values, which were attributes customers envisioned in a “best-in-the-world” call center, were not very different from what would be expected of any human services operation. None of the values related to the technology whereas the complexity of the technology was listed as an irritant. Having to wait on the telephone was also a major irritant.

Chapter 37 Private insurance call center sales CASE: PhoneDirect Written with Paul Inkster Key Words—capacity planning, outsourcing, performance measurement of call centers

Private insurance call center sales Prior to 1992, a government insurance commission (in Australia) provided all inbound and outbound call center functions servicing both the public medical system and its private medical insurance clients. Although the public insurance cover, being available to all citizens, required no acquisition or awareness programs, the private medical insurance company had different marketing needs. However, the management of the two functions did not vary. There were no proactive measures in place to lift the reach and awareness of private medical insurance in the marketplace.

Problem At this time there was no distinction in customer service in areas such as: •

New member sales/enquiries

•

Existing member sales and enquiries

•

Media effectiveness monitoring

•

Anti-attrition processes

•

Customer satisfaction programs.

Additionally, with the call volume activity increasing relative to the burgeoning popularity of private medical insurance at this time, callers, regardless of their member status or call intention, were subjected to:

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•

Lengthy delays in call answer times

•

No online facility for call back requests

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The end result of such a situation was simply that the management of the private customer relationship was: •

Ineffectual

•

Costly

•

Lacking control

Solution As part of an overall renewed sales focus, the client sought an outsourced facility with which to partner in the establishment of a dedicated Private Insurance Sales and Service Center. All new member sales, anti-defection activity and member upgrade programs were centralized external to the existing call center activities with the launch of a nationwide advertising program designed to lift awareness and acquisition. The following call traffic and customer service/sales processes were implemented: •

Dedicated Customer Service Operator Team for: • • • • • •

New member sales Member upgrades/cross selling Anti-attrition and customer retention programs Alliance programs New product/Service launch Rate increases

•

Performance Based Sales Management

•

Key Performance Indicator control in: • • • • •

•

Call answer times Call resolution Escalation procedures Sales to call conversion rates Occupancy levels

Qualification Procedures designed to: • • •

Recognize sales opportunities quickly Qualify sales and convert prospects Enable customer service officer (CSO) personnel to recognize nonsales calls


•

Training & CSO Education Processes: • • • • •

Product knowledge revision New product training Sales based training Objection handling Customer service techniques

All processes were designed to highlight a focus on member sales and satisfaction in all types of contact environments.

Results The key measurement of the solution was the increase in sales conversions with the introduction of the dedicated call center. With all management focus on reducing general inquiry and information requests (non sales calls) sales conversion rose markedly. Performance Criteria was implemented by the client on the call center that dictated that the outsource contract was conditional on a 25% sales conversion rate being (a) maintained and (b) improved. This type of contract basis forces the call center to develop mechanisms that shift the focus of delivery from a cost center to a profit center.

Chapter 37 Private insurance call center sales 197

Commentary The case shows that effective performance management ultimately contributes to bottom-line improvements. There is no magic here. The need to define goals then tie those goals to some strategies and then hold everyone accountable is not new. We have seen this as MBO, strategic planning, and now roadmapping (for a good overview of how to roadmap and see some examples go to http://roadmap.ecn.purdue.edu/CTR/default.htm). Whatever you call it to set a goal is to drive. To measure is to know. And to know is to earn. Simple, straightforward, but very effective. Period.

Chapter 38 Capacity forecasting CASE: ABN-AMRO Bank Key Words—forecasting, self-service

Company background ABN AMRO Bank is a long established, multifaceted and prominent bank of international reputation and standing. ABN AMRO is the largest bank operating in the Netherlands and worldwide ranked as the 11th largest bank. ABN AMRO has a presence in 74 countries. Using its worldwide network, the bank provides universal banking services consisting of commercial and investment banking products to corporate nationally and internationally operating clients as well as personal and private banking customers. In 1995, ABN AMRO started a call center in Nijmegen for the Dutch market. The first aim of this project was to increase the service through telephone towards the customer. ABN AMRO started the call center with around 40 agents. The reason to start in this mid-sized city was primarily in the favorable labor market conditions in the east as opposed to the west of the Netherlands. At present 500 agents are operating in Nijmegen and the number of service functions has increased since. Today the ABN AMRO call center operates among others as a telephone bank office, customer service, telemarketing and an investor service-line to handle telephone requests from investors in the stock markets. In this case the investor service-line will be highlighted.

The problem In the case of the investor service-line it is important to know the amount of calls to be expected. In case of a volatile market, many investors will call the call center to either buy or sell shares and stocks. However, the planning and control department of the ABN AMRO call center faces the difficulty of predicting the volatility of the stock market. Next to the difficulty of forecasting, the planning department has to take into account the rules and regulations regarding the banking privacy and secrecy. The prob-

198

Chapter 38 Capacity forecasting 199

lem is to forecast the number of agents of an investor service-line to maintain a high service level.

The solution If an investor calls, the agent will take the order, enter it in the system and the order is executed. Each subsequent call takes more time because the agent repeats the order to ensure the correct understanding of the order. Before an agent is authorized to take calls and execute the orders, the agent has undergone an extensive training program. ABN AMRO uses historic telephone data to forecast the number of agents to maintain a high service level. Past data are smoothened to calculate an average that is used to forecast the number of agents necessary on a particular day of the week. The peaks and dips in actual call volumes are evaluated and the causes are used as predictors to forecast future call-volumes. However, there is no usable indicator to forecast the call-volume in the case of a heavy fluctuation in the stock market. If the stock market is fluctuating heavily, the planning of the number of agents needed to handle the higher call-volume can be met at best one day later.

Figure 1. Forecasting agents ABN AMRO call center. Number of agents is fictional.

If such fluctuation occurs, ABN AMRO meets the demand for agents by allowing overtime for its agents, and recalling agents in training courses. In this case out-


sourcing is no option, because during the handling of the order the privacy of the investor and the bank secrecy is at stake. For the day-to-day handling of orders for the stock market the forecasting system is operating satisfactorily. Forecasting is very difficult in times the stock market fluctuates heavily. To cope with this scheduling problem ABN AMRO is now in the process of orientation on a computerized voice response system (VRU-system) to take order calls. Secondly, the bank is exploring the opportunities of self-service for the investor line. ABN AMRO has developed a software package “Homenet” that is used by clients for the day-to-day banking transactions. Homenet includes the possibility to enter stock market transactions by the client. Both solutions implicate a high level of “self-service” by the client instead of using the call center agents. In this way the call center’s workload in peak times would be decreased by shifting orders to channels where no human interaction is needed so fluctuations in stock-orders can be more adequately met.

The result Apart from the challenges within the investor service-line, ABN AMRO faces an increased call-volume in all service functions. While there is a feeling that both VRU and self-service offer potential solutions to the capacity problems, it remains hard to measure the effect of solutions as the number of contacts has increased enormously for all service functions.

Commentary While ABN AMRO does not believe self-service to be a solution, the fact is that it is a solution. Our research shows clearly that 25-75% of all contacts can be done by the consumer. Executives don’t seem to like self-service. This is probably because of the poor experiences we have all had in self-service experiences. The fact that self-service has been bad does not mean self-service has to be bad. The technology exists for good self-service. But—and I emphasize but—the technology is not the solution. The selfservice solution lies with the customer. What does the customer want? How do you give it to them, self-service? And here is the most important thing: how do you communicate that you have a self-service opportunity for this particular question. Consumers do not want to waste their time. Given the choice they will choose the non-selfservice because in the past they have been burned. You probably have one chance to make a good impression so make sure you have it right. Then when consumers try self-

Chapter 38 Capacity forecasting 201

service it works. They will use it again and tell their friends. Get it wrong and they may never try again: You only have one chance to make a good impression. Self-service saves you money so incent the consumer...give them a couple for using self-service. Make it easy to use self-service but difficult to call. Hide your number. We have encouraged person to person contact by phone by making the number the easiest alternative found. If you have good self-service make that easy and the phone number difficult. Self-service is the only way. We cannot keep up with demand. The growth and need for customer contact will continue to outpace our budgets. By moving 50% or one-half of your contacts to self service you have more time, energy, and resources for the more difficult problems. Your CSR’s time is being wasted on simple things now.

Section 3 Strategic Management of Call Centers

Strategic management involves managing the total organization to create the future,1 rather than just letting it happen. It includes the internal elements of the organization, such as style, structure and climate, implementation and control as well as aspects of the environment. Strategic management is about success—not just profit—as it applies equally to public sector organizations that might measure their success in terms other than profit.2 Strategic management and the pursuit of competitive advantage have driven the decision to establish and to continually update call centers. For a long time it has been argued that customers have wanted better access to the companies from which they buy their products and services3 and, even though there are numerous channels available, the call center has become the major channel for most customers and most firms over the last decade. To gain some concept of the size and the importance of the call centers, researchers4 have indicated that as much as 70 percent of a company’s interaction with its customer is through call centers. Several forces, including the introduction of toll-free numbers (making access to companies cheap and easy for consumers), advances in telecommunications (making it possible to deal with large volumes of calls at a reasonable cost), and increasing competition, have converged to make call centers an important strategic force for business5, but they still must be managed strategically and within the strategic context of the overall business.

1

Hussey, D. (1998) Strategic Management (4th ed), Butterworth Heinemann, Oxford. Although not uniformly used around the world, some of the largest call centre operations can be found in the public sector. For example, the Australian public sector agency (Centrelink) now has 28 Call Centres with 4,680 staff handling about 22.5 million calls per year. These call centres are located around the country and networked into one virtual site that is managed centrally. 3 Anton, J. (2000) The past, present and future of customer access centers, International Journal of Service Industry Management, Vol. 11, No. 2, pp. 120-130. 4 Gilmore A. and Moreland, L. (2000) Call centers: How can service quality be managed? Irish Marketing Review, Vol. 13, No. 1, pp. 3-11. 5 De Ruyter, K. and Feinberg, R. (2000) Introduction, International Journal of Service Industry Management, Vol. 11, No. 2, pp. 118-119. 2

203


Some call centers have resulted from re-engineered or reorganized service production processes. Other times they have simply grown “topsy-turvy” without clear strategic thinking and have not been integrated into the core of business activities. They have been seen as adjunct to the mainstream of the business, and in some cases, the activities have been outsourced because they have not been perceived to be part of the fundamental business. How wrong this can be! Sometimes the establishment of the call center has been simply to save money without any further thought as to how a call center might contribute beyond this. This is not to suggest that the cost savings might not be worthwhile. Private business and government agencies are reluctant to be precise about the size of cost savings, but just the return on investment from marketing from call centers has been suggested to be 20 percent or better.6 Cost ratios of 2:9 have been suggested in respect to telephone banking versus face-to-face banking, and in other industries less than half the staff numbers have been necessary once the change to call centers has occurred. Others have asserted that, at the median, paper transactions are five times the cost of call center transactions.7 It is quite easy to see the savings if one considers an organization such as the Australian government welfare organization Centrelink (chapter 55) that needs to provide services to its 6.8 million customers in 22 different community languages: it is just not possible to provide people with these language skills in every office across the country but they can be provided centrally by multi-lingual call center services. There are issues other than cost savings that should be considered in the strategic management of call centers. In this section we will uncover some surprising lessons and challenge some commonly accepted call center management myths around what actually matters. We will summarize the major areas of customer complaint with call centers, discuss some of the issues in measuring services quality, and review the research that may assist managers to improve on the services offered in call centers. The possible effects of moving from a business strategy that focuses on in-person contact to one that uses various types of automated and other call center strategies will also be raised. But first, we will start with the issues that need to be considered in deciding what type of call center you will have, the associated structural issues and choice of location.

6

Prabhaker, P.R., Sheehan, M.J. and Coppett, J.I. (1997) The power of technology in business selling: call centers, Journal of Business & Industrial Marketing, Vol. 12, No. 3/4, pp. 222-233. 7 Kinder, T (2001) The use of Call Centres by local public administrations, Futures, Vol. 33, pp. 837-860.

Section 4 Strategic Management of Call Centers 205

What type of call center should you have? Call center operations have become the norm in most sectors such as retail, telecommunication, banking, insurance, mortgage lending, utilities and travel. They can facilitate sales, bill paying, transfer of funds, credit authorizations, reservations, and provide a range of technical assistance on products and services. In Australia, call centers have reduced branch banking activities to such an extent that only one in ten transactions is now carried out in a physical bank.8 The strategic possibilities for call centers are enormous both in the government sector and in the private sector. Call centers predominantly have “inbound” or “outbound” functions, but some have combined functions. For incoming calls, most call centers are “front-ended” with an interactive voice response (IVR) system that prompts the caller to direct his or her own call route with specific questions or choices, although many still require the caller to press keys on their telephone keypad to navigate their way through the process. Not all calls result in contact with a live person (known variously as an agent, operator, customer service representative, or worker in call centers). Speech recognition systems provide information directly without the intervention of a live agent e.g., in the U.S., it has been found that more than 70 percent of callers use a speech recognition system to get train timetable information without talking to an agent.9 It was actually a little surprising to find that in some Australian research conducted for Centrelink that some customers actually prefer not to interact with a live agent by telephone— some people argued that the computer is unlikely to lie or make mistakes so a computer-generated voice was preferable to an agent who was perceived to be fallible! Most studies, though, show that customers like to be able to speak to a real person with one study indicating that customer satisfaction indicators were down 28 percent when only self-help was available compared to services combining self-help and live support. Moreover, it has often been reported that about 70 percent of internet “shopping carts” are abandoned before completing the sale, which tends to indicate that customers need more than automated solutions. Similarly, IBM has found that about 70 percent of customers who make a purchase on the web contact the call center to complete their orders

8

Barker, G. (2001) Are we talking our way into trouble? The Sunday Age, 28 January, p. 7. Maselli, J. (2001) Speech recognition cuts Amtrak's Call Center costs, InformationWeek, 3 December, p. 24 9


because they still want to speak to a person who is an expert to make sure that their decision is the correct one.10 The basics of a call center should not be difficult to decide, although rapid changes in technology may still make this a somewhat challenging task. The objective should obviously be to meet customer needs. Customers generally have one of four basic needs when communicating with a company: they want to ask a question about a product such as its price or where it can be purchased; they want the company to do something such as take an order, change their address, send them some information; they have a problem with a product and need guidance such as technical support; or they have a complaint about the product. The real issue is the level of service that is going to be provided—basic or high level (or somewhere in between the two)—and what level of human interaction is to be provided. What will it cost and how will it be funded?

What additional contribution might a call center make? Increasing uses have been found for call centers. One different reason for establishing a call center was that of Citibank in its Philippines business. It wanted to service more customers but was constrained by the government banking laws that permitted the company to have only two branches, so a call center was developed to enable access to, and be accessed by, more customers to overcome the problem.11 One of the newer areas of call center operations is in health, where nurse triage has been found to be a very effective use of call center technology. This provides for a patient to speak to a nurse or other healthcare practitioner who can either direct the patient to a doctor, recommend an over-the-counter product or issue a prescription, or be told to report to an emergency room at a hospital. Many creative ideas are evident in our case studies. For example, call centers can become profit centers in that they can become sales centers, and in fact can even sell or recommend products for other firms that might be linked to your own product, e.g., GE recommending soap powder (chapter 44). They can prevent problems—again, the GE example is interesting in that the packaging recommends that the customer con-

10

Turek, N. (2000) Call centers: Here, there and everywhere, InformationWeek, Vol 23, No. 809, pp. 168-171. 11 Oliva, E.L.G. (2000) Call center outsourcing becoming popular in Philippines, Newsbytes, 9 August, p. NWSB002200D


tact the call center before installing their product in order to prevent problems from arising and to increase customer satisfaction (chapter 51). We have made some further suggestions as to how this service might be enhanced even further. The case of Resorts Condominium International, or RCI, in chapter 52 shows how a call center might add value by increasing the share of the customer; infomediaries take us to the next revolution with AudienceOne showing how individualized publishing may be controlled by call center agents (chapter 50) and Capital One Financial Corporation illustrating how selling may be personalized to the habits and needs of individual customers (chapter 49). Call centers are not just being used for external purposes. They are also being used by large organizations for internal purposes to deal with basic staffing enquiries such as compensation, benefits and other employment conditions. The future is likely to bring much greater uses of this type of technology and service delivery, even in areas that have essentially remained unchanged for centuries, such as that of the medical consultation. It has been suggested that primary care providers and specialists will only see patients in their offices when absolutely necessary and that nurse and patient monitoring will be conducted from the electronic physician office, the call center.12 People expect service 24 hours per day seven days per week now so the nurse triage provides for this expectation. Given the volume of calls handled, call centers can also become possible bases for market research as we can see from the case of the GE Answer Center in chapter 45. Managing churn is another concept that is certainly strategic and can be handled by call centers that are appropriately set up—see the Vodafone case in chapter 41.

Structural issues One of the criticisms of call centers is that they have been too limited in their operations and not integrated into the mainstream of each business. This may be because they are located remotely or because the top management simply allow their managers and supervisors to operate in silos, or stovepipes, rather than seeing the business as a “whole.” Until quite recently then, the location of the call center was based on the availability of advanced telecommunications (suitable for data and voice and capable of hosting intelligent network systems), the cost of telecommunications, the cost and

12

Stier, R. (1999) The medical call center: A strategic marketing resource for the future, Marketing Health Services, Summer, pp.25-28.


availability of suitably qualified and skilled labor, financial incentives offered by governments of various countries (such as refunds for training of staff, incentives for building in rural areas and the provision of state run training programs), suitable living environment to attract key staff, property costs and access to transport systems. This meant that call center operations were often located in distant locales where there was insufficient management attention. Some firms have seen the folly in this and have placed the relevant call center operations close to the manager responsible for the product. This sends clear messages to both employees and customers that this is an important aspect of the business. At the Brazilian airline TAM, executives even take turns at working in the call center13 which also sends clear messages to everyone that this part of the business is important and highlights the emphasis on service delivery in this area. However, even when they are co-located or reasonably close, more often than not, call centers have not been fully integrated with the information streams and processes of the business.14 This separation of call centers from the mainstream business has often meant that the full value of call centers has not been realized. Even though most banks in the USA, for example, view call centers as the nucleus of their customer service operation, most still see the call center as a cost center and not as a profit center, and few firms see the call center as providing a competitive advantage.

Location As we know, call centers allow labor-intensive face-to-face interactions to be replaced by telephone and avoid the need for the service to be located proximal to the customer. This means that activities carried out in small offices distributed widely can be concentrated in one site, even remotely from the customer, perhaps even in a different country. This creates cost saving by the rationalization of property portfolios, making more effective use of space, reducing capital costs by using technology more intensively, reducing management and supervisory costs as some of the technologies can assist in monitoring of performance, and fewer people are likely to be needed to produce the same level of output. But, how should a firm decide on the location for its call center?

13

Arussy, L. (2002) Don't take calls, make contact, Harvard Business Review, Vol. 80, No. 1, pp. 16-17. 14 Gross, T. (2001) From call center to e-contact center, Communication News, Vol 38, No. 1, pp. 58-59.


The Mercedes-Benz case study in chapter 39 provides an example of the criteria that were considered in decision-making. These included labor laws and regulations, the availability of native speakers and the operational costs. Even though there are often advantages from a number of management perspectives, including HRM, of colocating with either a production plant or head office, as this provides other career opportunities within the business for call center workers, and tends to lessen silo management and facilitates the integration and optimization of the value of the call center, in this case, co-location did not win out. In addition to languages spoken, and typical accents of the local people, the availability of labor is an important consideration, as is the unemployment rate (turnover is likely to be lower when the unemployment rate is higher). However, the availability of government incentives to locate in particular countries and particular regions within countries can also make a significant difference. The consolidation of call centers has been found to create savings, e.g., American Airlines has been quoted as saving over US$2 million per year when it established its pan-European call center in Dublin, allowing it to close five other sites. Although the technology makes location almost irrelevant, location does, however, matter to the customer. If customers can have their question answered or problem solved on the first call it is probably less important but when there are difficulties or the operator has no idea where they live and cannot even pronounce the name of their city or town (and this is relevant to the transaction) then customers often become annoyed. This was an unexpected issue raised time and again by customers of a large government agency in Australia (Centrelink) who seemed to feel that people from another state or area could not possibly help them in the same way as a local person who they could identify with. (This, in some respects, is related to the customer’s lack of understanding about how the technology actually works and the fact that all agents can tap into the customer’s record, but it is still important to the customer and should not be dismissed as a non-issue from a management perspective.) This same issue might arise in respect to the use of outsourced call center operations, especially if it becomes known to the customer that they are dealing with a person at long distance. Outsourcing can be a complicated arrangement but when choosing a provider it is recommended that cost savings not be the only criterion used and that customer satisfaction (performance) be the basis of any contract.15 An out15

Swerdlow, R.B. (2000) Placing value on customer satisfaction for call centers, Simulation Series, Vol. 32, No. 4, pp. 194-198.


sourcing strategy, though, can result in cost savings because there is no need to invest in the expensive and ever-changing technology, and these outsourced services can purportedly match the peaks and troughs of telephone traffic better when offering different services.16 (The Proflowers case provides alternative ways of handling this issue; see chapter 48.) Generally business-to-business focused call centers will be operated within firms, but if they are business-to-consumer focused there is 70 percent likelihood that these will be outsourced.17 Robeco provides an interesting case in that it provides an outsourced reception for new enquiries but provides existing clients with direct numbers depending upon the service they require (chapters 40, 42). SalesForce, an outsourced call center operation, aims to overcome the problems inherent in such operations by consciously working on being a partner to the client organization and an extension to their business (chapter 56). For example, agents treat every contact with customers as a potential sales encounter, and the client’s internal technology department monitors the integrity of what they do. Decentralized locations across time zones have been found to be useful to help spread the call loads in peak times (which are different at the same time across time zones), whereas offshore locations have been used not only to provide services across time zones but also to reap the benefits from lower staffing and infrastructure costs. For example, India provides significant call center outsourcing services to the USA, and India also provides the second largest outsourcing market for call center services after Australia and New Zealand in the Asia Pacific region.18 The question of company “image” might be raised here, just as it was an important consideration in the MercedesBenz case in chapter 39.

Customer segmentation Most people have complaints about call centers. One of the most frequently heard complaints is that customers have to wait for far too long when they call. Instead of ensuring that all customers get prompt assistance, some firms have segmented their customers—see our Charles Schwab case in chapter 54. The process of dealing with the 16

Richardson, R. and Marshall, J.N. (1999) Teleservices, call centres and urban and regional development, The Services Industry Journal, Vol. 19, No. 1, pp. 96-116. 17 Prabhaker, P.R., Sheehan, M.J. and Coppett, J.I. (1997) The power of technology in business selling: call centers, Journal of Business & Industrial Marketing, Vol. 12, Nos 3/4, 222-233. 18 Anonymous (2001) Indian call centre industry sees growth slowdown this year, Newsbytes, 22 November, pNWSB01327001.


segments is sometimes known as value-based caller routing, which means that customers of high value are recognized either by the phone number from which they are calling or by some identification that they enter upon calling. This can occur during the process by which the customer provides basic information while waiting for their call to be answered. When the live agent answers the call they are faced with a pop-up screen showing the customer’s details and information about previous contacts. What customers find very irritating is that they often have to go through a lengthy process to provide such information only to find that the agent asks for the exact same information or seems oblivious to the fact that it has already been provided. (Some cynics think that some call centers put callers through the “hoops” just to keep their mind off how long they have been required to wait!) Customers expect that once they have provided the information it should be readily at hand for the agent—and rightly so. Another variation on the theme, and one that is nothing less than startling, is that of one of the largest American airlines that automatically disconnects its Platinum (best customer line) after they have been on hold for 59 minutes!19 Apparently, the manager of this call center indicated that this was due to two factors: first, his compensation is based on the average time required to handle customer calls, including the time spent on hold, and this method assists him to meet his targets; and secondly, agents wanted to avoid speaking with customers who had been on hold for so long as they tended to be angry! What is being overlooked here is the concept of lifetime value of the customer and the longer-term considerations.

Measuring service quality Experience shows that very few organizations actually measure customer satisfaction with call centers.20 This is not surprising because measuring quality from a customer perspective is difficult and so most have stayed with the following metrics: average speed of answer; queue time; percentage of callers who have satisfactory resolution on the first call (measured by agent); abandonment rate (i.e., those who disconnect prior to answer); average talk time; average wrap up time; percentage of calls blocked (i.e., 19

Arussy, L. (2002) Don’t take calls, make contact, Harvard Business Review, Vol. 80, No. 1, pp. 16-17. 20 Miciak, A. and Desmarais, M. (2001) Benchmarking service quality performance at businessto-business and business-to-consumer call centers, Journal of Business & Industrial Marketing, Vol 16, No. 5, pp. 340-353.


those who could not even get to a queue); time before abandoning; inbound calls per period; agent turnover; and services levels (typically measured by calls answered in less than x seconds divided by the number of total calls).21 However, the services management literature does provide some ideas about what might be important to customers and, over the last three years, academic researchers have begun to address this issue seriously. Although research on a large scale public sector call center network in Australia found that operators tended to underestimate the positive perceptions of customers about their services,22 it has been suggested by other researchers that managers generally perceive the quality of services as much higher than that perceived by customers, mostly because they use different criteria.23 However, it has to be remembered that it is the customer that will be the judge of service quality and it will be the customers’ views that will influence future business success. The consequences of these judgments can be significant too. For example, research has found that a dissatisfied hospital or primary care patient can cost a healthcare provider US$238,0000 in potential revenue over a patient’s lifetime.24 Based on previous theory and research, a team of researchers from the Netherlands25 hypothesized that the following variables would be important to customers: employee characteristics of self-efficacy, adaptability and empathy; time; communication style; reliability; perceptions of commitment to service quality and customer satisfaction; empowerment; staff attitude; explanation; competence; security; and knowing/understanding the customer. They actually found that four scales were predictive of customer satisfaction: adaptiveness of agents, assurance that focuses on security and explanation that takes away uncertainty, empathy and authority (to deal with various problems and questions). In the specialized and complex area of social security services, a study, using innovative technology and process, that did not presuppose the factors significant for customers, found that customers wanted reliable follow-through 21

Feinberg, R.A., Kim, I-S., Hokama, L., de Ruyter, K., and Keen, C. (2000) Operational determinants of caller satisfaction in the call center, International Journal of Service Industry Management, Vol 11, No. 2, pp. 131-141. 22 Bennington et al., op. Cit. 23 Miciak et al., op. cit. 24 Gustafson, B.M. (1999) A well-staffed PFS call center can improve patient satisfaction, Healthcare Financial Management, Vol. 53 No. 7, pp. 64-66. 25 Burgers, A., de Ruyter, K., Keen, C. and Streukens, S. (2000) Customer expectation dimensions of voice-to-voice service encounters: a scale development study, International Journal of Service Industry Management, Vol. 11, No. 2, pp. 142-161.


(this presupposes that the problems could not be remedied on the first call); respect and mutual trust; understanding and caring staff; prompt efficient service; easy accessibility; open and effective communication; personalized/individualized service; and reliable information.26 The latter factor was related to the fact that customers believed that sometimes they would be given different information if they used office-based services rather than the call center services. Chapter 43, Autopsy of call dissatisfaction tells us though that that the most important thing to work on is getting queries resolved on the first contact and that this is more important than anything else, including how long it takes to get the call answered. This is useful information for the call center manager that helps prioritize the numerous factors that need to be considered in managing this type of service. Another area of concern for customers is that, because the agent has a script that they must follow closely, enquiries that do not fall within the ambit of the script are generally not handled well. This is particularly the case when call center operations have been outsourced. Other complaints that customers have with call centers include the lack of a personalized service; uncaring communication; getting the “runaround” (customers often complain that their calls are transferred too many times or that they have to tell the same story to more than one person before they get assistance); the complexity of the telephone system; and unreliable information and service.27 For particularly complex or personal matters many customers want to speak to the same person that they have dealt with previously and they are annoyed that most call center operations actually do not provide for this choice. We also know that customers do react well to particular accents and that in Europe, Europeans do not tolerate poor language skills so particular attention needs to be paid to these elements.28 Finally, our cases on organizing for the call center (Mega, ANWB, National Emergency) indicate that more and more companies are adopting a centralization model (see chapters 57–59).

26

Bennington et al., op. Cit. Bennington, L., Cummane, J. and Conn, P. (2000) Customer satisfaction and call centers: an Australian study, International Journal of Service Industry Management, Vol. 11, No. 2, pp. 162-173. 28 Turek, op. cit. 27


Other useful research findings Although it has taken some time for researchers to show interest in the call center industry, over the last few years we have seen some useful research being conducted to assist businesses to improve their services and profitability. The size of the call center and its impact on both customer satisfaction ratings and on employee satisfaction has been one such area of interesting research. The findings to date suggest that even though employees are more satisfied in call centers with less then 50 staff, little difference has been found in customer satisfaction ratings between small and large call centers so the strength of this relationship is obviously moderated by other variables.29 Perhaps counter-intuitively, it has also been found that in low complexity call situations it is possible for call centers to achieve average customer satisfaction ratings even when employee satisfaction is low.30 However if the business of the call center is complex (e.g., technical know-how needs to be conveyed) then high customer satisfaction ratings will not be achieved when staff are not satisfied. Recent research has also pointed to the issues involved when a business transforms its service from personal to self-service, a common aspect of call center services.31 It found that in complex situations, assuming that personal service is still available, a transformation from personal service to self-service may have a positive effect on social bonds (and thus loyalty) because self-service will be used for the simple and frequent tasks whereas for the difficult and non-frequent tasks that are of higher importance personal service will be used and the service worker will seem more significant. However, self-service (through automated machines, automated telephones or the internet) without a minimum level of personal interaction can produce a negative effect on customer loyalty because the important social-bond mechanism is removed. Therefore, once automation occurs personal service and personal relationships become even more important. At the micro level, research has pointed to the importance of personalization of the call, the offer of additional services, an optimal rate of speech, and the absence of vocalized pauses (um, ah, etc.) as being significantly related to high caller repurchase intentions.32

29

Miciak and Desmarais, op. cit. Miciak and Desmarais, op. cit. 31 Selnes, F. and Hansen, H. (2001) The potential hazard of self-service in developing customer loyalty, Journal of Service Research, Vol. 40, No. 2, pp. 79-90. 32 Pontes, M.C.F. and Kelly, C.O. (2000) The identification of inbound call center agents’ competencies that are related to callers’ repurchase intentions, Journal of Interactive Marketing, Vol. 14, No. 3, pp. 41-49. 30


Services quality challenges for call center managers There are numerous challenges for those attempting to control the quality of service in a call center environment. The first and probably the most important point is that everyone needs to remember that the “calls” are actually placed by real people who have a particular need or problem to be solved. Secondly, in most cases, under a customer relationship management paradigm, a call is not just a transaction but part of an overall relationship that the customer may have with the firm over a lifetime, and lifetime value is what needs to be preserved. Call center agents are “front-line workers”, albeit invisible to the customer, who can be key strategic resources “providing market intelligence and acting as the company’s ambassador.”33 It is too easy to de-personalize calls and to treat them simply as statistics and not as people with problems who could represent significant lifetime value for the firm. Call center managers not only need to get these points across to their operators but they need to train and retain quality staff for reasonable and consistent levels of service to be provided. Once the importance of callers and the place of the call in customer relationship management is firmly established and the human resource management issues addressed, then some very practical but difficult issues still remain as challenges. The first is that call center demand patterns are difficult to predict and result in sharper increases and decreases than one finds in a more traditional office-based service.34 This spikiness of demand can lead to customer complaints and is a major source of managerial problems. If managers have excess staff, they are likely to become bored whereas if they staff at a lower level (on the basis of average demand) staff may suffer from too much pressure. There are additional challenges to those who manage call center operations because the customer cannot see, or hear, what is happening at the call center they have contacted. This means that if a wait is incurred it is experienced differently to that while waiting for an office-based service, because in this latter context the customer can actually see what is happening (e.g., the number of people waiting, the effort being made by the staff, etc.). Thus there is a range of issues particularly relevant to wait times for customers using call center services that need to be considered and managed, and these in33

P. 958 of Frenkel, S.J., Tam, M., Korczynski, M. and Shire, K. (1998) Beyond bureaucracy? Work organization in call centres, The International Journal of Human Resource Management, Vol. 9, No. 6, pp. 957-979. 34 Betts, A., Meadows, M. and Walley, P. (2000) Call center capacity management, International Journal of Service Industry Management, Vol. 11, No. 2, pp. 185-196.


clude the fact that unoccupied time feels longer than occupied time; pre-process waits feel longer than in-process waits; anxiety makes waits seem longer; uncertain waits are longer than known finite waits; unexplained waits feel longer than explained waits; unfair waits feel longer than equitable waits; the more valuable the service the longer the customer will wait; and waiting alone feels longer than when waiting with a group.35 We have already seen, call center technologies make it possible to give highvalue customers priority over lesser-value customers, provided that the software is programmed to screen calls appropriately. However it is still important for customers to be able to speak to the person who can meet their needs, and all needs are not the same. Skills-based routing has been suggested as the answer to find the best match between the needs of the customer and the skills of the available agents. The usual ACD system delivers calls by selecting callers from a queue based on some statistical criteria such as idle time since log in or idle time since last call, but this method assumes that all agents are equal in their ability to service a caller’s needs and that all callers are equal in their priority and value to the call center. How to set up a system that meets customer needs but at a cost acceptable to the business and in a way that does not increase the stress on the more skilled and experienced staff is surely a challenge for the best call center manager. Ironically, many of the technologies and methods used in the industry to measure service levels and to create efficiencies have, in fact, created many of the problems. The so called predictive-dialing industry has been mired in a mind-set that focused solely on having call centers make as many calls as possible in any given time frame, but these may not have been meeting either customer or business needs. The industry is slowing waking up to the fact that a lot of services do not lend themselves to this approach and that success needs to be measured by bottom-line results—not just agent productivity.36 For example, a large automotive insurance company used to immediately cancel a policy upon a telephone request to achieve efficiency and short call times but they found that a change in this policy has allowed them to retain 17 percent of these policies and to gather valuable market information simultaneously37 thus indicating that efficiency is not always the best policy.

35

Zeithaml, V.A. and Bitner, M.J. (1996) Services Marketing, The McGraw-Hill Companies, New York. 36 Diamond, S. (1999) Smilin’ and dialin’ attitude nets profits, Communication News, Vol. 36, No. 2, pp. 12-13. 37 Arussy, L. (2002) Don’t take calls, make contact, Harvard Business Review, Vol. 80, No. 1, pp. 16-17.


Just the same, there may be business strategies that still lend themselves to the production line approach, even though we know that this has human resource management consequences. For example, it has been suggested38 that the production-line approach, with its emphasis on a high volume of calls being handled as quickly as possible by agents, is favored when the business strategy is one of low cost and high volume, when the connection to the customer is transaction-based and over a short time period, when the technology is routine and simple, when the business environment is predictable and when you have employees with low growth needs, low social needs and weak interpersonal skills(!). However, it is also argued that if your business strategy is one of differentiation, customized and personalized and focused on relationship building and long term connections to the customer; if the environment is unpredictable and you have employees with high growth needs, high social needs and strong interpersonal skills; then you need more of an empowerment approach rather than a production line approach. There may be risks in adopting an empowerment approach but the involvement of staff in making decisions about service levels is needed. If firms are at all concerned about relationship management then there is little question that they need to both train staff appropriately and allow them the discretion to meet customer demands. In other words, they need to adopt an empowerment approach.39

Summary Given the ubiquity of call centers, and the central role they are assuming in the operations of most businesses, it is imperative for companies to work out how to manage call center services in order to satisfy their customers better than the competition. The PIMS (profit impact of market strategies) work, carried out over more than 30 years, found that companies in all industries that have superior customer-perceived quality are more profitable over the medium to long run40, so the picture is fairly clear—call center service quality is absolutely critical to the success of any organization. The challenge is to provide cost-effective services that meet or exceed customer expectations.

38

Gilmore, A. (2001) Call centre management: is service quality a priority? Managing Service Quality, Vol. 11, No. 3, pp. 153-159. 39 Batt, R. (1999) Work organization, technology, and performance in customer service and sales, Industrial and Labor Relations Review, Vol. 52, No. 4, pp. 539-564. 40

Burns, J. (1995) Developing and implementing a customer contact strategy, Managing Service Quality, Vol. 5, No. 4, pp. 44-48.


The future In the future it has been suggested that organizations will become customer-centric, which will allow customers to access organizations by voice, web, or email and then be escorted to the appropriate resource within the organization―perhaps much like the old concept of the switchboard operator who always seemed to know everything, but in the future this process will be IT enabled. In theory, this will occur in a virtual organization where knowledgeable resources, regardless of their physical location, will be able to participate in and contribute to developing long-term successful customer relationships.41 The technology will not require a mass of customer service representatives in a single or small number of call centers but will enable customers to contact appropriate people who are mobile and geographically dispersed. This model will allow agents to work from home as well as from their vehicles and other office locations. This sounds good but one wonders whether it is simply an IT guru spinning a story. We have heard for some time how good the speech recognition programs are, but a story by Carol Vinzent in Fortune magazine reported the frustration of dealing with the “disembodied words” of United Airline’s speech activated baggage information service when her luggage had gone missing.42 It is suggested that a voice recognition system costs companies about 25 cents per minute whereas the use of real people costs about $1.50 per minute but one questions what the real costs are when customers are not satisfied! In the Fortune story, Carol Vinzent was highly frustrated by the voice recognition system but actually thought that this was less irritating than dealing with some of the airline staff which is certainly not something that any firm would like to have reported. More recent claims of call center software, though, claim that voice recognition accuracy is now 90 percent or more accurate.43 The prediction that the internet will replace the call center will not occur either, in the short-term or longer term. People find it much easier to say what they want than to type it into a computer, and it is even said that speech enabled websites will act on a “look and say” basis rather than a “point and click” basis in the future.

41

Prabaker, P.R., Sheehan, M.J. and Coppett, J.I. (1997) The power of technology in business selling: call centers, Journal of Business & IndustrialMarketing, Vol. 12, Nos. 3/4., pp. 222233. 42 Vinzent, C. (2000) Beyond phone menus: A new way to offer ‘service’ on the cheap, Fortune, 24 July, p. 338. 43 Maselli, J. (2001) Voice recognition aims to lower call center costs, Information Week, 22 October, p. 63.


Telephones are ubiquitous and not difficult to use whereas those firms that are trying to get people to move to internet based applications will face a number of issues. For example, a recently conducted a survey for a local government organization in Australia that had been investing considerable resources in its web-site found that less than 10 percent of its residents had even looked at the site. No one mentioned that they wished to be consulted through this medium yet 50 percent of respondents actually had internet access at home or at work. There are other reasons for the call center being here to stay. The first relates to the medium term in that call centers need to be web-enabled and a report of October 2000 indicated that only 8 percent of call centers in the USA were web-enabled at that time.44 Call back buttons or “contact us” buttons are currently available on web sites, which allow for customers to arrange for a call to be placed to them at a later time but the problem is that it is not in real time. The reason for this is that second telephone line penetration, even in the USA is not very high (generally less than 25 percent) so when the telephone line is being used for web browsing it is unavailable for callbacks.45 In the future, though, callers will be able to open dialogue boxes on a web page from which questions can be asked and live answers provided. Screen sharing features will allow an agent to control the caller’s computer screen to assist this person to see the correct information and it will also be possible to speak directly to the caller if a microphone and speakers are available at the caller’s end.46 Finally, from the business perspective, application of the technologies involved in call center operations can play a key role in accessing more customers, and in providing better quality services, especially where additional or extended services become available. When high contact (in person) services can be converted into low-contact services, through the use of technology, a number of benefits can result. While on the one hand, call centers replace the need for face-to-face interaction when customers want information, on the other hand, businesses can target and prioritize customers to reduce their customer acquisition costs.

44

Abrams, A.S. (2000) Internet customer service: Is your pharmaceutical call center prepared? C@all Center CRM Solutions, October, pp. 92, 94, 97. 45 Durr, W. (2000) Turning browsers into buyers using your call center, C@all Center CRM Solutions, September, pp. 68, 70-71. 46 Jackson, W. (2001) VA outsources call center, Government Computer News, Vol. 20, No. 27, p. 44.


But not all services lend themselves to call center operations or to technologically assisted transactions. These include services where there is high importance placed on personal contact, where a high degree of personal attention is required, where risk is perceived to be reduced by direct personal contact, where customers feel unable to use the technology, and where the technology is not perceived to add value.47 It has been also been suggested that call center technologies may not have been well accepted in some cultures.48 Relying on technology can be a problem, too, because it can sometimes fail. (The same disadvantage would also be applicable to office-based services that rely on being able to access information through networks.)

47

Walker, R.H. and Craig-Lees, M (1998) Technology-enabled service delivery: At risk of compromising the customer-service provider connection? Paper presented to the Australian and New Zealand Marketing Academics Conference, Otago, New Zealand. 48 Bennington, L., Cummane, J. and Conn, P. (2000) Customer satisfaction and call centers: an Australian study, International Journal of Service Industry Management, Vol. 11 No. 2, 2000, pp. 162-173.

Chapter 39 Location analysis CASE: Mercedes-Benz Key Words—location

Company background Mercedes-Benz (www.mercedes-benz.com) is known for its luxury cars with outstanding performance and high quality. In order to improve their standard of high quality and service to the customer, Mercedes-Benz introduced one customer assistance center (CAC) that provides the customer with product information, technical information and 24-hour road service. The already existing CACs in the various countries are then to be dissolved in order to standardize the service level all over Europe.

The problem Mercedes-Benz decided in 1996 to build one customer assistance center for 17 countries in Europe covering 12 languages, in order to standardize service and quality and to establish a direct communication channel between factory and customer. Once Mercedes-Benz made this decision the next problem was to find a location for the customer assistance center.

The solution Before Mercedes-Benz decided to open a customer assistance center in Maastricht, they carried out a survey in which the criteria for the locational choice were analyzed. The criteria used by Mercedes-Benz were: •

Labor laws and regulations;

•

Availability of native speakers;

•

The operational costs of a customer assistance center in relation to the location.

Mercedes-Benz used a short list of areas, countries and cities which could meet the above-mentioned criteria. All options were analyzed. A possible location for build-

221


ing the CAC in Germany was considered due to the roots of the parent-company in Germany and secondly the importance of Germany for the European Mercedes salesfigures, since 60% of all European car sales of Mercedes are generated in Germany. However, since the third criterion of operational costs was unfavorable compared to other possible locations for the CAC, Germany was not chosen as location for the CAC. Another location that was taken into account was the United Kingdom or Ireland. Especially the UK was considered because the UK-subsidiary call center of Mercedes-Benz already had a database system to assist their UK-customers. Ireland as a location for the CAC was taken into account because (European) incentives from the government were possible. The reason not to locate a CAC in the UK or Ireland was that Mercedes-Benz was not convinced that the second criterion, “availability of native speakers,” could be met. Another option for a location to build the CAC was the Netherlands. The Netherlands had a good reputation with respect to call centers and Amsterdam was the first location to be investigated. Although Amsterdam met the three criteria, the labor market for call center agents has become tight since many pan-European call centers are located in the Amsterdam area. Due to the personal network, there were contacts with Viking Direct (see case Viking Direct in this book),1 which is located in Venlo, a midsized city in the south of the Netherlands. Viking Direct used so-called border workers from Germany to staff its call center. Viking Direct showed that staffing a call center with border workers was a successful option. Mercedes-Benz therefore analyzed the border between Germany and the Netherlands. At this point Mercedes-Benz came into contact with the regional industry promotion bank LIOF nv2. LIOF was successful in convincing Mercedes-Benz to locate the center in Maastricht. Maastricht is situated in the Euregio in which Hasselt and Liège in Belgium and Aachen in Germany are also situated. In this region many different languages are spoken—not only French, Dutch and German but also Italian in Liège due to migration during the mine-era in Belgium. In the Netherlands and also of course in Maastricht the other criteria could be satisfied. 1

Viking Direct call center is a mail-order company in office-supplies situated in Venlo with its main market in Germany. See chapter 7. 2 Industriebank LIOF nv is the Limburg development company. LIOF contributes to the prosperity of the province with an ongoing program to strengthen the province’s economic base. LIOF targets industry and the dynamic service sector.

Chapter 39 Location analysis 223

Maastricht was chosen and not for example Heerlen, because the building specifications were met in Maastricht. One of the specifications was the possibility for expanding. Moreover, the more international and European image of Maastricht emphasized by the Maastricht treaty was an additional advantage. Another aspect in the decision to locate the CAC in Maastricht was the opportunity of receiving European and governmental incentives.

The result Mercedes-Benz opened its CAC November 1, 1997 in a temporary building and moved to their definite site in October 1998 that was officially opened October 16, 1998. At present the CAC is adding more languages and countries to their service, with the endgoal the 17 European countries covering the whole sales-area of Mercedes-Benz. At the moment of writing up this case more than 700 people are employed in the CAC.

Commentary Communities aggressively compete for new call centers. Technology has allowed call centers to be built in any region/community without sacrificing quality. Indeed, there are a number of U.S. companies who have been experimenting with offshore centers. India, the Caribbean, and other English speaking areas may provide economic advantages compared to locations within the United States. Companies considering building or relocating would be well advised to explore offshore opportunities. In addition since many local, state, and national governments might be encouraging call center development, companies would be well advised to explore concessions and incentives that might be available for building a center in a community.

Chapter 40 Service quality deployment CASE: Robeco Key Words—service quality, call etiquette

Company background Established in 1929 as an investment club by prominent Rotterdam businessmen, the Robeco Group (www.robeco.nl) has become one of the world’s largest independent financial asset managers. In seventy years, its professional and innovative approach has led to assets under management of well over € 79 billion. Robeco is offering equity, real estate and bond funds, from throughout the world or in one particular country or sector. The Group creates interesting opportunities for private, institutional and business clients. It also manages individual accounts for institutions. In the Netherlands, the Robeco Group distributes its products through Robeco Advies, the Group’s own direct-marketing service, which is available to every investor. Shares in the listed companies can also be bought through banks and stockbrokers in the Netherlands and abroad. Robeco Bank (Switzerland) S.A., Robeco Bank (Luxembourg) S.A. and Banque Robeco S.A. market the Robeco Group’s asset management services and investment companies from Geneva, Luxembourg and Paris respectively. Robeco Group funds are listed on sixteen stock exchanges in nine European countries.

The problem Robeco is a financial asset management company without branch offices in the Netherlands. Transactions are done by telephone. The way Robeco attends to the customer has to be of exceptional quality, because Robeco is advising and taking care of the customer’s financial assets. The challenge Robeco has faced is to develop a strategy that provides service excellence delivered by telephone contact with the customer.

224

Chapter 40 Service quality deployment 225

The solution When calling Robeco, the customer will be welcomed by an agent that can be seen as a receptionist. This service is provided by an outsourcing call center, SNT. The receptionist is trained to discover the customer’s wishes by using scripts. These scripts are developed by Robeco in order to be able to transfer the call to the right agent within Robeco. Robeco values the etiquette of the receptionist, because the receptionist is the first contact with the customer since Robeco relies on telephone contact. When the receptionist has identified the reason of the call, the receptionist has to decide to which department the call can be transferred. SNT is able to handle 50% of all calls itself. The other 50% are transferred to one of the three departments within Robeco of which each has a specific assignment. Transaction services is responsible for handling orders from customers that already have an account with Robeco. These clients have a direct telephone number to call Robeco and bypass SNT. If the customer has not decided yet to make a transaction, the receptionist will refer the customer to the Robeco advice department. The agent at the advice department will inform and advise about the possibilities for investing through Robeco and advise the customer of the best opportunity to buy financial assets in one of the Robeco funds. These agents are highly educated with a university or college degree. If the customer decides to make a transaction, he or she will be referred to the transaction department. The third department at Robeco, FIT (“Flexibel Inzetbaar Team”), is the department that takes care of the overflow from the transaction department and is answering special and unusual questions from customers. The FIT team also handles the requests from customers with regard to savings and the Robeco saving account. In the figure below the organization of Robeco Advies is schematically outlined. For the Robeco departments, etiquette is very important. Agents are trained to meet the customer in a very distinguished and polite way.


Calls from existing clients

Calls

Transaction Services (Robeco)

SNT outsource callcenter

FIT (Robeco)

Advice (Robeco)

Figure 1. Schematic outline, Robeco organization

The result Robeco has put much effort into a distinguished image and service. Robeco is presently investigating the possibilities to improve the technical tools to optimize the call handling. The technical tools such as planning and forecasting and queue identification to make the waiting calls visible to the agents and supervisor will be installed soon. Robeco has already invested in advanced data-mining and warehousing software.

Commentary This case demonstrates the importance of what may be called conversation quality. Due to the fact that the conversation is ‘mediated’, or takes place remotely simply means that agents have to work harder to convey an impression of service excellence. Words, tone of voice, and listening skills can make the difference, therefore call centers should focus on these aspects in training agents to get ready to ‘voice’ the customer.

Chapter 41 Customer churn management CASE: Vodafone Key Words—churn, customer loyalty

Company background On March 15, 1995 Vodafone (www.vodafone.nl) was granted permission from the Dutch government to develop and exploit a second national cellular network in the Netherlands. The customer who wants to use the Vodafone network can subscribe with a so-called service provider who provides access to the network. Several service providers offer access to the Vodafone network. Together with Vodafone network provider, Liberfone service provider was established. Liberfone changed its name to Vodafone Sales and Services (LVS). LVS competing with other service providers had to operate at arm’s length from the Vodafone network provider in order to keep the competition fair amongst the service providers.

Present Situation in the Customer Approach

Customer

SP*

NP**

Libertel Verkoop en Services

Others

Libertel

* =Service Provider **=Network Provider

227


Presently LVS has an 80% share in all Vodafone subscriptions. LVS uses direct, Vodafone city points and business points, and indirect ways, dealers, to sell subscriptions. Next to selling subscriptions LVS takes care of customer service and retention of customers.

The problem The mobile telephone market is highly competitive. The Netherlands will count 5 network providers in the near future who offer their services to the customer. It is therefore essential to provide excellent service to the customer to satisfy and to tie the customer to the company. Nonetheless customers seek other providers since these providers offer better (temporary) financial deals. LVS is facing the challenge to retain customers who intend to terminate the subscription with Vodafone and subscribe to other network providers.

The solution The relationship between LVS and the customer can be explained by the cycle of the rising and sinking sun. In between the rising and sinking of the sun, the customer has multiple contacts with the service provider. The figure on the previous page shows the moments of contact. Each moment of contact is used to try to find out the level of satisfaction of the customer. From data collected in the past, LVS has set up an anti-churn system that holds a list of 210 indicators to forecast the possibility that a customer churns. In this system the most important indicators are •

The customer feels that he has an outdated phone;

•

The customer feels that the subscription is too costly given his calling behavior;

•

The customer inquires for the termination procedures. LVS developed a computer program that detects possible churners on the basis

of these indicators. As soon as a possible churner is detected an anti-churn call is made. The environment in which LVS and the customer interact is more complex. Other than the direct contact that LVS has with the customer, the customer is also in contact with friends, the dealer where he bought the phone and subscription and/or his employer who may have a collective contract with a dealer for its employees. The

Chapter 41 Customer churn management 229

friend has the newest phone, the dealer advises to quit the present subscription so that the dealer receives a commission and the employer wants every employee to have the same subscription and phone. Due to these influences the customer might decide to terminate the subscription. The direct contact that LVS has with the customers can disturb the relationship the dealer has with the customer and the collective contract the employer has signed. In this matter, LVS not only tries to retain the customer but also to satisfy the dealer and the employer.

The results LVS is presently seeking the best ways to satisfy the customer. The anti-churn system identifies a group of possible customers who intend to terminate the contract. LVS is testing with this group which kind of service can retain these customers. For example, a trip to London can be offered if the customer has a high call volume. Response by some customers was “this is too good to be true”. LVS considers service to the customer as very important in retaining the customer. By using the anti-churn system the customers who churn are detected and LVS is experimenting to find the optimal way in service and offers to satisfy these customers. In this respect the dealer and the employer also play a role and need to be taken into account and ways to satisfy the dealer and the employer are therefore also part of the experiments.

Commentary This is a great example of using research to understand your customer. It shows how we can treat different segments of customers differently. LVS demonstrates that there is a lifetime value to the customer. The concept of lifetime value is quite important. Indeed economic segmentation is one of the 13 critical components for a successful company in the future. Here is a discussion of economic segmentation adapted from a paper in Defying the Limits 3 (the CRM Project): The concept behind economic segmentation is relatively simple. The execution, however, is frightening to many. Economic segmentation means that the company knows the value of each customer (sales, profits, revenue) and uses that information to strategically enhance probability of purchase, repurchase/loyalty, and/or wallet share. For the call/contact center this means that when the call or e-mail or web contact is


made (even before you pick up if possible) the CSR has an understanding of the importance of this customer and the center has a differential strategy to recognize differences in importance. We have a simple question—if we could guarantee that you can increase customer satisfaction, sales, and profits by doing one thing, only one thing, would you do it without arguing? You would think that most people would say sure. It turns out that when the answer is economic segmentation most business people put up the kind of fight that your 15-year-old does when given the same proposition (even after agreeing to do it without argument). Of all the things you can understand and actually do, the concept and implementation of strategic economic segmentation of consumers is the single most effective thing you can do, and is the most important habit on our list. The reason is quite simple. Without knowing the economic value of a customer how can a business make a realistic decision about that customer? Let us tell you what we mean. My car dealer made me come back three times, stand in line three times and tell the same story five times (twice on the phone prior to the three repair visits) and they did not have a part promised two times, didn’t call me back four times as promised, then put in a part I didn’t need because the repair guy hadn’t spoken to the repair manager and then refused to deduct the cost of the part not needed. This was two weeks before my wife and I were going to buy 80k worth of cars. Was the $7.89 worth risking all this? You and I know the answer to this. Now let’s repeat this together—no. But the people who work in this dealership have absolutely no idea that there is a lifetime value to a customer. (If they had a record they would have seen that we had bought 6 cars over the past 20 years and were likely buyers in the future). I will make every effort to find another dealership to buy these cars. They have no idea that each customer who walks in the door has a value that can be calculated based on what they have purchased up to this point and they have a future value based on a formulation of what a customer spends after 1 year, 5 years, 10 years, and 20 years. The economic value of a customer has got to be one of the most important pieces of information that you have and most businesses today have absolutely no clue. Carl Sewell of Sewell Cadillac has determined that each customer who walks in the store is worth $356,000 over their lifetime. Stew Leonard’s grocery has determined that each customer who walks into his grocery is worth 45k.

Chapter 41 Customer churn management 231

If I am on the phone and angry over a $100 charge wouldn’t it be nice to know if I am worth $5 of profit per year or $150,000 in profit per year? A number of years ago a Purdue intern at a GTE Call Center in California got a call about a $.59 overcharge (yes 59 cents—this will become important in a second). After arguing, the student (as she was instructed) told the customer that unless they paid their bill their phone service would be shut off in three weeks. And so the student put the order in and three weeks later the service was shut off. It happened that this was the largest brokerage firm on the west coast and GTE’s second largest client. Needless to say the CEO called the GTE CEO and service was turned on within an hour—but the intern was turned off permanently—blamed, canned, and returned to Indiana (defeated and very sour on a career in customer service). In talking to the Center Manager there was no way for a CSR to know the size and value of the customer from the screen. The intern was doing exactly what the company said to do. This story is repeated millions of times in business after business. On the positive side, airlines have it right—sort of. When I call my special “chairman” number I get through quickly, they know my name, they change my flight without hassle, and they upgrade me without my begging or even asking. The number I enter when I get to the system identifies me as someone of importance to the airline. I feel good each time I talk to them and am encouraged to fly on this airline again even if the schedule is less convenient (you would too). The restaurant that recognizes you after you have been there once a week for 6 years, the check-in line that is shorter because you are special, the special waiting room with snacks, and on and on. Your company has the opportunity to strategically treat customers of different values differently. It starts with tier identification—for without the initial identification the treatment cannot be proffered. But the importance of this goes beyond the treatment at the moment of time. Your company must fence off the most valuable customers from the competition. When you know the value of your customers you can send special promotions, strategically give rewards. You cannot fence that which you cannot identify. You may have lost your third most important customer and have no idea. Without identification you do not know that your third best customer had not made a contact or purchase in three months (they had been purchasing each week). If you knew right away you could have attempted an intervention to correct a problem and recapture this important customer. You cannot recapture what you do not know you have lost.


The economic value of the customer is the fundamental principle for CRM and one to one marketing and right now most companies are simply not thinking correctly. I would point out that I am spending a lot of time on this principle because I probably get the most resistance from businesses on this one. There is an inherent belief that in treating your most valuable customers differently (maybe better) than your least valuable customers you are breaking the prime directive of “the customer is always right” and the constitution of the US which states, I believe, that all people are created equal. The economic segmentation of customers doesn’t lead to mistreating customers, nor is it saying that some customers are not equal. It is saying that some customers are more equal than others. In a world of intense competition and limited resources your energy and resources cannot be spread equally across all customers—you must put a bit more energy into your better and best customers. Economic segmentation is a fundamental determinant of your future. Here are the questions you need to ask: 1. Which customers should get to sleep in the Lincoln Bedroom? (When I heard of the study, I think that amidst the outrage of my comrades I was the only one to say out loud “Right on.” If I had a Lincoln Bedroom I’d use it to entice and reward and reinforce big donors to the center for Customer Driven Quality—in a second—a nanosecond. I can assure you the really big donors get the President of the University. Small donors get me. 2. Can your customers be identified by their value? 3. Do you know the lifetime value of your customers? 4. Do you know your top 10, 20, 30, 50 customers? 5. If a top 50 customer left would you know it? 6. Have you gotten your best customers together and asked them what they want?

Chapter 42 Call customization CASE: Robeco Key Words—CRM, customer relationship management, one to one marketing

Company background Robeco Advisory services is a division of the Robeco Group (www.robeco.nl), the largest Dutch asset manager. Robeco Advisory services is responsible for the contact with the customers. The call center of Robeco Advisory services is meant to provide assistance to the customers of Robeco. Customers can call them for questions about their funds or to give new orders or to ask for advice. The call center is divided into several departments. The three largest departments take care of 90% of the calls, and these are: transaction services (TS), FIT (Flexible Information Team), and “Advisory services”. Transaction services deal with the straightforward questions, and when it becomes more complicated, TS connects the customer with FIT or directly with “Advisory services”, depending on the type of questions the customer has. The agents who are answering the calls in the “Advisory services” department, have had special training and are more specialized than the agents at transaction services. This way a shift is made in the incoming calls, from general to specific. There is also an external reception desk that answers the general calls and then decides to which agent in which department of Robeco Advisory services they should connect this customer, as illustrated below.

Ex ter na

TS

lr ece pti on

FIT

de sk

ADVIES General

Specific

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The problem Robeco Advisory services’ mission is to be the “best listening” provider of information and products in the area of asset management. Being the “best listening” company does not just happen automatically. Wanting to be the best listening provider has several important implications for a telephone based business. First of all, if you want to give the customer the feeling that she/he is listened to and taken seriously and that her/his questions are answered quickly, the customer should be assisted in a way that guarantees that perception is firmly built and supported in the customer’s mind. The issue for Robeco is to understand the telephone experience so well they can define and deliver just what “best listening” means. One of the basic problems that Robeco discovered was that when a customer calls in and an agent takes the call, the agent would be different than the agent they may have spoken to previously. This is clearly a normal call center experience but would not normally lead to the perception of being the best listening company. At the very least, Robeco determined that this new agent should be able to know on the spot what this customer’s relationship with Robeco is like, and what his/her last calls with other agents were about. This would mean better and more direct service to the customer, who would be more satisfied with Robeco Advisory services. From the agents’ point of view, the agents should be able to see previous (telephone) contacts with this customer, knowing the subjects of these previous calls and being able to note down the needs of the customers while still on the phone. This tells us that the story of the customer and of the agent boils down to the same thing: instant information encompassing the relationship between each individual customer and the company. This is the definition of one-to-one relationship marketing and would give Robeco the possibility to build a competitive advantage over its competitors. The competition in the market is growing and Robeco needs to succeed here to differentiate itself from the other providers. But how could they implement a one-to-one marketing strategy?

The solution The need was clear, but setting up a new system was not done in one day. At first, a cross-functional project group consisting of advisors (agents) and managers formulated several objectives of which the most relevant ones are:

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•

to improve the registration of clients’ data and needs,

•

to improve the support of the conversations and

•

setting up an advice module to support the advisors.

These objectives were met by installing a call center application called EDGE (Effective Data Gathering Expertise system). EDGE is an application that operates over other applications. It is an application that can show a client’s data in a well-organized way. When a client calls and is answered by the reception desk, his account number is entered into the system, and a CTI (computer telephony integration) connection sends this call to one of the advisors. The advisor will then have the client’s data on his screen before he has even started talking to him. The application is managed in such a way that there are different windows the agent can activate, with different data about the respective client. This new system has become a valuable tool in customer relationship management. The advisor can access and enter almost all wanted data of the client in the system, without having to interrupt the conversation. One click with the mouse is often enough to do the job. The agent likes working with the new system, and is therefore motivated in his/her job. The system is also valuable to the organization because of the amount of data available through the application. It is now possible to use database selection procedures to increase the efficiency of mailings.

The result Implementing EDGE has had a positive influence on the customers, on the advisors and on Robeco Advisory services in general. The customer gets what she/he wants in a fast and effective way, without having to wait long for it. The advisor is also happy. She/He can give the customer what she/he asks for in the full context of that customer’s past history with the company. Robeco believes they have succeeded in creating a call center where the customer is the central focus and where today’s innovative technologies are used to assist people in an efficient way.


Commentary For most of us reading this we would not see anything special or particularly interesting here. First the need for information at the command of CSRs is well established in the States. Part of the importance of this for Robeco has to with the state of financial services in Europe. From the description of this case it seems that Europe may still be behind the U.S. in application of advanced one-to-one principles and call center process and procedure. European financial services institutions would do well to study and adopt the premium team approach (Fidelity Investments) and the value segmentation approach (Charles Schwab) already well understood in the U.S. The “mission” of Robeco to be the best listening provider would appear to be a somewhat elusive goal. Listening would appear to be something that is easily duplicated by competition. Finally, the European market might be quite a fertile market for U.S. call center companies and technology. The growth of call centers in Europe is now greater than the growth in the U.S. The state of the industry may be a bit behind the U.S. also. However, entering the European market is complicated by legal and cultural issues. Any company considering this market would best be served by strong European partnerships. This case also illustrates the very important concept of one-to-one marketing, which we discussed in great detail in the chapter just before this.

Chapter 43 Autopsy of caller dissatisfaction Key Words—customer dissatisfaction, once and done, customer satisfaction Probably the most urgent questions facing a call center are: What is great service in a call? How can we provide it? How do we get better? The answers to these questions require an autopsy (from the Greek word meaning seeing for oneself) of caller dissatisfaction. Researchers at the Center for Customer Driven Quality at Purdue University undertook to autopsy caller dissatisfaction.

The autopsy Telephonic switch technology allows incredible flexibility in measuring standard statistics across industries and types of call centers. According to experts there is only a small set of statistics that call center managers use to assess the adequacy of operation of the center. They are: 1. ASA—the average speed of answering the call. It is assumed that consumers get frustrated when they wait, thus the longer the wait the more dissatisfied the caller. 2. Queue time—The time the caller is in line and must wait. It is assumed that longer queue time leads to dissatisfaction. 3. Abandonment rate—It is assumed that hanging up the phone before the call is answered is indicative of caller dissatisfaction. The higher the abandonment rate the greater the dissatisfaction. 4. Average talk time—The length of time of the call. One could predict that the longer the time the more likely it is that the caller is satisfied. One could also predict that the shorter the time it takes to resolve whatever the issue is they called about the greater the caller satisfaction.

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5. Adherence to schedule—This measure represents the percentage of time the agents are in their seats as scheduled answering calls. In the modern center agents can log off or do work outside answering calls (paperwork, investigative work, etc). It is assumed that the more the agent is in his/her seat answering customers the more likely the consumers will be satisfied. 6. Percentage of calls blocked—Systems have their limits. Call blocking occurs as centers reach these limits and do not allow calls into the queue at all. It is assumed that the more this happens the more likely any single caller will have experienced a blocked call and the greater the dissatisfaction. 7. Time before abandonment—How long does the consumer hold before hanging up? It is assumed that the higher this number the greater the caller dissatisfaction with the call. 8. Inbound calls per shift—The greater the number of calls the more rushed and hurried the agent and therefore the greater the dissatisfaction. 9. Service levels—a measure of call center efficiency. It is measured by dividing the number of calls answered within some goal divided by the number of calls. The higher the service levels the greater the number of satisfied customers. 10. Resolution of first call—This represents the percentage of callers who have their question/problem answered the first time they call. It is assumed that this is related to caller satisfaction.

The study When you talk to call center managers and executives you get all sorts of answers to the question of what causes customer dissatisfaction. Most believe that speed of answer is at least part of the answer. But what really is the answer? Purdue University’s Benchmark Survey of call centers provides the means to address the question. The database (at the time of this study) had a cross section of 2500+ centers (20+ industry groups) measured on 50+ variables. In addition to those measured variables (described above) the survey measures the degree to which call center customers report “top box” satisfaction scores on internal instruments. Most call

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centers (75% according to the Purdue survey) do their own caller satisfaction surveys. These surveys differ but they all have in common a top score. By reporting “top box” score we are able to equate all the survey work as well as use a measure that many call centers use to set goals (that goal is creating the most satisfied callers). Using sophisticated statistical regression techniques we can autopsy or see if any relationships exist between the predictor variables (the thirteen operational measures) and the criterion variable (the thing we want to predict—in this case caller satisfaction). We can therefore uncover what causes caller dissatisfaction.

Findings First the Purdue database allows us to look at how differing industries are succeeding in creating satisfied callers. Table 1 shows that there is wide variety in call center performance with insurance call centers doing a more effective job of satisfying callers (64% top box scores) than computer software companies who report 26% top box satisfaction. The real issue is what causes caller dissatisfaction. The research showed that only two of the operation measures predicted caller dissatisfaction. By far the most significant predictor of caller dissatisfaction was the percentage of calls closed on first contact. The greater the resolution the first time the greater the caller satisfaction—the less the resolution the greater the dissatisfaction. Of significance but less than resolved on first contact was abandonment rate. The more callers gave up and hung up before getting an agent the greater the caller dissatisfaction.

Commentary 1. No amount of answering calls fast, adhering to schedule and the like is as important as resolving the call on first contact. Call centers should work on getting their resolved on first contact rate as high as possible. Table 2 shows industry averages for resolution on first contact across the industries from data warehoused in the Purdue Benchmark Study.


?

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TABLE 2 Calls closed on first call in percent General_Industry ID 1 2 3 4 4 5 6 6 6 7 8 8 8 8 9 9 9 10 11 12 12 13 13 14 14 14 14 14 17 18 19 19 19 20 20 20 20 20

Industry Aerospace Automotive Catalog Chemical Pharmaceuticals Consumer Products Banking Brokerage Credit Card Health Care Provider Insurance (Health) Insurance (Life) Insurance (Other) Insurance (Property/Casualty) Cable Television Media Publishing Other Government Real Estate Retail Computer Hardware Computer Software Telecom Provider - IXC Telecom Provider - CLEC Telecom Provider - Other Telecom Provider - RBOC Telecommunications Transportation Travel Agency Airline Hotel Travel - Other Fuel Utilities other Utility Electric Utility Electric and Gas Utility Gas

Average of Data 48.88 66.99 73.41 70.31 69.16 66.77 69.24 73.33 72.91 67.09 72.63 69.91 79.72 69.19 66.37 53.14 71.32 68.20 67.41 68.00 62.59 64.59 56.79 69.13 57.40 67.68 49.67 64.26 74.69 51.89 65.83 48.75 50.41 72.50 72.47 69.33 76.57 73.74


2. Many of the operational measures being put into reports and taking executive attention probably don’t matter. It is important that managers and executives not waste their time on meaningless pieces of information. To do so distracts and detracts from the important stuff. Spending time on speed of answer seems to be wasted since this autopsy of caller dissatisfaction showed speed of answer to be insignificant in determining caller dissatisfaction (or satisfaction). The first thought that comes to your mind when you think about decreasing abandonment rate is to hire more agents and decrease amount of call time—both in hopes of getting to people before they abandon. The findings also suggest that centers could try to increase the number of seconds before callers abandon the call. It is better to get them to wait and then resolve the problem than to have them hang up and maybe try again. How does Disney create customer satisfaction despite hours of waiting in line? The lessons here suggest that movement of any kind is good. Distraction helps decrease perceptions of waiting. This might translate into call waiting strategies. Education, entertainment while on hold might keep consumers on the line for enough time to have a CSR get to them. Distraction techniques are subject to easy verification (try it and see how abandonment rate is affected) and are much cheaper than the resource increase strategy for decreasing abandonment rate.

Chapter 44 Call center as profit center—Pay for product placement Key Words—call center ROI, references, product placement

Problem For many senior executives the call center is perceived as a cost. (It actually may be a cost.) OK, we all agree to that. So we try to convince the company’s executives that what looks like a cost is actually an investment. There certainly is a compelling argument to be made that a satisfied customer brings in money and a dissatisfied customer takes money away. If you can convince your executives of that then you have a fighting chance of convincing them that the call center had a positive return on investment. There are some books and formulas that help you do this; see:

Driving Customer Equity: How Customer Lifetime Value Is Reshaping Corporate Strategy by Roland T. Rust, Valarie A. Zeithaml, Katherine N. Lemon Return on Quality: Measuring the Financial Impact of Your Company’s Quest for Quality by Roland T. Rust, Anthony J. Zahorik, Timothy L. Keiningham Go to www.1to1.com and search for ROI for a series of very good articles and white papers on how to figure ROI for a CRM application. Go to www.benchmarkportal.com for white papers on figuring ROI for call center applications. But there is another way…maybe. The consumer is calling about some spotting issues with their GE dishwasher. After you determine that it is not a product or use or care issue you recommend that they change dishwashing liquid brand. But you do not make a recommendation. Why not? Why not determine the various products that work best to eliminate spotting and

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then ask the manufacturers if they want to pay a fee for product placement in your call center script? Whenever the spotting issue comes up—and it comes up pretty often for dishwasher questions/problems (according to the GE Answer Center www.geappliances.com/ geac)—you offer the tips about changing dishwasher detergent and then offer a coupon worth x% off one of the products that GE has determined works well on this problem. The company pays for placement. GE increases customer satisfaction by making their products work better but also by giving the consumer something more: a coupon of value. The brand/company that has paid for placement has a new customer at a fraction of the price of mass advertising. Win, win, win. What is offered can be related to the product service sold or it can be totally unrelated. Look at your credit card or department store bills and look at all the products offered outside the scope of that which the bill concerns. You can make money selling “things” to callers, offering special deals, offering coupons, etc. Given the nature of your calls what can you do to make money and increase customer satisfaction?

Commentary Figuring, demonstrating, convincing others of the call center’s ROI is still one of our biggest challenges. A number of systematic approaches have been detailed. The trouble is, they take a lot of effort and I really cannot say if they are accurate. Also, they may be based on assumptions that not everybody in your company may buy into. Life can also be simple. There’s a number of ways in which you may contribute to your bottom line. In this chapter we outlined just one; we challenge you to stop and think about 100 others. What can you give away to callers that enhances their satisfaction with your product and services that some other company will pay you to promote? You know people like free stuff. Give some of your stuff away too; it may sell other product lines (and get rid of inventory). This too tells the customer that you care about them. It rewards them for doing business with you (be careful—it may encourage more calls).

Chapter 45 Call centers as product design workshops CASE: GE Answer Center Key Words—product information, customer feedback, ROI

In traditional market research you have an idea and a $150,000 budget to assess the market for that product/service. You call in the marketing department and after some focus groups, mall intercept studies and survey designs, voilà, you have your answer to the product question. OK, maybe it is not so quick and/or easy. Actually the development of new products is a lengthy and costly process. The focus groups, mall intercepts, depth interviews, surveys and other standard marketing techniques may help design a product that consumers say they want but it takes a long time and is very expensive. But wait—why go out to consumers when you have consumers coming to you?

The General Electric way The GE Answer Center (www.geappliances.com/geac) realized this in 1992 and has ever since used the call center as a market research platform of first opportunity. If GE engineers have a question they program it into the CSR’s computer screen and after the call is completed the consumer is asked if they will help in a project and the marketing or design questions are asked.

The result A good story. The obvious result of this is having instant feedback from consumers about design and marketing issues of interest to the company. Marketing, engineering and product development can get fast, efficient feedback on questions of interest. This is the obvious effect of this process. But there are some very interesting side effects (intended and unintended) that make this an interesting process regardless of whether the marketing, engineering and product development people get answers to questions. First, the call center becomes better integrated into the “flow” of an organization. Instead of being simply an appendage (way out there) the call center is part of the 245


normal and natural conversation of the organization. It will only take a couple of successes for the call center to be thought of as a strategic weapon for the other more strategic functions in the organization. If marketing (or product development, or engineering, or any of the tens of divisions that might have questions to ask) sees the call center as an opportunity, then when the VP asks for more money for call centers the senior management understands the value of call centers. This is further reinforced by the informal visits that many of the functionaries who use the call center to answer questions make to the call center. In this way the executives in the call center are known throughout the organization and to the executives. The real value may even lie in a more obscure result of all this. It will only take one call center solving a problem story to become part of the corporate legend. These legends establish individuals and functions long after the individuals and functions are gone.

Commentary Some caveats need to be described when implementing this strategy. First, never lose sight of the real reason for the call. The marketing question cannot get in the way of solving the consumer’s problem the first time. Second, the information gleaned from this process is questionable. The callers to the call center are not representative of the company’s product purchasers and users. So the results of a marketing survey cannot be representative, valid, or reliable per se. Making final decisions based on a sample of call center callers is tenuous at best and fraught with real problems and totally misleading at worst. However, you have the call center and you have consumers calling. Why not use them to gather quick easy insights into marketing and design issues?

Chapter 46 Escalation of customer dissatisfaction: Identifying the top reasons and creating satisfied customers out of consumers CASE: GE Answer Center Key Words—customer dissatisfaction, customer research, problem analysis Not all calls go smoothly. If we are to assume that the goal of each call is to maximize customer satisfaction then identifying and handling callers whose dissatisfaction increases on a call is extremely important. Recovering dissatisfied customers is clearly important. According to statistics 80%+ of dissatisfied customers will be loyal to your company if their dissatisfaction is resolved. According to research at the Center for Customer Driven Quality anywhere from 20% to 70% of your callers are still dissatisfied after finishing their contact with you. The issue here is not simply having a recovery system for callers who might become more dissatisfied because of the interaction with the CSR but to avoid the escalating dissatisfaction and catching it before it gets bad. At the beginning of a contact it might be easier to satisfy the customer than later on after the anger and dissatisfaction have escalated.

The General Electric case The GE Answer Center (www.geappliances.com/geac) in Lexington, Kentucky, has a two-pronged system for this. First, they have specialists trained to recover satisfaction when a CSR identifies a caller as being more dissatisfied after the call. These agents have received special training after having been identified by team leaders as especially good at these calls. CSRs can warm transfer a call to these agents at any time. If these “Customer Care” agents are not available CSRs fill out a special e-mail request and one of these agents calls the customer back within 2 hours or immediately the next business day. Second, the real genius of GE’s vision is they have identified the top 16 escalation issues for transfer to the specialized Customer Care Agent. Now instead of simply

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reacting they can proactively transfer or proactively work with the customer with scripted and known solutions. If these 16 top issues account for 90% of all escalation issues and the solutions are effective, the need for escalation specialists has decreased and customers are satisfied well before the need for satisfaction recovery. Some of these escalation issues are: 1. Loss of ATM/check card―CSR issues new card Fed Ex to customer. 2. Encoding errors on statement 3. Missing deposits/adjustment 4. Second request due to inadequate response to initial request 5. Robbery or loss of wallet/purse

Commentary Knowing the top issues that will cause greater dissatisfaction with the center/business means that steps can be taken to avoid and modify the increased anger by testing various solutions. More importantly by having CSRs aware of these top escalation causes makes them more aware and sensitive to these escalations. It increases CSRs’ competence in dealing with these issues because scripted and proactive effective responses exist. Specialists can be developed to handle these situations. Special time can be better spent because there will be fewer escalations. Probably most importantly, the call center is more effective because it is not simply reacting to customer dissatisfaction—it is strategically identifying, minimizing, and maximally attenuating these episodes.

Chapter 47 What is caller satisfaction related to? Justifying your call center CASE: General Electric Key Words—caller satisfaction and post call behavior, customer loyalty and retention, customer research The problem faced by most call centers is simply: How do you justify the expense of developing and running a call center? The answer lies in some simple, necessary, essential, but for most of us boring and difficult, consumer research. Justifying the expense of your center requires that you go beyond knowing that satisfied callers are more likely to buy to knowing how much more likely. Most call centers were and are founded on the original TARP finding that satisfied consumers are more likely to purchase from you again. The TARP research and most of the supporting research since their groundbreaking work is retrospective survey research. Consumers are surveyed and asked if they are more or less likely to purchase a product after various situations. The evidence has certainly been consistent and leads one to conclude that if a call center can solve problems and answer questions they will have satisfied callers and these callers will probably be more likely to be loyal and purchase more products from the company. Yet for most companies the link between caller satisfaction and repurchase, purchase and loyalty is borne by analogy and few if any call centers do the proprietary research necessary to establish the link for their center (and the extent of the link). What good is caller satisfaction if it is not related to some outcome—purchase or related factor? Simply put, does a satisfied caller really mean that they are more likely to purchase from you again? What is the relationship between caller satisfaction, repurchase, purchase probability, positive word of mouth, and customer lifetime value? It may be the legendary managerial skills and attitudes of Jack Welch (ex-CEO of GE) or just some wisdom in the call center division, but GE decided to do the tedious specific proprietary research to establish the link between what happens in the call center and what happens to sales.

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General Electric General Electric (www.geappliances.com/geac) is one of the legendary conglomerates on the U.S. economic landscape. It has the greatest market capitalization on the U.S. stock market (that is, before the recent 2002 market retrenchment (collapse if you have a stock portfolio that looks like mine—Worldcom, Nortel, AT&T). There has been an awful lot written about GE and Jack Welch, but one of the things that lies below the surface was the “let’s experiment—let’s try it—let’s find out” ethic. They wanted to know and did research to determine things.

The solution The basic form of the research is to get the name and number of all callers and using sampling techniques get customer satisfaction numbers immediately after the call. Follow-ups with callers at various time frames (1 week, 1 month, 6 months, 1 year, 2 years, 3 years) measure purchase history. The essential questions are •

Does caller satisfaction lead to purchase?

•

How quickly does caller satisfaction lead to purchase?

•

Does caller satisfaction lead to loyalty and repurchase of other company products?

•

What is the lifetime of a customer who is satisfied?

The premise of all call centers is that solving customer problems, answering questions, and having the customer leave a call more satisfied than before the call is somehow related to sales metrics. If we did not believe this relationship then the justification for call centers weakens. If every contact is an opportunity for increasing the probability of sales, relationships between caller satisfaction and sales should be found.

What did General Electric find? GE found that 17% of callers buy appliances within 30 days. Given some average per person sale the effect of a caller contact can be quantified and compared to costs of call center. However, GE does not know what percent of those 17% would have purchased a GE product anyway. This is an important piece of information because if 80% of those 17% would have purchased a GE appliance anyway then the case for justifying a call center is clearly lower. GE does not know what percentage of appliance seekers

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who call other manufacturers with questions buy from the competitor. GE does not know what percentage of those who want to call and do not call buy GE products. GE does not know how a call is related to loyalty.

The problem Most call centers and senior executives do not have the background necessary to do reliable and valid research. Any marketing researcher would be able to poke holes in GE’s analysis and methodology. Any beginning marketing researcher would be able to design a semi-rigorous study that could answer the questions that GE might be interested in. The fact is that GE seemed pleased with their finding. The finding served to justify what they do and are doing. So in some sense all is well. The call center is justified. Yet, it seems to outsiders that a company really needs to know how calls and caller satisfaction is related to outcomes—purchase probability, purchase frequency, loyalty to product or manufacturer, word of mouth, wallet share. This information would exponentially increase the power of management to strategically manage the call center. Indeed, why spend millions of dollars increasing caller satisfaction when effect is limited? On the other hand, maybe spending millions to raise satisfaction is worth it. There is only one way to know—research.

Commentary 1. The value of a call center must ultimately be measured by the effects of the calls on some outcome measure—more sales—greater life of customer—a sale more quickly. 2. The research to justify a center is seldom done and not done well by even the best companies. According to the Purdue University Benchmark Study of Call Centers about 80% of call centers regularly measure caller satisfaction. Less than 1% has ever looked at the relationship between caller satisfaction and measures of sales performance beyond the call. Research at Purdue University has shown that the relationship between satisfaction and purchase is weak at best. There is no one to one relationship between satisfaction and repurchase or dissatisfaction and defection. Thus in all likihood a satisfied customer is almost 50% likely to switch and a dissatisfied customer is 50% or


more likely to stay. This calls into question all the money we spend on contact centers. The moral of the story here is that although there is not a one to one relationship between satisfaction and repurchase and loyalty it may be the only game in town so it is worth trying to create satisfaction.

Chapter 48 If the phone rings…everyone answers it CASE: Proflowers.com Key Words—employee responsiveness, call center-centric company, corporate culture, distributed work, call demand problems No matter what the business that a call center is attached to there are busy times. Imagine yourself a florist. You would love to spread demand for your product across the year but it is not going to happen. Sixty percent (maybe more) of your business will be done around Mother’s Day and Valentines Day. Management certainly understands that inventory has to be different around those days and plans for it. Call centers understand that there will be more calls around certain days—and sometimes plans for it.

Proflowers.com Proflowers (www.proflowers.com) is a small Internet business ($35 million sales in 2000). They have taken the approach that they really don’t want to hire new people just to lay them off. Not only is this a very expensive proposition but also it affects all who work in their center. At the same time they certainly understand that no matter how busy they are they must make the sale, the customer must come first, the call must be answered.

The Proflower solution Every person in the company from secretary to programmer gets trained in the call center. When it gets busy everyone can get involved in answering calls.

The effect The effects of this are many and quite extraordinary: 1. Heavy call loads can be addressed without outsourcing or temporary hiring. 2. Everyone who works for the company understands a consumer point of view and can in the course of pursuing their work understand better

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how their decisions are affecting the customer. Or at least they are more likely to ask the question. 3. There is a common connection between VP’s, Directors, CSR’s, programmers, and secretaries. The call center is not a hidden cost but a central strategic part of the organization.

Commentary There has been a lot of talk about creating a customer-oriented culture. Talking about such a culture won’t get you there, but a collective responsibility to listening to the customer will, as this case shows. As with so many of the solutions presented in this book, it is simple. But you have got to just do it. Maybe the most important part of the case has to do with executives getting their hands dirty. We simply cannot overestimate the many positive effects of front line employees seeing the “suits” getting their hands dirty. Even when you don’t think they are looking they are watching you. One of the favorite things I used to do in my retail consulting practice was do a walk through with executive committees. There were 2 things I looked for. First, I always had an assistant roll up a couple of pages of newspaper and plant them directly in the path of this executive committee. Then I watched to see if any of the executives picked it up, on the way through the store. Although there were a couple of executives who would pick it up, for the most part executives simply passed them by (although one or two did call out to tell someone to take care of it). It does not take a rocket scientist to figure out what the message is to the employees in the store that see this. If the executives don’t take responsibility why should they? I understand you can dismiss this—maybe they didn’t see it—so I invented a second thing. The second thing I did was even more dramatic, it turns out. I had my assistant walk behind us and count the number of customers and employees that passed within 5 feet of the CEO and President. I counted the number of times they said hello or some other recognition of their existence. It pained me and pains me to say that the index of customer orientation in most cases (I made up this name) was as close to 0 as you could get without going over. Executives did not acknowledge or help customers in any way (they sometimes said hello to employees). Think of the message here. Here are the CEO and Presidents of these relatively well known retailers spending hundreds of thousands training frontline people to deliver exceptional customer service and they

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walk through the store day after day ignoring the very thing that they are saying is important. The double standard here is so striking. In any case executives working the phones, arm in arm with the frontline CSR, has an incredible positive influence on the culture of your call center.

Chapter 49 Infomediaries: The next revolution CASE: Capital One Key Words—customer information, infomediary

The 1990’s in call center evolution was the era of traffic. Get as many people to access the company as possible. Answer the calls quickly and efficiently. The common call center metrics of this era were (and still are) speed of answer, abandonment rate, talk times, percent solved on first call. The underlying philosophy is to build a customer base, solve their problems, answer their questions, and make them satisfied with the call and you build loyal customers. The era of traffic is over. The next era is information. Call centers that capture and capitalize on essential consumer information will lead their companies into the 21st century. The battle now is in capturing information. Not all call centers capture information. Most take information for the purpose of the call and its outcome but do not keep it. Very few capture. Very very few capture it right. Very very very few use it. Very very very very few capitalize on it. Now the battle will be in capturing information that will be used to profile consumers so that value can be delivered. The call center and its associated web access will be used to build a fence around the customer so high that it would be difficult for the customer to cross it to another company and difficult for the competitors to get to the customer. The essential question is, “What information can you collect now that you can do something with?” Getting personal can increase customer lifetime value. In ecommerce research personalization increases click through from 2% (without personalization) to 4-15%. Personalization takes the 2-4% conversion of surfers to buyers to 10%+. With personalization the average order size increases 10-15% and rentention/repeat goes from 25% to 40-60%. Personalization based on unique information pays BIG. Becoming an infomediary requires a perceptual shift of call center management:

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Chapter 49 Infomediaries: The next revolution 257

Manager’s view We have more information

Infomediary View What information has the highest value?

than we need. We don’t know how to leverage

Keep it simple and focused.

what we have. We’ll get to it.

Use it or lose it!

Capital One Financial Corporation Rich Fairbanks, Chairman and CEO of Capital One (www.capitalone.com) says that “credit cards aren’t banking—they’re information.” Capital One Financial Corporation (COF) gets 2+ million calls a month asking about balances, payments, interest rates…your typical bank credit card call center. But this call center is anything but typical. Caller information is matched with key demographic and marketing data from identification of the telephone number calling in, and before the call is picked up by the CSR, the top potential reasons for the call are already on the screen. The data base also displays what the caller might want to buy even though the caller is not calling to buy anything—preparing the CSR to sell once the call is handled. This is taking just 100 milliseconds—one tenth of a second. While your CSR is still typing in the first name of the caller COF knows what this caller has done, their background, their history, and the reasons why this caller might have called, and what they might need. Pretty cool. Based on their millions of calls COF has compiled the top 10 categories of calls and has matched that frequency with key customer background, call experience, and demographic variables to be able to predict what the call will be 60-70% of the time. Call routing can then be intelligently based before the CSR even picks up the call. Here is a particularly instructive example. COF knows the callers who call each month for a balance. Their IVR can now answer these calls with a direct statement of balance. “The amount now due on your account is $300; press 1 if you have a billing question, press 2 if you do not think we have received your payment.” Now before the


CSR’s time is even occupied 90% of these customers are taken care of. Thirty seconds of CSR has been saved. COF is one of the 10 largest issuers of credit cards in the U.S., with almost 18 million accounts with balances totaling over 17 billion dollars in 1999, 11,000 employees, and a market capitalization of 8 billion dollars. Every interaction is also a selling opportunity. Based on data collected from past experiments COF can predict who is likely to buy and based on their habits and market information can predict what they are likely to buy. These calls are routed to one of COF’s selling experts who then close about 15% of their calls. The genius of this is that unlike teleservice centers that annoy customers by calling at dinner, COF talks to customers who have a high probability of buying when they choose to call the center. The result in 1998 was that 50% of COF callers purchased something within 12 months of signing up for their credit card. The key to COF success is its collection and use of data. They do not erase the call information after 3 months; instead they log it—every call, every marketing effort, every cause and effect. If they sent out a solicitation in a blue envelope they know the call volume that results. They know which customer received what color and they record the reaction. They are not afraid to test and experiment. In 1998 the company performed 28,000 experiments. They tested new approaches, new ads, and new products. Based on what it has learned from the information, it markets 6000 different kinds of credit cards, very personalized cards to match the needs and interests of all its customers. They have created an infomediary company.

Commentary So the moral of the story is simple. “It’s the information, stupid” not the call. The four essential questions you need to ask as you move to being an infomediary from a vending machine are 1. What kind of information do I need? 2. Is the call center or web best positioned to get that information? 3. How do I maintain access with the customer? 4. How can I leverage that information to exchange value with the customer?

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Actually it is not so simple. This is a credit card company that adds value to customers by selling them things that add value to their lives while they are solving their problems. These sales are based on scientific market and customer data. The sales are personalized to the habits and needs of the individual customers. Data mining is being made easy by some relatively easy but sophisticated statistical packages. Check out the offers of SAS and MicroStrategy. Although I don’t want to oversimplify things, all you do with these packages is throw your data into a computer black box and they automatically look for relationships using a number of statistical techniques that we used to know how to use. The danger is, of course, you get garbage. The upside is that you find counterintuitive relationships or heretoforeunknown relationships that increase possibilities.

Chapter 50 One to one publishing CASE: AudienceOne Key Words—personalization, one to one marketing, customization

The issue Your caller calls for some information about the product you sell. You ask the required name, address, and serial number. You click and the computer sends that request to another unit who has a person pick the literature, put it in an envelope, and mail it to the customer. The customer gets the generic literature and probably says nothing and doesn’t feel anything special toward the company that sent it. What if you could send a completely individualized and personalized response to the customer in the same time and at lower cost than sending the generic literature? You save time and money by not printing the document until needed (no inventory, nothing stale, no waste—it is not printed until needed). You save time and money for no one has to “pick” the literature. It is printed and mailed directly. More importantly you increase the wow factor. The customer opens a unique and individualized document with their names and some specific reference that only she/he could have received.

AudienceOne AudienceOne (www.audienceone.com) identified three different types of people they could market to. Users before a trade show, during the trade show, and after the show. The pre-show group was the 4,000 preregistered attendees. A special website was created and through the mail and e-mail the preregistered individuals were told they could go to the web site and profile their interests. Based on the profile unique literature was created for each person who visited the site. Out of 4,000 preregistered people 436 visited the web site and filled out a profile. Individuals could choose among 43 different product categories and 150 different companies that were at the show. A total of 436 users requested 916 unique books in 10 days. Their books had a personalized cover page, table of contents (unique for each book), and a cover letter. The content of the

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book depended on the topics and focus of the individuals. Each book included a map of the exhibit hall with colored highlights to all booths in the areas of interest selected. The books were handed out to the people at the AudienceOne booth at the trade show. For those registrants who did not pre-register kiosks allowed them to create personalized trade show books. Limitations in pages were created so that the customers could pick up their individualized books in 30 minutes.

Analysis Peppers and Rogers started a marketing revolution with the publication of their “One to One Future” in 1995. Their theme—create loyal customers for life and capture more of their money by creating a product and service that was so unique to them that they could not get it anywhere else. Levi’s personal fit jeans—for an extra $10 Levi’s will take your measurements, zap them to their factory and have a personal pair of jeans made just for you. British Airways finds out what their customers want to eat before they fly so that they can have exactly what they need on the plane without any waste. Paris Match makes a personal pair of eyeglasses suited to your special face and desired impression. Just for Feet takes an image of your feet and makes a personal pair of shoes in their factory just for you. General Nutrition Centers will mix for you on the spot an assortment of products with essences selected by you—and to top it off they make a label with a name that you select, such as Richard’s Remarkable Shampoo. I just purchased a personalized pair of ski boots from SureFoot. Using patented technology they take a computer mold of your foot and then build an internal ski boot that fits into an off the shelf shell. I will not say that wearing these ski boots was paradise but it was not the hell it has been. (By the way Surefoot does shoes, running shoes, and anything for the feet). More importantly people will pay a premium for personalized (and better) stuff. AudienceOne (www.audienceone.com) provides a one to one publishing system. Instead of sending out generic information AudienceOne turns your information into a custom document for the specific customer. You have reduced printing costs and improved customer relationships since you are sending very personalized material. AudienceOne takes the customer’s profile (who, what they want, when do they want it, where do they want it), selects relevant information from the database, prints the specific and unique document(s), and can print and send, e-mail and send, or make available on the Internet for immediate viewing.


Commentary What does this mean for call centers? •

Personalized publishing allows visitors to a company/call center access to a site to create focused books and pamphlets made to the needs and specifications of each visitor and caller. Users can choose to receive the material by mail or online. By providing instant access to information consumers are not treated as a generic “For more information fill out the form” but feel special.

•

Since these documents are prepared digitally they can be hardcopied to be mailed or e-mailed directly to the caller. Since these documents are prepared by the caller and the questions they an-

swer, a person is not needed to pick the literature and put it in an envelope and mail it.

Chapter 51 1-800-call-before-you-install: Proactive customer satisfaction maintenance

Key Words—customer satisfaction, proactive services, preventing problems, problem analysis

What can you do if you know that a large percentage of your customer dissatisfaction in the first 30 days of product purchase is a result of inaccurate, ineffective, foolish, and downright incorrect installation? According to the GE Answer Center (www.geappliances.com/geac) you put on the box and you put on the packaging, and you put everywhere you possibly can the following: Please call before you install….1-800…. GE sees this as proactive customer service. Why wait for customers to call when they are angry and dissatisfied? Get them to call before the dissatisfaction occurs. They see this as positive maintenance. More broadly this is proactive customer satisfaction maintenance. But this does more than correct potential installations errors. It is used to reinforce the consumer for purchase. Consumers know that they have GE behind them every step of the way. They have already called the call center so the second question call becomes very easy.

But it could be better The current GE system is flawed for it requires the consumer to make the call. What percentage of consumers do not call even though the packaging and the product all have it clearly marked that they should call? This percentage is probably as high as the percentage of consumers who use an appliance without reading the instruction manual despite everything about the packaging saying to read the manual before use. So, let us suggest that GE can take this one step further. Instead of waiting for the consumer to call them why doesn’t GE call the consumer? Indeed, there is no reason why each GE reseller cannot fax, e-mail, or send GE the names and addresses of the consumer. The call center can use their low demand times to call the consumers and reassure them. In 263


this way proactive customer relationships can be achieved with 90%+ of consumers— not simply the 50% who call before they install. There is an IBM commercial that shows a repairman knocking at the door. The woman of the house answers. The repairman says that he is there to repair the refrigerator. The woman says there is nothing wrong with the refrigerator and yells back to her husband to see if he called the repairman to fix the refrigerator. The camera shows a close-up of the repairman who says that the appliance is not broken yet but it will be. The image is crystal clear. Why wait for the problem to happen? Smart appliances will allow repair services to know before the consumer when a problem is happening and dispatch help before the problem becomes evident. (E-mail [email protected] if you want to see this commercial. I will e-mail it or send it on a disk to you. I wonder how many people will read this). In this futuristic case (actually this is not so far away) and in the current GE situation the premise is the same. The consumer is always better served if the problem is avoided. Avoid the problem by designing products and services that make the problem unlikely. But GE’s plan is actually quite creative. Have the installer call before installation to prevent the problem from happening. We have also seen this technique in a grill sold at COSTCO. By asking customers to call before they put it together they have eliminated 85% of returns.

Please read the following important information! For assembly assistance or questions on parts DO NOT RETURN your grill to the store. Please contact the GRILL SERVICE CENTER at 1-800-241-7548 (24 Hours A Day, 7 Days A Week) ATTENDEZ UN INSTANT Veuillez lire les informations impotantes suivantes! NE RETOUNEZ PAS votre gril au magasin 1-800-387-6057 (Ouvert 24 heures, sur 24, 7 jours par semaine) CENTRE DE RÈPARATIONS DES GRILS

Chapter 51 Proactive customer satisfaction maintenance 265

Commentary What are your significant problems? When you have identified these problem areas work with marketing and product development to address these specific problems through prompts on product or packaging through call center contact. If you think about this there is a lot you can do here. We find too many companies unwilling, or unable to pin down the problems. Fix them, avoid them, because customers will not let you ignore them.

Chapter 52 Increasing the share of the customer, not simply market share CASE: RCI Key Words—share of customer, up- and cross-selling

Time-sharing is coming back. After a period of very poor image, consumers are beginning to like the value that time-sharing provides. For the past 10 years those two words (time share) made people shake in fear. Images of offers of free trips with the requirement that you sit through a high-pressure three-hour sales presentation race through potential consumers’ heads. Tales were told of time-shares that could not be sold after consumers got tired of their one week in a place they didn’t want to be anymore (or sold for pennies on the dollar paid). No so anymore; see . Enter RCI (www.RCI.com), previously Resorts Condominium International. RCI was born in 1974 giving time-share owners an opportunity to exchange their week at the beach for a week at the ski resort. Now time-share owners were not stuck with their week in a place they didn’t want to be; they could (for a fee) trade their place with others. RCI single-handedly jump-started and revolutionized the time-share industry. RCI has over 3200 affiliated resorts in over 90 countries. Seven of every 10 vacation exchanges are arranged by RCI. Over 15 million vacation exchanges have been arranged by RCI (1.8 million in 1997). For an annual membership fee consumers (3.2 million member families in 1997) deposit their vacation time at an RCI affiliated resort into the RCI SPACEBANK (TM). Members make withdrawals from this bank and apply it to time at another resort that has been deposited. But RCI saw something else. In the creation and fulfillment of the basic transaction (trading time shares) there is a possible expansion of these benefits that creates unique value to the customer, greater satisfaction, and more potential profit for the company. The expansion of benefits to the customer and profit to the company is the thrust of this story. What started as simply an exchange service has turned into a value added company that makes the membership fee seem insignificant given the range of

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Chapter 52 Increasing the share of the customer 267

benefits. It might be that the members would pay the membership fee for all the services RCI offers even if there were no time-share exchange. The number one benefit of RCI membership is exchanging vacation time. But members receive: •

Special rates on extra resort vacations. RCI has access to empty properties that are part of their resort partners.

•

Very special rates for vacations booked 2-10 days before date.

•

Full service travel agency services—RCI felt that since they had them on the phone making an exchange, why let consumers call another agency to book the trip?

•

Vacation insurance—Like a service warranty this add on is highly profitable and easy to sell because the benefits are obvious and resonate with the consumer.

•

Member discounts―hotels, merchandise, services, entertainment, car leasing and rental, home security and other companies pay RCI for the right to make an offer to the customer base. So RCI makes money on each transaction and up front fees for giving companies the access.

Commentary Try to find value added services to add to what you do. If you are answering questions about washing machines, sell detergent in some great offer. If you are answering questions about computers, try giving consumers an option on paper, ink, or updated software appropriate for their systems. Multiple selling is the best way for in store businesses to increase profit. The same holds true for call centers. Whatever the call, whatever the reason, there is some compelling offer that will add value to what your center is doing, increase customer satisfaction, and of course make the center a more integral business component to the company. According to the Purdue University Center for Customer Driven Quality Benchmark Survey of Call Centers, 41% of centers up and cross sell. Twenty-three % of calls give rise to these possibilities. Thirteen % result in sales. If you are not doing it, there is a lot of added revenue you are missing out on.

Chapter 53 The call center as means of creating customer loyalty CASE: RCI Key Words—customer loyalty, customer relationship management, CRM

The call center represents probably the largest single source of recent customer contacts that you have. Why waste it? How can the consumers who call with a question, comment, concern, or problem be leveraged to create customer loyalty? Imagine that you wanted to reinforce all callers with something that you could send them. The something must add value to their call to you.

Company background RCI (www.RCI.com) callers are members who pay a fee to trade time-share time. RCI sends a complimentary subscription to all its consumer members of a slick glossy quarterly magazine called “RCI Endless Vacation”. Affiliated Resort customers also receive a magazine called “RCI Premier”. The goal of these magazines is clear and simple— add value to the membership. By providing information and reinforcement to member resorts RCI establishes itself as the leader in the field. Their message is, Why member up with another organization when we are the largest with the most customers with the greatest products and services? The message to consumers is just as clear. You have made the right choice by being an RCI member because here is a magazine that no one else can get. By constantly reinforcing the decision to be affiliated or to be a member of RCI, RCI is making it harder for a customer to defect. By adding value to the membership with information and entertainment RCI is making it difficult for another company to steal its customers. By using the magazine as a means to create value and therefore loyalty RCI also has the opportunity to introduce new products and services. Finally, RCI sells advertising to companies and services that add to theirs. The magazine is a profit center as well as a loyalty builder.

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Commentary Businesses do something similar when they send newsletters to their customers. Land’s End, J. Peterman (the old company), and many other companies send catalogues that tell stories that add value. What the RCI case suggests is that since call centers are more likely to get names and e-mail addresses of customers than representative retailers the call center can try and capture customer loyalty by forming a relationship with the caller. Whatever the business, there is a magazine or newsletter that exists or can be created which can reinforce and add value to the relationship between caller and company. I just saw this at the Cheesecake Factory—they sell associated advertising on their menu. There is no research that allows us to state categorically that this strategy leads to more satisfied customers but the logic for that relationship is clear and exists in other venues.

Chapter 54 The case of the priority customer CASE: Charles Schwab

Key Words—call routing, customer segmentation, economic segmentation, one to one marketing Jill V. Important calls the call center with a question. This question could make the difference between a large purchase from you or your competition. Unfortunately you never get to talk to Ms. Important because she became part of the 16% of the calls that were let go because your system got busy. When she tried the next day she was in queue for 6 minutes (“Your call is very important to us”) then she hung up because she figured if you couldn’t talk to her within 3 minutes maybe she was not so important after all. You are confused since you just installed an expensive system that told Ms. Important that the call was very important to you. (In fact she heard that message 27 times before she hung up). The next day she called, determined to get through and after ten minutes got a CSR who did not have an answer to her question. Ms. Important concluded that she wasn’t that important and so maybe you weren’t that important. So not only did she not call back but also she looked for competing brand names and made a $10,000 purchase from your competitor. That really is too bad. Ms. Jill V. Important has spent a lot of money over the years with your brand. It was a shame to lose her. More importantly, in many ways it is a crime to lose her. If you are running a business and someone steals from you, you immediately call the authorities. In this case the call center has stolen from the company (lost sales). Not only are the authorities not called but also the company has no clue what happened or even that it happened. The issue here is simple and clear. It is the lesson of the current one to one marketing paradigm. All customers are not the same. There are some customers who are more valuable than others. The airline industry recognized this years ago when they established different levels of perks in their frequent flyer programs.

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Charles Schwab In some industries it is very easy to put a value on a customer. The financial services industry can value segment by the number of trades made in a given time period (like flying miles) or by the value of the portfolio under management. Charles Schwab (www.schwab.com) has over 9 million accounts. In the beginning the Schwab philosophy was that each one deserved a high level of service. It only took a couple of years to realize that all customers were not the same. Charles Schwab has segmented their clients into different groups with each group getting a different level of service. Schwab’s telephone systems identify the customer before the CSR picks up the phone. The high net worth client gets the phone answered in less than 15 seconds always (other customer wait). The lower groups get regular treatment. In 1999 Schwab closed accounts of people who had small accounts with little activity and contact (these clients were draining money and resources—let them go to Fidelity). Schwab’s Signature clients (net worth 500,000+) get •

A special 800 number

•

Bond investor service

•

Global investing service

•

Estate planning hotline

•

Special web site

•

Access to premium research

•

“On investing magazine”

•

Customized e-mail alerts

•

Quarterly portfolio profile

Schwab has another segment they call “Active Traders”. Active traders get advanced trading tools (e.g., streaming NASDAQ data, advanced routing of orders to ensure best price, priority access, and special trading prices. In both cases what Schwab has done is understand their customers and provide a level of service that increases that segment’s satisfaction. More importantly they have tried to fence these valuable customers off from the competition by providing a level of service and experience that may be hard to match. It is not simply that a competitor cannot match them; it is not in the customer’s best interest to risk it. Why should a signature customer risk going to Fidelity when they have had such a good Schwab


experience even if Fidelity promises enhanced services just like they got at Schwab. These customers are fenced off and fencing off your most profitable customers is a key to success these days and in the future.

Commentary For the call center there are two primary applications: 1. First, your system must be able to mark and identify your priority customers before you pick up the phone. The system should be able to put the priority customer to the head of the line so that they are treated special. There are currently systems that do this. The weakness of these systems is that the customer is not told they have moved to the front of the line because they are special. The seamlessness actually misses the point of the system. The customer should know that they are being treated special so that they can display the behavior that got them there in the first place. If I am falling behind on my frequent flyer miles and am about to lose my level of status I actually receive a letter telling me that in order to keep the status (which gets me free first class upgrades when available) I have to fly x flights in the next 3 months. You can be certain that I am going to fly those extra miles (if I value that extra status). 2. If your system cannot identify customers and move them up in the queue you have got to be able to flag customers as priority customers and agents should be trained to recognize this status and treat them accordingly. A customer who asks for an accommodation for a $100 problem should be treated differently if they have never purchased anything from the customer that is in your top 20% (spending $300,000) per year. Many of the airline companies recognize their high priority customers when the call is answered. 3. But what if your systems cannot identify customers at both contact points? It makes sense then to develop and communicate a separate 800 number for the best customers so that anyone who calls on that number is assumed to be a “best” customer and treated accordingly. In

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this system the actual value of the customer is not known. What is known is that from other databases they have been marked and since they call the special number they are priority customers. These customers are sent a communication telling them that they are special and here is a special number. In all these cases the customer is not treated as a commodity but treated along some value continuum. The recognition here is that not all customers are worth the same amount and differing levels of treatment and consideration are given based on this value. The goal is to fence off your best customers. Make it difficult for them to get the same level of treatment at a competitor and make it difficult for a competitor to steal them. In some sense the issue is to also know if your good customers have suddenly stopped coming to you. Knowing that a good customer has not been seen for a year when they were monthly customers allows outreach to try to correct a problem or encourage the customer to purchase again.

Chapter 55 A multilingual call center service CASE: Centrelink Written with Trevor Deeming Key Words—multilingual, cultural sensitivity The Centrelink Multilingual Service (CMS) provides the full Centrelink (www.centrelink. gov.au) call service (see previous case studies) in over 20 languages for social security and other human services customers in Australia. The service is a national public service situated at Liverpool, New South Wales, Australia.

Problem The problem was how to provide a service to people who not only have different languages but also different cultural backgrounds. Australia is a highly multicultural country. There are over 190 separate languages spoken and almost 1.25 million (of about 20 million) people regularly speak a language other than English at home. The proportion of Centrelink customers for whom this is the case is much higher, e.g. 17.9 percent of Centrelink customers were born overseas. Even in those who speak English, the level of proficiency—defined as not speaking English well or not at all—is poor. For example, in the Italian speaking population, 18 percent of 45-64 year olds have poor verbal proficiency, and in the 65year-old plus population it is 44 percent. In the Vietnamese population, 50 percent of those in the 25-44 year age group have poor proficiency, and this rises to 65 percent in the 45-64 year age group and to 90 percent in those over 65 years of age. Language is not the only issue. People from diverse cultural backgrounds find it more difficult to understand a communication and payment system that is designed, as they experience it, around another culture. Interpreting has been widely used to bridge the communication gaps for people who are not proficient in English, but this has its own drawbacks. Some of these drawbacks are high chance of errors in a three-way communication situation, high

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cost, delays in organizing this service and not being able to have this service available for all real time.

Solution The Centrelink Multilingual Service provides the full Centrelink call service as a bilingual service. The customer receives the service in his own language and with someone who understands his culture. This is congruent with government and his Centrelink access and equity goals. Forty-five qualified bilingual operators provide the full service for the full coverage for call centers. The demand for the service has grown each year since its inception. In 1998, 273,000 calls were handled. The major language areas used by customers were Chinese (Mandarin and Cantonese), Vietnamese, Arabic, Spanish, and the former Yugoslavia languages. The service average speed of answer (ASA) in 1998 was 11 seconds. In 1999 according to data the ASA was 17 seconds. Eighty-five percent of calls are handled to completion with no need for further referral. Cost efficiencies are being met as more traffic is being handled by bilingual operators, thus reducing costs of double handling and interpreting.

Commentary How many languages do you need to offer in your center? It is clear from recent demographic reports of the 2000 Census that Hispanics represent 9%+ of the population. If the preferred language of Hispanics is Spanish then certainly you might consider Spanish agents. You need to look at the demographic breakdown of your market or market areas. You might have to offer CSR’s who speak Spanish or Chinese. There are real reasons why you might want to consider native language presentation of information. Research at Purdue shows that in bilingual individuals cognitive analysis is best served by presentation of information in native languages (even if nonnative language skills are exceptional). In a consumer situation this would manifest itself in increasing the likelihood of purchase of goods and services if information is presented in the consumer’s native language. It may be that given the same information and interaction caller satisfaction would increase if the interaction is in the native language also.


In Europe the situation is complex because most Europeans speak multiple languages. Generalizing from our research we would suggest that even there multilingual presentation of interaction in the native language would maximize chances for satisfaction and sale.

Chapter 56 A customer loyalty program CASE: SalesForce Written with Caz Hosking Key Words—customer loyalty, technology

As indicated in a previous case study, SalesForce (www.salesforce.com.au) has Australia’s largest single site outsourced call center facility with about 800 staff located in four buildings on the one site in Melbourne, and another 400 staff located in either Brisbane, Sydney, Adelaide, Perth, or Kuala Lumpur or Auckland. This case study focuses on just a component of business, that of an airline customer loyalty program, the call center activities of which are outsourced to SalesForce. This call center is responsible for providing loyalty program related services to 1.5 million loyalty program members, which involves handling approximately 40,000 inbound telephone calls and Internet e-mail inquiries per week, and processing about 5,000 membership applications. Other tasks include handling general inquiries, membership sales, managing compliment and complaint letters, and making outbound “win back” call to nonrenewed members—managing more than 20,000 pieces of inbound correspondence (via fax or mail) per week.

The problem The client, a major airline, decided in 1994 to amalgamate diverse databases and service centers and selected SalesForce as the supplier for the amalgamated operation to manage the call center activities for their loyalty program members. SalesForce had previously run just one component of the loyalty program. SalesForce had user input in the development of the new system. The cutover occurred in December 1996. At 9pm on a Monday night the phones were turned off from the Sydney center that was handling the majority of the operation and at 8.30am on the following day the calls began being serviced from SalesForce in Melbourne. Not only was this a new call center in a new state but they also had new agents, a new computer system, and a new service provider.

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To service this new operation staffing numbers in this call center had to increase by 120 fulltime equivalents (from the existing 30), and 20 casual staff. To facilitate this, one major advertisement was run in a Saturday newspaper. This generated 2000 responses in just over 2 days. From call back interviews to approximately 700 people, 300 applicants were interviewed in groups of about 15 at a time. The final part of the process involved yet another interview, and sometimes a further telephone interview as well, meaning that most applicants had four or even five interviews. Stage two of the implementation was to design, develop and write the entire training program and supporting manuals. This development took approximately one month and included product, procedural, and systems knowledge, customer service and sales skills, SalesForce culture, and customer development etiquette. The training itself took four weeks. Concurrently, all administrative systems had to be developed, the location had to be designed logistically and technically, all resources had to be secured and relationships with the airline and other program participants had to be forged, and the existing call center already operated by SalesForce had to be maintained without any impact on the service levels. Due to the heavy paper-based nature of the work (e.g. application processing, mileage claim verification) the workflow is intricate. Call center agents need to interact. Some of the call center agents need to interact with up to 20 other parties, e.g. other airlines, hotel partners, and other suppliers in their daily activities. The challenge for SalesForce was to organize the process such that the service to customers/members is seamless and SalesForce itself is transparent. The SalesForce service commenced with a significant number of backlogged unprocessed claims from the previous provider.

The solution SalesForce has developed a unique culture that we have described in chapter 22. In this instance, as in others, SalesForce aims to be a partner to the client, an extension of the client’s business. A fully integrated solution is provided in which every contact with a member or prospective member is treated as a sales encounter. The communication system employed in this call center is Nortel-based with a front end IVR developed by the client. Client supplied internal and internet e-mail capabilities also contribute to the communication system. Members’ profiles within the database are updated within the call center through application processing, actioning

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error reports, and “nerve cell” activity. The integrity is monitored and the system maintained by internal information technology departments at the airline. The needs of members are catered to through a frontline, two support areas, and the nerve cell. The nerve cell is responsible for all of the systems internally and interfaces with program partners. As such it is able to respond both tactically and strategically to the changing demands of the call center and to recommend to the client changes to the existing processes.

Results The performance of the call center is measured by numerous service levels including call wait and handling times, abandonment rates, processing turnaround times, and volumes processed. There has been a marked and sustained improvement in all of these areas as well as the quality of the service provided to these members.

Commentary Loyalty programs aren’t about accruing points or earning awards. They are about relationships, recognition, and service. Consequently it is not sufficient to merely communicate passively with these customers in the hope that they will keep coming back. The challenge is to undertake long-term customer development and forge relationships that will last. There are a number of requirements for doing this effectively. •

Leading edge technology

•

Streamlined processes

•

Flexible policy

•

The appropriate people

In the case of this loyalty program’s service center, SalesForce successfully combines these elements to provide a balanced and fully integrated solution. In the U.S. E-Loyalty (www.eloyalty.com) is a company devoted to helping businesses use CRM to develop customer loyalty. They have a very worthwhile newsletter.

Chapter 57 Organizing for call center quality CASE: Mega Limburg

Key Words—call center organization, mystery calling

Company background In Limburg (a southern province of The Netherlands), Mega Limburg is the sole supplier of gas and electricity. Mega Limburg serves 400,000 customers in Limburg that consume both gas and electricity. Because of governmental laws and regulations, Mega Limburg has structured its organization in network services and commercial services, which are two separate subsidiaries. Network services is responsible for the connections to the network and the technical aspects of the network. Commercial services is responsible for the marketing and commercial activities and maintains the relationship with the customers. Within commercial services the department of customer service is responsible for customer service with a call center (front-office) that handles all telephone contacts with their customers. The back-office of Mega Limburg includes billing and administration services and the meter inspectors.

The problem The gas and electricity market is rapidly changing. The electricity companies have to adapt their organization to this new environment. The government is stepwise liberalizing the electricity and gas market, which will result in 2007 in every customer being able to choose his or her electricity and gas supplier. In response to these changes, Mega Limburg decided to reorganize the way in which the customer could contact Mega Limburg. The challenge for Mega Limburg was to increase the service level to the customer and to increase the convenience for the customer by introducing one telephone number that can be used for every type of request.

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The solution In the past Mega Limburg was organized in four regions, north, middle, southeast, and southwest and each region was subdivided in four departments. This resulted in 24 different telephone numbers that customers could use to contact Mega Limburg. In 1997 Mega Limburg introduced one telephone number and located all telephone activities in Roermond. Roermond was chosen because Roermond is in the middle of the province and is therefore the best location for all of the employees considering travel time. The philosophy behind only one telephone number is to have an overall service approach to the customer. The customer is offered a “one stop one shop” facility for all of his/her requests instead of calling different numbers for specified requests and information. In the original organization with the four regions the “call center agent” was only responsible for a limited type of questions and requests. In the new situation the call center agent has to deal with all questions that can be raised. The questions vary from information about tariffs, change of address, and new connections up to emergency calls. To handle all these questions the agent is coached very intensively. Not only the agent needs to gain knowledge about the activities of Mega Limburg. The agent is also trained in how to attend to the customer. Every agent has access to a central customer database in which all information of each customer is stored. To gain a sufficient knowledge level to answer all questions, the agent is trained by Mega Limburg at the start of the agent’s career and is updated when needed. The attendance to the customer’s call is carefully looked after. The agent receives training in attitude and behavior and, 6 times a year, coaching to ensure that the agent shows courtesy and empathy. A supervisor listens in to conversations. This is not the common silent monitoring but the supervisor sits next to the agent. The calls are evaluated and where necessary the agent is trained to improve his/her performance. In evaluating the agent, the customer is asked his/her opinion about the call. Questions like “What did you think of the call?” and “was your problem well attended to and solved?” are posed in the periodic customer satisfaction survey. Apart from the coaching, the evaluation, and the customer satisfaction survey, Mega Limburg also uses the mystery call technique. For this Mega Limburg hires an external bureau that evaluates the call center on the basis of mystery calls. All the above-mentioned instruments are designed to improve and ensure a high level of customer service and attendance.


Result Mega Limburg has discovered that not only the call center agents have to be impressed with courtesy and empathy towards the customer but the whole organization. The socalled back-office needs to be impressed with courtesy and empathy to the customer of Mega Limburg. The call center can provide a high service level, but only if the backoffice service level is also of high standard will the whole organization be able to provide a high service level to the customer.

Commentary The mystery call technique is quite common in the retail environment but rarer in the call center world. In the mystery call a “plant” trained and hired to ask similar questions calls and goes through a script evaluating the quality of the CSR’s responses at each step of the way. The beauty of this technique is that all CSR’s are told that they may or may not have a mystery caller and so they never know if the call they are on is the mystery caller or a real consumer. The theory then is that they must maintain the highest level of quality at all times since they do not know when they will be called. This technique has some advantages over in-house quality monitoring. In-house monitors may have biases to a particular agent (they usually know them). CSR’s also generally know when they are being monitored and so can present their best self on a monitored call. It might sound as if the mystery caller program would have a lot of advantages over in-house quality monitoring. There are a couple of problems with mystery calling. There simply cannot be as many mystery calls as there can be quality monitoring. As a result the sample of calls in a mystery program will be less than other programs (it is too expensive). In addition the gap between a mystery call and evaluative feedback is greater than that for a quality monitoring system (since most mystery call programs are outsourced). Since calls are distributed it is not possible to guarantee that all agents are assessed by a mystery caller (in-house quality monitoring can plan the number of times each agent is assessed). So, we recommend: 1. Internal quality monitoring should not be abandoned for mystery calling. 2. Mystery calling is a good addition for understanding what real people are hearing and the service they are receiving.

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3. Both mystery and internal monitoring are dependent on understanding what is important to the consumer. If you are assessing silly or meaningless aspects of a call it doesn’t matter how you are measuring it, the measurement will be useless. It is our experience that most of the issues being measured in both the mystery and internal monitoring systems are of this type—meaningless. 4. Finally, no matter what you decide to do it is probably best if all the company’s executives call their call center once in a while just to experience it. Probably more will be gained from this activity than any report from a quality monitoring group or a mystery calling group.

Search the following sites for more on mystery shopping www.mysteryshop. org, www.servicecheck.com, www.tele-monitor.net, http://www.tnsofres.hu/kutmeg/mystery.php (for Europe).

Chapter 58 Call center process re-engineering CASE: ANWB

Key Words—gateway number, human resource problems, database; information for agents

The problem Call centers for sales and services function as an information source for a great diversity of questions from customers, non-customers, and potential customers. Many businesses have separate call centers for different divisions and/or products. Companies with multiple call centers face the prospect of answering the same set of questions from different consumers over and over and over again. But maybe more significantly, multiple call centers increase the probability that the same consumer will receive different answers for the same question or the same consumers will face unequal treatment each time they call. In both situations the chances for customer dissatisfaction is clearly increased. Operating multiple call centers with different management and different systems increases the probability of customer dissatisfaction. This was the case of ANWB.

Company background The ANWB (www.anwb.nl) was founded in 1883 as a holding association of existing Dutch bicycle associations. The abbreviation stands for “Algemene Nederlandse Wielrijders Bond”. At present the ANWB has 3000 employees. The ANWB has 52 branches throughout the Netherlands of which more than 30 cover all activities of the ANWB. The ANWB’s mission is to represent and take care of the interests of its members in the field of recreation, tourism, transportation and mobility. As a result of this mission ANWB classifies restaurants, hotels, recreation parks, group facilities and water recreation. The ANWB has its own tour-operator that sells holidays. The ANWB recognizes three business units, namely ANWB sales and services, ANWB assistance and road service, and ANWB printing services.

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As long as the ANWB has existed it receives requests for information from customers, either member or non-member. First it was by mail followed by telephone and fax, and then e-mail a couple of years ago. The ANWB call center for sales and services is presently located in The Hague where the ANWB has its headquarters. In The Hague also the emergency center is located that assists in the case of emergencies in the Netherlands and abroad.

The ANWB call center ANWB had a separate telephone number for each service and/or product. These separate telephone numbers served a useful function for ANWB. It made it possible to schedule agents with specific training and knowledge for the specific services that each telephone number represented. The system seemed to work well when there weren’t too many products and too many calls. However, the inefficiency and weakness of this system became clear with a growing list of numbers (to correspond with a growing product list) and an increased call-volume (for each of the products).

Telephone number for specific issues Telephone number for specific issues

Telephone number for specific issues

1 1


1

Call Center ANWB 1



1

1 1

1



1 = specialized agents to answer questions Figure 1, problem situation ANWB call center


ANWB agents clearly tried and were motivated to satisfy the customer as best they could. The agent had a good chance to answer consumer questions because the customer already specified the area of concern by choosing which number to call. The agent was highly specialized. Although ANWB did not have an extensive knowledge base on the computer, the agent, by virtue of experience, expertise, and specialization, had a unique and extensive set of information available in memory. In addition, agents used a large set of manuals, books, and maps to answer questions they had no or little experience in or could not remember the answer to. A complicating factor was that telephone calls with the same questions could be handled by a branch office of the ANWB. The present situation was inefficient and potentially ineffective. It was easy for the consumer to not know what number to call. The consumer could get ineffective answers. The consumer could get unequal treatment or different answers to the same questions. ANWB decided to reorganize the organization for incoming calls and the structure of the call center. The challenge for ANWB was to reorganize its call center in such a way that in the end only ONE telephone number is operational and that any question for any product or service can be answered by anyone.

The solution ANWB remodeled its telephone information service by developing a single gateway number that consumers call (Figure 2). Because an agent could now receive a telephone call about any of the products and services, the company was forced to develop a database of information and questions available to any customer service agent. Training now would consist of how to navigate the computer system to access answers to questions and solutions to problems. What ANWB will find is that there will be a need for very specialized training to handle a subset of the questions that cannot be addressed by the expert system. A second-line support that is able to handle very specific questions will probably be implemented in the future.


Figure 2, final call center organization and structure.

The result ANWB is going to face a set of interesting human resource issues. Since the present organization with specialized agents has been operative for a very long time, present agents will have difficulties and will resist this new structure and organization. In the new situation the agent has to take every call. Agents will have to adjust themselves to a completely new way of handling calls. Some agents may not make it and ANWB will have to be ready to let some of the long term agents go. ANWB will have to spend time and effort compiling a database and an expert information system that will allow agents to answer the questions that come to them. Despite the costs and problems that a change will cause, there is good reason to believe that ANWB is making the best strategic choice. The single number gateway is clearly the most technically efficient way of handling calls and spreading demand across call center resources. The model for this is the GE Answer Centers. One number accesses representatives for 245,000 products and services of GE. While most GE CSR’s have access to answers to 80% of all the questions that are asked, specialized agents are available to seamlessly answer those special questions that come up once a week, once a month, or once a year. Thus GE can seamlessly and expertly respond to xxx-million calls per year in an efficient cost effective manner.


The creation of a database of questions and answers accessible to CSR’s from any screen needs to be considered. This is an essential element in this solution. What is interesting is that whatever the model (gateway number or multiple call centers for differing products or division) many companies do not have effective databases of questions and answers. Thus, consumers get very inconsistent treatment when they call in. Consumers not only get uneven treatment but also get differing answers to questions that should have only one right answer. The creation of a database information system that will lead to consistently good treatment with consistently solid and correct answers is probably the side effect of the ANWB situation that will have the greatest positive impact on their customers. There are a couple of ancillary issues that this case raises. The easy part will be for ANWB to establish this new one number gateway center. The technology is available and will actually save them money. And it is probably a good thing that they will save money because they will face two problems that will cost them both money and time. The human resource issue needs to be handled with care and expertise. A new system will only work with the cooperation and acceptance of the CSR’s. Yes, they could fire the CSR’s and hire new ones but that will lead to a period of less efficiency and effectiveness and cause some very damaging customer dissatisfaction. One must have some very skilled managers who understand the difference between making a technology decision that is technically correct and a leadership decision that involves those whose acceptance of the change is needed to make it work. The history of business is full of examples of companies that have “done themselves in” by ignoring the human issues. Creating a mission statement and then involving current employees in the new implementation will make the transition to this new system most likely to occur with a minimum of trouble. Finally, ANWB should institute a regular and in depth measurement of customer satisfaction. The justification for such a dramatic shift in call center operation can only be justified by the concomitant change (increase we hope) in customer satisfaction.


Commentary 1. Consistent and effective treatment of consumers who call in requires a technology and process/structure that makes that treatment most likely. The single gateway number appears to be the most effective way to achieve this. The model for this approach is General Electric. From the beginning GE had a gateway number to all its products and services. From turbine to jet engines to light bulbs customers started with 1-800-626-2000. According to GE executives this approach simplified customer communications and didn’t seem to impede customer contact. Most CSR’s could answer questions about most product areas because of the advanced GE database. The other 20% of calls were transferred to product specialists. The beauty of this approach is that call load is distributed across all centers and is not dependent on staffing at any one area. The use of a gateway number forces the company to train and educate CSRs and create computer systems that support multitask specialty. Having separate specialists makes a company dependent on the CSR, which has led to many of the deficiencies we now see in many call centers. GE thought so highly of this system that in the 1980’s they used this approach in a spectacular television commercial that said to customers whether it is a turkey stuck in an oven, a child’s toy stuck in a microwave or a jet engine, there is only one number to call. “Like every GE product GE stands behind it, only one call to make if you have any questions.” (If you would like to see the commercial e-mail [email protected]). 2. Human resource issues must be addressed when a dramatic change is implemented. Always keep your eye on what is important. The agents are secondary to satisfactorily answering customers’ questions and resolving their problems.

Chapter 59 Call re-engineering CASE: National emergency number Key Words—gateway number, number identification

“Company” background The police department in the area of southern Limburg has been divided into 5 main geographical districts, which together account for 23 police units. The headquarters of the region, southern Limburg, is located in Maastricht. The headquarters in Maastricht incorporates the police “meldkamer” (reporting chamber for urgent matters). Around 1985, a national emergency number was created (06-11) in the Netherlands, which was supposed to serve as a mediator between the three different emergency departments of police, fire department, and ambulance. In 1997, this number was changed to 1-1-2, which is supposed to become the uniform European emergency code. In the Netherlands, there are +/- 25 regions with their own 1-1-2 centers. That means that when people call 1-1-2 in Holland, they will end up in a call center in a police station in their neighbourhood, where regular police calls (of the police call center) are combined with the emergency calls. When people call 1-1-2, they are answered by a specially trained member of the police force, by means of the words: “alarmcentrale 11-2, do you want police, fire department or ambulance?”

The problem A person calling the emergency number can ask for one of these three services, but once the person is put through to either one, the separate agencies have to assess the situation and, depending on the kind of emergency, call in the help of the other agencies. The agencies have to be able to combine their strengths immediately to assist victims in time of extra need. But this is harder than it seems, for in the area of southern Limburg, the “meldkamers” of the police department, the fire brigade and the ambulance were located in different buildings in different cities, used different regional districts, and had their own ways of dealing with emergencies. Additionally, the result of being in different locations was that a single department had to judge, based on the

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story told by the person calling 1-1-2, whether the emergency situation called for the help of one or both of the other agencies. If so, they had to inform (one of) the other two agencies via (direct) telephone lines. This caused delay in the service and was not working very effectively. So this situation had to be changed. An additional problem was related to the use of ‘automatic number identification’(ANI) in the alarm center in order to identify the location of the person calling 1-1-2. Number identification identifies the telephone number of the caller, even when calling from a telephone box or with a mobile phone. With this number the location of the caller can be established. Of course the use of this technology is restricted by law. In case of an emergency, the police can fall back on this law to justify using caller identification. This greatly simplifies the work of the separate services in determining where the emergency is at, and additionally, it gives the people responding to the emergency call a chance to locate abusers of the alarm number. However, ANI only works on digital connections, and can only be transferred with the calls over distances up to 500 meters. But when the people occupying the 1-1-2 emergency center have to put emergency calls through to one of the three ‘meldkamers’, the calls were transferred over large distances (due to the fact that all three services were located in different buildings), and number identification did not work anymore. So how did they deal with the problem of multiple locations and number identification?

The solution It is clear that if it would be possible to “co-locate” the 1-1-2 emergency center with all three emergency departments within a distance of 500 meters, that both problems would be solved. But this is easier said than done. Since relocating whole buildings (can you imagine moving a police department or a hospital?) was not possible, only a small part would be relocated. It was decided that it would be best when all three emergency services would have their own mini call center (meldkamer) in the police building in Maastricht. The first part of the integration, connecting the 1-1-2 center to the ‘meldkamer’ of the police, had already been established from the first beginning period of the emergency number. Because the 1-1-2 center had to be occupied by police officers, this had been combined in one call center in Maastricht. But the next part, integrating the ambulance (CPA, Centrale meldkamer ambulance dienst) with the ‘meldkamer’ of the po-


lice, was carried out later. The ‘ambulance-call center’ moved into the police headquarters building in Maastricht. This re-location had several advantages: •

The distance between the police and ambulance had been reduced to a minimal physical distance, so that they were now located in the same building, in rooms close together.

•

The automatic number identification-function can now be transferred when transferring phone calls from 1-1-2 to the ambulance call center.

Despite the physical re-location, the communication with the hospital and/or with the departing place for the ambulances (which is not at the hospital) did not suffer any negative consequences from the use of a new location. The last assignment is the fire department. Its headquarters is located in Gulpen, about 15 kilometers from Maastricht. A separate fire-“meldkamer” in the police building in Maastricht has not yet been established. It is one of the first items on the calendar. This immediately implies that the firemen in Gulpen answering the emergency call transferred to them by 1-1-2 in Maastricht cannot use automatic number identification to find out the location of the caller. They have to make sure that they know where the emergency is at by asking the caller about the location of the emergency. This is not always easy. When a caller is hysterical, the caller might not be able to remember where he or she is at. Or maybe the caller does not know his way around town because he is a tourist or a visitor.

The result The integration of 1-1-2 with the police and ambulance call center is working smoothly now. ANI has made life a lot easier for the people working on the telephone, dealing with emergencies. The abuse rate of the 1-1-2 number is still very high (around 200 calls a week), but when there is repeat abuse by the same caller, the police can now react because they know the location of the abuser. From the experiences with the ambulance call center combined with the police and 1-1-2 center in one building, it has become clear that integrating the fire department, too, would be a great improvement in the service delivery. But the integration plan goes one step further. In the near future, the police are planning to also integrate the ‘meldkamers’ of the three agencies into one semi-integrated ‘meldkamer’ in one

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room for all emergencies, so that police, ambulance, and fire department can discuss their actions immediately, without having to do that via telephone lines through one building.

Commentary This case illustrates a couple of things: 1. It is interesting to remember that what we are used to in the States (911) is not necessarily what is found around the world. 2. While the 911 gateway number would appear to be modelled on the 1-800 gateway numbers to all a company’s products and services there is an interesting and notable difference. When I call GE at their 800 number no one’s life is at risk. When a 911 number is called a life may hang in the balance. As a result, calls made to 911 but not really needing 911 assistance put lives at risk. That is why some police/emergency systems have instituted a 311 system for calls needing police/emergency that are not life threatening. Agencies report that 311 has helped focus 911 calls to those who really needed emergency attention and has made the 911 system better and more efficient. It may be that companies can use different 800 numbers for different levels of customer service. For the very best customers their 800 number would be guaranteed to be answered quickly and the level of training and response would be greater than the other 800 contact.

Chapter 60 The case for benchmarking your call center Key Words—benchmarking, performance measurement

First a short story (with a point). I had the greatest fishing trip that I have ever had last month. The Caribbean was cruel this day. After three hours of nothing, a nibble then a bite, then three more hours of battle. (At times I thought the fish had me, not I the fish). Exhausted, my clothes soaked, finally I won. I pulled it in, a 45-pound gefilte fish. Some of you are probably saying what is a gefilte fish? Some of you are saying it would take a very large Passover dinner to eat a 45 pound piece of gefilte fish (and that’s when everyone likes it). Further, you may be asking, How much horseradish would be needed for 45 pounds of gefilte fish? And, finally, some of you are saying, what is this all about? It is simple. In order to understand if the 45-pound gefilte fish is a large fish or a small fish or a just right fish you have to know the standard size. If I were to tell you the average gefilte fish is 120 pounds you might conclude that I should have thrown it back. If I were to tell you that the average gefilte fish is only 12 ounces the 45 pounder is very big (global warming, I think). The point is that for every metric there has to be a standard. Ninety-eight point six is a benchmark established by norms of the human body and is used a general point of reference for probing further for symptoms. In the absence of some standards board or some objective measure/meaning of standard (like body temperature) the key to finding out if you are better/worse, faster/slower, higher/lower, louder/softer, bigger/smaller is to benchmark. A metric is just a number (and call centers accumulate many of them). The relationship of that number to some reference creates meaning. Benchmarking is a structured analytical process of identifying, comparing, implementing, and reviewing measures of process, performance, and outcome against standards to understand, pinpoint weakness, and gain competitive advantage. These comparisons can be against averages, standards, or best practices. Each comparison provides information or a scorecard about your performance. Benchmarking allows you

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to look beyond your four walls and see how you are doing compared to others and be able to answer the simple question…Are we as good or better than we want to be? Of all the ways to benchmark the two most widely used benchmarking procedures are competitive benchmarking and process benchmarking. Competitive benchmarking allows you to compare where you are against the competition in your industry. For example, McDonalds might want to know the comparison between average speeds of service at take-out at their places against Burger King. Computer software call centers might be interested in how their average speed of answer compares to other computer software call centers. Process benchmarking measures against similar processes but across industries. This type of benchmarking identifies best practice and is not restricted to your industry. A retailer might be interested in comparing how their lines operate compared to lines at Disney World.

Why benchmarking? At its simplest level benchmarking is giving your call center a report card. It is a way to know and understand the effectiveness and efficiency of your call center based on a standard (at Purdue an A usually represents a score of 90% or above on all required work…a B 80%, a C 70%, and so on). Benchmarking is a report card and a process that allows you •

to expose areas where improvement is needed.

•

to pinpoint areas for cost reduction.

•

to assess performance objectively.

•

to see whether improvements are successful.

•

to learn from the positive experiences of others so you do not have to reinvent something that has been invented.

•

to know what the best is…what can be done.

Benchmarking Benchmarking is not simply something to help call centers improve (although it may be a recent discovery for call center managers), it is a business practice that can best be defined by “Better your Business: Benchmark It”. Any process, any outcome, any aspect of financial performance is fair game for benchmarking. Amazon.com lists 168


books on benchmarking. The list below includes some outstanding resources for understanding benchmarking and call center benchmarking.

Benchmarking resources American Society for Quality (www.asq.org)—Provides a list of benchmarking articles, networking resources, and forums. American Society of Training and Development (www.astd.org)—benchmarking articles, information, benchmark surveys available, forum. The Benchmarking Exchange (www.benchnet.com)—surveys, studies, and a list of best practices. Benchmarkportal.com (www.benchmarkportal.com)—Devoted exclusively to call center benchmarking. Reports, papers, and forums about benchmarking and call centers. Benchmarking: An International Journal (www.mcb.co.uk/bij.htm)—The only academic journal devoted to the nature and scope of benchmarking with case studies. If you would like to see the titles of the articles, go to www.bids.ac.uk. Look for “Direct Access”— click on “Direct”. Go to “Ingenta.journals” click on “search”. Go to the B’s and search for benchmarking or type in benchmarking in the title search. You will get a list of volumes and can see the titles. Peerscape (http://www.tanftrack.com)—A product of Deloitte and Touche’s consulting group PeerScape allows a company to compare performance on 120+ financial measures. KnowledgeSpace (www.knowledgespace.com)—A product of Arthur Andersen’s Knowledge Enterprise group. This is a qualitative approach that takes managers through best practices using quizzes and case studies. It feeds managers with global best practices though monitoring of internal databases and worldwide collections of news and information. ProSci research (www.prosci.com)—Tools, links, books for conducting benchmarking. Call center benchmark reports in various countries available for purchase. Society of Consumer Affairs Professionals (SOCAP) ( www.socap.org)—The premier destination for all things dealing with consumer contact. Resources, papers, reports, events related to customer satisfaction, access, and call centers.


U.S. Interagency benchmarking and best practices council (www.va.gov/fedsbest/ index.htm)—provides a calendar of benchmarking events, benchmarking web sites, and other resources. The web site was not accessible, hopefully a temporary problem. Search “Google” for U.S. Interagency benchmarking for a list of government sites that have benchmarking links. U.S. Navy Best Manufacturing Practices (www.bmpcoe.org)—Offers case studies from companies. Best Practices LLC (http://www.bestpracticedatabase.com/)—information about best practices for call centers and customer service.

Some considerations What to Benchmark—The Center for Customer Driven Quality at Purdue University has been collecting benchmark data on call centers for 6 years. The almost 2000 call centers in the data base represent the most extensive dataset for benchmarking call centers in existence. With over 100 variables measured in each survey the dataset represents depth as well as breath. (A copy of the survey questions can be accessed at www.cfs.purdue.edu/conscirt/quality.html click on call center benchmark survey). The categories we have benchmarked include •

Center costs

•

Performance measures

•

Caller satisfaction

•

Call center strategy

•

Human resource issues

•

Call flow work processes

•

Caller knowledge and agent knowledge issues

•

Technology and technology integration

•

Facilities issues

Call Center Costs—This category includes the fixed and variable costs of running a call center including human resource costs (e.g. salary, benefits, recruitment, training), network costs, hardware and software, real estate, telecommunications, annual budgets.


Performance Measures—These are probably the most widely measured and used metrics to assess call center efficiency and effectiveness. These include average speed of answer, average talk time, average after call work, average abandonment rate, average time before abandoning, average time in queue, percentage of calls blocked, call handle times, adherence to schedule, occupancy rates, sales per hour, number of inbound and outbound calls per agent shift, percent resolved on first call (operational definitions of each of the measures discussed here can be read/downloaded at www.cfs.purdue.edu/conscirt/quality.html; click on definitions of terms used in Purdue Benchmark study). Caller Satisfaction—This category includes how call centers are measuring caller satisfaction, the level of caller satisfaction, and the percentage of calls that result in complaints. Call Center Strategy—This category includes your center’s vision, its mission, and its goals. Human Resource Management—This category represents over 50% of most call center budgets. The measures here include human resource budget in absolute terms as well as a percentage of total call center budgets, number of supervisors to agents, turnover, costs of hiring a new agent, quality monitoring scores, costs of training agents (new and ongoing), types of training, length of new hire period. Knowledge Issues—The evolution of call centers has created call centers that are no longer just receivers of basic information but seekers of strategic information. Important issues in this category include what information agents have access to as the call is answered (name address, phone number, purchase history, call history), what operational information is accessible from agent’s desktop including billing history, payment history, pricing, shipping, frequently asked questions and their answers, and accessibility to expert databases of solutions to problems. There are also sets of knowledge issues that emanate from the center’s point of view. These include mechanisms to collect information, warehousing capability, reports and analyses, and information that gets disseminated across the organization to areas and individuals who might find the information useful. Call Center Technology—Walk on any CRM/Call Center/Contact Center exhibition hall and you will see hundreds of products and hundreds of vendors selling the “stuff” that makes call centers go. Categories that can be benchmarked here include automatic call distributor, voice response units, interaction voice response units, com-


puter telephone integration, predictive dialing, headsets, and reader boards. Then there are software issues that include automatic number identification, computer assisted surveys, skill based routing, value based routing, agent monitoring software. Facilities and Design—The measures in this category include number of agent seats, average size of cubical, total cubical workspace as a percent of total space, size of desktop screen, and other space available to agents (cafeteria, lounge, study/writing rooms, break room).

The 13 most common metrics The Center for Customer Driven Quality and Benchmark Portal (www.benchmarkportal.com) have been benchmarking call centers for the past 8 years. There are over 5000 call centers in our database. There are thirteen common metrics used in most of these centers. The data below are across all industries. More refined comparisons within a particular industry or size of call center might be more appropriate for you. Call Center Performance Measures in 2002—All Industries (n=5000+ )

80% of calls answered in X (goal) seconds—38.15 Average speed of answer (secs)—38.29 Average talk time (minutes)—6.11 Average after call work (minutes)—5.09 Average abandoned (percent)—5.45 Average time in queue (secs)—37.3 Calls closed first contact—66.3% Calls blocked—1.1% CSR Occupancy—76% Average time before abandoning (secs)—73.5 Adherence to schedule—84% Average attendance—88.9% Average inbound calls per 8 hr shift per CSR—58.9


The 10 steps of benchmarking Our experience at the Center for Customer Driven Quality has led us to conclude that there are ten essential steps for benchmarking a call center: 1. Get buy in, commitment, resources from the powers that be 1.1 Confirm and keep them informed 2. Identify the processes, outcomes, or services to be benchmarked 2.1 Confirm and keep them informed 3. Identify the company or companies that will be used as the comparison group 3.1 Confirm and keep them informed 4. Collect and warehouse the internal and external data. 4.1 Confirm and keep them informed 5. Analyze the data 5.1 Confirm and keep them informed 6. Communicate the results 6.1 Confirm and keep them informed 7. Establish change objectives and goals 7.1 Confirm and keep them informed 8. Develop an action plan for each objective 8.1 Confirm and keep them informed 9. Implement and monitor the plan 9.1 Confirm and keep them informed 10. Start over….

Critical success factors in benchmarking Although benchmarking is a very effective tool the process and its outcome are fraught with dangers. Some of the critical success factors include: 1. Commitment from senior executives—This is not simply, “I know we are doing benchmarking” but involvement in the development of the benchmark plan and the role they play in any change plan implementation. Involvement equals acceptance. At each step of the way the


powers that be should be told of the steps being taken (confirm) and kept informed of progress and outcome. 2. Employee involvement—Cross-functional teams should be involved in all aspects of the benchmarking. Once again involvement equals acceptance of the process and the outcome. Involvement means that the benchmark process, as well as its consequent plan, is our process, not just theirs. Since the employees of the center are going to have to be part of the solution they will have to be part of the investigation of the problem and the solution.

A benchmark case The nature and scope and power of benchmarking can be fully demonstrated by illustrating an actual benchmarking of a call center (adopted from Anton, 2001). A 22 call center operation in a financial services company with 33 billion in assets allowed Jon Anton to track a benchmark study from inception to completion in one of their centers with 325 agents. This center handled 4.5 million calls annually in two dominant areas, customer service and complaint handling. ninety of the calls were inbound. The financial services company wanted to benchmark against other financial services centers with call centers of between 200-400 agents, with 2-5 million calls handled annually. Table 2 shows a set of factors that this call center thought important to benchmark. Using Purdue University benchmark data and a peer group selected by the management of this company as the basis of comparison, a snapshot of performance can easily be developed. From the table it is clear that “Your center,” compared to any of the control groups (peer average, peer best, all industries all centers), is underperforming on average speed of answer, average inbound calls abandoned, average time in queue, average resolution first time, average CSR occupancy, adherence to schedule, and average calls per shift. While any or all of these factors can be addressed it makes sense to intervene on a factor that has the greatest impact for this type of call center. These clients were advised that research at Purdue (Feinberg, Kim, Hokama, de Ruyter, and Keen, 2000) shows that first time resolution is the single most important predictor of caller


satisfaction. The bank’s call center resolves 65% of problems at first call while the average of peer group is 77.3%. The bank calculated that this 12.3% difference resulted in a cost of over 2 million dollars per year. If the cost of improving first time resolution is a small percentage of the cost of not doing it, then clearly an initiative is warranted. Table 2 Selected factors to benchmark Inbound Performance Comparisons Metric Description Average Speed of Answer (seconds) Average Talk Time (minutes) Average After Call Work Time (minutes) Average Calls Abandoned ( % ) Average Time in Queue (seconds) Average First/Final Calls ( % ) Average CSR Occupancy ( % ) Average Adherence to Schedule ( % ) Average Calls/Shift/CSR ( calls ) Average Attendance ( % )

Your Peer Group Peer Group Best All Participants Center Response Median Average Median Average Median Average 35.0

20.0

32.2

12.5

17.1

25.0

33.3

4.2

3.0

7.2

3.0

3.4

4.0

10.2

3.0

1.0

5.3

1.0

1.1

2.0

6.8

7.0

3.0

5.0

2.0

2.8

4.7

5.5

54.0

35.0

44.3

16.0

18.4

34.0

43.2

65.0

79.0

77.3

85.0

86.1

79.0

68.1

76.0

80.0

79.4

87.0

89.1

79.0

74.9

81.0

89.0

87.8

92.0

95.3

84.1

86.0

58.0

70.0

83.2

85.0

86.5

70.0

69.2

75.0

90.0

88.7

95.0

87.7

88.3

86.9

To help the call center determine the costs and possible effectiveness of intervention, we have developed a tool that looks at all possible solutions, their costs, and benefits. Table 3 presents what we feel is the key to effective benchmarking. In Table 3 eleven possible interventions for increasing once and done problems are priced in terms of estimated costs, implement time, risk of not being completed, and impact on the problem. A return on investment is then calculated and the optimal decision—the decision that has the greatest impact at the least cost and risk—can be calculated.


Table 3 Solution Optimizer Solution Optimizer Cost Gap Per Implement Risk Factor Impact SOLUTIONS Seat ($) Time (days) (0-100) (%) Applicant Testing 100 30 40 20 Skill Based Routing 400 50 50 75 Applicant Screening 250 40 30 30 “Once CT Integration 900 120 75 90 & Value Based Done Routing 400 60 60 55 Calls” Monitoring/ Coaching 300 60 40 65 Product Training 600 90 65 35 Expert Systems 1500 180 95 55 Contact Tracking 3000 120 85 50 Performance Comp 300 30 10 15 CB Training 600 90 35 35

ROI

Optimal

(%) Decision 374 6.49 315 4.51 184 2.18 137 1.91 128

1.49

118 91 89 64 64 53

1.33 1.01 0.94 0.85 0.65 0.61

This is an expert system that provides the decision team/executive with decision support. In this bank call center it is clear that the two best solutions for increasing percentage of once and done are better applicant testing and skill based routing of calls. The implementation team received approval from the bank’s higher-ups to implement the top two solutions. After six months the bank reported the following results: 1. Resolution at first call improved by ~12% 2. Average time in queue reduced by ~3% 3. Average CSR occupancy improved by ~6% 4. Calls per CSR shift increased by ~9% 5. Caller satisfaction increased by ~7% The cost of implementation was ~$600,000. These costs included development and implementation for new selection process, training of CSR’s, and installation costs. When the improvements were converted to estimated dollars there was an estimated payback in 16 months.


Commentary Benchmarking can become a tool for call center improvement. While the wide world of business has adopted benchmarking as a tool of choice for improvement, benchmarking is simply just beginning in call centers. It could be that call centers were never seen as strategic tools in business and thus not in need of quality improvements. It could be that call centers have never been run and directed by business professionals. Whatever the reason the strategic value of call centers is driving a benchmark movement. But this movement is not simply a “who is doing this better and let’s pay them a visit to see what they do” movement but an analytical and strategic effort to quantify process and results to deliver key improvements that benefit the employees of the call center, the business that houses the call center, and the caller.

Section 4 Technology Issues

Technology cannot solve everything. Sometimes technology cannot solve anything; sometimes, if you are lucky, technology can help you solve something. We just got back from the state agency in Indiana that handles all government retirement accounts, X millions of them. We sort of invited ourselves, having just completed a benchmark study of government call centers and being interested in the state of call centers in our state. Anyway, it was a fortuitous visit because the agency had just hired a very expensive consultant who had just completed a 186-page report recommending purchase of an outrageously expensive set of technology from an outrageously expensive, big, and very good company. We read, we observed, we met, and then we sat down in a conference room and asked what we considered to be a simple and harmless question. We thought the consultant was going to burst. His eyes popped out as did the veins in his neck. It was like watching Lou Ferigno turn into the hulk (for those of you under 45 ask a boomer). The agency’s executives could not find the words to answer the question. You want to know what the question was? It was, What problem is the technology going to solve? What is the strategy behind the acquisition of this technology? Many call centers invest in technology because they really believe it will solve problems. Some have a particular strategy and they pick technology that seems to solve that problem. Some, like our friends above, have no strategy and might not know a strategy if it came up and bit them in their 403b. In either or maybe both instances technology can be beautiful but it, itself, does not solve problems or make things better. There is a lot of very cool call center technology out there. We love going to the big trade shows and learning about the dizzying array of technology there for the picking. And as you talk to the vendor reps this technology will slice, dice, make coffee, make Rays Pizza (not just Ray’s but the original Rays; this reference is more obscure and you need to talk to a New Yorker) in the call center industry. We love the technology. At the same time we have seen so, so, so many examples of technology implementations that have failed. Wastes of so, so, so much money that it makes us dizzy.

305


The four cases here are examples of effective technology implementation. There are lessons to be learned and many more cases that could have been written. But first we start with a short piece that looks at all the things that can go wrong. It is called “the immaculate deception” and refers to the gap between the great promises of the technology and the reality of the awful and failed implementations out there. Indeed we estimate that at least 75% of all technology implementations in call centers fail to live up to the hope and hype and chapter 61 makes it clear why. After toning down the high technology hopes a little, we introduce a number of cases that report various successful technology implementations. The first case, Accor Reservations Services, illustrates the importance of seamless data traffic in the service supply chain. It shows that the exchange of information between the call center and the other players in the supply chain is essential if the call center is to be taken seriously in its role as infomediary. The second case discusses how technology provider CMG was able to integrate those ‘old-fashioned’ contact points, such as mail and fax, into our modern day digital world and how calls may be routed to the right (i.e., most suitably skilled) agent. The third case, SCOOT, shows how important it is to actively pursue database management as accurate information is central to any call center’s operation. Additionally, the Xerox case illustrates that database management is not just about adding more information. In contrast, it is shown that a lean and mean database, containing relevant information only, works much better. Finally, in the two Centrelink cases it is demonstrated how a government agency was successful in integrating multiple call centers into one virtual call center, while taking into account culturally sensitive issues.

Chapter 61 Immaculate deception: The unintended negative effects of the CRM revolution Written with Michael Trotter

Key Words—customer relationship management, CRM, expectations, history of call centers, quality of worklife The CRM movement promised great things. It promised a world where company, employees, and consumers are partners. In the CRM world, profit flows to those companies that deliver a seamless and integrated positive experience to their consumers. This is the world in which the consumer can purchase any time, anywhere, through any access channel and although the company cannot promise that the product and service will be right they can promise they can make it right with one phone call, e-mail, web, or wireless contact. Considerable work and thinking has been conducted documenting positive effects that CRM has (and should have) on business and the consumer. CRM defines a magnificent great new world for consumer and business. As two professionals who have spent a good portion of their professional careers (one in academia and the other on the frontlines of CRM) doing research, writing, teaching, convincing others and thinking about CRM we would like to be able to write another compelling piece extolling the virtues and summarizing the seminal cases showing how the uses of CRM have improved business and consumers in dramatic ways. Unfortunately that is not our conclusion. Instead, the promise of CRM is not the consumer world that we inhabit. It is not the consumer world that most “regular” consumers inhabit. As consumers interact with companies to purchase and receive postsales support, their individual perceived experiences don’t demonstrate the managed relationship that CRM was meant to provide. Consumer satisfaction is simply not increasing at the rate promised by the CRM revolution. It may be that we have not given the revolution enough time (it took the French 100 years to win the Hundred Years’

An earlier version of this chapter appeared in Defying the Limits: Effective Strategies for Unlocking CRM’s Full Potential, vol. 3, www.crmproject.com.

307


War). It may also be that behind the tsunami of CRM lies a darker more depressing reality. The unintended negative unintentional effects of customer relationship management may outweigh the intended positive effects, making the promise of CRM much harder to make real through the eyes of the customer. Let us start by defining CRM as the acquisition of customers and the continual focus on increasing customer retention, loyalty, and share of wallet. Further we need to agree that the effectiveness of CRM is measured through the eyes of the customer and efficiency is measured through the eyes of the company. We then create a balanced scorecard to ensure that we are not guilty of singular focus on either effectiveness or efficiency. The integration of a company’s electronic, voice, and live access channels are paramount to providing an effective and efficient total customer experience. A huge amount of money is being spent in these efforts. The Purdue University Center for Customer Driven Quality estimates that CRM is a 60+ billion dollar industry. Yet, Forrester research asserts that only about 40% of formal CRM implementations are successful. This being the case, why is there so much failure? While companies engage in CRM activities out of the good intention to ensure that no consumer goes unsatisfied or unheard, CRM has the potential to actually produce negative effects which may (or might) make it actually less likely to make the world better for the consumer.

What goes wrong: Unintentional negative effects of CRM CRM negatively affects the quality of life of workers. CRM promises a positive impact on the quality of life for consumers. Twenty-four hour a day, seven days a week, 365 days of the year access and accountability to consumers of even the least expensive products. I have a question about the dating on my frozen spinach on Sunday at 3 in the morning (I have a sudden urge for spinach). The CRM revolution has led me to expect the company to be ready and available for my call. The company must staff a call center ready to answer these questions. These call center employees have lives and families also. Why should customers expect this to happen for a $1.25 package of vegetables? We can see these high expectations when a consumer purchases a $50,000 car, but a $1.25 bag of spinach? (It is interesting that the consumer is actually more likely to have an 800 number to call and someone with an answer to the spinach question than the $50,000 car question.) CRM has negative effects on someone’s quality of life.

Chapter 61 Immaculate deception 309

CRM negatively impacts the quality of life of executives. For the company senior and midlevel executives CRM creates tremendous pressure to make things happen. The easy statements of the problem are always more compelling, complete, and accurate than proposed solutions. Customer dissatisfaction and statements about corporate responsibility and initiatives to improve satisfaction are always more compelling and better defined than any specifics offered to make consumers more satisfied. This places a tremendous amount of stress on front line leadership and workers (CST’s, CSR’s, in store associates) who may be totally unprepared to deliver on the corporate promise. It is not just the accessibility to the people, it is also the accessibility to information in a 24/7/365 world. Technology does not replace the people component of this complex equation. Executives are stressed, mid-level leadership is squeezed between the company and the frontline employee, so they are stressed, and most importantly the individuals that are accountable for serving the company’s most valuable asset (the customer)—the frontline employees—are stressed. Poor quality of work life is a result of CRM. According to Purdue’s most recent research, this is affecting 2.2% of the American workforce. CRM creates increased costs of products and services. CRM costs money. This is more than just the cost of the technology. It is the cost of the re-training of the frontline employees and their managers, the hiring and continual education of technology groups within our companies and the eventual re-engineering of the processes that customers and employees use during the service delivery experience. Someone has got to pay. Without any doubt, in the end, it is the customer. If customers knew that each product and service raised the price of goods and services by even 1% do we really think they would choose CRM? Or if they knew how much it impacted the price of goods they would most certainly have an increased expectation during their service experience. CRM actually increases customer frustration. Back to spinach for a second. We expect companies to have a focus on CRM if they expect to be competitive. When the call to the company is not answered, when the e-mail is responded to slowly, when we hold on for 2 hours although the call is very important to the company, when our calls are handed off from one agent to another, when we wait more than 15 seconds in a fast-food line or three minutes for help in a store or restaurant, consumers can become frustrated. How much do these frustrations add to a general increase in stress and frustration in our lives? Frustration leads to aggression. Just how much of the lack of


civility in society and even aggressive outbursts results from the accumulation of little frustrations that accumulate every day from an unrealistic and raised expectation from the CRM promise? Ten years ago we didn’t have these expectations. Ten years from now our expectations may be so high that we expect to be served our favorite food before we even get to the restaurant. Almost subliminally CRM tells the customer they are in charge, the customer is always right. Well, “the customer” is not always right. Neither is the customer in charge. A business has a right to make a profit and having the “right customers” allows for a business to make this profit and still see the customer as being right. The customer is not in charge and probably shouldn’t be. Perpetrating this lie, although a nice idea, is somewhat psychotic and damages the psychological well being of consumer, company, and maybe society. We would however propose that knowing who the “right customers” are for your company and then knowing that they can assume a role of “being in charge” can make sense. Too many companies are trying to be everything to everybody and this begs the issue of “the customer is always right”. CRM takes time. People suffer from time poverty. Single households, dualwage earner (with or without kids) households, and regular nuclear family households suffer from a poverty of time. There is simply not enough time to do the things we need to do, let alone do the things we might want to do. CRM has increased the opportunity for us to communicate with companies. This takes time and we have engaged in it as a part of every day. Everywhere you go people are asking for a few minutes of your time to give feedback on the experience that you just had at a hotel, restaurant, or rental car company. In our passion to be customer “centric” (the latest in terms that you need to be using), we have made gathering and analysis of customer feedback a significant focus of a company. In the past we would have forgotten whatever it is we are calling about (or solved it ourselves); today we use our personal time to call, e-mail, search the web, and take time that might be used for more fruitful and enriching activities. Technology cannot solve everything and sometimes it cannot solve anything. Many companies and executives believe that CRM technology can solve THE problem. Technology clearly cannot do it alone. Companies purchase technology with the belief that the investment in hardware and software will allow them to achieve success. They forget that technology requires people to interact with it for it to even begin to work. Once you have the people using the technology you need to consider the processes that are being used by both the employees of the company and the customers interacting


with the company. Process change is where most organizations find failure in their implementation of formal CRM initiatives. For the most part companies do not consider the non-technology side of the technology purchase when computing the cost of the investment or calculating the return on investment (ROI). They ignore the training and nurturing required to make a new process, technology, or anything else successful in a people intensive environment. Consumer expectations are a never-ending cycle. Customer expectations invariably cycle upwards. Fulfill customer expectations this year and you will be facing a higher bar next year. It is not simply that expectations of customers are higher for your company because of your improvements. Customers are making comparisons across industries. We expect and know that Federal Express can track packages at any time and any place in their transit. (I was on the phone with FedEx asking where a package was because I was about to leave the office for a meeting in Washington, D.C., as the phone agent told me that the FedEx person was about to enter my building whereupon I heard a knock on my office door and there it was. Yes, that was cool.) However, it means that I simply don’t understand why the post office can’t do the same thing. (The fact that the U.S. Postal Service handles 300 times the volume as FedEx doesn’t enter into my calculation. The fact that I am only paying only 37 cents for a letter while I pay $11.00 to FedEx doesn’t enter my calculation.) I don’t understand why the airlines that put a bar coded slip on my luggage lose my luggage and cannot tell me where it is. This is not just an issue of comparative service, it is also a result of the business taking more of our time to ask us for information that we then believe will result in a simpler and more customer focused experience. We then experience that after we provide our credit card account number by use of the touch pad of our phone, we are then asked for our account number by the live agent that answers the phone. At some point business, no matter how well intentioned or good at what they do, will not meet the rising expectation of the customers. CRM raises the bar and once it’s raised the consumer raises the bar. The CRM revolution was supposed to make things better, quicker, more effective. CRM may be working but unrealistic consumer expectations make it look like it is failing. Great service is now harder than ever because getting to WOW (that point way above customer expectations) is impossible because average today was actually great five years ago. CRM feeds a value of failure that permeates business. Top executives thrive on tough talk. Instead of realizing and proposing that complex problems have very


complex solution, executives look for villains to fight. Attacking the bureaucracy of the company wins board approval. Boards love tough executives attacking tough problems. Standards for customer service/satisfaction are set. Testing and measurement begin. Proofs of customer dissatisfaction and weak links in the organization are found. Many of the solutions that are created are implemented in a short-term fashion with poor results. This creates a stress on both the implementation group as well as the executive team. In many cases expediting the implementation process forces organizations to cut corners. Customer behavior is dynamic and thus requires a business to approach it with a dynamic solution. As mentioned earlier, CRM may not be failing, but the expected results we tie to its success are giving an impression of failure. Forcing standards and policies on weak organizations does not provide long-term success. Time is not provided in the implementation models to allow for organizational understanding and commitment, so we end up with quickly established standards. Top executives may actually not have the time (their careers are based on short-term success rather than longterm implementation and long-term benefits of CRM) to ensure that the CRM initiatives are addressing the problems and not solving symptoms. CRM may simply not be important. If consumers are so dissatisfied, why then has our economy been so good? If Japanese goods and services are so good and their consumers so satisfied, why then has the Japanese economy been so bad? There is no doubt that customer satisfaction plays a role in purchase loyalty and profit. But there is an enormous difference between saying it plays a role and saying that it is determinant in profitability and long term success of a business. CRM is based on a definition of business that says consumer satisfaction is paramount and determinant of purchase, loyalty, and wallet share. CRM might not be important and therefore any money, time, effort, or thinking about CRM is wasted. CRM is poorly implemented. Ill-considered implementation of ineffective solutions leads both to employee disengagement and greater consumer dissatisfaction. Without real study as to the determinant factors in customer satisfaction, businesses implement strategies “believed” to be important. For example, retailers looked at WalMart’s growth and success and found an answer. Latching onto this Wal-Mart policy was believed to be able to lead all retailers to the promised land. The policy that I am talking about is the “greeter.” Wal-Mart at first selected older seniors to stand at the front door and greet all consumers. Nothing is really wrong with this. Who can get angry at a grandparent figure? Making customers feel good at the front puts them in a


better mood to buy. So many retailers copied the strategy. It turns out that Wal-Mart’s success has little or nothing to do with the greeter. There is nothing wrong with the greeter. What is wrong and harmful is that the money and effort that other retailers put into their version of “The Greeter” took money and effort, and stalled the search for the real answers to what makes Wal-Mart successful. Indeed, given that we know WalMart’s success has to do with a cost structure and understanding of the customer such that customers get what they want, quickly, without human interference at a relatively best price the waste of money and effort by the other retailers made it less likely that they would be able to invest money lowering their cost structures so they could do what Wal-Mart does. In the call center industry we have an even better example. The industry measures speed of answer as a critical element in CRM delivery. Speed of answer is elegant, simple to understand, and very simple to measure (it comes with the technology). And speed of answer can be manipulated; you want to lower, so you force people to work quicker or hire more CSR’s. Unfortunately, our research at Purdue’s Center for Customer Driven Quality has not found one industry of the 20 we track where speed of answer is a statistically significant predictor and determinant of caller satisfaction. The quest for speed of answer, like “The Greeter,” deflects attention and money from the real answers. Again, companies are not dealing with the real customer satisfaction issues that come from the customer. We are not spending the time and resources to understand the specific customer demands that, if addressed by the company, would result in satisfaction. CRM may lower motivation of employees. Promoters of world-class customer service standards argue that standards push employees to excel. But human motivation is more complex than that. Studies of human motivation have shown that at some level fear and motivation actually detract from the performance it is supposed to enhance. We attempt to engage in motivation for the sake of motivation and not for the benefit of satisfying customers. Many of the daily metrics in contact centers have less to do with customer satisfaction and more to do with production. There has to be a balance and a direct link between work done and customer satisfaction. CRM technology cannot, alone, be the salvation and may make customer service worse. The promise of CRM technology cannot be achieved simply by installing the technology. Indeed, most of this technology needs human implementation. Adding technology to the contact agent’s work place without an understanding of how the


technology will improve their interaction with customers or change the processes of customer interaction is the cause of many CRM implementation failures. Many CRM implementations do not plan for or provide enough training on the use of technology and practice with using the technology before letting agents use the new technology to deal with live customers. The hype is different from the reality. Walk on any CRM industry event exhibitor floor and talk to CRM company representatives. We have created a very confusing environment in which to offer products. The partnerships that have been created are so broad and all encompassing that you cannot determine and value propositions or unique offerings. In the end everyone is trying to be everything to everybody. The promises and the claims are unsupported by the reality. The reps are only doing what they have been trained to do, sell product. And many reps (in probing their understanding) really believe what they are telling us. There is a self-fulfilling prophecy here. If they say it long enough they may actually come to believe their promises. Thus when their CRM implementation does not work it could not be because of faulty implementation or a poor CRM system but it must be the failure of the company. This creates impediments to any solution and implementation plan. Salespeople and CRM company brochures make too many promises. As a result it may be that the CRM system and training is perfectly adequate but looks inadequate next to the promises. CRM detracts from what is really important—the product. One of the fundamental problems of the whole CRM movement is one of misdirection. A good magician misdirects the audience so that it appears that magic happens. CRM efforts actually misdirect corporate attention from the fundamental issue of business. To paraphrase a Clinton election war cry, “it’s the product/service”, stupid. Consumers don’t buy CRM, they buy products and services. Creating exciting and compelling products and services will always win out over any compelling CRM strategy. Putting money and effort in CRM takes resources and effort and attention from the fundamental product and service development issues. This is not a cry for quality. Six Sigma efforts are also misdirected in some ways. Product quality of compelling products is important (although the history of the U.S. economy is defined by a number of very compelling but really bad products—“the Delorean”). Try to talk about product quality to slide rule makers. In the 1940s and 1950s there were any number of slide rule makers. They really did understand the quality movement. They made better and better and better slide rules (my first slide rule


was a wooden one that lasted less than a year before it warped). Building a quality slide rule should have, according to the Six Sigma advocates, led to better and better sales. And it did for a while, until slide rule sales declined due to the emergence of the electronic calculator. (You would have thought that one of those manufacturers would have seen this coming). Alas, none did, and the 10 slide rule companies became three and the three became none. None of the slide rule companies survived in any transformed form even though they made a very high quality product and continued to improve to the day they died. No amount of CRM will change the fundamental relationship between the consumer and their money; they part with it for products and services. People will pay for solutions to problems and fun, not for solutions to problems, fun, and CRM. Companies and their executives must never lose sight of the need for compelling products and services, both current and future. CRM distracts and misdirects and sometimes uses limited and valuable resources (time and money) for things that fit a paradigm but are not essential. Companies have actually gone out of business pouring money into robust customer service delivery while ignoring the need to re-engineer their product. CRM raises the expectations of executives. There is a vicious circle of expectations that are raised in a company with the investment and implementation of CRM. In order to convince the senior executives to invest the money necessary to buy the technology, train the people, and implement the system, the CRM companies and internal advocates and champions must promise the moon. The senior executives are invariably led to believe that CRM implementation will directly solve problems, lead to greater customer satisfaction, reduce returns, increase purchase frequency or loyalty (pick one or many of these choices). This creates some very unreasonable expectations within the company that may lead to the large failure rate of CRM implementation. The CRM is not failing. The internal expectations were too high, too unreasonable, or just the wrong ones. In many cases we have set expectations of CRM initiatives that are not aligned with the customer expectations. In no particular order, here are some other negative unintended side effects of CRM: The goals of CRM have led many companies to collect information that has no real connection to a program or effort. Companies gather a lot of specific data from each customer and then do nothing with it, e.g. collect credit card numbers using an IVR and then have the live agent contact ask the cus-


tomer for her credit card number or send out a gold card application to a person who is already a gold cardholder. They collect information meant to allow for more personalized service and then never touch the data gathered. CRM is based on the notion that everyone in the company serves the customer in some way. If you do not serve the customer, you should be serving someone who does serve the customer. In reality, we are seeing many companies that implement extensive and expensive CRM programs and technology and leave out parts of the organization (and employees) that are not directly related. Having everyone in the company see the customer as the primary reason for existence is the crucial foundation for successful CRM in all areas of the business. Anyone who affects the customer service delivery process must understand his or her role in customer satisfaction, e.g. a finance group that has “rules” about returning merchandise that makes the return process painful. In some instances, CRM efforts are defined by creating very robust and detailed contact channels and then not maintaining them. That is, many companies invest large sums of money into putting up a website and then don’t keep the site up to date or companies develop great IVR scripts and applications and never adjust them to the changes in the business. One of the hallmarks of ineffective CRM is the creation of a website (email or text chat) as a cost reduction move, not an additional channel for customer access. Consumers who expect access are disappointed. The future of the electronic channels is that it is not an option to be exercised for cost reduction or containment, but an additional access channel that all customers come to expect. CRM encourages consumers to e-mail their questions and when an answer never comes the customer is frustrated and dissatisfied.

Commentary Customer relationship management is not new to business. Companies that are successful in the long term have always seen the need to stay in touch with their most valuable resource, the customer. These companies have always had a sense of who their most profitable customers are and what the next evolution of product should be. There is no quick fix to a product quality issue or a service delivery problem. The ideas behind CRM are distorted by inadequate definition, poor implementation, disregard for the human element, and political/corporate opportunism. The dan-


ger is that when the CRM initiatives fail and do not produce the desired result(s) CRM will be blamed. Rebellion against CRM will then turn business back from achieving the dream of CRM. Handled improperly, CRM can turn an otherwise consumer-centric organization into a losing situation for all, leading to devalued, unmotivated employees, consumer defection, consumer dissatisfaction, and reduced revenue and profits. The interesting thing is that handled properly CRM may be leading to the same thing. It is not too late for the CRM movement to fulfill its promise. The CRM vision will be achieved by companies that realize that CRM technology will take cost and management effort away and never eliminate the need for dedicated, trained, motivated, and effective people on the phones, at the computers, and in the stores.

Chapter 62 Call center automation: When process increases mistakes and delay, there is only one thing to do CASE: Accor Reservation Services

Key Words—Internet, call center efficiency, reengineering, seamless integration, eliminating errors

The problem Accor Reservation Services (www.accorhotels.com) is a hotel reservation service that has two types of customers. The first one is the “retail customer” interested in booking a room or getting information about any of the 2,500 hotels that subscribe to the service. The second customer is any of the hotels subscribing to and making use of Accor’s services. While the customer access to the system is relatively seamless, the success of this type of system rests very clearly on the accuracy, up-to-datedness, and seamlessness of hotel information. Unless CSR’s who answer the call have up to date hotel information their ability to serve the calling consumer is quite impaired. Unfortunately, the process by which information was transmitted to Accor by the hotels was full of potential problems. For example, hotels that were part of the Accor system keep the database up to date by sending faxes to Accor’s head office in Evry, The Netherlands. This led to a number of recurring problems. Information was not up to date. Sending a fax with information did not guarantee that the information would be entered into the computer system in the fastest possible time. Translation of fax to computer was fraught with inaccuracies and possible mistakes. The Accor model is not a model of information efficiency and accuracy. More importantly, executives at Accor believed that delays and inaccuracies led to missed sales and dissatisfied consumers (both consumers who wanted a reservation and hotels who wanted guests). Accor wanted to improve the service delivery to the hotels and heighten the occupation rate of the hotels.

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Company background Accor Reservation Services is an international non-profit network for hotel reservation services of French origin. Accor Reservation Services has a portfolio of more than 2,500 hotels in every category, from budget to upscale and resort hotels. The company has centers (reservation centers) in Amsterdam, Madrid, Frankfurt, London, New York, Perth, and the headquarters in Evry (near Paris). They are accessible from 23 countries over the world. Customers are regular everyday people, business travelers, travel agencies, and tour operators. The reservation centers receive calls from customers of any of the four categories and make reservations in the hotels of their wishes. Accor Reservation Services can make reservations in the name of any one of the hotel chains. The following hotels are from the group Accor and are bookable through Accor Reservation Services: Sofitel, Novotel, Mercure, Jardins de Paris, Ibis, and the Parthenon hotels. The reservation center in Amsterdam is the smallest one, due to the fact that it serves only the Dutch market and the Dutch speaking part of the Belgian market. Accor Amsterdam uses seven different telephone numbers (but sixteen lines) for customers to contact it. They have a separate number for Accor–The Netherlands, Accor–Belgium, Novotel–The Netherlands, Mercure–The Netherlands, Mercure-Belgium, Sofitel–The Netherlands, and Ibis–The Netherlands. When the callers use the hotel specific lines, Accor’s agents will answer with the name of the hotel chain. Worldwide, all reservation centers of Accor use the same computer reservation system, called TARS (The Accor Reservation System). All reservations are managed via this system. The hotels are bookable on a free-sale base up to six rooms per reservation. They are obliged to give their open-close dates by fax to Accor Reservation Services so that it can be updated within 30 minutes. Reservations via the reservation centers across the world go directly to the central computer in Paris, from where the respective hotel will be notified about all the reservations booked on that day from the various countries and the details concerning the customers visiting. So the mainframe of TARS, based in Evry, serves as the central system for the reservations. It is clear that a central computer system with the same software everywhere is very much necessary when these call centers at different locations in the world want to access data about hotels and bookings, coming in from all over the world.


The solution To be able to improve their service to the hotels and to increase the hotels’ occupation rate, Accor is developing T.O.L., or TARS On Line. This is a computer software system, based on the TARS system that Accor’s reservation centers have already been using for more than two years. T.O.L. is meant to connect the hotels to the central mainframe of Accor, and thus to all the reservation centers. This way, the hotels will be in contact with Accor Reservation Services every time of the day. They will not need to update their data with Accor all the time by fax, as this will then be done automatically. With this kind of connection, the road that data has to travel between the hotels and Accor’s central computer will be as short and as fast as possible. Promotions will be made available to Accor in its reservation centers in no time and when a hotel has no more rooms available, this will also appear in the systems of the reservation centers on a very short notice. The half hour update time will be redundant, since the new system will keep the hotels’ PMS (personal management system) up-to-date immediately. The aim for the new system is to give the hotels the opportunity to decide among three options: to use T.O.L. 1) as an interface between their own personal management system and Accor’s T.O.L.; 2) as an automatic interface, meaning that the two systems are interrelated; or 3) as a total interface, somewhat like an external reservation platform, for example one reservation platform for six or seven hotels in one region, completely integrated.

Intended result The plan is meant to improve the service that Accor as a call center (or reservation center) can deliver to each hotel worldwide that makes use of Accor’s reservation services. Consumers will have up to date access to information. Promotions can immediately address low occupancy issues.

Commentary The “seamless” connection between member hotels and Accor’s service is a small issue for Accor. It can easily create a system that corrects the problem, which was easily identified. Yet it is easy to be fooled by the simplicity of this problem and not see how this issue permeates your situation.

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The “seamlessness” in a supply chain is not a minor issue. The ability of the Internet to connect the whole “supply chain” (in this case member hotels to ultimate consumers) not only increases the speed of the operation but also saves money by eliminating paper and the people who must handle the paper. The Internet’s ability to connect the “supply chain” is estimated to be able save companies anywhere from 2040% of back office costs. These savings can be passed along to consumers or straight to a company’s bottom line. It is easy to believe that the impact of the Internet will be in some unbelievable increase in sales. The growth of B to C (business to consumer sites and businesses) would certainly support that notion. Yet in projecting how the Internet will affect business we cannot help but think that the greater impact on business will be just like that in the Accor case. The Internet allows levels of efficiency, reliability, and cost savings heretofore unachievable. This will in turn lower costs and make business better able to serve the customer, which will, in effect, increase the bottom line. The essential exercise is for you to jot down on one half of a legal pad all the different pieces of paper generated to and from your center, all the pieces of paper handled by people, all the pieces of paper to and from consumers, and on the right hand side of the page indicate if the Internet could substitute. For every yes you must then find ways to integrate and implement the Internet solution.

Chapter 63 Call routing CASE: CMG Key Words—call routing, channel management

Company background CMG (www.cmg.com) is a leading European information technology company, founded in 1964 and active in more than 40 countries. CMG provides services in the areas of system development, management consultancy, and advanced technology for the financial world, transportation, trade, industry, and telecommunications. CMG offers a complete package to build, manage, and maintain a call center IT infrastructure for companies. According to the requests and goals of the client CMG is able to construct an IT infrastructure, provide training to the client’s personnel, run the helpdesk, and even provide outsourcing for its clients. CMG runs a 24/7 hour call center in Amstelveen, The Netherlands, that not only serves its clients’ needs but can be applied as an outsource call center for a client. CMG is a consulting company that is involved in numerous call center projects and encounters the challenge of optimizing the call routing and the workload of the agents.

The problem Optimizing the call routing and consequently the workload of the agent needs a tailormade solution. CMG has built a general framework for the IT infrastructure that can be adapted according to the specific requirements of the client. How CMG tackles the challenge of optimizing the workload by designing the optimal workflow process is the issue of this case.

The solution The general framework is composed of various IT applications. The applications will be illustrated only in general. This means that technical explanations are not part of this case and only the concepts of the applications will be elaborated.

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A call center is normally a centralized department that handles incoming calls but can also handle letters, faxes, and e-mails. Next to incoming calls, a call center can also be used for outbound calling for marketing activities. The challenge is to organize these activities in such a way that an agent is constantly active performing one of the above mentioned tasks. One of the goals is to organize such a workload that the agent is satisfied with her work. (A satisfied agent is more likely to create a satisfied customer.) First, to achieve uniformity in answering mail, incoming mail needs to be processed as efficiently as possible. CMG created an automated system for letters and faxes to optimize the distribution of letters to the competent agent. The old-fashioned way had an employee being responsible for the correct distribution of the mail. He read every letter and fax to determine the correct address in the organization. The employee searched for keywords but also interpreted these within the context of the letter. It is obvious that the old-fashioned procedure was slow and mistakes were frequently made. The most common mistake was when the employee diverted the mail to the wrong agent. CMG created a system that scans and digitizes every incoming letter and fax. The system distributes the mail according to discovered keywords and patterns in the mail. The keywords and the pattern recognition are determined from historical mail research. The system provides a fast distribution of the mail to a competent agent. Apart from a fast, efficient, and correct distribution of the mail, the system offers the advantage of a correct logbook and a digitized mail archive. CMG also optimizes the agent’s workflow with the so-called skill-based routing. Skill-based routing is intended to optimize the use of the agent’s skills. The skills of each agent are determined and stored in the system. Skills can include the spoken languages of the agent but also the specific knowledge acquired after training and the authorization to handle certain calls, sign letters, etc. This makes it possible to route a call, a fax, a letter, or an e-mail to the most competent agent. Various options are possible to introduce this kind of routing. The first possibility is to filter the calls by an agent(s) that can be seen as a receptionist who determines to which agent the call is diverted. The second possibility is to use a VRU-system (voice response unit) that diverts the call by the dialing selection of the customer. CMG can accommodate above-mentioned solutions according to the desires of the call center client. If the incoming telephone call comes from a digitized system


(ISDN), the call can be compared with existing data in the database and can be routed to the most competent agent, for example, routing the call to the same agent who had previous contact with the customer or connecting the customer with an agent who speaks his/her native language.

The result CMG has many call centers as clients and CMG is able to adapt the various solutions to a new call center client or to accommodate available systems according to the new requests of already existing call center clients. CMG itself is constantly updating the applications and is developing new IT that can further optimize the workflow in the call center.

Commentary There are many of you reading this who are saying, “This is nothing new; we have been doing this for years.” Great. This case is written for a large number of you (you would be surprised at how many centers do not have systems and procedures that this case illustrates) who do not have systems and procedures to accomplish what has been illustrated. So what are these things? 1. Timeliness. Our research shows that over 50% of companies do not respond to emails within a 24-hour period, and it turns out that 24 hours is the upper limit most customers expect. Believe it or not, we have found that 20% of companies do not reply to e-mail at all although they have a website with an e-mail address. The same goes for faxes. 2. Automation. The only way to handle any real volume of e-mail and fax contacts is to automate. Based on an analysis of the fax, mail, or e-mail a scripted response is given/sent. 3. Expert system. The success or failure of such an automated system depends on the accuracy and depth of the database. Expert systems are only as good as the experts who created them. In your organizations you have people who can solve any problem that is encountered. Find them and turn what they know to a system. Once incoming contact can be analyzed either personally or automatically, the routing will occur. 4. The system described above becomes very powerful when you are very creative about its application. For example, GE has skilled agents by expertise. It also has skill

Chapter 63 Call routing 325

routing based on escalation, the probability that a problem will turn into a real bug problem. The special CSR’s are further trained to deal with that bone issue. What are the creative things that you can do in terms of skilled routing? 5. The system is also only as good as the ability to automatically detect key words and patterns. While 100% detection is theoretically practical, in reality, there will be a certain percentage of automated responses that will be inaccurate. The key here is not to be disappointed that this inaccuracy exists but to a. Measure the extent of the problem; track the mistakes and work to reduce. b. Find out what consumers would accept after a mistake is made to “make it all better” and automate that too. c. Minimize and work toward elimination by researching the errors and learning from them and then incorporating what you have learned into the automated system. 6. These days there are a number of really good automated systems. The stronger companies will be developing neural network expert systems that will learn and change based on the learning. Things will be getting much better and much cheaper in this area really soon. 7. Whatever you do, respond before 24 hours. Remember, the more you beat 24, the more you wow the customer.

Chapter 64 Database management CASE: Scoot Key Words—database management, information access

Company background Scoot Netherlands (www.scoot.com) aims to be market leader in providing quality business information to the consumer and the business market. Scoot is equipped with a call center and internet-site that can be used by the customers to retrieve information about other companies. The two most frequent questions that Scoot answers are what and where are you looking for. Scoot competitors are the “Gouden Gids” (Yellow Pages) and the “Pink Pages,” published by KPN Telecom as a part of the telephone guide. In 1997, a joint venture was set up between the publisher group VNU and the London-based company Freepages. VNU, at present, holds 75% of the shares and is the financial partner, whereas Freepages provides the technology and know-how. The Gouden Gids is part of the VNU group as well. Both the Gouden Gids and the Pink Pages are refreshed once a year when they are republished. The update of the information is done on only a yearly basis whereas Scoot updates its database on a continuous basis. Customers know that the Gouden Gids can contain outdated information since they receive a refreshed edition only once a year. With Scoot the image is different. The customer expects up to date information. The Gouden Gids’ earnings come from advertisements in the guide. Scoot’s income comes from the companies and businesses that pay to have their address and information given first when the customer requests information for their type of business.

The problem Scoot’s success is determined by the depth, timeliness, and accuracy of the information it has. The problem was to develop a database that satisfies the requests from customers but also attracts companies that are willing to pay for the distribution of their information.

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Next to the challenge of developing the database, the database accuracy asks for continuous updating.

The solution Freepages already existed in the United Kingdom and had developed a database with a directory. Freepages knew from experience the most frequently asked requests and had indexed the company’s information accordingly. Scoot adapted the directory layout from Freepages in the United Kingdom and started to enter the Dutch company’s addresses according to the English directory. At Scoot a special department is responsible for the content and updating of the database. On a regular basis the content department checks the database for its validity. If a request cannot be met by the call center, the call center will refer this request to the content department. Apart from returning the call with an answer, the content department tries to find a structural solution to prevent referrals to the content department in the future. The key question for the content department is whether the additional information gathered to answer the question necessitates the adding of a new subdirectory that will allow the call center to retrieve the correct data immediately. A new subdirectory, which is needed from a customer point of view, should also be judged by the sales department since it will have to generate sales for this subdirectory. The following example is offered to illustrate the issues involved in the maintenance and update of the database. A customer requests the name and location of a sports shop. The customer needs this information to buy swimwear for her Caribbean holiday. She will not appreciate it if the referral from the call center leads her to the name and address of a sports shop in her neighborhood where only winter sports articles are sold. But does the CSR know to ask the question if the consumer doesn’t state it? Is the database accurate and searchable so that this query can be answered efficiently and effectively? There are many reasons why a database on companies might not create a subdivision such as winter sports and summer sports. There might not be enough sportshops in the region to make a detailed subdivision. It might never cross someone’s mind that such a distinction is useful. There is constant tension in Scoot between the call center and the sales and database people.


The result The perfection and improvements of the database are resulting in the fact that referrals from the call center are diminishing. Adjustments will always be made because new questions will emerge. The category of coffee shop didn’t exist until recently. The subdirectory was added because customers regularly placed requests for addresses of coffee shops. Also the need for accuracy of the database causes constant attention for the content department to check and change the database. At the moment 120 agents are operating in the call center and 100 employees are responsible for sales.

Commentary Scoot illustrates the importance of accurate and timely information. Without accurate and timely information, Scoot has nothing to add in the marketplace. Its ability to understand the questions that will be asked and then develop the information in the database before too many consumers ask for it is what its employees are being paid for. While the power of information is easy to see in the Scoot case, it is less easy to see but no less important for most call centers.

Chapter 65 Keeping it simple: Call center automation CASE: Xerox Key Words—database management, self service

Company background Xerox (www.xerox.com) is an international company that originally was the dominant manufacturer and distributor of copiers. Xerox’s Dutch national welcome center is in Amstelveen, The Netherlands. The national call center provides hardware-support planning, help-lines for hard- and software, remote diagnosis, installation planning and documentation, service requests, and contract sales. Work flow for the center is described in the chart below. Customer calls:

FIRST LINE:

call intake

± 20 agents

SECOND LINE:

helpline

± 5 engineers

THIRD LINE:

support

FIELD SERVICE

A phone call that cannot be answered by the first line and has to be put through to the second line costs a lot more money, since additional engineers have to be involved in the call and they are more expensive than the first-line agents. Most call center agents of the first-line activities work at Xerox for a maximum of three years. This limit is imposed by Xerox, which claims that agent performance deteriorates in significant ways after three years. So most people working on the first line are hired from temporary employment agencies or are temporary workers.

329


The problem Xerox found that caller satisfaction was low because the computer system used to support the agents in the welcome center in solving the caller’s problem with Xerox’s products impaired and hindered agent performance. Agents were frustrated and that frustration was communicated to callers. It was a system in which as much information as possible was put in, in writing, for the agents to be able to retrieve any possible piece of information regarding the products offered. It was a tree-like system and it took the agents too long to find the information necessary to answer the questions asked by the customer. Secondly, the agents were never sure they could find the information needed. Thirdly, a large number of training hours were needed to make new agents familiar with as many of Xerox’s products as possible, and with the computer system.

The solution In 1994 and 1995, Xerox embarked on development of an internal legacy system unique to the company. The system was called TAC Book, which stands for Telephonic Avoidance Call. The TAC Book no longer describes all the problems possible, but is restricted to those problems that can be solved or answers that can be given over the telephone by the agents occupying the first line. Instead of just text passages, the new computer system has built-in photographic images of Xerox’s products. A great deal of product and service information was left off the front-line system under the theory that it was hard and unreliable for the front-line agents to find the information, anyway, and they were handing off the call to the more specialized agents most of the time. Because of this measure, the system is not stuffed with too much information; it can run faster and it takes less time to access the needed pages. When the agent does not retrieve the answer to the customer’s question in the TAC Book, he does not have to look any further. He knows that the problem is too complex for him to solve over the phone. He can immediately put the call through to the engineers or the second-line support. New agent training is much simpler and faster since the elaborate product information that stuffed the first system is no longer there. This saves a lot of time and money. Besides the time savings, there is an increase in the quality of the service, because the people on the first line know what is expected from them, and likewise, the

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personnel of the second and third lines know they will have to deal with only the graver and more complicated problems.

The result The TAC Book has been a great success in both efficiency and effectiveness. More problems are solved per agent/shift and customer satisfaction ratings have improved significantly. At this point in time, 800 problems are being solved per month via the TAC Book. This is 10% of the total calls in one week. And it is continually improved and elaborated. The satisfaction of the customers and Xerox’s own personnel has increased over the years. Year

Customer satisfaction

1993

87%

1995

93%

1996

95%

1997

95%

This is of course not just due to the TAC Book. There are all kinds of factors responsible for the satisfaction of the customers and the personnel. However, these numbers prove that Xerox is working on both and is successfully doing so. The success of the TAC Book has had several consequences: 1. Other departments of Xerox that deal with customers are using the TAC Book now too. It improves the communication with the customers, because they do not have to be product experts to be able to understand the customers’ wishes better and to be able to react to these wishes. 2. Concessionaires (users of the Xerox name, e.g. companies selling Xerox products) are also using the TAC Book. 3. Large customers that use only Xerox machines (e.g. that have more than 100 machines in their company) can also use TAC. This way, they can solve their own basic problems and save Xerox a lot of time. Besides this, these customers usually use central reporting of problems, which also decreases calling time.


Commentary Once and one is the key to call center success. Earlier we showed empirically that getting the solution to the customer’s problem is the key to caller satisfaction. In this case we see that the reason for this may be more than simply getting the answer to the customer but it is what getting it done (or not getting it done) does to the CSR. Dissatisfied CSRs lead to frustrated CSRs lead to CSRs without confidence leads to caller dissatisfaction. It is interesting that Xerox in this case has developed a system that supports and reflects the problem caused by an outdated system. The system stinks. The CSRs can’t get the work done. The CSRs get frustrated. The CSRs cannot deliver customer satisfaction. The CSRs grow frustrated and leave. Xerox concludes that CSRs are not motivated and so it embraces a system that guarantees low motivation, high turnover, and less than ultimate service by hiring temp workers for the first level. Xerox has created a self-fulfilling and self-perpetuating system that will continue to create problems even when it gets a system that supports exceptional customer service. (In our opinion and experience it is highly unlikely that Xerox executives will, after they develop this new great system, go back and reanalyze the temporary hiring solution.) What Xerox has done to streamline and focus the agent’s responsibility is actually quite brilliant. Determine the top problems, script a simple solution, have a path for the more difficult solutions, and then implement. In addition, the self-service solution for good customers was quite prescient; Xerox was clearly ahead of its time. It is not that all customers will use a self-service option or want a self-service option. Our research shows that almost 25% of customers will do self-service. Just think of the resource advantage that 25% represents. Solving their problems are less costly. (Take the price per call multiplied by 25% of the number of total calls. You can use the savings to improve the center, invest in the business, raise salaries, lower prices, and provide tennis, gold and diving for all call center supervisors). Finally, the creation of a unique legacy system has both advantages and disadvantages for a company and should be fully considered before implementation. Clearly Xerox, in this case, was excited to finally be developing a system specific to its needs. This excitement may blind Xerox to the full implications of this decision. First, the needs today will not be the needs in three years (notice that we didn’t say may not be, we said will not be). The legacy system will not be able to support these new things it is

Chapter 65 Keeping it simple 333

called upon to do. It is very difficult (at best) to get legacy systems to do new things. The programmers and engineers who developed the system will be long gone and it will be costly (both time and money) to find someone who understands what was done and how it was done to get it changed. Second, while it may seem that a legacy system designed to meet specific needs is a wonderful idea, it makes it very difficult to add on to the system when vendors come up with the latest and greatest new CRM stuff. The development of legacy systems has its route in the belief that available technology cannot possibly be specific enough for your needs. While five years ago we might have agreed that available second-party systems do not have the ability for infinite flexibility, we do not believe that this is the case now. There is a cheaper, more flexible, more integrated system out there that can be purchased/leased at a cost significantly cheaper than you can develop one for. Moreover, this system can be made to do 98% of what your legacy system will do. Moreover, while the legacy system will hardly ever be upgraded and will have to be replaced, vendor systems (from strong, reliable companies) will be upgraded, added to, and be better able to meet the future at a small percentage of the cost of changing or replacing the legacy system. Finally, we emphasize work flow. In order to design a more successful system you must first understand the work flow of a position. If you know the flow you can make it simpler and easy. If you know the flow you can script effective responses. If you know the flow you can minimize problems. If you know the flow you can train effectively. Xerox learned what the CSRs did and thereby eliminated the “mess” and made it possible to do the job well.

Chapter 66 Linking Australians to government services CASE: Centrelink Written with Paul Conn Key Words—call center integration, public service call center Centrelink (www.centrelink.gov.au) is a government agency which provides a range of social security and other human services through a network of some 400 customer service centers and twenty-three call centers linked on a telecommunications platform to provide a single national “virtual” call center way of accessing services for about 8 million Australians. It is a large volume operation that involves 19 million telephone calls per year handled by 3,000 staff members.

The problem The origins of the current network are found in eleven geographically “footprinted” call centers that were established during 1992. From these tentative steps, rapid increases in call demand and opportunities for process redesign over the following years caused major reviews of resourcing, telecommunications platform arrangements, and re-thinking of ways to provide an improved experience for callers. The high call volumes experienced almost immediately placed real pressures on strategies to address access difficulties and the wait times experienced by customers.

The solution: The “virtual call center” The most profound change between 1992 and 1997 was the creation of one “virtual” call center by linking all call centers together as “Centrelink Call” on a national automatic call distribution (NACD) platform. Call routing across centers and the three major time zones in Australia had a demonstrable positive effect on call handling capacity. All call centers were linked on an outsourced telecommunications platform, operated by Australia’s largest telecommunications provider, Telstra. The Spectrum service delivers call handling capabilities equivalent to fourth generation ISDN PABX’s and

334

Chapter 66 Linking Australians to government services 335

ACDs. Unlike the former arrangements for site-by-site PABXs, Spectrum services are delivered directly from the public network. Spectrum is the proprietary name for the Centerx service supplied by Telstra, which is delivered from the Nortel DMS 100 Intelligent Network. Exchanges are based in nodes in all capital cities and a number of regional centers around Australia. Call handling is controlled both at the global NACD level, and is augmented through ACD MIS-based macros which can be set to threshold levels for calls (that is, macros which block calls), leading to logical queuing to other ACDs. All calls are answered by the Interactive Voice Response unit (IVR), which can route calls to particular ACDs, both physically and logically. Both the IVR and Spectrum are also capable of supporting computer telephony integration (CTI) enablement. Centrelink Call is primarily an inbound operation, although limited outbound initiatives have been undertaken since the inception of the NACD. Performance reports are generated using the ACD MIS, and Telstra as platform provider generates these to meet Centrelink Call’s requirements, using the CallScan system. The implementation of the NACD stimulated a series of critical changes over the ensuing 18 months: •

Phasing out the original and overloaded General Enquiry Queue;

•

Moving to multiple lines based on segmenting the customer base to match organizational priorities;

•

Rebadging the existing One3 numbers to match this;

•

Starting the very slow process toward skills-based routing, involving reconfiguring queue configurations in all call center sites, to support greater opportunities for call routing irrespective of geographical or time zone considerations;

•

Extending hours of operation, through opportunities offered by national scheduling and phasing in early automation options; and

•

Revised role definitions for managers/team leaders to enhance their skills to support the work of frontline staff and facilitate teams arrangements.


The results For Centrelink the clear advantages have been •

through outsourced management arrangements, access to technical and support staff dedicated to supporting and improving operations specifically for its needs;

•

an ACD which is capable of handling the current extremely high call volumes, with capacity for the forecast increases in underlying demand in the coming years;

•

savings in capital equipment and replacement costs, and reduced call costs through tariffing arrangements negotiated under the contract. The tariffing arrangements ensure satisfaction of the legislated requirement that customers can contact Centrelink from anywhere in Australia at the cost of a local call. The real costs are borne by Centrelink, but at a rate less than normal long distance call costs.

•

in-built flexibilities to ramp up new call center sites or relocate/expand existing sites with minimal delay;

•

enhanced ACD MIS facilities, supporting national and site-by-site monitoring in continuous real time; and

•

enhanced disaster contingencies through uninterrupted power supply arrangements for all Spectrum exchanges, very high levels of redundancy for all critical components and 24 hour per day support services. The Spectrum platform, together with staff who are recruited and inducted spe-

cifically for call center work, has given Centrelink Call the capacity to address the challenges before it. Some brief idea of the scale of demand is indicated by the statistics for the financial year 1998–99 in which 97.92 million call attempts were made to Centrelink Call, representing an increase from 60.1 million in the previous financial year. Centrelink Call staff successfully answered 17.87 million calls in 1998–99, at an average of 67,942 per day. This was an increase of nearly 2 million more calls answered than in 1997/98. Beyond this, a further 1.21 million calls were completed successfully in the IVR, at an average of approximately 5,000 per day. Reduced access, in the form of excessively high busy signals during peak call periods, is a challenge for Centrelink Call, but the capacity provided by operating as a

Chapter 66 Linking Australians to government services 337

virtual network is shown by the following example. In April 1999, which was a period of intense call demand, 65.7% of callers were answered on their first call attempt; 76.8% of callers required three or fewer attempts. The issue continues, but performance based on technology and process redesign is impressive and continues to improve.

Commentary The virtual network has also stimulated further changes, for which call center automation changes are seen as the driver in the coming years: 1. Simplification of the Interactive Voice Response (IVR) process Customer feedback is very clear on this issue—less complexity, fewer choices, and faster access to the solution, usually through a call center staff member. Improvements in voice and production quality in the IVR (through professionally recorded messages) have eased the difficulties, but the real opportunities are seen to be achieved through the major ramp up of CTI-enabled automation initiatives. 2. Creating capacity to take on new work without endless resourcing increases In the public sector context, resource management is a critically important issue. The call centers are looking at re-engineering processes for completing calls and after-call work faster; at the national level, automation is seen as a way of improving our handling of targeted simple enquiries, to free up skilled operators for value-adding or new work. 3. On-line tools and the intranet/internet Second, Centrelink is already moving to utilize the evolving technologies to focus on Desktop productivity, through graphical user interface (GUI) presentation screens, which sit on “top” of CTI enablement and offer multiple applications running at the same time through the use of split screens. Centrelink Call is moving away from online scriptors which have increased productivity to a reasonable degree, as it is clear that the combination of IVR enhancements, CTI, and desktop based softphone arrangements are offering the next level of process improvements. CTI enabled desktops in call centers initiate significant changes, which position call centers to be able to address current call demand and be ready for work arising from internet access channels.

Chapter 67 Call center queues for minority customers CASE: Centrelink Written with Kris Vleeshouwer Key Words—cultural sensitivity, call routing Centrelink (www.centrelink.gov.au) has established call center services for customers from remote indigenous communities in Australia. The service currently covers approximately the top half of Australia, including the Torres Straits. The workgroups provide customer service advice and updates to customer records using staff that has been recruited with appropriate cultural and language skills. For those of you who have not visited (or are not from) Australia, it is a very big country with most people living in a few concentrated areas.

The problem Customers from remote indigenous communities and their advocates were having difficulty accessing general call center services as call center staff did not have a good understanding of the remote cultural and language issues involved for this customer group. Customers often also suffered significant delays in getting access to Centrelink payments because of their remoteness. In April 1998, a telephone survey was also conducted with customers accessing the indigenous queue at the Cairns Call Center. Some community agents were also contacted for feedback. Most callers (83.3%) said they prefer to speak to an Aboriginal or Islander staff member, because they thought Aboriginal and Torres Strait Islander staff could understand and relate more to the customers’ needs and circumstances, and the customers felt more comfortable and confident speaking to their own people. Some of the staff in the Cairns queue are able to speak Creole, which is widely spoken in the Torres Strait Islands. Other staff adapt their English, sometimes speaking broken English, to facilitate understanding.

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Chapter 67 Call center queues for minority customers 339

At the time of the survey, most of the customers’ calls were answered within sixty seconds, but some respondents indicated that busy signals and longer waiting times were a problem. This was particularly difficult for community agents, especially in places where there might be only one line available in the office for a number of services.

The solution The Cairns Call Center piloted an indigenous workgroup with staff who were recruited with appropriate cultural and language skills to deal with remote indigenous customers. Following an evaluation, a further group was established in the Palmerston Customer Service Center to service customers in the remote areas of the Northern Territory and the top half of Western Australia. A customer satisfaction survey carried out at the initial evaluation of the Cairns Call Center pilot project indicated significantly improved levels of customer satisfaction with the new service. There has been a 15% increase in the use of the service by customers in six months. There has been a reduced delay for remote customers in accessing Centrelink. The monthly average speed of answer for the Indigenous queue has been compared with the national average speed of answer in the other queues (restricted to those customer segments covered by the Indigenous queue).

Table 1: Average speed of answer (in seconds) Customer Segment

January

February

March

April

May

June

Retirement & Disability

153

249

277

246

146

29

213

268

185

221

Disability, Sickness & Care Families

245

226

249

265

115

124

Employment Services

182

243

223

237

122

101

Youth & Students

393

245

205

166

117

85

Cairns Indigenous Queue Palmerston Indigenous Queue

153

103

80

59

103

81

74

75

89

77

71

84

Note: In March, a queue for disability, sickness, and care enquiries commenced operations. Previously these calls were handled in the retirement and disability queue, and the employment services queue.


Commentary This problem here is that Aboriginal and Torre Strait Islanders want to talk to one of their own. While this might not be questioned in the context of Australian history, when applied to the U.S. market one might feel very uncomfortable. The equivalent finding here would be that African American consumers would want to speak to African Americans, Hispanics to Hispanics, Asians to Asians, Jews to Jews…and on and on. On the one hand we want to give customers what they want; to not do so goes against what we preach. It certainly is common to have same race/sex/ethnicity in some business situations. Just as those who are new to Australia demand services that are specific to their language and culture, so do Aboriginal and Torres Strait Islander customers. The remoteness of many indigenous communities in Australia makes this an important service. The case also highlights the need to be culturally sensitive or globally sensitive. As U.S. call centers enter global spaces and global call centers enter U.S. markets, the need to interpret and translate cultural imperatives is important. We have seen a number of Indian call centers come into the United States without success because they did not partner with U.S. businesses to communicate the advantages and benefits of outsourcing to India. We have also seen a number of failures of U.S. managers who were hired because of their experience and expertise to start up and run call centers outside the United States because they tried to institute management and call center processes and technology that were so successful for them here.

Appendix Resources that will knock your socks off

In the list below you will find 327 extremely good ideas for your center. Yes, we said 327 (determined by some very hard research). Just kidding. We do not know how many ideas are here. We do know that there are many potential ideas. After each link you should come up with at least one new idea to try at your center. The learning should not end here. The more you learn, the more you will want to know. There are hundreds of essential website resources containing case material to learn from forever. As with the list of cases, our list of additional information sources is by no means comprehensive. They are intended as a starting point for more learning. In this way, the learning will and should never stop. If you know of something not listed here, please help us ([email protected]). Here are some cool places to learn: 1. www.crmproject.com. Barry Jacobs of Montgomery Research has put together simply the best place to go for ideas. There is so much here you better wear shades. “This project explores a bouquet of collaborative technologies that together comprise a total CRM solution. It’s our attempt at bringing the wisdom of the world’s foremost CRM gurus to your desktop. The best-of-breed vendors you’ll find here describe their products in detail, and they explain how to work with those products. Top industry analysts offer reviews, advice, and their visions of the future. Corporate giants share the secrets and success stories of their own CRM implementations. Top academics contribute their predictions and offer a glimpse into their personal research about the customer.” And it’s free. 2. www.fastcompany.com. This new age magazine is a cross between Rolling Stone and Business Week. We look forward to every issue. There is not a single issue from which I do not learn. After I get done I have probably ripped out for filing 50% of the pages. Even the ads are educational. The website has it all, but subscribe anyway. 3. www.1to1.com. In the early 1990s, Martha Rogers and Don Peppers published a book about the one-to-one marketing relationship—and they changed the world. They have a dynasty and they have done an exceptionally good job of promoting and

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making the one-to-one world understandable. Their website is chock full of terrific examples and probably the next best thing to hiring them. 4. www.siebel.com. Just another company, but it has case study after case study after case study. Search on the site for case studies and buckle your seat belt. 5. www.benchmarkportal.com. I have a psychological and financial interest in this company. It started by licensing the Purdue database, which was then commercialized. Jon Anton has taught at Purdue and is a friend. My brother Michael works for the company. That said, if you want to benchmark your center against any criterion, they are the ones to talk to. The broadest, most important set of call center/contact center data in the world at a price you can afford. A load of free things, too. 6. The Mandelbaum Papers. Professor Avishai Mandelbaum of Israel Institute of Technology is a brilliant researcher of call centers. Three of his papers are available at the links cite of the Center for Customer Driven Quality or his site at http://iew3.technion. ac.il/serveng/References/references.html. Pay particular attention to: Call Centers: Research Bibliography with abstracts, a very complete list of research and conceptual articles that have appeared; Telephone Call Centers: Tutorial, review, and research prospects; and Empirical Analysis of Call Centers. 7. Free downloadable list of sayings on customer service and leadership at www.ccdq.com. Click on leadership graffiti or customer service graffiti. 8. Center for Customer Driven Quality, Purdue University. The only university-based think tank research teaching institute. For those of you wanting to be part of a University “thing” (it makes you feel good), we need members and partners. Free stuff, membership stuff, more membership stuff—we want you to be members. 9. www.crmadvocate.com. They bill themselves as “the worldwide source for CRM success stories.” If you cannot find interesting, useful, exciting, uplifting things here you will find them nowhere. Cases, links, newsletters, webcasts, applications, presentations. You want it, they got it. The one-stop shop for CRM. 10. www.realmarket.com. Headline news for CRM. Your source for everything CRM. I mean it, this is everything. The essential newsletter and site for call centers. 11. www.iccm.com. The site for Incoming Calls Management Institute. This is Brad Cleveland’s Institute and there is a wealth of information here about all things. Brad Cleveland has written some of the best books on call centers (including Call Center Management on Fast Forward). He is a great speaker and his experience and history

Appendix: Resources 343

make him a treasure for call centers. You can get access to Queue Tips, Call Center Management Review, The Call Center Catalog. Great resource links page. 12. Customer Contact Strategy Forum. www.ccstrategyforum.com. A leader (they say the leading) community for contact center executives. This is a membership site. 13. CRM Guru, www.crmguru.com. Another all-inclusive site for all of us CRM junkies. White papers, presentations, free reports, information, secrets, links, good stuff. 14. International Journal of Call Center Management. www.winthroppublications.co.uk/CCMFrontpage.htm. This is the only research publication devoted to call centers. By research publication I mean an academic type of research. Academic research is very different than market and applied research that you are probably used to. But there may be some papers here that might help you. 15. Journal of Satisfaction, Dissatisfaction and Complaining Behavior. This is a U.S. journal devoted to—you guessed it—satisfaction, dissatisfaction, and complaining behavior. www.vancouver.wsu.edu/csdcb/home.htm. 16. E-piphany, www.epiphany.com. One of many companies selling CRM solutions but they have some useful stuff on their site. 17. E-Loyalty, www.e-loyaltyresource.com. An e-marketing site but their discussions and stuff on creating e-loyalty may help you conceptualize call centers as loyalty mechanisms. 18. Customer Service Quarterly, www.e-csq.com. A subscription based for money newsletter. Too expensive for my taste because I have to pay for it from my pocket but it has a lot of very useful information. So if you can get the company to pay, it is worth it. You will always find something. 19. SOCAP, The Society of Consumer Affairs Professionals, www.socap.org. The biggest and best (in my opinion) association of professionals in the customer contact, call center, and CRM field. They have a lot of information available on their site. They publish a journal called Customer Relationship Management, a mix of applied and academic research and thinking. 20. Call Center News, www.ccnews.com. Up-to-the-minute news about our industry. 21. Service Quality Institute, www.customer-service.com. John Tschohl’s institute to promote and help businesses develop all things customer service. A terrific


author (e-Service) and terrific speaker and a guy who knows a lot. The site has for fee and for free stuff. 22. e-Summit International, www.summitcircuit.com. An international oriented site. Very nice, almost indispensable, resources/links page. Check it out. 23. Call Center Careers. Interested in a new job? www.callcentercareers.com/ index.jsp. 24. If you are interested in quitting your present job go to www.iresign.com/ uk/home/ for creative letters of resignation. Read them; it might inspire you. 25. Call centers New Zealand. Want to get away? www.callcentres.net/top frame. 26. Caviar, caviar, caviar. After you are finished reading all above, you might be in the mood for a spot of champagne and a dip of caviar.www.caviarteria.com/ caviar.html. 27. CRM Community. It’s free and there is a lot of information. Your source for success in CRM. www.crmcommunity.com/why_join.cfm. 28. Call Center Depot. Many, many things here. Links, reports and of course the ubiquitous stuff. www.callcenterdepot.com. 29. Quotes from the characters of MASH including Sidney Friedman’s, “Ladies and gentlemen, take my advice. Pull down your pants and slide on the ice.” http://swamp4077.tripod.com/mashquotes.htm. 30. searchcrm.techtarget.com. Another great all-inclusive site. There is so much here and so much available. White paper, technical advice, free stuff, books and more, more, more. 31. Do you need to make a decision? Looking for help? Visit the Internet magic 8 ball and the decision is easy. http://8ball.federated.com/. 32. Oracle has some good videos and papers for free. Can be used for training or just for fun. www.oracle.com/thinkcustomers/index.html?content.html?manual. 33. Destination CRM. www.destinationcrm.com/. Another of those allinclusive CRM sites. Just a lot of information. If you can’t find it here, you can’t find it. 34. CRMxchange, www.crmxchange.com/. A community of CRMites (you know who you are). Very full. Columns, sessions, archives, equipment, pictures, passion, sex, pathos, and violence.


35. CRM Forum. Another big site, www.crm-forum.com/. If you can’t find it, you don’t know what you want. Yellow pages, library, careers, news, and editorials. 36. Sherpaweekly, www.marketingsherpa.com. A very useful group of newsletters. In the one dated 2/6/03 we learn that it sucks being the sherpa working from home and getting the flu. There are some very good case studies and links each week.

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Index

KEYWORD TOPICS

Chapter

Access Agent hiring Agent empowerment Agent selection Appreciation days Automatic response

3 6, 7 11 6 16 33, 34, 65

Benchmarking Benefits of call centers

60 1

Call center automation Call center efficiency Call center integration Call center organization Call center ROI Call center-centric company Call centers trend Call demand problems Call etiquette Call forecasting Call monitoring Call routing Caller convenience Caller dissatisfaction Caller market research Caller/consumer satisfaction/ dissatisfaction Capacity planning Career ladder Change Channel management Churn Communication quality Communications technology Company image Compensation Computer based training Contingency planning

65 62 62 57, 66 44, 45 48 3, 61 29, 48 40 28 31 35, 63,67 30 43, 45, 46, 51 39, 46 3, 9, 25, 31, 36, 43, 46, 47 29, 37, 38, 63 9, 15 11 63 41 9 3 18 12 10 10

353


Corporate culture Creation of expert database CRM Cross-cultural differences Cultural sensitivity Customer access Customer expectations Customer feedback Customer information Customer relationship management Customer segmentation Customization

8, 22, 48 58 42, 53, 61 27 55, 67 23 3, 26 45 45

Database management Distributed work

64, 65 10, 19

Economic segmentation Eliminating errors E-mail handling Employee evaluation Employee motivation Employee responsiveness Employee satisfaction Employee staffing Employee turnover Empowerment Expert system

54 62 33 8 8, 9, 15 48 9 9, 23 8, 9, 10, 17, 21, 22 11, 14, 16, 48 34, 58

First time resolution Flex time Forecasting Future trends

12, 43 11 28, 29, 48 2, 3, 61

Gateway number Growth of call centers Hiring incentives

53, 59 1 13

History of call centers Human resource problems Human services

1, 61 12, 58 36

Importance of call centers Information access Intention to call Interactive voice response

1, 2 64 23 32

2 54 42, 49, 54

Index 355

Internet IVR

62 32

Job rotation

19

Leadership Listening Location

8, 11, 16, 19 25 39

Management support Marketing communications Mentoring Metrics Motivation Multi-lingual Mystery calling

19 3 14 11 14, 16 7, 55 57

Number identification

59

Once and done One to one marketing Outbound call response Outsourcing

12, 43 42, 49, 54 30 29, 30

Performance assessment Performance measurement Personnel selection Personalization Pitfalls Planning Policy development Preventing problems Proactive services Problem analysis Product information Product placement Profit Program evaluation Public service call center

9, 37, 60 37 7 49, 54 61 12 12 62 51 46, 51 44, 45 44 44 13 66

Recruitment Reengineering Retention Role Stress

13, 20, 22, 66 44, 62 8 23

Scheduling

16


Selection Self-service Service quality Share of customer Skills training Staffing Strategic value Stress Symbols

20 32, 33, 34, 38, 65 2, 26 52 9 27 1 23 18

Technology Temporary workers Testing for CSR skills Training Turnover

24, 56 6 6, 9 8, 9, 10 8, 13, 14, 15, 16, 17, 19, 21, 22, 23

Up- and cross-selling

52

Value-based routing

54

Waiting time Work distribution Work load

35 19 10

Written by authorities on the call center industry, Cases in Call Center Management brings to light the strategic importance of call centers in todays business world. While large corporations have dedicated call centers, small organizations, even if they do not identify a part of the organization as a call center, due to changing attitudes toward customer service, in practice have call centers. As interactions with customers move away from person-to-person to interactive media options, the call center is emerging from the shadows to become a vital force for corporate marketing and communication. Cases in Call Center Management covers the gamut of

topics by examining

real call centers in action and how managements at those centers have dealt with key call center issues including Human Resource Management Operational Management Strategic Management and Technology Issues

Among the organizations covered are Accor Charles Schwab General Electric Hewlett Packard Mercedes Benz Thomson Consumer Unisys Yellow Pages Direct The book is rounded out with a section on resources that will provide hundreds of ideas to accentuate your cur rent call center. Both a practical guide and an exhaustive reference, C

ases in Call Center Management

is an

investment in the future success of your customer service operations.

Richard Feinberg is a consumer psychologist and professor in the De par tment of Consumer Sciences and Retailing and the director of the Center for Customer-Driven Quality at Purdue University.

Ko de Ruyter is a professor of

marketing and marketing research at Maastricht University.

Lynne Bennington is a professor of services management and head of the School of Management at Royal Melbourne Institute of Technology University, Australia.

D

ICHOR BUSINESS BOOKS An Imprint of Purdue University Press

West Lafayette, Indiana www.thepress.purdue.edu

1-55753-342-3

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Cases in Financial Management

Cases in Operations Management

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The Call Center Dictionary

100 Great Marketing Ideas (100 Great Ideas)

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Management Ideas (In Brief)

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Ideas in food: Great recipes and why they work

The Great Mushroom Call

International Cases in Tourism Management

Designing the Best Call Center for Your Business, 2nd Edition

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100 Great Business Ideas: From Leading Companies Around the World (100 Great Ideas)

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