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Folks like me whose heads are usually wrapped around revenue assurance, billing, and OSS issues tend to forget about customer care’s role as a revenue center.
Yet optimizing the contact center offers one of the greatest returns on investment for a telco.
After all, customer loyalty drives profitability. In fact, AT&T’s research in this area suggests that service quality — of which customer care is a part — has the highest impact on customer loyalty.
And Harvard Business Review studies confirm that it typically costs 10 times more to acquire a new customer than to retain an existing one. So when you factor in acquisition costs and base operating cost, profitability in the telecom industry is usually realized in year three of a customer relationship.
Bottom line: It’s foolish to lose people out the front door due to poor call center practices.
Yet as critical as the call center’s mission is, it’s in conflict. Retaining customers means spending money in agent training and technology; however, it’s also imperative to save money on staffing, networks and time spent talking to customers.
So what to do? Well, for Robert Lamb, director of Contact Center Services at AT&T Consulting, the answer is to strike what he calls an “artful balance“ between contact center investment and cost savings. Exactly what he means by artful balance is the subject of my interview with him.
I met Robert at the recent TM Forum conference in Orlando where he gave an insight-packed talk on contact center strategies. It was a cool presentation. First, being a professional speaker, Robert knew how to keep his audience engaged. He also broke up the PowerPoint with some fun roundtable discussions. Best of all, his thorough knowledge of the subject made for some great Q&A.
In the interview, Robert offers advice from his consulting work with his internal client, AT&T, and other world class customers like Ford, Dell, Discover Financial, DISH Network, and General Motors.
|Dan Baker: Robert, many of the people reading this blog have revenue assurance and related jobs. And I’ve found that a surprising number of these people come from customer care backgrounds. Apparently it’s a great training ground.|
Robert Lamb: If you’re involved in customer service, you’re aware of a lot of things. You are certainly aware of what your customers want and what the primary issues are, especially the most repetitive ones. If it’s a good contact center, you’re also aware of what’s going in your sales, marketing, and legal departments, and even fulfillment teams.
So somebody who grows up in customer care really has a good sense of where the customer painpoints are — what issues customers care about. And that’s the first step to understanding how to gain greater wallet share.
|Robert, there are so many areas in customer care that require attention. Are there any particular ones that a telecom should give top priority to?|
Dan, a critical one is First Call Resolution (FCR). When someone contacts you, your goal should be to resolve the customer’s issue immediately so the customer doesn’t have to call again.
Think about it — if you’re achieving 50 percent first-call resolution, what does that mean? On face value, 50 percent sounds like a good figure. But that for every call you make, you need to make another call. And what does that mean? Somebody is dialing a toll-free number twice. Someone is using the network twice. Someone is using your infrastructure twice. When you add it all up, it’s just not efficient.
And how important is FCR to retention? Well, AT&T did a survey of our customer service in the wireless area and found that if a single customer call successfully resolves a problem, only 6 percent of callers are likely to consider switching providers. However, if the call does not resolve their problem, 38 percent are likely to switch to another carrier. So if you’re not measuring FCR, you should be. It makes a huge difference.
|Wow, that statistic around FCR is really quite surprising. And it brings up the whole issue of KPIs. What set of metrics is AT&T keen on these days?|
Well, before we upgraded our contact centers at AT&T we used to focus on KPIs such as Average Handling Time and Average Speed to Answer. Now these are not bad metrics, but they don’t tell you the full story. Basically you need to think beyond mere operational metrics and figure out what your business goals are. And also, what is your customer experiencing?
At AT&T, for example, we’ve got a group involved in customer retention — or a “save the customer“ group. Now if you try to limit the amount of time those people talk on the phone, you’re handcuffing those agents. What you need to do instead is measure their success in saving customers — and measure it by revenue, for example.
Bottom line, you need to make sure the metrics you use are geared to your business goals, and that requires you do some analysis.
|What are the key technology tools an agent needs to have these days?|
Well, one of the first questions I ask when I engage a call center client is, “What’s your agent desktop look like?“ Are agents navigating six or seven different screens to get what they need? If that happens, the agent often ends up talking about the weather and other chit-chat because they’re feverishly trying to find answers to their questions.
Carriers also need to consider moving to all-IP in their call centers. That’s a nice saving opportunity and may soon become a necessity since very few telecoms are installing TDM Automated Call Distribution (ACD) technology in the local loop these days, so it’s just a matter of time before all contact centers will be IP-based.
The IP environment offers a number of options. You can buy your own CPE, but also, many operators including AT&T often choose to lease their CPE so they don’t have to make a large capital expenditure. Certainly you will save money on equipment and leasing costs — that’s what I’ve seen. But also to virtualize, consolidate, and centralize your call center operation, IP helps a great deal.
|Social media has emerged as a potentially great customer intelligence source. Have telecoms figured out how to leverage that yet?|
Dan, in the customer care world, I’m afraid we’re still coming to grips with social media. But one thing’s for sure: The viral effect of websites like Twitter and Facebook can magnify isolated customer care problems into public relations disasters. Great example: When rough baggage handling by United Airlines workers damaged a folk singer’s guitar and United refused to compensate him, the singer wrote a song blasting the company. The song, “United Breaks Guitars,“ now has 9.5 million views on YouTube alone.
On the positive side, however, social media is often a very inexpensive and fruitful way of hearing the “voice of the customer.“ In effect, social media tells you what’s wrong and points out what can be done better.What better information could you have for root-cause analysis?
|Carriers have many channels of customer contact — Web, IVR, live agent and others. How do you segment customers into the right channels?|
Matching the right resource to the task is very important. You have agents out there of all stripes. Senior agents. Rookie agents. Then there’s IVRs and off-shore/outsource agents.
You need to think in terms of life-long customers being paired with life-long agents. If you have a customer group that’s comfortable with automation, then you can send them to an IVR. Likewise, if you have a low-value customer or one you want to lose, you can also send them to an IVR machine.
An IVR call is typically one-eighth the cost of a live agent call.
Of course, the Web is the lowest cost per contact overall. Now what often happens, because not every website is as friendly as it should be, is that people get frustrated and go direct to the call center to resolve their problems. This is why I highly recommend an integrated Web support model that includes chat that will guide the customer through so they don’t get frustrated and start calling your call center to get their questions answered.
The younger generation (or millennials) like to use the Web. They even like to do things with their thumbs using mobile apps. So you need to take advantage of that desire to use the Web as their primary help source. So how do you balance your resources in the real world? Well, there’s no real substitute for analyzing your own particular situation, but I suggest that you define the customer segments, figure out what your business objectives are for each segment, then from there you can match the resources you want to make available for each one. And the value of the customer needs to be not only their value today, but potential value. What are they worth tomorrow?
So a lot of this requires leg work. It’s not rocket science. But it does take some time.
|Utilizing remote office agents or home-based agents is a controversial issue. What’s your take on that?|
Some companies have been able to make home-based agents work very well. Actually, Southwest Airlines, a company we have consulted with, has 12,000 call center agents and most of them work from their homes.
But at AT&T we faced resistance to this move because agents working in the offices were afraid for their jobs. But over time, AT&T has gradually shifted to home-based agents. Often people working from home are new mothers who are also highly trained agents. Home-based agents are particularly good when you consider snow storms and other bad weather. Because they are stationed at home, it’s like having your own built-in disaster recovery program. Plus you can divert calls from weather-affected areas and people won’t notice any degradation of service.
A related topic, of course, is call center outsourcing. Now that topic needs to be handled very carefully. Once you identify your customer segments and separate your “white glove“ customers from others, you can begin to decide which segments are worth considering for outsourcing.
The temptation to move to offshore is great because of the cost savings. About 70 percent of a call center’s OPEX expense is labor. And when you consider that Pacific Rim labor costs (India, Phillippines) are one-tenth the cost of U.S. labor, you can see why it’s attractive.
But too often companies haven’t done the analysis and built a true business case for a move offshore. In the PC world, Dell lost a lot of credibility (and market share) when they switched to a heavy offshore customer support model. Its competitor, HP, who relied on American agents, was perceived to have much better customer service and that hurt Dell. After we helped them with the analysis, Dell was able to line up the customer segments that it was worth sending overseas, so they achieved the right balance of cost savings and quality.
|Robert, thanks for sharing these great ideas, and I get the sense that we’ve merely scratched the surface. So my last question is: If a telecom wants to improve its customer care, where does it start?|
Dan, what I’ve shared is generic advice based on my consulting experience with many clients. But there are always risk and complications in applying so-called “standard“ principles in a fast-moving field like contact centers. Plus every operator is different, so the watchword is really “plan before you execute.”
Before you go out and change your customer care world, you should do it with partners who have done it before. You can use either in-house consultants or outside ones. But please develop a comprehensive roadmap. In other words, define what you mean by success.
Ford Motor Company had some fantastic ideas when we started consulting with them on how to upgrade their contact centers around the world. The trouble Ford had was the economy was terrible and they struggled to keep the lights on. But while the “great ideas“ for improvement were good, they were unrealistic for their situation, so we helped them a few years ago shape a strategy to fit their current need. And now Ford has recovered and is competing quite well.
You need to do a thorough evaluation of the call centers as to their current state. That’s important because later on you want to be able to measure your progress or lack of it. And you can actually measure your implementation in phases. How much did we achieve? And what can we do better? And the costs associated with your targets you can also measure so you can show progress and get greater funding from the CFO perhaps.
This article first appeared in Billing and OSS World.
Copyright 2011 Black Swan Telecom Journal