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How to measure a successful call centre - Q&A Session between GCCRM Advisors and Members
China Perspective
Mr. Robert Yang, Regional GM, East China, AVAYA
www.g-cem.org
This article is exclusively written for GCCRM.
Question :
In China call center is very familiar and useful for us. However I've no idea about the criterion of a successful call center, especially in the telecom industry. Is the criterion qualitative or quantitative? If quantitative, what does it mean concretely?
Answer:
1. Issues of Call Centre Standards
It is a big issue to access the success of a call centre. In short, business objectives will be the most important criterion, especially from the perspective of the head of the business - CXO.
For any business, there are basically two reasons to choose the implementation of a call centre project. First, it aims to provide better customer services; second, to lower operational costs. Other justified reasons of implementing a call centre project include:
* better prioritise incoming and outgoing calls
* maximise staff productivity
* enhance customer satisfaction level; achieve service standards demanded by customers
* ensure staff safety (avoid direct contacts between staff members and customers)
As the tool for enhancing customer service standards and lowering operational costs, a call centre should equip with a series of technologies and management support measures, including:
* long distance filing of various sorts of complaints or spreadsheets
* investigate relevant customer information
* information management system support, such as information registration, filing information and distribution program, etc
* facilitate record or registration by fact tracking
All of the above are accessing criteria of the success of a call centre.
2. Call Centre's Cost Efficiency Analysis
The top three expenses of a call centre are salary, communication, and computer software and hardware. According to the data in John Anton's "Call Center Management by the Numbers", the proportion of these three expenditure items is 66%, 14% and 8% respectively. Accounting for 85%, the proportion of salary in the public sector is the largest, while the computer sector has the lowest proportion, which accounts for 60%. Taking into account the following factors, the statistic in China will be different: 1. many employees have relatively low pay, 2. many companies do not adopt No.800 and thus they do not bear all communication cost, 3. some computer software and hardware are more expensive. However, the proportion is unlikely in a total reverse.
Relatively speaking, equipment investment should be the focus of Chinese companies' cost management. Currently, call centre technology has already reached international standards. While focusing on world-class standards, companies have to consider the time required to achieve this objective. In regard to enhancing customer services efficiency and training of internal management staff and professional staff, IT investment could be launched in phases. Despite the availability of relative high-end technologies such as IVR, intelligent path, predicted dialling out and audio visual digitalisation storage, still your service standards may not be comparable to those offered by international companies decades ago even though those technologies were not available. For some multi-national companies, human resources control may be another factor to consider because indirect cost of human resources is usually very high. An extra person entails extra cost. Human resources out sourcing is usually a solution.
Understand cost components and know how to control cost is important, more important is being able to know how to generate returns and the amount. Among three kinds of marketing call centres, namely, telemarketing, tele-coverage and tele-opportunity management, telemarketing generates the most direct returns because profits that resulted from completed phone orders are returns. Tele-coverage usually refers to the supporting function of other sales and marketing teams. Hence, it's not easy to identify its returns. The role of assistance means value assessment could be highly flexible and therefore, the possibility of under-estimation would be much higher. If possible, try to identify returns in a more accurate manner. For instance, when dealing with big clients, duty distribution can be based on the size of order. For channel support, the rule of 80/20 can be applied to manage channel segments. Thirdly, tele-opportunity management occurs when a call centre refers purchase demands to local sales, agents or direct sales. Therefore, it is highly difficult to quantity its efficiency. Customer incoming calls analysis is necessary in order to identify whether the call centre is merely passing on customers' purchase desires or using service technique to persuade purchases.
A service support call centre consists of two major types, namely, customer service and technical support. In general, effect of technical support is more direct because nowadays customers are usually willing to buy services. With revenue, assessing technical support would not be much different from that of telemarketing.
Without generating direct revenue, customer service and internal support call centres become most difficult to assess. It needs more sophisticated methods to understand their values. Without this kind of detailed understanding and display, many companies either describe a call centre as a "necessary evil", or unrealistically force it to transform into a "profit centre".
In fact, customer retention and development are the functions of a good customer service centre. Its contribution to customer loyalty level should be the focus when assessing the value of a customer service centre. Meanwhile, customer loyalty level is a deciding factor when the company is determining a customer's lifetime value. In general, customer loyalty level has the following aspects: 1. the length of period that maintaining relationship with the company, 2. the amount in each purchase, 3. to what extend they refer the company to friends and relatives.
For instance, the total annual cost, including salaries and expenses on communication, hardware and software, of a customer service call centre is US$400,000, and the following performance has been achieved, compared with that of prior to the establishment of the centre:
1. customer loss rate reduced from 40% to below 30%
2. customer referral increased by 6%
3. customer annual purchase increased from US$4000 to US$4200
Assume this company currently has 5000 customers and sales cost is 70%. While other data remains the same, a 3-year input-output analysis can be conducted. Deducting the additional expense of US$100,000 of the first year, total income of the 3 whole years will almost reach US$3 million. This is the way to work out the cost-efficiency ratio.
For a call centre that provides internal service support, another method is needed to analyse its cost-efficiency. Assume a medium-sized company has 2000 PC users and every month it receives about 1000 help requests from customers. Previously, staff members were busy in seeking appropriate assistance (IT engineers, workmates or the manufacturers) and therefore, a lot of time was wasted in the following areas:
1. put the work aside in order to seek help (it's estimated that 125 days were used by the whole company annually)
2. wait for maintenance workers whom did not set up appointments (estimated 270 days)
3. if other workmates got involved, their working time were then occupied (estimated 1500 days)
4. on average, twice a month data restoration was required due to errors made by external consultants whom did not understand the company's internal environment (estimated 24 days and data loss)
5. loss due to frequent misuse of technological application (without saving files immediately, inappropriate software installation, misuse of data processing formula, etc) (estimated 600 days plus other data and information loss).
Meanwhile, IT engineers' non-standard and inconsistent duty allocation, logistic distribution and support measures have resulted in significant waste of human resources. We are not going into details here.
Work out the money equivalent of these losses will help to figure out the cost-efficiency ratio of establishing an internal support call centre.
At present, many companies' call centres are gradually transforming into integrated "customer interactive centres". In terms of cost/efficiency management, this will demand a higher level of quantitative mindset. A simple method is to list the possible sales amount; and in terms of services and enquiries (connections, calling in and calling out amount), use direct voice service indicators as business indicators. It should be noted that the heads of company do not understand nor are interested in communication indicators. Therefore, it may be more persuasive if we can accurately illustrate how those figures reflect the change of customer value or the quantitative increase in business efficiency. However, currently most companies do not have sufficient studies on issues like customers' lifelong values.
3. Some Indicators for Call Centre Management
Call centre management requires many quantitative indicators. There is no ready-made "basic standards" though other companies' previous experience should be used as reference. Some common standards are as below:
About The Author
Robert Yang is Avaya China Regional Sales GM and responsible for Avaya CRM business and SI strategy in China. Robert joined Avaya (AT&T Business Communications Group) in 1996 and help to launch the Call Center methodology and solution in China. With over 10 years working experience in Call Center and voice field he specializes in channel management, account sales, technical support, service and Call Center designing, consulting, integration, industry development. Robert has more than 100 clients which including the Call Center and CRM system in service provider, banking, multinational company, outsourcing, government, utility industry. He is the eyewitness of China Call Center and CRM history.
Mr. Robert Yang graduated from Nanjing University of Posts&Telecommunications and hold MBA degree from Shanghai Jiaotong University.
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