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Solving the Profitability Dilemma

Solving the Profitability Dilemma

Solving the Profitability Dilemma

Actionable Analytics, and cooperation between marketing and customer service organizations, are key.

2/6/2002
By Donna Fluss
CallCenter Magazine

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To meet corporate profitability objectives, too many call centers sacrifice service quality by cutting staff and pushing agents to reduce average call handling time. That’s a non-starter because profitability hinges on providing good service. Implementation of labor-saving e-service channels, such as Web self-service applications, is only half of the solution. The other half lies in boosting revenue using analytical tools that will enable call centers to leverage information freely shared by customers to upsell and cross-sell products and services, reduce customer attrition and acquire new customers at reduced cost.

Containing Costs

Call center agents, supervisors and managers know that the waste of customer information represents a high, but un-quantified, opportunity cost. More than 90% of call centers evaluate and reward agents for minimizing average call length to meet productivity goals. Agents, driven by management to move quickly to the next call, ignore customer data, turning the call center into an assembly line.

Why? Absent additional revenue, CXOs (CEOs, CFOs, CTOs) must often cut costs to maintain or boost profitability. Because agent-related expenses account for 70% to 80% of a call center’s overhead, the logical choice for the budget ax is labor. All too frequently, that results in substandard service as overburdened agents rush through calls and move onto the next customer.

A growing number of companies are deploying self-service and e-service channels to increase both profitability and customer satisfaction. Self-service technology has a successful precedent: automatic teller machines (ATMs). Many bank customers were initially hesitant to bank with a machine instead of a human being. But as banks attempted to cut costs by reducing the number of tellers, lines in banks grew longer and tellers became ruder and rushed. Suddenly, a machine that didn’t talk back no longer seemed like a bad alternative.

Market penetration of e-service channels, as was true of ATMs in their infancy, remains low. Less than 10.7% of US-based call centers have rolled out an e-service application and most are not realizing their full value. This is due, in many cases, to poor implementations that discourage customers from using these new channels. Many call centers remain wary, too, of the costs and complexities of integrating e-service channels with legacy systems and business processes.

Despite the challenges, it is possible to simultaneously increase revenue and agent productivity. Give agents tools and applications that are easy to use; do not add incremental time (cost); and allow them to capture the information that customers offer freely.

For example, when a customer calls to ask for a credit line increase, the customer often communicates the reason for the request. If the agent had tools with which to capture this information, they could use the valuable data to increase revenue by redirecting the information to delivery organizations that sell related products or services.

The tools must be more than a capture and upsell application. They must have intelligence, workflow, personalization and routing capabilities. They need to seamlessly integrate with customer support software (CSS). And they must link with delivery organizations that can expeditiously act upon the information.

These tools can help drive a revolution in call centers. For years, the CRM industry has talked about converting call centers from cost centers to profit centers, in part by transitioning from single channel phone centers to multichannel and multipurpose servicing environments. But to create these profit centers, companies need more than new service channels. They need analytics tools that empower agents to capture and process information to provide quality service while increasing revenues.

New Tools

The marketplace needs new tools that I call “Actionable Analytics.” These products must be designed and developed jointly by call center and marketing analytics experts. Actionable Analytics will assess data, patterns and preferences in real time and facilitate immediate action. The tools will increase revenue while improving productivity and service quality. Likewise, the tools will enhance agent performance while reducing attrition.

Sounds like a dream? Maybe. But we won’t find out until marketing and customer service organizations collaborate.

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