The Strategic Role of the Call Center in a Down Economy

By Peggy Carlaw

As the economy struggles to recover, many companies continue to be faced with doing more with less in all areas of the organization, including the call center. Rather than thinking of the call center as a cost center, however, smart companies are using their call centers to strategic advantage. As the first line of contact with customers – whether in a sales or service role – call center employees represent your corporate brand. They are the ones who deliver on the promises you make to your customers. During a down economy, they can improve sales and build customer loyalty – and they can do so while reducing operating costs.

Poor Customer Service Affects Your Corporate Brand: Business magazines are filled with stories of companies that are known for excellent service: Amazon, the Ritz-Carlton, Zappos, and Hewlett-Packard to name a few. Unfortunately, most of our interactions are with companies whose service is less than stellar. The extra time and energy is takes to extract service from a substandard service organization is wearing. Consequently, we search out a competitor, or we buy as little as possible from the offending company. Either way, we’re sure to tell our friends about our miserable encounters, and the company brand is maligned.

A 2010 study of 195 professionals and 165 college students by Ernest Ronan found that when customers had bad experiences with call center staff, they were less willing to buy from the company in the future. The strength of this reaction increased from 72 percent in 2005 to 86.3 percent in 2010. Similarly, customers’ negative perception of a company’s brand because of bad service increased from 83 percent in 2005 to 98.9 percent in 2010, and their unwillingness to recommend the company rose from 77 percent to 91.5 percent over the same period. These figures indicate that buyers are growing significantly less tolerant of poor service. When the economy is bad, companies struggle to compete for fewer customers. Losing customers due to poor service is just not smart business!

The Payoffs for Providing Good Customer Service: On the other hand, positive call center experiences have a positive impact on customer satisfaction and lead to a number of factors that will benefit a company vying for business in a stagnant economy.

Loyal Customers: Satisfied customers are nearly 33 percent more likely to purchase again. Moreover, since it’s less expensive to keep a customer than to acquire a new one, improving customer satisfaction reduces costs.

Improved Sales: In addition to providing repeat sales, satisfied customers are more likely to respond to an up-selling or cross-selling offer. Loyal customers also tend to be less price-sensitive, thereby increasing your opportunity for a high-value sale.

Referrals: When the economy is down, minimizing risk becomes increasingly important as customers decide where to spend limited funds. Word-of-mouth advertising is the most trusted and least expensive form of advertising. The more satisfied your customers, the more they’ll tell others.

Improved Shareholder Value: The Harvard Business Review traced a direct correlation between customer satisfaction and shareholder value. They theorized that a 1 percent improvement in customer satisfaction translates into a 3 percent market value increase for the average company. This flies in the face of the traditional view of call centers as cost centers. They may cost money to maintain, but they generate a wealth of return if managed correctly.

When customers interact with your call center, they form perceptions of your brand that are far more powerful than the messages you send through your various marketing channels. According to Beta Research Corporation, 80 percent of customers state that the quality of service they receive from a call center representative reflects the quality of the company and its products or services. This is a powerful incentive to use the call center to support your brand – one that will more than pay off when the economy rebounds.

A Strategy for Quickly and Affordably Improving Service: Rather than looking at your call center as a cost center to be cut during tough economic times, look at it strategically as a profit center, one that can improve customer loyalty and reduce operational costs. With a little attention and a small investment, your center can achieve stellar results for your company. Here are the steps to take.

Assess the Current Situation: What are your customer satisfaction scores, net promoter scores, or customer effort scores? What are your internal quality scores? How about operational metrics like average speed of answer, talk time, and call resolution rates? Do your call center employees understand the critical role they play in the success of your business? When you ask them what their job is and they say, “I’m in the claims department,” or “I’m a technical support rep,” recognize that you’ll need a cultural change to help them see themselves as serving others.

What you want to hear is: “I help our customers get a fair reimbursement on their insurance claims and help them feel secure knowing that we’ll take care of them,” or “I make sure our customers have the least downtime possible so their employees are productive and their businesses are profitable.” You’ll use this baseline assessment later as you measure your improvement.

Identify Process Snags: Do your processes and procedures make it easy for customers to do business with you, or are they designed to make it easy for you to do business with your customers? Customers want to spend the least amount of time and energy possible getting answers to their questions and solutions to their problems. Examine your internal workflows and adjust them to be more customer-friendly.

Identify Opportunities for Improving Agent Skills: Do your employees know your products and procedures? Do they know the company’s values around service? Are they able to listen to customers and clarify their needs? Do they focus on the positive: what they can do for customers rather than what they can’t? Do they set expectations for what will happen after the call? If the answer to any of these is no, an investment in training is indicated.

Engage Frontline Supervisors in Reinforcing the Initiative: Frontline supervisors are responsible for making sure that new processes are followed and that skills learned in training are employed on the job. Be sure that they understand the strategic value of the call center to the overall success of the business and the importance of their role in leading their teams in a process of continuous improvement. If possible, tie part of their pay to the performance of their team.

Measure Again: Once you’ve streamlined your processes, made sure that your call center agents have both the attitude and skills to provide outstanding service, and have frontline supervisors engaged in continuous improvement, it’s time to measure again.

Results You Can Expect: When processes are streamlined, call center employees are trained, and frontline supervisors are empowered to support continuous improvement, you can expect improved customer satisfaction scores, and reduced costs as well. For example, Jennifer Edwards, training and program manager at Motorola’s Home & Networks Mobility Division, reported a 10 percent increase in customer satisfaction and a 56 percent improvement in call resolution rates. Jean Pierre Berone, customer services director for Dell, reported that within two months after beginning the initiative in Montpelier, they achieved a 10 percent rise in customer satisfaction rates and a 10 percent reduction in the time taken to resolve technical issues.

In as little as a few months, with minimal investment in process improvement and training, you can turn your call center into a strategic tool to improve customer loyalty and reduce costs. This will improve your bottom line during the economic downturn, and you’ll be well positioned as a service leader when the economy recovers.

[From Connection Magazine November 2010]

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