How CRM is Changing Teleservices for Issuers

By Burney Simpson

November, 2001

[Editor's note: the following article was written for the credit card industry, but is equally applicable to any industry or organization providing service via the telephone.  It is reprinted by permission.]

The buzz has been on for customer relationship management for several years now, and its influence is growing in the industry once known simply as telemarketing. CRM is giving rise to a new breed of teleservices employee, one more skilled than the telemarketer of not so long ago.

The ubiquity of the personal computer and the rise of the Internet mean more consumers can ask questions and resolve problems without needing to talk on the phone with a company representative. And advances in the power to track and analyze customers' actions have made data mining an essential part of any CRM system

While some experts predicted those technological changes would mean less reliance on customer service representatives at contact centers, the opposite has been true. Now, the human touch is needed more than ever to handle the tougher inquiries and complaints that the cardholder with a phone or a PC can't resolve alone.

The telemarketing industry is finding that computers may be built to collect and sort huge amounts of data, but the human brain is often the best tool to interpret the information. Computers can't soothe angry customers, fix vexing problems, sell something, or otherwise build the relationship and leave the client with a smile as he hangs up or logs off.

Call centers and their agents must "acquire customers and give them service, but we also have to gain loyalty and bring in more value for our clients," says William Sims, director of investor relations at Sitel Corp., an Omaha, Neb.-based teleservices firm.

For telemarketers, that's meant a move away from aggressive outbound sales calls and phone agents with a take-no-prisoners attitude. Instead, the industry is fielding more inbound calls from customers of card issuers and other clients, and employing a kinder, gentler agent. Asking more of the agent is leading to better compensation, though the position remains for most a temporary one until something better comes along.

Inbound calls to third-party teleservices firms working for card issuers rose 54% to 181.6 million last year from 118.2 million in 1999, according to Card Marketing's annual telemarketing survey. The increase is based on results from 20 firms that reported calls for both years.

At the same time, the growth in outbound calling hours on behalf of issuers cooled off. Thirty-three companies reporting for both years racked up 30.9 million hours for issuers, up only 7% from 29.0 million hours in 1999.

Determining exactly how many of those inbound calls should be classified as CRM is tricky. Still, industry experts indicate that 2000 was the year that CRM became an important factor at call centers. What's causing the growth is an increasing willingness by issuers to farm out to trusted third parties some customer service functions formerly performed exclusively in-house. For instance, some teleservices companies report that issuers have them handling billing disputes and statement queries, besides at least partial involvement in processing requests for higher credit lines.

It's too soon to gauge the repercussions from the changes. But as CRM grows, there's a need for a new type of rep who can not only listen but also can use email and the Web to serve customers. What used to be a customer service representative is evolving into an eCSR.

Today, the eCSR has to juggle ways of dealing with customers. Phone skills are a given. In addition, the eCSR must be able to send back to the customer the proper email response to a question. And with websites placing red 'help' buttons on selected pages, customers can request immediate interaction with an eCSR. Once connected, the rep can use online 'chat' to engage the customer. If more service is needed, the customer can provide a phone number and the rep can call back.

"Agents have to be able to multitask - deal with email, sometimes [use Web] chat, sometimes live voice," says Robert Schuman, president of Contact America Inc.

Schuman estimates that 20% of the La Jolla, Calif.-based telemarketer's business is devoted to customer relationship management. And this year's inbound calls for card issuing clients appear likely to double last year' total.

A great eCSR, Schuman says, "must have people skills, analytical skills, show common courtesy, be polite, and able to handle irate people. It takes skills to find out exactly what the real problem is."

Simply put, it's all about customer service, says Schuman.

This combination of technical talent and people skills doesn't necessarily mean that call centers need better-educated personnel, the experts say. College experience is preferred, but a four-year degree isn't required.

"It's not an education thing. It's work ethic. It's believing the customer deserves respect," says Roberta Tamburrino, president of Naperville, Ill.-based Customer Solutions Group, which specializes in call-center training and staffing. "That [the customer] should be served - not that they are a burden to the CSR's workday. We've had success with high school students because they're malleable, open minded, and eager."

Working the Keyboard: The eCSR must know how to work a keyboard and surf the Web, she says, but these days many young people have already learned that at home.

As noted, the move to CRM has calling centers handling requests that issuers used to keep in house. Schuman says that privacy has been the top concern for cardholders in 2001. Card issuers as well as every other financial institution in the first half [of 2001] mailed out millions of privacy policies to comply with the Gramm-Leach-Bliley Act that took effect July 1.

"They get their [policy] statements and call the 800 number on their bill," Tamburrino says. Often, the calls are going to a teleservices company rather than to the issuer.

Charge disputes and requests for higher limits also have become common. Call centers don't have the authority to make a change, but they can email a form that tells the customer the matter is being looked into.

APAC Calling Centers of Deerfield, Ill., has become one of the largest CRM telemarketers, with inbound calls for issuers increasing from 7 million in 1999 to 31 million last year. Card issuing clients include Chase Manhattan Bank and Discover.

When hiring an eCSR, APAC prefers candidates with previous call-center experience or some college class work. The best prospect is someone with background in an APAC client's industry.

For a card program, APAC may check with human resources at a financial services firm that recently has conducted layoffs. One major account serviced at APAC's headquarters in suburban Chicago is Sotheby's, the art auction house. To find a potential eCSRs for that client, APAC checks with the placement office of the School of the Art Institute of Chicago, hands out flyers downtown near the school and its dorms, and put ads in the school newspaper.

Job applicants are screened on the phone and must apply online. If that goes well, they take a typing and keyboard test that includes surfing the Web, says Brett Trainor, APAC's site director at Deerfield.

"We ask them to do a Web search and find five sites," he says. "If they succeed, it proves they know browsers."

Then they get verbal interviews. But a quiet person in an interview may still make a great eCSR, says Trainor. "Someone can seem quiet, but you put them on the phone and they're talkers," he says.

Once hired, the trainee is put in the classroom to learn about the client she will be servicing and to master three to five software applications, says Claudia Diaz, an APAC account manager. That training lasts 10 to 15 days, depending on the campaign.

Meanwhile, the new reps are assigned to a calling center team with a coach. On their first full day on the floor, the reps sit in a so-called sidecar and watch teammates answer calls. Soon, they go live with the coach in a sidecar monitoring their work.

On a typical day, the center is quiet, with banners on the walls promoting APAC clients. The eCSRs are assigned to only one account each and have no minimum hourly call requirements. "This isn't your calling center with a guy in the aisle yelling 'Sell!'" says Trainor.

A rep's PC has three screens. The first displays background information on the calling customer, including previous contacts, along with account data. On the second screen, nicknamed the "Dashboard," eCSRs see a scroll of suggestions and scripts for a particular campaign or sale.

The third screen can be enabled for Web interaction with the customer. That can mean email chat. Or, if the caller allows it, the eCSR can figuratively look over her shoulder to see the Web page the customer is viewing. If the call is a complaint, the eCSR may be able to "push" her to a page that resolves the issue. A savvy eCSR peruses the caller's record of purchases and pushes her to Web pages with products she might want to buy.

Sophisticated Software: Some customers need help with the basics, such as gaining access to their own account information. During slower times, the rep answers emails. APAC offers clients the option of having customers' emails answered within four hours or 24 hours.

The extensive interaction between customer and agent has brought a need for sophisticated software that can handle as many as six customer requests simultaneously. Indeed, so much data can be generated that it requires a sophisticated user to make sense of it all, says Ellen Arrington, managing partner at Siebel Systems, the San Mateo, Calif.-based CRM software company.

"The technology is very powerful and we have to ensure that the employee uses it effectively," says Arrington.

That has meant more training for Sitel, one of the biggest teleservices firms serving card issuers. "We used to train (agents) in a matter of minutes. Now it can take four to five weeks," says Sims.

Sitel's inbound calls for issuers grew from 2.5 million in 1999 to 13 million last year, according to the CM survey. Its Internet-related revenues accounted for about 10% of its total year 2000 revenues of $760 million, says Sims. Clients include American Express Co.

The need for better-trained and more creative reps has forced telemarketers to become creative with compensation, too. The pay is better, there are more opportunities for advancement, the atmosphere at work is more relaxed, and the reps' suggestions are respected, not ignored.

APAC pays starting eCSRs $12 to $14 an hour, twice what it pays new outbound agents. That can rise to $18 an hour.

Pay for an eCSR can reach $16 an hour at Peoria, Ill.-based Affina-The Customer Relationship Co., according to Samuel DiLiberto, director of business development. That's $4 an hour more than agents handling the standard inbound calls earn.

In comparison, the Incoming Calls Management Association in Annapolis, Md., found in a 2000 survey that the median wage for full-time agents nationwide was $12.55 an hour. Affina offers tuition reimbursement at schools near its eight calling centers and a 401(k) retirement program. Every year it also gives its agents about $500,000 worth of the consumer electronics sold by several of its clients.

Those incentives pay off in lower turnover, says DiLiberto. "We estimate it costs us $9,000 every time we lose an agent," he says.

Contact America's Schuman says making eCSRs the elite agents encourages others to climb the call-center ladder. "The (agent conducting) CRM is the most highly skilled and the best paid. There is a stratum within a call center. That's good for the business, because it helps people that want to move up."

In some ways, APAC treats the eCSR as if he or she were on the management team serving the client. For example, agents monitor what callers say about a firm's website and share the information with their coaches. That in turn is passed on to the client. That shows agents that their input is respected and improves morale, says Trainor.

Turnover: And they may be on to something at APAC. In an industry where annual turnover rates of 100% are not uncommon, APAC claims turnover at Deerfield has been in the 30% range.

Allowing agents to use their training to solve customers' problems makes the job interesting and cuts down on burnout, says Schuman.

But even with those improvements, compensation could be better, says Customer Solutions' Tamburrino. "They are still woefully underpaid," she says. In general, agents are "people out of high school that may do it for three or four years. It's not a career, it's entry level."

That may or may not change as customer relationship management evolves. But it seems clear that CRM is becoming an integral part of any marketing program for card professionals.

As the credit card and banking industries continue to consolidate, consumers may have never set foot in a branch. So the phone agent is becoming the primary connection to the issuer for many customers, says Schuman.

"Many local banks are gone," he says. "Contact with managers and tellers is gone. For many customers the only interaction is with an ATM. The only touchpoint is through the call center. So it has to be very valuable."

This article has been reprinted by permission from Credit Card Management, a Thomson Financial publication, July 2001 edition, copyright 2001. For reprints of this article, in its original from, contact Howard Gilbert of CCM at 212-803-8200.

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