Tag Archives: Financial Articles

Articles

Maximize the Impact of Your Profit per Sale

Make Sure You’re Dedicating Your Resources to the Right Clients

By Jill J. Johnson, MBA

Few enterprises truly understand the actual profits generated by the individual sales they make. Most metrics for sales effectiveness are monitored by reviewing top-line revenue results. Yet the most critical determinant of ongoing business viability is understanding what revenue drops to the bottom line after all costs have been considered. You must understand what profit is generated by sales to each of your clients. Then consider the benefits and vulnerabilities the cumulative impact these sales mean to your business. Knowing the breakdown of profitability by individual sales to your clients can have a significant impact on your ability to achieve your business goals.

1. Understand the Impact of Profit per Sale

Many expenses go into determining profitability for a company. The same is true for determining the profitability of a sale. Each sale has multiple components impacting its final profit. You should consider your total cost of goods sold, including investments in promotion and delivery expenses. Factoring in the costs associated with the staff time required to generate a sale is also necessary. Unfortunately, few companies consider all these expenses when developing their marketing and sales strategies. Whether you are working on growing your business or struggling financially, the impact of the true profits generated by each individual sale takes on greater importance.

2. Know Your Profit per Client

Frankly, not all clients are worth the effort to generate a sale. Sometimes the growth goals you’ve set for your business mean that you are growing beyond clients you have historically served. This transition period is a vulnerable point for any enterprise. It is also stressful because you might be wrong and wind up losing a client that could have provided even revenue value if you had not been afraid to maximize your relationship.

Carefully study the costs associated with serving each client. Perhaps you have long-term clients you like personally, but if you have not taken the time to explore the costs of the sale, their value to your business may have changed dramatically over the years. Before abandoning these clients, try to identify options to trim your expenses without jeopardizing your quality. But it may be time to move on if they are not generating any real profit to your company.

3. Review Your Customer Segments Revenue

Using a target-marketing approach to group your customers into similar client segments provides you with a more detailed understanding of what is working and what is not. The key to effective target marketing is focusing your sales activities and expenditures toward those type of customers your enterprise can best serve as well as those who will stay with you over the long-term and generate solid profitability. 

4. Evaluate Individual Sales Profitability

There are two ways of looking at your sales profitability data. One is by the individual client. The other is by combining clients using some specific target-marketing components. Grouping clients by similar characteristics makes it easier to identify trends in the data that you can use to assess the profitability of each of these major segments.

There are many options for grouping your customers into segments. For a B2B client, you could group them by industry sector, number of employees, location, and so forth. For a B2C customer, you could group them by where they live, personal attitudes, age, family size, or income level.

If Client Segment A generates solid profits for you, but all your marketing efforts go to Client Segment B which is barely break-even, the choice is obvious. You must retool your marketing and sales activity to attract more prospects from Client Segment A.

5. Monitor Individual Client Profitability

A complete review of the mix of your customers and sources of sales will reveal your potential vulnerabilities if market conditions change. It is not enough in today’s complex and competitive marketplace to look only at your total overall sales. If you have one customer that generates more than one-third of your sales, you are in an extremely vulnerable position if you lose that client to a merger or change of staff—or if it goes out of business. Controlling and monitoring client profitability and cost of sales allows you to take corrective action before your business’ survival is at risk. This takes on even greater importance if you are overly dependent on key clients for your profitability.

6. The Impact of Pricing on Profitability

A close companion to client profitability is understanding the impact of various pricing strategies on the perceived value of your goods and services and how they intertwine when attracting customers who will buy from you. Engaging in discounted pricing strategies often attracts customers who buy from you based on price, not value. If you are in a service-oriented business, this can be a slippery slope. You may get clients who keep you busy but do not generate the profits you need to build a sustainable enterprise or increase your net worth. It is a delicate balancing act, but one you must realistically consider given your business objectives.

7. The Impact of Strategy on Profits

You must also consider the financial consequences of your business direction and your vulnerability to setbacks. This assessment allows you to make better business decisions and set a more realistic strategic vision for your organization. Picking your niche through target marketing must also incorporate a true understanding of the costs of reaching them, as well as their ability to add to your bottom line in a meaningful way.

Final Thoughts

Reviewing the trend information for each of your major client segments is a highly impactful approach to evaluating the effectiveness of your sales and marketing efforts. It removes your emotions and the relationships with your clients to allow you to be more detached in considering your clients’ impact on meeting your business objectives. They are no longer just people you like—they become part of a bigger grouping of customer segments that impact your future costs and business growth. If you are not attracting the kinds of clients generating the profitability to move your enterprise forward, it is time to reconsider all your sales and marketing efforts.

Jill J. Johnson is the president and founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than four billion dollars’ worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information on Jill J. Johnson, please visit www.jcs-usa.com.

Articles

How Secure Is Your Call Center?

By Art Coombs

It’s a typical Sunday afternoon, and Jane is headed to the grocery store to pick up a few items for the week. She completes her shopping and heads to the checkout lane, where she meets Nathan, the clerk who is eager to help her with her grocery purchase.

After the usual question, asking if she found everything okay, Nathan provides Jane with her total shopping bill. He then asks if she will pay with cash or card, and she says, “Debit card, please.”

Nathan hits a button and says, “Okay, go ahead and read your card number to me while I type it into my register.” Jane is uncomfortable with this. After all, her credit card number is personal information. However, without another option (and she really needs to get the groceries home to make dinner), she quietly reads the card number to Nathan. As the line of customers builds behind her, Nathan then reads the card number back to her to make sure he entered it correctly. The people behind Jane all lean in a little closer and listen as this critical sequence of numbers is read aloud.

The transaction continues, and Jane becomes even more uneasy when she is asked to give the expiration date, the billing zip code, and the three-digit code on the back of the card. All of her sensitive information is now “out there,” and the people in line behind her, as well as Nathan, all have an opportunity to lift her number. As consumers, we never know where or when a fraudster might try to use our data.

Jane receives her receipt, heads to the car, and loads up her groceries. When she gets home, she puts an alert on her card because of her concern after the payment experience in the grocery store.

Now, this story is highly unlikely in today’s world.

In fact, credit card processing at the grocery store or other retail stores has advanced to a point where the card never leaves the customer’s hand, and all information is confirmed on a keypad that only the customer can see. Yet the scenario above happens hundreds of thousands of times in call centers every day.

However, the story illustrates something consumer research has proven: Customers are well informed about security and uncomfortable about verbally sharing sensitive information over the phone.

In a recent study commissioned by The Summit Group, more than a thousand people were asked about their comfort level when engaging in credit card transactions over the phone. Nearly 70 percent of consumers stated they are “somewhat” or “very uncomfortable” giving their credit card information over the phone. And that comfort level decreases significantly if the call center is located outside of the United States. Yet most will continue the transaction and verbally share sensitive information.

In a recent article published by The CNP (Card Not Present) Report, security professionals identified their own company’s employees as their biggest security threat, but most feel their organizations are not taking adequate steps to address the problem, according to recent research. The survey, conducted by Experian Data Breach Resolution and the Ponemon Institute, found 55 percent of respondents said their company had experienced a “security incident” that originated with a negligent or malicious employee. Sixty percent of the companies said their employees are not knowledgeable about how they contribute to their organization’s security, and only 35 percent reported that senior management makes employee security awareness a priority.

Technology solutions exist that are easy to implement into current systems. For example, there are technologies that allow customers to enter sensitive information via their telephone keypad. Agents will see dots on their screen and hear monotones as the information is entered. Credit card numbers are sent directly for processing, and notification is given to the call center agent once the charge is approved. It is the call center equivalent of swiping a credit card when shopping in a retail store. The customer maintains control of his or her information, and the clerk or call center agent never sees or hears it, eliminating the temptation for credit card theft.

Call center operators and merchants would be wise to enhance their security protocol with technology, as many consumers will opt for other ways to make their purchases. With better security protocols, people may feel more comfortable engaging in phone transactions, which will result in more buyers and more revenue. Additionally, for current customers, having an alternative will increase customer satisfaction and likely result in increased spending among customers.

Art Coombs is president and CEO of KomBea Corporation (www.KomBea.com), which has been helping call centers become more compliant, secure, and efficient for over twelve years. He has been developing and marketing tools that blend human intelligence and automation to improve call center phone interactions.

Articles

On-Call Case Study: Finding a Profitable Solution to a Time-Consuming Problem

Teleservice Company Achieves an 11 Percent Bump in Ongoing Monthly Billing

By Janet Livingston

Many teleservice companies have clients with on-call staff that must be reached for callers’ emergencies and urgent situations. Knowing who to contact and how to reach them seems like an easy situation, yet it seldom is. Here are some of the issues in play:

  • On-call responsibilities change often, rotating between staff, so that no one burns out or becomes overburdened. Contacting the correct person at the assigned time is essential.
  • Not everyone should attempt to handle every type of urgent situation. Instead of one person trying to serve as a generic on-call solution for everyone, the better resolution is to direct caller needs to specific on-call employees according to their expertise. This means having multiple employees on call, and the associated need to determine which on-call person to reach.
  • A third level of complication arises from the contact preferences of each person on call: home phone, cell phone, text, email, and so forth. The preferred method also can vary depending on the time of day and the day of the week.
  • On-call assignments can change with little or no notice, often at the last minute. Keeping everyone apprised of the latest developments can be a formidable challenge.

Now multiply these four issues times the number of clients with on-call staff, each with different paradigms, expectations, and levels of complexity. The result is a dizzying matrix of ever-changing variables and complicated scenarios demanding unrelenting compliance from clients. Handling on-call schedules and the associated details with accuracy presents a never-ending problem for teleservice companies – one that requires many people to handle.

Yet finding a successful solution to the on-call dilemma can turn a key source of frustration into a significant source of revenue. Here’s how this happened for one teleservice company.

The Problem: Too many errors occurred trying to reaching clients’ on-call personnel. Often this was not the fault of the call center, but rather stemmed from client miscommunication or noncommunication. Even so, these mistakes resulted in a disproportionate number of customer service inquiries and dissatisfied clients who ultimately cancelled their service.

Without a comprehensive solution to address the problem of maintaining accurate and up-to-date on-call personnel, this problem would continue to drain resources and cause issues.

The Past: Common industry attempts to correct this on-call dilemma have resulted in complex solutions that only somewhat addressed this pain point. An unfortunate side effect in doing so was increased labor costs, often by a couple of FTEs (full-time equivalents), without any offsetting revenue to cover the increase in expenses. Sadly these initiatives fell short of fully addressing the problem.

A common alternate approach was an attempt to streamline this issue by offering a one-size-fits-all solution. While this covered those clients with the most basic needs, it failed to provide an acceptable solution for those clients who didn’t fit into this one box. This was completely unacceptable in an industry that conditioned clients to expect mass customization of their service to meet their specific needs and exacting expectations. Service complaints escalated, and client cancellations skyrocketed because of this failure.

Furthermore, in an attempt to appease high-profile (or loudly complaining) clients, exceptions were made to the standard solution. This resulted in staff confusion, an increase in errors, and the eventual disregard of the standard set in place, thereby returning the teleservice company to its original untenable situation.

This scenario has played out over and over in teleservice call centers around the world.

The Challenge: A comprehensive solution was sought to address frustrations at an established West Coast call center and meet their clients’ growing expectations. Offering bilingual service and focusing on government and education verticals, the call center had a felt need in this area, especially for clients that fell outside of these two primary markets.

The objective was to develop a clear process for clients to submit on-call information that would encompass the full spectrum of their needs, while reducing staff errors, decreasing the number of FTEs dedicated to this issue, and providing additional revenue in the process.

This seemed like an impossible challenge, but with ingenuity and persistence, the call center found a solution that mixed automated technology with personalized customer service and worked in tandem to address these needs.

The Results: Once implemented, noticeable results occurred quickly with appreciative agents, relieved customer service staff, and happier clients. Because of this initiative, monthly revenue increased 11 percent. This is a month-over-month increase that will continue indefinitely.

This initiative was repeated at a smaller operation in the southwestern United States with similar results. A third implementation at a multilocation teleservice conglomerate is under way with the potential to surpass the success of the first two.

When we see problems as opportunities, we can focus on maximizing the potential they present. The results are improved operations, happier stakeholders, and increased revenue.

Janet Livingston is the president of Call Center Sales Pro, a full-service call center consultancy. Contact Janet at contactus@callcenter-salespro.com or 800-901-7706.

Articles

Three Ways to Boost Contact Center Profits with the Cloud

By Rob Schneider

Regardless of whether customer relationship management is handled in-house through internal agents or outsourced to a third-party contact center service provider, there’s no question that it’s a critical function for customer satisfaction and loyalty. The contact center, once viewed as a cost center, has finally emerged as a value center. Forward-looking brands now know that the path to a consumer’s wallet is through fanatical customer service. The contact center can be a key component in adding value to the customer relationship, creating new opportunities for revenue, and encouraging future purchases.

Ideally, a true value-add contact center strategy is designed to help offset some of the operational costs of doing business over the phone, online, or through mobile channels. But the traditional brick-and-mortar contact center model hasn’t proven to be as cost-efficient as one would hope, despite being cheaper than face-to-face sales. However, it also shouldn’t cost a lot. So, if your contact center is a slow drain on your finances, something is wrong.

For outsourcers, providing the highest level of value to clients and their customers while maintaining healthy margins is key to a successful business model. But keeping up with premise-based contact center technology, hardware migrations, changing client needs, shifting government and compliance regulations, and changes in workforce management can all put financial pressure on the contact center, degrading margins and affecting service levels.

For many, cloud technologies are helping decrease some of these financial burdens, allowing contact center service providers to focus their time and efforts on attracting and servicing clients rather than maintaining technology systems. And focusing on your customers has its benefits: Recent research from the Aberdeen Group indicates that cloud-based contact centers experience 27 percent lower annual customer-turnover costs. Additionally, these centers typically experience about 28 percent lower infrastructure costs than contact centers with a traditional infrastructure that requires time and energy to maintain.

Here are three simple ways a move to the cloud can improve the bottom line:

1. Optimized Equipment Enables Better Service: Surprisingly, 42 percent of contact center agents are unable to effectively address customer queries due to outdated interfaces and disconnected systems. Data center equipment needs to be constantly maintained and optimized to ensure it’s in proper working condition so downtime is minimized and customer service is never affected. This means checking data centers for networking issues, performing routine monitoring, and allocating power to maximize server load capacity. For outsourcers serving numerous clients, these costs mount as servers and equipment are added, and failures can equate to significant loss of business and reputation.

Moving contact center operations to the cloud eliminates the majority of this work, decreases IT labor costs, and helps shift remaining costs from capital to operational budgets. More importantly, cloud architecture gives agents access to optimized and updated equipment, providing access to the tools necessary to get the job done. By moving to a cloud-based solution, businesses can focus on the important details of their operations without having to worry about the headache of maintaining equipment.

Moving to a hosted cloud solution also influences reliability by reducing the failure points to the network. As with any cloud solution, when evaluating providers, make sure to focus on reliability metrics to ensure your partner has a clean record.

2. Remote Agents Actually Get You Closer to the Customer: Businesses everywhere are abandoning traditional brick-and-mortar contact center facilities and embracing a virtual work environment. Today, distributed global agents can provide round-the-clock service, and the money saved by eliminating physical workspaces can go toward customized agent training to deliver improved customer service.

Letting even a few agents work remotely can save money and boost productivity, as it increases agent flexibility and allows businesses to recruit top talent regardless of location. Using the cloud to facilitate work-at-home business models also means that remote employees access files from a single, secure network location. This promotes sharing and unification strategies in the workplace and ensures that remote employees have access to the tools they need to service customers from any location.

3. Connect to Convince: Customers expect accessibility like never before – via phone, email, Web chat, SMS/texting, mobile, and social media. According to a recent eConsultancy report, consumers want multiple channels of communications, and there isn’t a clear winner for their most preferred interaction channel. In the eConsultancy report, approximately 57 percent of consumers surveyed said they would like to have the option of live chat for customer service, 60 percent want email communication, and 61 percent of customers surveyed want to engage over the phone.

Consequently, the more interaction platforms available to consumers, the greater likelihood of convincing first-time customers to make a purchase, become a loyal brand proponent, and develop into a repeat buyer. However, translating this into profit requires outsourcers to offer service through all channels and do it well. Nothing is more frustrating for consumers than a poorly set up IVR, painfully slow Web chat interactions, or ignored social media posts.

Conclusion: For companies just starting out with a cloud-based contact center, easing into multi-channel communications is possible. It is also much easier and more cost-effective than upgrading on-premise solutions to support new channels. Today, cloud-based contact center platforms support a long list of features, including IVR, outbound dialing, email, Web chat, SMS/texting, mobile, and social media. When integrated with applications such as CRM, customer analytics, call recording, and workforce management (WFM) software, finding and focusing on the customer value becomes much easier.

If you’re feeling frazzled, service is suffering, or profits are down, it’s time to consider moving to the cloud. With all the options available, there’s never been a better time to make the switch and boost your bottom line.

Rob Schneider is vice president of customer service at Connect First.

[From Connection Magazine – Jul/Aug 2014]

Articles

PCI DSS Compliance: The Promise and The Peril of Data-Rich Call Centers

Leave a comment

By Kristyn Emenecker

Today’s call centers hold great promise. This data intensive environment has the potential to yield insights for differentiated service, customer loyalty, and customer acquisition. But this information-rich environment must be carefully guarded to avoid potentially serious breaches.

Call centers must comply with a myriad of data security regulations and requirements. One such set of requirements is the Payment Card Industry Data Security Standards, known as PCI DSS.

PCI DSS Overview: Although introduced in 2006, some organizations may just be learning of PCI DSS requirements. PCI DSS is a mandatory data security compliance program that applies to all entities that process, store, or transmit credit, debit, or other payment cards, at any volume. Entities affected include merchants and third-party providers and applies to card business transacted over all payment channels.

Compliance with current PCI DSS requirements (now version 2.0) can be a challenge. Fairly straightforward standards are issued every three years, but guidance for requirements are updated often and can be lengthy as well as subjective, and PCI DSS-certified entities are held accountable to the latest guidance.

Compliance is not a “one-and-done” endeavor, either. Merchants and third-party providers must file a compliance certificate annually, and certification must be on file at the merchant bank.

Call Center Issues with PCI DSS Compliance: A call center’s data intensive environment – including digital call recording, combined with employee turnover, open physical environments, and potential off-site staff – means that data security requires constant vigilance. There are three issues that call center managers need to be aware of.

First, digital call recording can present challenges when it comes to complying with PCI DSS’s data storage requirements. Call recording is a valuable tool for quality control and fraud prevention, but presents a double-edged compliance sword when, by nature of containing sensitive data, it could itself be used as a data source for fraud, as was the case in a well-cited UK investigative report.

PCI DSS: Data Storage Requirements

  • PCI DSS allows data to be stored, but it must be protected: primary account number (PAN), cardholder name, expiration date on card, and service code.
  • PCI does not allow other data to be stored, even if encrypted: full magnetic stripe, PIN/PIN block, and CAV2/CID/CVC2/CVV2 (3-digit code on back of card); CID code (4-digits on front of AMEX card).

Suggested Protection Mechanisms for Call Recordings

  • Use end-to-end encryption: encrypt audio and screens at acquisition and decrypt only at playback.
  • If CVV2/CID is taken, then pause and mute or tone-over audio recording while caller speaks the code.
  • Alternatively, have the consumer provide credit card data via self-service/IVR to avoid agent handling and recording.

Second, a call center’s open physical layout may put data security at risk. The traditional open floor plan and low dividing walls that facilitate easy supervisor intervention on a call center floor can also allow for “shoulder surfing,” the act of viewing sensitive data on a co-worker’s computer screen without authorization to do so. Some call centers locate approved workers who process sensitive data in separate areas.

Third, regarding at-home agents, PCI DSS requires two-factor authentication for those workers who have access to the cardholder data environment. In addition, remote agents should work on a separate segment of the company data network, protected by an internal firewall.

Cost of Non-Compliance: While cost of compliance can be high, the cost of non-compliance and a potential security breach can be even higher from both a monetary and reputation perspective. Non-compliant merchants and third-party providers face stiff penalties from the card issuer including a fine per incident, increased fees and restrictions, and removal of processing privileges, should there be a breach.

Security breach costs also extend beyond PCI penalties. Costs may include irate customers, lawsuits, heavy regulatory oversight, lost goodwill, and lost business. According to the Ponemon Institute’s 2011 Cost of Data Breach Study: United States, the average security breach cost in 2011 was $5.5 million, and the average cost per record was $194.

Five Tips for PCI DSS Compliance

1) Know How PCI DSS Requirements Affects Your Business: The PCI DSS Quick Reference Guide outlines the twelve requirements of PCI DSS v2.0.

2) Take Key Steps Toward PCI DSS Compliance

  • Contact your acquirer or card issuer
  • Conduct a scoping exercise
  • Engage a QSA (qualified security assessor)
  • Engage an ASV (approved scanning vendor)
  • Continuously engage in proactive maintenance and re-evaluation

3) Develop a Prioritized Approach: The PCI Security Standards Council has provided a prioritized approach for pursing PCI DSS compliance (version 2.0), aligning the twelve PCI DSS requirements with six key milestones.

4) Keep Current: Because guidance for PCI Compliance is regularly updated, make sure to stay informed, particularly on guidance related to your business type. For contact centers, the supplemental guide for protecting telephone-based data will be especially relevant.

5) Work with the Right Partners: Consider a cloud solution for your contact center infrastructure, and let someone else handle the headaches. Cloud solutions are often run by sophisticated IT experts. Bob Kendall of Hitachi reports, “We moved to the cloud because we found that cloud solutions adhere to the highest security standards.”

If you choose a hosted or cloud-based solution:

  • Choose a partner that is PCI DSS-certified. This is an absolute must if they will come in contact with your customer’s payment card data. No exceptions.
  • Choose a member of the Cloud Security Alliance (CSA). The CSA is a group of elite companies that have demonstrated their knowledge of the cloud and how to secure it.

Work with security experts who are familiar with technologies that offer PCI DSS scope reduction, such as point-to-point encryption and tokenization. And finally, ensure your payment application is PA-DSS-certified. The list of approved vendors can be found online.

Create Tomorrow’s Contact Center Today: It is possible to create tomorrow’s contact center today by harnessing the power and promise of data to meet strategic business objectives while ensuring data security and compliance. Organizations can and should strive to provide security and quality at every touch point in the contact center, while staying focused on their main goal: creating great customer experiences.

Kristyn Emenecker, vice president of product marketing for inContact, has eighteen years of experience in the contact center industry, serving in a variety of operational, consultant, and senior leadership roles. She is active in a number of industry groups, published in multiple trade journals, and a regular on the industry speaking circuit. Follow Kristyn on Twitter: @LIVinEden.

[From Connection Magazine – May 2013]

Articles

Transforming Your Contact Center into an Essential Corporate Contributor

By Donna Fluss

It’s no longer enough to deliver an outstanding customer experience, something too few organizations do anyway. Contact centers that want to be relevant in the era of social media need to transform from slow-moving, reactive organizations into real-time, proactive departments that are a step ahead of customer needs.

Warning Signs: Here are some signs that your contact center is at risk of being marginalized:

  • You provide only customer service.
  • You support only calls, emails, and possibly text/chat sessions.
  • Peer organizations, such as marketing and sales, as well as senior executives, refuse to meet with you to understand trends and customer sentiment.
  • Your budget is cut annually, and you are asked to “do more with less.”
  • It’s extremely difficult to get approval for a system upgrade or new investment.
  • Your contact center has been outsourced to an offshore location, or outsourcing discussions are underway.

These are some of the warning signs, and there is little doubt that more than half of the customer service-oriented contact centers in the United States are currently at risk or will be in the next few years. Senior executives in many enterprises would gladly eliminate their support organization (despite their desire to deliver great service) if they could figure out how to do it without alienating their customers.

Changing Your Destiny: If your organization is at risk based on the criteria above, it’s time for change, and it’s up to the contact center manager to lead the charge. Sure, this may stir up trouble, but the risk of doing nothing is far greater. While customer service downsizing will reduce operating costs in the short-term, the long-term impact to a company’s bottom line will be negative, as evidenced by well-publicized examples like Dell and United. Senior executives have a fiduciary responsibility to improve the profitability of their companies, and too many have already shown a willingness to make radical changes to enhance their short-term financial position.

Getting Started: The steps for getting started with contact center transformation may vary, but the guidelines below lay the foundation for change. Each contact center should implement the changes that best position them to become relevant within their organization, so that senior management sees them as an important contributor to the company’s bottom line rather than a low-value cost center. Here are three high-value approaches to consider:

1) Transform your contact center into a revenue-generating profit center.

  • Work with sales and marketing to formulate a plan to convert your contact center from a cost center into a revenue-generating organization; ask for their support in transitioning the contact center into a sales organization.
  • Establish realistic departmental sales goals.
  • Keep start-up costs low and prove your ability to meet them before asking for major investment dollars.
  • Retrain agents so that they can identify sales opportunities and close them successfully.

2) Assume responsibility for handling social media interactions.

  • Ask marketing to help you take over the responsibility for handling social media interactions.
  • Draft new policies and procedures jointly with marketing and legal departments.
  • Establish rules of engagement for consistently representing your brand in a professional manner.
  • Define social media metrics for measuring the performance of the service organization.
  • Select and retrain staff, or hire and train new agents to handle social media interactions.
  • Establish social media service levels to set appropriate response time objectives for each social media channel.

3) Take on back-office processing.

  • Identify back-office tasks that can be handled by contact center agents during slow periods.
  • Determine the best way to identify contact center slow periods.
  • Establish a process for distributing and managing the new work.
  • Train agents to handle the back-office tasks.

For all three of these transformational initiatives, contact center leaders will need to modify their key performance indicators and quality assurance, agent evaluation, and rewards and recognition programs to support the new contact center mission.

Final Thoughts: Contact centers are essential to the long-term viability of most enterprises, but they must do more than deliver an outstanding customer experience in order to be considered essential corporate contributors. Contact center leaders need to take the initiative and implement the changes necessary to make their department highly relevant to their enterprise. There are many ways to achieve this essential goal, but the best one is to become a revenue-generating profit center that builds outstanding and lasting relationships with customers in their channel of choice.

Donna Fluss is the founder of DMG, a vendor-independent research and consulting firm that analyzes contact center and back-office technology and best practices. DMG uses this information to help enterprise and contact center leaders build their servicing strategies and select the right solutions for their environments. Contact Donna at donna.fluss@dmgconsult.com.

[From Connection Magazine – May 2013]

Articles

What’s the Industry Standard for Calculating Revenue per Minute?

Leave a comment

By Steve Michaels

Questions: Is there an industry standard for calculating per-minute revenue? Is it minutes of talk time, or minutes of talk plus work time, or something else? There are a variety of things we charge by minute, and it can make a big difference in the calculation. How should I proceed?

Answers: Most telemessaging services have a mixed bag of rates for their accounts, such as flat rate for older accounts, other accounts billed per call, and still others billed per minute. Some charge for each transaction, such as an outbound call, a patch, or even a wrong number. Others charge for wrap-up time – the work done after the call is completed. There are no set rules for what to include. Also, in certain parts of the country, telemessaging services charge more than in other parts of the country.

Here is an example of how a particular service accounts for their billing. They bill $32,700 per month, and each segment of accounts has a different profit margin. The number of transactions was 28,000 for the month. Dividing $32,700 by 28,000 equals $1.16 per transaction. There were 27,000 minutes of operator-connect time, which translates to $1.21 per minute. Some flat-rate accounts were charged $85 per month even though only ten calls were received. Those accounts make a whopping $8.50 per call. Remember, pricing for your clients can vary greatly, depending upon the customer and their needs.

Therefore, to answer your question, there is no industry standard. Many services measure the time taken for inbound and outbound calls and charge for both; some include wrap-up time, too. The more you can bill (including wrap-up time) per minute or transaction, the more revenue the business will earn, and the more it is worth. Simply put, the higher your profitability, the greater the sales price of your business.

Steve Michaels is a business broker with TAS Marketing and can be contacted at 800-369-6126 or tas@tasmarketing.com; his website is tasmarketing.com.

[From Connection Magazine – November 2012]

Learn more about the Telephone Answering Service Industry.

How to Start a Telephone Answering Service, by Peter Lyle DeHaan, PdH
Get the latest info in the book How to Start a Telephone Answering Service.
Articles

Faster Call Resolution Is the Key to Cost Center Profitability

Leave a comment

By Vikas Nehru

As companies face a backlash against offshore call centers or have simply found it was not the right solution for their particular business, they are bringing service back to the US. This doesn’t need to be cost-prohibitive, however. Nearly 80 percent of the time and cost of providing customer service is spent on service resolution.

The right combination of customer service technology vastly reduces resolution time, even for complex human interactions in the call center. Resolving inquiries faster and providing customers with the satisfactory service also opens the door to up-selling and cross-selling opportunities, thereby transforming call centers into profit centers.

The Pitfalls of Offshore Call Centers: The public outcry over outsourcing jobs, coupled with growing customer dissatisfaction over service quality, have caused companies such as Lehman Brothers to reroute calls back to centers in the United States. Customers complain that agents were unable to solve their problems. Whether this stems from true service issues or ideological views on outsourcing seems to matter little. Justified or not, many customers feel shortchanged when their call is routed thousands of miles away, making it difficult to foster customer loyalty. Therefore, many companies are making the conscious shift to bring back the contact center so customers receive more localized, personal attention and service.

Spikes in call volume compound this problem. The Merchants Global Contact Center Benchmarking Report 2005 reported that 58 percent of centers experienced call center growth of 20 percent per year. Additionally, the number of abandoned calls rose for the third year in a row, with the average caller willing to wait just 65 seconds.

Web and other support channels aren’t minimizing this challenge. According to John Ragsdale, research director at Forrester Research Inc., “Support interactions increase on average 20 percent year over year, so even if self-service siphons off some of these, it won’t handle all of them…. The faster and easier it is to get information, the more people will call with more complex problems.”

What is really needed in the contact center is correct channeling. A customer’s preference for contact and his or her particular inquiry must be matched with the right mode of communication – be it self-service, chat, co-browse, email, or phone.

A Positive Path: Early call center applications focused on call routing and case management. However, this only resolved one aspect of call center interaction. Identifying the question is relatively easy. What is more troublesome is helping agents access the right information to answer these queries.

Typically agents rely on a combination of individual knowledge, online repositories, company manuals, and calls to colleagues to find the necessary data. With no easy-to-follow, repeatable process, customers often wait an inordinate amount of time for answers – and then don’t receive consistent responses to their questions. Moreover, it’s difficult for agents to master a wealth of new knowledge to keep up with product releases and policy changes.

To solve this problem, many companies are using technology that helps agents answer questions more quickly and accurately. Until recently, the components needed for customer service (business process management, knowledge management, and search capabilities) were a collection of point products. It was up to the agent to know when and how to use them.

However, applications have matured and now bring these components together into a single solution that empowers agents of any skill level to successfully resolve inquiries. Moreover, with the right technology in place in a call center close to your own business, it can be seamlessly integrated into the entire business – from front office to back office – and tied in with the overall business strategy.

Since many companies first sought to relocate the call center overseas in order to cut costs, simply bringing it back to the States is not the answer. Fortunately, those companies, if they implement the right technology and strategy, can save money as they repatriate their call centers. Service resolution management (SRM) provides a way for organizations to reduce resolution times across all channels, even for traditionally high-cost, human interactions.

By supporting contact center agents with an SRM solution, organizations can free their customers to choose a preferred means of communication, while ensuring prompt, consistent responses regardless of which channel they choose. This reduces the resolution time and escalation to tier-two support, which is typically a major drain on call center profitability.

Further, by resolving inquiries faster, contact center agents can create cross-sell and up-sell opportunities with existing customers. Customers who are impressed by an agent’s ability to resolve their issues quickly are more receptive to hearing about a new service or add-on product. There is a proven correlation between customer satisfaction and increased sales, and, in many cases, organizations using SRM are effectively able to transform their call centers into profit centers.

A New Profit Center: A major US telecom company learned this lesson early, transforming its contact center into a true profit center. The company realized that it was necessary for its agents to resolve inquiries first to gain each customer’s trust before attempting to cross-sell or up-sell new services. An evaluation of customer issues revealed that most calls involved multiple steps and many channels of communication.

The company trained its agents to use SRM technology to access any information necessary to resolve customer inquiries. The customer service application made it easy to learn about the company’s products, service plans, phones, and accessories, manage accounts, service requests, support relevant promotions, and receive notifications of pending service issues, all in one place.

The company found that customers who were happy with call resolution were much more open to purchasing additional services. In fact, the company discovered that the agents with the highest customer satisfaction rating are now the highest sales producing agents.

A major search engine company was also proactive at keeping its customers happy. In order to become more knowledgeable about its customers and deliver insight-driven interactions, the company needed the ability to access all information about each customer from a single repository. With more than 274 million unique users in twenty-five countries and thirteen languages, this was no easy task. The company decided to deploy SRM technology to resolve customer inquiries faster and more accurately across channels.

The new customer service application provides call center agents with a unified interface for accessing solution knowledge. Through automated, structured guidance, agents are directed through the resolution process to rapidly diagnose and answer customer questions – even through new product introductions, policy and procedures changes, and the addition of new information systems. Detailed search-and-retrieval functionality speeds access to pertinent information.

Agents no longer need to switch between multiple systems or databases to meet customer demands. An integrated customer history allows for improved efficiencies, resulting in an 80 percent first call resolution rate and addressing one of the most expensive and challenging aspects of call centers today.

Instead of tackling the problem by using cheaper labor, these companies have retained more customers and kept jobs in the states by using technology that drives down the overall cost of the call center. By gaining a 360-degree view of each customer, agents have greater insight to solve problems and engage customers with relevant new offerings.

Vikas Nehru is vice president of product marketing for KANA Software, Inc, a provider of customer service solutions.

[From Connection Magazine – October 2012]

Articles

Improving Performance, Productivity, and Profitability

Leave a comment

By Matt McConnell

It’s an old adage, but it still rings true: Time is money. And in today’s call centers, time is a very scarce resource.

Today’s customers are more educated about products and services and able to answer most of their questions by doing research online. When they do pick up the phone, often it’s because they have a problem they can’t solve on their own. Agents are expected to be knowledgeable enough to handle complex customer inquiries efficiently and effectively, while providing outstanding customer service at all times. This requires ongoing training and coaching of your agent workforce, which requires time.

The profitability of your call center ultimately depends on the productivity and performance of your frontline agents. As a result, many technologies have emerged in the call center that are dedicated to improving these metrics. Workforce management (WFM) forecasts staffing needs based on historical data; automatic call distributors (ACD) distribute calls to agents in real time; and other systems like learning management systems (LMS), quality monitoring, and performance management focus on making sure calls have better outcomes.

Yet despite all of these technological advancements aimed at improving overall call center efficiency, there never seems to be enough time to devote to improving performance and the typical agent still spends around 11 percent of the day sitting idle at his or her desk, waiting for the next call. Even more maddening, this waiting time often comes in two- to three-minute increments and is rarely productive.

The newest wave of call center technologies is aimed at turning this unproductive, idle time into productive time that agents can use to complete tasks and activities designed to improve their overall performance – without negatively affecting service levels or requiring advance scheduling.

Making Use of Idle Time: In every center, no matter how well run, agents and managers are being asked to do more with less. Take more calls, faster, and with fewer agents; up-sell and cross-sell more with less training; and improve performance with fewer coaching sessions.

Most of these restraints revolve around a lack of time in the call center for agents to effectively do their jobs while at the same time get the training and coaching they need to satisfy customers and keep service levels high.

Technologies to improve operational efficiency – such as ACD and WFM – have been in place in most call centers for some time. But agents need even more time to complete critical tasks and activities without negatively affecting customer service.

New technologies are now going after the largest segment of un-utilized time – idle time – by identifying all of the small, two- to three-minute pockets of time between calls across the center floor and aggregating them to create larger, more usable blocks of time for groups of agents to complete assigned activities.

These activities can include anything that can be completed at the agent desktop – online training sessions, coaching, knowledge base reviews, or after call work. When blocks of idle time become available, agents are prompted to begin work on activities in their queue. When call volume spikes, they are prompted to return to answering calls.

This technology is possible through integrations with existing call center technologies such as:

  • ACD: A call center’s service level compliance at any given time is determined by monitoring key customer-identified ACD metrics in near real time. When service levels are in compliance, a prompt is sent directly to one or more agent desktops, instructing agents to complete an assigned activity. If service levels drop, agents are sent back to taking calls.
  • WFM: Training activities, coaching sessions, and other off-phone work is delivered only during acceptable times and not allowed to conflict with higher priority scheduled activities such as lunches, breaks, or the end of a shift.
  • LMS: Not only are assigned learning sessions delivered to agents, an extra layer of transparency is added by enabling managers to track both session delivery and agent completion of assigned tasks.

These new technologies also integrate with other call center systems, including quality monitoring, coaching, knowledge bases, and intranets to deliver assigned activities and tasks to individuals or groups of agents.

More Time Produces More Productive Agents: Even the most efficient, technologically advanced call centers experience downtimes in call volume. And in every center, there are activities agents must complete that take time away from handling customer interactions but are necessary to help them do their jobs better.

While some off-phone activities must occur at certain times – such as lunch, breaks, and vacations – many other activities can take place during natural idle times between customer interactions if centers can dynamically respond to call volume.

By being able to identify natural downtimes for agents to complete important off-phone activities that improve individual performance, call centers can make the most of an agent’s workday and ultimately increase overall productivity and profitability.

With more productive agents on the floor, it really is possible to do more with less. Centers can take more calls with the same number of agents – or the same number of calls with fewer agents – and agents can receive more training and coaching by finding more time in their days.

Matt McConnell is the chairman, president, and CEO of Knowlagent. More than 300,000 call center agents are using Knowlagent every day around the world. Matt is the author of the book Customer Service at a Crossroads, and he holds eleven software patents.

[From Connection Magazine – September 2012]

Articles

Boost Your Bottom Line with a Wellness Program

Leave a comment

By Sherry Leonard

If I hadn’t experienced it, I wouldn’t have believed our wellness program could reduce attrition by 50 percent, absenteeism by 80 percent, and increase our insurance premium by 50 percent, while improving our overall company’s performance. Our program saved us $380,000 in the first year – that’s almost $2,000 per employee!

These fantastic results are exactly what we experienced over a nine-month period. As the president of a lean call center company, CaLLogix, in New Hampshire (an expensive part of the country for a call center to be located), my focus is on being highly responsive to our clients’ changing requirements, delivering exceptional service, and managing a profitable company.

Attrition, absenteeism, and rising healthcare costs negatively affect both service and the bottom line. Our ability to provide superior service depends upon our staff being ready to take the important calls coming into our center. When fifteen people are absent on a single day in a 200-person call center, we have to scramble to cover the calls those agents would have taken. We used to average fifteen absences, but now we average two; that’s much easier to manage.

We initially designed our wellness program to address a few big challenges for our employees: smoking cessation, weight loss, and stress reduction. Our goal was to help our employees become healthier and happier by reducing smoking, eating healthier, and better managing the stress they face in their personal and professional lives.

Employees are better able to serve customers when they are healthier and their stress is managed. Not only has our wellness program increased the health of our employees, but it has also solved some of our key management issues. Here’s how we’ve designed our program:

Smoking Cessation Program: We offer this two times per year. More than half of the program participants stopped smoking initially, and 7 percent are smoke-free one year later.

Conscious Success: This program teaches employees how to quickly reduce stress through easy-to-use mindfulness techniques that can be implemented at any time to immediately calm the nervous system and increase effectiveness in the present moment.

  • Monday Minute: Conscious Success sends out a weekly newsletter with stress-reduction tips, and we also post this on our internal site.
  • Meditations: We hold brief stress-reduction meditations a few times a week, using recordings provided by Harvard Pilgrim and Conscious Success.
  • Webcasts: Conscious Success offers a monthly webcast where techniques are discussed and taught and questions are answered.
  • Awaken Your Inner Radiance Book: We bought this book for our supervisors and administrative staff to help them learn how to reduce negative thought patterns and live a healthier life.
  • Conscious Success Program for Leaders: Our supervisors participated in a variation of the Conscious Success program that focuses on reducing negative thought patterns and stress that affect leadership and management abilities. A 360-degree assessment of participants’ emotional and social intelligence was conducted at the beginning of the program, and they will be evaluated again a year later. We are coaching our supervisors on the results of the assessments to help them further develop their emotional and social intelligence competencies.

Healthy Eating Programs: We organize and run this program internally. It includes:

  • Healthy Recipes: In celebration of National Nutrition Month, we research and post a week’s worth of healthy recipes and healthy dietary guidelines and tips on our internal website.
  • Healthy Start: To encourage a healthy start to the day, during Customer Service Week we offer a snack each morning consisting of apples and peanut butter, granola bars, yogurt, or orange juice.
  • Happy Healthy Day: On Valentine’s Day we wish employees a happy day and introduce them to the delicious health benefits of oranges and dark chocolate.
  • Summer BBQ: At some point during the summer, we offer a relaxing, team-building lunch outside.

Theme Days: To encourage a relaxed, enjoyable, motivating, and happy atmosphere at work, this gives our representatives a fun break, since their home lives are often quite stressful. Some themes are: 50s Day, Patriot’s Day, Celtics Day, Red Sox Day, Ugly Sweater Day, Hat Day, Super Hero Day, and Halloween (with appropriate) dress up.

Customer Service Week: Many of the above-mentioned programs are offered during Customer Service Week. Our most recent theme was Refresh – Recharge – Reconnect. During this week we offered Healthy Start, “Souper” Heroes soup-and-sandwich lunch, puzzle challenges each morning, blood-pressure screening, smoking-cessation programs, flu shots, mini-office yoga classes, and opportunities to reconnect by having supervisors write compliments about their employees on paper leaves that decorated big paper trees on the walls.

+500-Step Challenge: A few times a year, we give pedometers and a log to all employees and encourage them to record the number of steps they take each day. Each time we offer this challenge, we get greater participation from our employees. In addition, many employees participate in our walking club, which meets three days per week at lunch. Our employees are now aware of the number of steps they take each day and have become more active. During Customer Service Week, we have a twenty-four-hour step challenge that gets the whole office moving.

Incentive Program: Agents who consistently meet or exceed goals in key areas – such as attendance, call quality, and up-selling – receive tokens they can redeem for cash and other rewards. Agents can also earn tokens for active participation in key programs and initiatives. Examples include the call center’s walking program, peer-mentoring program, and the wellness program’s kick-off survey.

We fully believe in walking our talk. Our management team participates in the wellness programs, dresses up for theme days, and creates much of the content for our employees. We also celebrate our achievements with our staff. In celebration of our sixth anniversary as a company, we gave each employee a chocolate-dipped strawberry, a glass of sparkling cider, and a note thanking them for their commitment and outstanding support in fulfilling our promise to our clients and their customers.

We’ve noticed some interesting results of this initiative:

  • Employees are more likely to participate in smoking cessation and eat healthier once they’ve participated in the Conscious Success program.
  • Each time we offer the +500-Step Challenge, participation has grown – and the group has become competitive. Now, during ten-minute breaks on rainy days, we see groups of employees walking the halls rather than sitting in the break room. In total, during our step challenge weeks, our employees have walked 2,710 miles and taken over 5,420,000 steps.
  • The number of employees asking for meditation breaks has grown, and attendance keeps rising in these sessions.

Here’s a specific instance where we’ve seen the program improve our customer service:

An irate customer, who tried to place an order online, called in and was not pleasant to our representative. The agent, who had been in our Conscious Success training that day, did everything right: she apologized to the customer, did not make excuses that may have frustrated the customer even further, didn’t become defensive, showed incredible patience with the caller, maintained a positive attitude throughout the call, and turned what could have been a horrible call into a great experience for the customer!

The provider for our smoking cessation program is Harvard Pilgrim Health Care; the provider for our stress reduction program is Conscious Success LLC, and the provider for our incentive program is Snowfly.

Sherry Leonard is president of CaLLogix and has twenty-two years of experience in call center outsourcing.

[From Connection Magazine – September 2012]