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Contact Centers Still Wanting

Published
  • June 19 2006, 11:25pm EDT

It wasn't long after Y2K that other business technology journalists and I were writing story after story on the "failure of CRM."Customer relationship management infrastructure of the time generally was a big investment that often didn't meet expectations of enterprises. But then, and much more today, we found that products generally performed as advertised; it was on the strategy, planning and execution side of things where things tended to malfunction.

Now it looks like technology investment as well as good business processes may again be differentiators. An exhaustive survey on contact centers conducted by Ventana Research finds that, in terms of managing contact centers, emerging economies are doing a better job of managing contact centers than counterparts in North America and the U.K. The main reason for this turned out to be fairly simple, according to Richard Snow, VP and research director, contact centers, at Ventana. "The new-world call centers don't have legacy process or technology. They've been able to start from scratch and ask how a call center should be run and what technologies they need to support that." By "new world," Snow isn't only referring to India but also to parts of Asia, South America and Eastern Europe. One technology common to these settings is the use of voice over Internet protocol, or VoIP. "There is no doubt VoIP is the technology of the future for contact centers," says Snow. "In North America and Europe there is legacy technology people can't replace. Yes, they are adopting VoIP in North America, but it's for incremental new seats. They have this technology constraint and also the problem of operating contact centers like this for 10 years."

There is some irony in all this. As companies have come to realize that managing customers is a core business, fewer of them are contracting offshore contact center services. According to Ventana, the percentage now stands at a shrunken and shrinking 17 percent. However, the top two drivers for managing contact centers remain increasing customer satisfaction, and reducing cost, in that order, two goals that are most often diametrically opposed. "The bottom line is, it's all managed on cost and as soon as you do that, you say, 'an agent in the U.S. costs $25,000 per year, an agent in India costs $1,000 per year, I just saved $24,000.'" But now the same people have figured out the value of customers and that the cost of losing them is still higher than the savings offshore. "Customers have choice, they move, I have to decide which customers I want to retain, I need an action plan that retains them." says Snow. "I can't afford to offshore that."

But poor legacy technology is not solely responsible for policies that force inquiries through extensive voice menus and limit human interaction call time at the risk of customer satisfaction. In an industry that remains cost conscious, it is cheaper to replace agents with technology, but often deflects customers more than it serves them. The study found that few companies have adopted more advanced products for voice recognition (17 percent) and voice analytics (11 percent) that would get closer to customer needs. And for all the talk of turning the call center into a profit center, fewer than 30 percent of companies actually use the contact center as a selling channel.

The greatest problem, Snow says, is that businesses don't measure the ight things and tend to use the metrics they do create to support an agenda. "My number one recommendation is to go back and look at what you're going to measure. My personal and anecdotal experience says we're driven by satisfaction but we don't know what makes for a satisfied customer." First-time call resolution is a great metric, but is call center escalation counted as resolution? Does an IVR (interactive voice response) system that claims to have an answer for a caller it does not monitor constitute first-call resolution? As for self-fulfilling metrics, Snow points to the fact that telephone companies consider every incremental handset purchase a new customer, putting market penetration north of 250 percent!

The ultimate answer to these problems is root cause analysis. "Get root cause right and people won't call, and you'll increase customer satisfaction at the same time," says Snow. Generally, people want to get through to someone who knows what they are talking about and are inclined to solve their problem. If that were the metric applied, they'd do much better, but the way they measure satisfaction today is meaningless."

A proper qualitative approach makes contact centers a chancy place to apply Six Sigma practices in Snow's opinion. Snow once built a large contact center for a cable TV company that fielded thousands of calls on billing errors, only to find a fix to the billing system put an end to the need for most of the call center itself. "Apply the principle, not the practice of green belts and black belts. Go back the principle and define the outcome you want and if you're not achieving that, go back and change the process, change what people do. That goes way back from the contact center because the ultimate performing contact center puts itself out of business. If you actually figured out why people were calling and solved all the problems you wouldn't get any calls."

It does make one wonder where we'll find ourselves after another five years. The report, "Evaluating Maturity in Contact Centers," finds that that few centers use business analytics that enable them to monitor customer satisfaction in meaningful ways and that most are foregoing the opportunity to improve customer satisfaction by changing processes and reducing cost at the same time. Not surprisingly, high-tech industries, communications carriers and other competitive markets, such as financial services, have the most mature centers. More stable industries - wholesale, manufacturing and the public sector - have the lowest levels of maturity. The public sector rates lowest in most categories, indicating a lack of investment and little pressure and incentive to improve the way they treat customers and agents.

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