User guides- Contact Centres

Part II

Business Basics: Models and Drivers and Goals, Oh My!

Developing meaningful business objectives Supporting business objectives with powerful performance drivers Establishing balance in your drivers Creating reports that help you to measure success

This part takes you on a whirlwind tour through the wonderful world of business models. In the process you can discover the ins and outs of such fundamentals as business objectives, performance drivers, and touch briefly on reporting.

A business model is a high-level description of how your business is organized and what things you’re going to do to produce whatever results you deem appropriate. A business model is really no more complicated than a game plan or playbook. “Our goal is to win the game, so here’s what we’re going to do. . . .”

Like game plans, business models change and evolve. Over time, your model will become outdated or you’ll find better ways to do things, resulting in a need to modify the plan. The important thing is to have a plan.

Determining Your Business Objectives
In the short term, your organization establishes goals and targets it wants the contact center to achieve. These goals, often referred to as business objectives, flow from the larger organization all the way to individual contact center agents, as shown in Figure 2-1.

Business objectives typically measure contact center effectiveness and the organization’s progress against four broad areas: cost control, revenue generation, customer satisfaction, and employee satisfaction.

Contact Center Business Model MISSION & VISION (Statement of direction and purpose provided by the corporation) BUSINESS OBJECTIVES (Measures of performance supporting the service, efficiency, and revenue objectives of the mission and vision) PERFORMANCE DRIVERS (Measures that can be controlled by management and staff that indicate the degree to which the business objectives are being met)
BUSINESS PRACTICES (The things done in the call center to affect the performance drivers) Process Forecasting and Scheduling Agent Performance Management Policies and Procedures Recruiting and Training Change Management Compliance Etc. People Roles and Responsibilities Skills and accountabilities Motivations Technology Telecom Network Applications Integration
Culture VALUES BELIEFS
Figure 2-1. Business objectives work their way down through an organization.
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Remember the old phrase “Garbage in, garbage out”? Well, it rings very true with business objectives — set bad goals, and you’ll get equally bad results. Business objectives need to be well thought out and justified. When well defined, these goals are the gauges that tell you about the performance of your contact center machine — like the gauges in an airplane.

Ideally you have input into specific objectives — if only to make sure that they are realistic. Specific goals and objectives vary by company, but Table 2-1 shows a few common examples.

Table 2-1 Example Contact Center Business Objectives

Goal/Objective Measure What It Tells Us
Customer satisfaction Post-contact satis-Are our agents pro-faction scores viding good service? Contact abandonment Are we answering rate contacts quickly Average speed of enough? (Hanging up answer is one form of customer feedback!)

Cost control Cost per contact Are we handling con-Cost per customer tacts in an efficient Cost per case manner? Cost per order Do customers have to

contact us too often?

Revenue generation (Net) revenue per Are we making customer money? Revenue per contact Are we maximizing

sales and upselling opportunities? Are we growing the business?

Employee satisfaction Employee opinion Do our employees survey feel valued and Retention rate respected? Employee referrals Do they like working here?

Identifying a good objective
There are two important characteristics of good business objectives: They’re measurable and they tell a complete story.

Ideally, a measurable objective tells you as much about an area of the business as possible. For example, using total contact center expenses to measure cost control tells you something about what the center costs to run, but it really doesn’t tell you if it’s profitable or not. A contact center that costs $1 million per year but has only one customer is much more expensive than a contact center that costs $50 million but has millions of customers.

The following are some good parameters for measuring objectives:

Revenue per customer: the total revenue generated by the contact center divided by the number of customers

Cost per customer: the total cost of running the contact center divided by total number of customers

Customer satisfaction: how satisfied customers are with their contact center experience

Employee job satisfaction: how satisfied contact center employees are with their jobs

Really, you can find or create all kinds of measures — as long as they tell you what you want to know about your operation.

Avoiding misleading measures
When considering business objectives, some common contact center measures should be avoided simply because they don’t tell the complete story and, as such, can be misleading.

An example is the operating budget — how much your company spends to run the contact center. Most companies would like to minimize the total cost of running their center, but if the company is growing at 50 or 100 percent per year, then in all likelihood contact center costs are going to rise. So looking at the contact center budget can be misleading when considering cost control.

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Another example is cost per contact — a very common measure that is simply the cost of running a contact center for a period of time divided by the contacts answered for the same period. Cost per contact can be misleading because it doesn’t consider the impact of poor quality and repeat contacts. If agents don’t do a good job handling customer contacts, then they are bound to call back. Although your cost per contact may appear low, a large number of repeats increases your cost per customer.

Measuring Progress with Performance Drivers
Business objectives are derived from your mission and are the goals and targets you’re trying to achieve. Using them to manage your contact center requires that you understand and use performance drivers.

Performance drivers are processes and behaviors — expressed as measures — that influence achieving your business objectives. For example, average contact length is a driver of contact center costs and has a direct impact on the business objective of cost per customer. So, average contact length is a driver of cost.

Performance drivers are the building blocks of the operation, and with them you can mathematically model the business objectives, budgets, and other aspects of operations — creating the economic model of your contact center.

Drop by a contact center and you’re likely to hear discussions about some of these performance drivers:

Service level: refers to how fast you answer the phone, e-mail messages, and so on. It is most commonly measured by the percentage of incoming contacts answered in a specified amount of time. For example, if the contact center answers 78 percent of all contacts within 30 seconds, the service level achieved is 78/30.

Average contact length: refers to how long it takes, on average, to process one customer interaction.

Agent availability: tells you how many of your agents are actually available to take a call — that is, they’re not already busy on a call.

Agent occupancy: refers to the percentage of time that agents are busy with customers.

Conversion rates: the percentage of contacts converted to sales (customer saves).

Retention rates: how many potentially lost customers were saved by agents.

Customer satisfaction: how satisfied your customers are with the level of service your contact center’s providing.

First-contact resolution: the percentage of customers who do not have to try back within a certain time frame (usually a day) to have their issue resolved.

Categorizing the drivers
Generally, performance drivers can be grouped into four areas. There are drivers that affect

cost control

customer satisfaction

revenue generation

employee satisfaction

Each category is discussed in the following sections.

Cost-control drivers

Your contact center is likely to come under the microscope for cost control often, even though contact centers are on average an efficient way to communicate with customers. Still, contact center expenditures are frequently one of the larger budgetary line items for corporations, so it’s no wonder their costs are scrutinized.

Items that affect the cost control of your contact center include

contact length

agent occupancy

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average cost of putting an agent online (wages, benefits, overhead, and so on)

repeat contacts from customers who don’t get an accurate or complete answer on the first try

nonproductive agent time (time away from the phone)

Well-run contact centers dig deep into these aspects of operations to better understand why they achieve the levels they do and how to affect them in the future. For example, contact length can be broken down into time spent communicating with the customer and post-contact work (time spent processing customer requests after the customer is gone). Both can be better understood when looking at how long different types of contacts take — an information contact versus a sales contact, for example.

Revenue drivers

It don’t mean a thing if you ain’t got ka-ching! Improving revenue generation can have a greater impact on margins than improvements in cost-control measures. In larger contact centers, small improvements in the customer retention rate represent hundreds of thousands or even millions of dollars in saved revenue. Similarly, small improvements in selling and upselling can have a big bottom-line impact.

In addition to your retention rate, key revenue metrics you need to consider include

conversion rate (the number of sales made per contacts handled)

revenue generated per sale

cancellations per contact (a variation on retention rate)

revenue lost per cancellation (a measure of the degree to which individual agents are mitigating revenue loss)

Customer-satisfaction drivers

Your customers want the same thing you do — an efficient and professional resolution to their problem. That’s the primary reason that the metrics to measure and drive service include

How fast you satisfy the customer’s request— including average speed of answer, service level, and hold time.

Number of times a customer needs to be transferred to another agent or representative

Contact review assessments — are your agents being professional, courteous, and competent?

Employee-satisfaction drivers

Get to know your employees so you can determine what the drivers to their satisfaction are. Some things that almost certainly come up as key drivers to satisfaction include

Supervisor support: Am I getting the help that I need?

Fairness: Is the workload distributed equitably so that I am not too busy while other agents are idle?

Feedback: Do I know where I stand?

Training: Did I get the training that I need to do the job well?

The importance of balance
You’ll need balance to maximize each component of performance and provide the best solution for achieving your business objectives. When you’re attempting to strike this balance, keep in mind that overemphasis on one area can hurt performance in others. For example, too much emphasis on cost control can hurt service and revenue.

Don’t go overboard on cost control

You’ve taken your quest for cost control too far if you

Hire low-cost people otherwise unsuited for the job.

Skimp on training and feedback.

Don’t spend adequately on support services.

Avoid a surplus of service

Customer service is crucial, but making the customer like you shouldn’t be your only goal. Remember that customers want contact center agents to perform a service, not become their best pals.

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Ensuring that ten agents are always available, waiting for the next call, to answer every customer call inside the first ring might be overly expensive. Your average customer is probably okay with waiting an average of three rings before their call is answered.

Resist revenue-generation mania

It can really turn off a long-term customer with a service concern if an agent fails to resolve the issue but makes great attempts to close in for more sales.

Although an overall focus on revenue generation is vital, overemphasizing short-term revenue gain will probably lead to long-term service pain, as your contact center loses the lifetime value of a loyal customer.

Don’t focus on entertaining employees

When it comes to making employees happy, some companies live with the motto, “Try not to upset anyone.” If you adopt that motto you’ll probably end up hurting your contact center’s performance.

People need feedback, and sometimes feedback is negative. Over time a fair, honest, and consistent approach wins as much or more in morale as does a soft hand — and it has the added benefit of keeping the organization on track.

For good contact center operation, try to strike a perfect balance between cost control, revenue generation, customer satisfaction, and employee satisfaction.

Table 2-2 provides a summary of the basic contact center business goals and the corresponding key performance drivers that affect them.

Table 2-2 Contact Center Business Objectives and the Performance Drivers That Affect Them
Objectives Measured By Driven By (Performance Drivers)
Cost control Cost per contact Contact length Cost per hour of providing the service

Table 2-2 (continued)

Objectives Measured By Driven By (Performance Drivers)

Percentage of time agents spend with customers Percentage of contacts resolved on first attempt

Revenue Revenue per Percentage of contacts generation customer resulting in a sale

Dollar value of sales made

Customer Post-contact customer Accessibility

satisfaction satisfaction survey Agent professionalism, courtesy, ability Process — ability to service the customer

Employee Employee opinion Management behavior and satisfaction score support — especially Employee turnover direct supervisor

Adequate training

Consistent feedback

Reporting: Providing Feedback

Contact centers are data factories. Almost every tool that a contact center agent uses collects, stores, and reports on something. Used properly, this information provides contact center managers with tremendous intelligence to analyze performance, develop practices resulting in improvements, and discard practices that don’t support objectives.

Increasingly, contact centers are hiring analysts with advanced degrees in statistics and engineering because their findings are so valuable in what they offer via improvements through the business model.

Reporting completes the contact center business model. Information reports give managers feedback they need about whether their practices and performance drivers are properly aligned with the contact center’s business objectives.