Long Term Cost Management
Illustration by Stephanie Wauters

Managing expenses in a contact center is tricky business. We have to remember that the transactions we handle are done in a partnership with our customers, so the changes we make directly impact the customer experience. Yes, there are opportunities to trim costs while also improving contact satisfaction—implementing better self-service options is a great example. Cut back in the wrong place, though—like reducing staff numbers when we are already stretched too thin—and we deservedly get an earful from customers who bear the penalty for our actions. Unfortunately, cost-cutting often happens in a crisis, and panic-induced decisions are the ones that typically have those nasty unintended consequences related to the customer experience.

That’s why a longer-term approach to cost management is a much better fit for contact centers. Measuring costs in more creative, strategic ways is how we focus our attention on true opportunities—those that will not carry the customer satisfaction risk with them. In fact, when we think about costs over the long term, we often generate ideas that have an even bigger positive effect on the customer experience than on our bottom line expenses.

To get the focus on the right opportunities, base your efforts on three simple concepts no CFO could argue with: Minimize (or eliminate) low-value transactions, utilize staff time intelligently, and complete transactions efficiently. If you can deliver on these three objectives, you will have the triple play of operational effectiveness: high-value work, completed by a right-sized and well-managed team, in a productive manner. And when you can tie a metric to each of these three concepts, you will have all the proof that anyone needs.

High-Value Work

We talk a lot about how we add value in contact centers, and every one of us can find some of these moment-of-truth transactions every day. But to locate them, most of us have to dig through large piles of ordinary, mundane transactions that our high-volume centers handle. These offer very little from a customer satisfaction/loyalty perspective, and are therefore viewed by many (rightly or wrongly) as an empty cost. Minimizing these calls is one of our greatest opportunities to control costs in the long term.

The tool we need is the right metric, and that metric is agent-assisted inbound contacts per customer per year. In short, this number tells us how many times the average customer calls on an agent for help throughout the year. And yes, most of us should want to minimize it. Why? Because for most of us, the majority of our calls are adding little value. If you have the level of detail in your data that allows you to identify and strip out the high-value calls from the calculation—those where you turned around a disgruntled customer, or made a sale or added a service feature—then by all means do so. If you do not have that capability, though, you can still use this number to help improve the operation. The metric works because it does things like:

Encourages no-call resolution

      —better to make sure that we never create any discontent or confusion that causes the call in the first place (e.g., if an overly complex invoice is causing customers to call, let’s fix the invoice).

Encourages better self-service resolution

      —improved design of self-service systems will allow people to get the answer more quickly than can be done over the phone.

Encourages first-call resolution

    —when a customer does need to call, the best way we can minimize the agent-assisted inbound contacts per customer per year number is by making sure that we handle the call fully and completely before saying good-bye.

Now, I know you are uncomfortable with reducing volume. A great case can be made for loyalty being enhanced by having regular touchpoints with our customers. Fear not. As you reduce the mundane, replace with proactive contacts. These are outreach contacts, so they do not impact our metric in a negative manner. And done properly, they can add tremendous value to the relationship you have with your customers.

Productive Staff

Let’s face facts—there are not too many people who truly understand staffing dynamics in a contact center. Erlang C calculations and exponentially smoothed forecasts may be perfectly wonderful tools, but if we try to use them to explain how productive our staff is, we are likely to put our audience to sleep… or at least send them to their mobile device to update their facebook status.

The bottom line is that we want to impress upon the executives that the many hours of time we pay for are used wisely. I have long been an advocate of something I call a design factor, which is the percent of paid staff time spent processing workload. Simply having one, and knowing the percent of time spent on things like vacations, breaks, meetings and other supporting tasks puts you well ahead of other operational areas in the corporation. Take it to the next level, though, and show how your design factor increases when workload increases, and how it drops when volume slows down. There is simply no better way to show that you only spend the money when it is most needed.

Efficient Contact Handling

Most of us understand that using talk time as an efficiency measurement is a losing proposition. Yet that does not mean that we should abandon the idea of handling a call efficiently. Your customer, in fact, wants you to be efficient. He or she has better things to do than chat with your agent for nine minutes when five would get the job done.

Talk time fails as an efficiency measure mainly because it induces bad behaviors, like cutting off a caller or providing only half an answer. It also fails, though, because the customer is part of the conversation and we cannot control that side of the talk-time equation. There are two elements of a call, though, that do not involve customer input—hold time and after-call work. Add together the average hold per call with the average after-call work, and you get the average research and document time per call (ARD). Measuring and monitoring this number encourages comprehensive, easy-to-use knowledge management systems, great agent training programs, and systems that automate and simplify post-call documentation as much as possible. It’s the best way we have to show that we work to be efficient without ever rushing our callers or giving them any less attention than our commitment to high-quality service requires.

Cost Savings Plus Improved Customer Experience

Agent-assisted inbound contacts per customer per year, design factor and ARD are not household terms. Adding metrics to our already data intensive world may seem counterintuitive, but the reality of our contact centers is that they are expensive to run. Developing ways to control costs, and to show that we are successful at it, is how we can avoid having more short-sighted expense reduction measures forced on us. The fact that these metrics all encourage activities that improve the customer experience is a side benefit that may just overshadow the cost savings.

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