Calculating ROI for Contact Center Technology Investments

FROM THE NOVEMBER 2018 ISSUE

Challenges and Priorities Survey

It’s easy to get excited about technology and conjure up all of the benefits that will accrue to the contact center. But you must make the case initially to get funding, and then, ideally, show that you delivered on that promise.

Three potential paths to business case development provide opportunities to deliver a return on investment (ROI):

  1. Gain Efficiency
  2. Drive Revenue
  3. Improve Service

Efficiency

Two big factors contribute to the contact center’s workload—volume and handle time—and drive staff needs. Any change that can reduce volume can be turned into a cost savings: fewer contacts to handle means fewer agents needed. Shifting volume to a lower cost resource—like an IVR, mobile app or the web—has a similar impact by handling contacts for pennies or nickels instead of dollars. And let’s not forget first-contact resolution and how it can reduce volume through fewer transfers and callbacks.

Other changes also reduce handle time:

  • Less time spent in the identification and verification steps
  • Less time overall as processes are streamlined or manual steps are eliminated through automation
  • Less time putting customers on hold searching for answers
  • Less time in wrap-up through automation capturing important information

Revenue

Changes in the center can drive revenue through sales (dollars) and customer acquisition (numbers of customers). Upsell and cross-sell have become commonplace in both sales and service centers, with metrics such as revenue per order or per contact. Centers may also impact customer loyalty, leading to greater customer value measured by products per customer, average customer value per year or for a lifetime. Retention is very impactful for environments with high customer churn, so reducing churn rate can be translated into revenue based on average customer value.

The impact of each of these can be significant, even if efficiency appears to decline. Here’s one example: a bank implemented a new technology environment, including CRM with customer segmentation, workflows, and scripts to identify affinity products for the segment or customer situation. The Director exulted, “Talk time is up and I’m thrilled!” because he could see the financial metrics increasing with more products (and therefore revenue) per customer.

Service

Service improvements, measured through higher customer satisfaction rating or net promoter score, for example, can deliver soft benefits with ripple effects into many areas. Some of the impacts can be translated to tangible benefits, especially if they deliver revenue.

In defining ROI for technology that focuses on the customer experience, carefully define assumptions or “what if” scenarios that can be approved by leadership. If they buy into the premise, then you can play out the financial analysis that shows the benefit.

For example, I have seen a B2B company make the case for their entire technology strategy by showing that improved contact handling would lower churn in their distributor ranks by at least 5%. This business case considered distributor input on what they needed from the center to help their business succeed and identified the technology to enable that.

Two other areas can drive measurable benefits.

Support and IT

The maintenance and management of technology is a cost of doing business. While it is not always attributed to the contact center’s budget, it is a real cost to the company. Perhaps more significantly, the constraints of IT resources can hold a center back from reaping the benefits of contact center technology. We often see things that idle on “wish lists” because IT can’t get them to the top of their “to do” lists. Technology solutions that free the center up from IT dependence can be enablers of other benefits. Cloud solutions are popular for many reasons, but this is a big one—the operation can pursue new capabilities with less dependence on IT resources and timelines.

Staff Factors

Changes that reduce attrition, shorten training and/or speed up time to proficiency may contribute substantially to a favorable ROI for technology procurement. For example, KM could drop training from four weeks to three weeks for each new-hire, and maybe move time to proficiency from an average of four months to two months. Those savings can add up in an environment with 25% or higher turnover.