Monday, March 25, 2013

Improving Performance Through Customer Service Metrics

Gaining the competitive edge in today’s fast-paced, constantly evolving business world means companies must escalate operating performance, reduce costs, increase reliability, improve cycle time to market, and ultimately meet and exceed customer requirements.  And oh, by the way, the call center needs to support all these corporate objectives, especially the ones about improving performance, while reducing costs and meeting service objectives.  In addition, the pressure to produce revenue through up-selling and cross-selling continues to increase.  Sound like an impossible dream…or job for a superhero?
Today’s call center manager is certainly expected to perform extraordinary feats.  But rather than calling upon superhuman powers, the best way to accomplish the above is with a well-designed performance measurement and management system and an understanding of what you should measure, when you should measure, and how you should report the information.
A finely tuned system of performance measures helps you plan for the future, manage call volumes, determine training and staffing needs, identify revenue potential, determine a program’s effectiveness, and evaluate the quality of service your customers deserve and demand.
This article takes a look at a three-step process for creating and implementing a performance measurement and management system that will provide the information required to continuously improve your call center’s policies, procedures, processes, and systems to positively impact customer satisfaction, loyalty and the company’s profitability.

Step 1 – Strategy

A performance measurement and management system (PMMS) is a powerful methodology that allows management to plan, monitor, and manage the business.  A PMMS must be built around a framework for understanding the customer experience.  No single event is responsible for customer satisfaction or loyalty.  To respond to changing business demands, managers must be flexible and quick to respond to the situation at hand.  To adapt effectively, managers need to have access to:
  • Timely and relevant information
  • Insight into root cause and solutions
  • The ability to communicate results
A successful PMMS must also be built around an interrelated set of financial and non-financial metrics designed to provide managers with vital information about the current state of their center and its future opportunities.
Every PMMS should support the enterprise’s strategic plan.  First, you need to understand the enterprise’s business strategy and objectives.  The next step is to create department objectives linked to that enterprise strategy.  Once objectives are identified, you can then identify specific performance measures.  As you strive to align your call center objectives with those of the enterprise, keep in mind that you should continuously analyze how the center’s performance impacts the company and your customers.  It’s critical to your career to hold yourself accountable for center objectives that maximize contribution to the company’s overall objectives.
The Balanced Scorecard Strategy
It’s vitally important to have a template that helps you organize your thoughts, determine what, when, and how you will measure your call center’s performance. If you haven’t looked at the framework of your PMMS in a while, we suggest reviewing your current structure to ensure that you:
1)   Measure the critical aspects of performance,
2)   Link measures to corporate strategy, and
3)   Communicate to employees a balanced view of what is important in the organization.
Harvard Business School Professor Robert Kaplan and Renaissance Solutions President David Norton recommend a framework called the “balanced scorecard.”  The balanced scorecard incorporates both financial and non-financial factors. Their model:
  • Helps align key performance measures with strategy at all levels of an organization
  • Provides management with a comprehensive picture of business operations
  • Facilitates communication and understanding of business goals and strategies at all levels of an organization
  • Provides strategic feedback and learning
Take a minute and reflect on your call center measures in each of these four areas:
Customer Measures
Financial Measures
Process Measures
Learning and Innovation Measures
What does your center measure in each of the four areas?  If you are struggling to list even one goal in each of the areas, perhaps you need to realign your goals to achieve a balance across your organization.
Step 2 – Measures
Developing an integrated set of measures that correlate with each other is at the heart of designing a measurement system.  Once you have determined your PMMS strategy, you then need to identify the specifics of what you should measure.  And it’s important to keep in mind that just because you can “count” it, doesn’t mean it’s a measure that counts!  And the measures that really count in affect service and profitability may not be easily counted.
One way to think about key performance metrics is to think about the three groups of “call center stakeholders.”  Who are these stakeholders?  Just think about the three groups of people you as a call center manager have to keep happy every single day  –  customers, senior management, and frontline staff.
Now think about what each group cares about.  What do you need to measure for each of these stakeholders?  Customers care about service, senior management cares about efficiency and revenue, and agents care about their workload, career path and their schedule.  What then, are possible metrics to keep you on track in each of these areas?  Below are some of the most common measures associated with these stakeholder concerns:
Service
  • Availability (Are we there when they want to contact us?)
    • Hours and days of operations
    • Line blockage/busy signals
    • Self-service option availability and capabilities to satisfy customer needs
  • Speed of answer (How fast?)
    • Service level (x% in y seconds)
    • Average speed of answer (ASA)
    • Longest delay in queue
    • Abandoned calls
    • Response time on emails
  • Quality (How well?)
    • Monitoring scores (from an internal perspective)
    • Customer surveys (from an external perspective)
    • “One-and-done” or first contact resolution
Efficiency
  • Staff utilization (Do we match workforce to workload?)
    • Agent occupancy
    • Shrinkage
    • Schedule efficiency
    • Self-service utilization
    • Employee retention rate
  • Contact handling (How long does it take?)
    • Average handle time (AHT)
    • After call work (ACW)
    • On-hold time
    • Transfer rates
    • System speed and availability
Revenue & Costs
  • Impact of negative references
  • Conversion rate (Are we selling?)
  • Up-sell and cross-sell rate (Are we generating additional business?)
  • Customer retention
  • Impact of lost opportunities
  • Cost per contact
  • Sales per signed on minute
  • Schedule efficiency (match of staff to demand)
Learning & Innovation
  • Voice of the customer initiatives (Are we really listening to customers?)
  • Value of information provided to other departments
  • Career growth of personnel in the center
Frontline Staff Satisfaction:
  • Schedule (work/life balance)
  • Fair workload
  • Career development opportunities
  • Absentee rate
  • Turnover rate

Call Center Top Twenty

We’ve frequently been asked to pick the top twenty measures that are most often used in the best-of-class call centers.  Our standard consultant’s answer is “It depends…”  Every business and every call center is unique and therefore no two call centers should have the exact same set of metrics.  Essentially, all of these measures can be contained in management’s three-legged stool of customer satisfaction, employee satisfaction and company profitability.  However, there are some commonly occurring measures that appear on nearly everyone’s list, and the most frequently used ones are listed below:
Call blockageError/rework percentage
Abandon rateHold time
Service level or ASAFirst call resolution (one and done)
Schedule adherenceSuccessful sales percentage
Agent occupancySuccessful up-sell percentage
Scheduled to actual staffQuality monitoring scores
Self-service percentageEmployee retention
Average Handle Time (AHT)Customer retention
Transfer percentageEmployee satisfaction
Cost per callCustomer satisfaction
Our hesitancy to pick the “Top 20” is perhaps best illustrated by taking a look at two different centers and seeing how each varies from the Top 20 measures listed above.  Let’s compare the measures for the customer service area of a local cable company with those of an inbound call center that’s handling catalog orders.  In reviewing this list, think how measures might be different still for a technical help desk or an airlines reservation center.  Then think about how your own list of metrics would be different and why.
Customer Service
Self-service percentageService level or ASA
First call resolutionAgent occupancy
Error/rework percentageEmployee retention
Transfer percentageQuality monitoring scores
Cost per callCustomer satisfaction
Catalog Sales
Revenue per callCustomer satisfaction
Sales per agentCustomer retention
Successful sales percentageHold time
Successful up-sell percentageAbandon rate
Quality monitoring scoresAHT
There are several measures that are similar between the customer service and sales centers above.  This example is one where the center cares about service, but has a strong focus on increasing operating performance and reducing cost.  The catalog sales center on the other hand has a primary focus on making the most of revenue opportunities. What is your organization’s primary focus and how do your call center measures reflect that?
As another example, let’s take a look at a company who has been losing customers to the competition over the last two years.  One of this company’s primary business goals for the year is to “Retain Customers.”  How would this translate into call center objectives, and more specifically, into a system of performance measures?  Here are some possible examples of performance measures that would link into the bigger corporate goal:
  • Abandonment rate
  • Customer satisfaction score
  • Speed of answer
  • First call resolution or ”one-and-done”
  • Escalated calls
  • Customer comments captured and passed to appropriate departments
Each of the above is a critical factor that impacts customer satisfaction and retention.  Now take a closer look at just one of these factors – escalated calls.  How could we develop a call center objective based on this factor?  First, we need to know what our current performance is for escalated calls.  Let’s assume that in our call center, escalated calls represent 30% of a supervisor’s workload last month, and each call also indicates a customer who was not completely satisfied by the interaction with the agent.  The call center objective could be to reduce the number of escalated calls by 3% within the next 6 months.
Now that we have finalized the objective, how do we communicate it to the center?  We need to let supervisors and front-line staff know what the objective is and why.  For example, inform your staff that by reducing the number of escalated calls to the supervisor, they are helping the supervisor become more available to assist frontline staff.  If supervisors are not spending as much time on escalated calls, then they can provide coaching opportunities to the frontline staff, which should improve the service they provide customers, thus increasing our customer retention rate.  We may also need to find a way for agents to be able to satisfy more callers themselves by giving them more authority or access to information.
As you evaluate what to measure, consider the relevance of the goals you set.  Take for example a speed of answer goal of 30 seconds.  Do customers care that the average was 30 seconds or that the period in which they called was 30 seconds?  Would customers care if ASA was 10 seconds longer/shorter?  What about 30 seconds longer/shorter?  Would the tradeoff be worth the savings or expense?  Business objectives for the enterprise change.  Shouldn’t call center goals be changed to match?
The call center acts as a central repository of data.  Don’t be data rich and insight poor!  Are there things in our call center that you can measure that might enable you to strengthen your relationship with other departments, such as marketing or product development?  What about things you can measure that might enable you to be proactive and initiate action, such as helping measure the success of various marketing programs or identifying reasons customers are calling to alert the production area of needed changes?  As you select the metrics for your call center, keep in mind that your ability to demonstrate value to the enterprise will assist you in getting the resources you need to do your job.

When to Measure

In deciding when to measure, keep in mind the two distinct time periods of real-time versus historical measurement.  Real-time data provides specifics for the “right now”.  Historical data provides statistics over time such as weekly, monthly, or quarterly and provide cumulative results.  Cumulative data helps to identify trends and/or fluctuation in performance.

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