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The Strategic Role of the Call Center in a Recovering Economy

Sales Management

The Strategic Role of the Call Center in a Recovering Economy image economyAs the economy begins to recover and organizations begin reinvesting in key personnel and equipment, many areas of the organization continue to have to do more with less, including the call center. Rather than thinking of the call center as a cost center, however, smart companies are using their call centers to strategic advantage. As the first line of contact with customers—whether it be in a sales or service role—call center employees represent your corporate brand. They are the ones who deliver on the promises you make to your customers. During a slow-growing economy, they can improve sales and build customer loyalty—and they can do so while reducing operating costs.

How Poor Customer Service Affects Your Corporate Brand

Business magazines are filled with stories of companies that are known for excellent service: Amazon, the Ritz-Carlton, Zappos, and Hewlett-Packard to name a few. Unfortunately, most of our interactions are with companies whose service is less than stellar. The extra time and energy is takes to extract service from a sub-standard service organization is wearing. Consequently, we search out a competitor, or we buy as little as possible from the offending company. Either way, we’re sure to tell our friends about our miserable encounters, and the company brand is maligned.

The Strategic Role of the Call Center in a Recovering Economy image Ronan statsA study last year of 195 professionals and 165 college students by Ernest Ronan found that when customers had bad experiences with call center staff, they were less willing to buy from the company in the future. The strength of this reaction increased from 72% in 2005 to 86.3% last year. Similarly, customers’ negative perception of a company’s brand as a result of bad service increased from 83% to 98.9% in 2010, and their unwillingness to recommend the company rose from 77% to 91.5% over the same period. These figures indicate that buyers are growing significantly less tolerant of poor service. When the economy is not strong, companies struggle to compete for fewer customers. Losing customers due to poor service is just not smart business!

The Payoffs for Providing Good Customer Service

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On the other hand, positive call center experiences will have a positive impact on customer satisfaction and lead to a number of factors that will benefit a company vying for business in a slow-growth economy:

  • Loyal customers. Customers who are satisfied are nearly 33% more likely to purchase again. And since it’s less expensive to keep a customer than to acquire a new one, improving customer satisfaction reduces costs.
  • Improved sales. In addition to providing repeat sales, customers who are satisfied are more likely to respond to an up selling or cross-selling offer. Loyal customers also tend to be less price-sensitive, thereby increasing your opportunity for a high-value sale.
  • Referrals. When the economy is down, minimizing risk becomes increasingly important as customers decide where to spend limited funds. Word-of-mouth advertising is the most trusted—and least expensive—form of advertising. The more satisfied your customers, the more they’ll tell others.
  • Improved shareholder value. The Harvard Business Review traced a direct correlation between customer satisfaction and shareholder value. They theorized that a 1% improvement in customer satisfaction translated into a 3% market value increase for the average company. This flies in the face of the traditional view of call centers as cost centers. They may cost money to maintain, but they generate a wealth of return if managed correctly.

When customers interact with your call center, they form perceptions of your brand that are far more powerful than the messages you send through your various marketing channels. According to RightNow, 89% of customers began doing business with a competitor following a poor customer experience. This is a powerful incentive to use the call center to support your brand –one that will more than pay off when the economy rebounds.

Your Strategy for Improving Customer Service—Quickly and Affordably

Rather than looking at your call center as a cost-center to be invested in only after other areas of the organization have recovered, look at it strategically as a profit center—one that can improve customer loyalty and reduce operational costs. With a little attention and a small investment, your center can achieve stellar results for your company. Here are the steps to take:

  • Assess the current situation. What are your customer satisfaction scores, net promoter scores, or customer effort scores? What are your internal quality scores? How about operational metrics like average speed of answer, talk time, call resolution rates, etc. Do your call center employees understand the critical role they play in the success of your business? Ask them what their job is and if they say, “I’m in the claims department,” or “I’m a technical support rep,” know that you’ll need a cultural change to help them see themselves as serving others.

What you want to hear is “I help our customers get a fair reimbursement on their insurance claims and help them feel secure knowing that we’ll take care of them.” or “I make sure our customers have the least down-time possible so their employees are productive and their businesses are profitable.” You’ll use this baseline assessment later as you measure your improvement.

  • Identify process snags. Do your processes and procedures make it easy for customers to do business with you, or is their purpose to make it easy for you to do business with your customers? Customers want to spend the least amount of time and energy possible in getting answers to their questions and solutions to their problems. Examine your internal work flows and adjust them to be more customer-friendly.
  • Identify opportunities for improving agent skills. Do your employees know your products and procedures? Do they know the company’s values around service? Are they able to listen to customers and clarify their needs? Do they focus on the positive: what they can do for customers rather than what they can’t? Do they show value in what they ask customers to do? Do they set expectations for what will happen after the call? If the answer to any of these is no, an investment in training is indicated.
  • Engage front-line supervisors. Front-line supervisors are the ones whose job it is to see that new processes are followed and that skills learned in training are employed on the job. Be sure that they understand the strategic value of the call center to the overall success of the business and the importance of their role in leading their teams in a process of continuous improvement. If possible, tie part of their pay into the performance of their team.
  • Measure again. Once you’ve streamlined your processes, assured that your call center agents have both the attitude and skills to provide outstanding service, and have front-line supervisors engaged in continuous improvement, it’s time to measure again.

Results You Can Expect

When processes are streamlined, call center employees are trained, and front-line supervisors empowered to support continuous improvement, you can not only expect improved customer satisfaction scores, but reduced costs as well. For example, Jennifer Edwards training and program manager at Motorola’s Home & Networks Mobility Division reported a 10% increase in customer satisfaction and a 56% improvement in call resolution rates. Jean Pierre Berone, Customer Services Director for Dell, reported that within two months after beginning the initiative in Montpelier, they achieved a 10% rise in customer satisfaction rates and a 10% reduction in the time taken to resolve technical issues. Many other companies—large and small—report similar results after following these steps.

Conclusion

In as little as a few months’ time, and with minimal investment in process improvement and training, you can turn your call center into a strategic tool to improve customer loyalty and reduce costs. This will improve the bottom line, and you’ll be well-positioned as a service leader as the economy recovers.

Comments on this Article: 2

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  1. Excellent article! Despite the current trends, there will always be a need for call centers. Generating business leads are still done on the phone, and it makes sense that you should have a team that can do it properly.

  2. “Identify opportunities for improving agent skills.”

    Better contact center training should be at the top of every call center manager’s list in 2013! Your agents interact directly with your customers and what they do/don’t know directly impacts your brand. The more time you spend training your agents the better equipped they will be to handle unusual situations.

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