Call Center Management – Taking the customer out of the service delivery equation Soviet style.

By Niels Kjellerup Editor & Publisher Ashgrove 21 August 2004 (latest revision).

Can it get worse? Recent research indicates that customer satisfaction is worsening. Call Centers are becoming synonymous with long waits on the phone and complaints are rising. Service Calls are outsourced, presumable as part of a business case where the interaction with customers is no longer core competency. It would seem, that the new competency vis--vis the customers is to grab their money and run. Service delivery has become so removed from the business model that customer service is viewed in the budget as a cost on par with cleaning and garbage removal. I’m not making this up.

What happened to good old business sense where Senior Management instinctively understood, that today’s happy and satisfied customer was tomorrow’s revenue stream?

Are Soviet style Management principals killing off Customer Service? Back in the Cold War era we in the West gleefully laughed and poked fun at Soviet Management Principles – for one of my thesis at University I documented a Soviet Shoe factory, which for 5 years running was heralded as No 1 by the centralised Planning Office in Moscow, because it always met or surpassed its out-put quotas. My contributions was to document that the successful General Manager of the shoe factory early in his carrier came up with the idea of simply adding a 5cm rubber sole to all the shoes produced. This increased the weight of the shoes and ensured he could surpass his KPI every year – ‘Tons of shoes shipped’. No one ever questioned if the shoes were sold or at what price.

It would seem the West has adopted similar management practices for service delivery. The focus on Quantity and disregard of Quality-measures has dislodged the Call Center from playing any role in the business model of the sponsoring organisation and if somebody else can do this cheaper, then its no wonder senior management opts for an outsource solution.

The Idiotic Vendor Measures. When Call Center Management bought into the idea, that the operational statics needed to optimise manning and call handling in a center were the key Benchmarks on which to judge a call centers performance and contribution, that was the day we allowed ourselves to adopt Soviet Style Management principles and the Soviet Call Factory was born. The vendors at the time (1985- 2000) could only provide metrics which was focussed on the call and not the call outcome. The ‘good’ manager knew how to squeeze up the number of calls handled and how to optimise call length by awarding reps for such behaviour. As a result the Call Center lost sight of the customer and the vital role of ensuring the customers continued support. The Vendors kept inventing more technology which could further turn the service rep from a dedicated and proud member of a team helping build the future revenue stream of the company into a mindless talking agent interested only in increasing number of calls per day and making them short. The vendors would talk about improved efficiencies & taking cost out.

What really happened was ‘we took the customer out of the service delivery equation soviet style’.

The really bad Call Centers. The most reliable measure of how well call center management is applying the Soviet Management Style is to look at staff turnover.

The Galley Slave Call Center has staff turnover from >15% to <35% p.a.

The Toxic Call Center makes it >35% and <70% &

The Gulag Call Center which is now showing its ugly head regularly in India makes this >70% pro annum.

It is no wonder that even the most diehard ‘out-source to India’ proponents are finding it hard to realise the promised cost savings – Indians have great pride in what they do and will rather quit than submit to the Call Center management style, as its currently practised in many centres in India.

The coming Call Center Renaissance - Focus on the Customer. Finding bad service delivery is easy – let’s take a look at companies delivering outstanding service.

Toyota Motor Company – since 1988 Toyota has been focussed on ensuring that it is no.1 in every market where Toyota is imported. In a recent study of the EU countries Toyota was no 1 in every country except Sweden where it was no 2. The interesting fact was that a Toyota owner was more likely to buy a Toyota again, than any other brand surveyed. The list was topped by Japanese and Korean car manufacturers. At the bottom just above Fiat came GM, Ford & Chrysler Benz. The wonderful news is that good service equates to better earnings and profits.

Dell Computer – while the company is now the largest manufacturers of PC’s in the world Dell is also spectacularly profitable. The cost-cutting-gurus will claim the success stems from Dell’s business model of no inventories. They are wrong. From his first interview Michael Dell has been determined to exceed customer expectation and it’s his continued insistence on delivering outstanding service and inherent understanding of the importance of happy customers to the future revenue stream, which lies at the bottom of Dell Computers success.

I’m sure Tom Peters or a Harvard Professor will soon publish a study of the impact of Customer Service on profit, just like PIMS (Profit Impact Marketing Strategies) in 1980s.

Measuring what matters in the Call Center. We know what Senior Management wants: ‘Happy customers who buy more frequently at a lower cost’. We also know what makes customers happy: ‘First Call Resolution’ & ‘speaking to a helpful & interested person’.

Adopting key benchmarks reflecting such call outcomes does not require any large IT investments – it requires doing your home work and understanding every single process integrating the Call Center to the customer and how the processes are actually working.  A process map detailing how your customers interact with your organisation is the key to First Call Resolution. Processes which prevent First Call Resolution need to be examined and changed. This is not easy but necessary and from there you get the first key benchmark –

90% of all calls completed to the customers satisfaction by whoever took the call.

Not only will customers be happy, your staff will flourish and your cost will plummet- a minimum of 25% of your operational costs are directly related to failing First Call Resolution and in addition - 20% of your call volume will disappear, as customer won’t have to call again.

You’re now ready for the second benchmark –

90% of all calls answered by a live person within 20 seconds.

There is no room for an IVR used to falsify the service level. Instead use IVR to assist customers who wants self service. Don’t force it on them to cut cost, but as a convenience.

As a starter the 90-90 benchmarks will provide the best Benchmarks for your Call Center.

Call Center Optimisation. Using analytic-software to capture call outcomes. This will allow you to analyse what has been screen captured by your systems and analyse calls by outcome categories. These type of Quality Management tools will help you document and quantify how the Call Center adds value to the REAL business model of the organisation and will help you develop business-model related Benchmarks.

 It might be a while before we get rid of The Idiotic Vendor Measures, but I hope you now realise, that you as a manger don’t need to adopt Soviet Style production targets to succeed. Just keep your eyes on the customer and how they are handled.


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