Call Centre Know How Essays.. Productivity, Measurements & Benchmarks

by Niels Kjellerup, Editor & Senior Partner of Resource International. August 4, 2005

These articles & ideas are based on the know-how and experience gained over the years working as a consultant with companies all over the world. The problems and issues always seem to be the same. If you can understand the ideas, they become yours to work with. All I ask is that you acknowledge the source. If you want to discuss issues raised or let me know some of your own insights please do contact me. The thorny issue of copyright means that you cannot commercially use my materials, issue them in any form as your own. Hopefully that won’t prevent you from applying the ideas to your Call Centre.

Productivity, Benchmarks, Measures and Controls

a. The Galley Slave Model

b. Benchmarking I

b. Benchmarking II - Customer service Call Centres

d. How Customer Service became a Corporate Strategy

e. Changing the Work Culture of a Call Centre

f. Moving from Service to Sales

g. The Toxic Call Center.

h. Introduction to The Coaching Culture Call Centre.

i. Outsourcing Customer Contact. Article confronting the issues.

j. Coaching Note on professionalism.

If you liked these articles have a look at The Managers Bookstore.

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Productivity in Call Centres - The Galley slave model 

No other single issue has caused more pain and upsets for Call Centre Managers than the issue of productivity demands from senior corporate management. There are two ways of looking at productivity ....

The Galley Slave Model

This school of thought believes that by using Information Technology (IT) to measure individual performance in the Call Centre, certain minimum standards will allow centre management to fine tune the organisation and maximise each staff member's productivity. Productivity is always measured in seconds and minutes of talk-time, idle time, wrap-up etc.

So, management pegs in at a productivity figure of say 20 - and threatens to fire anyone who falls below 18.5. The staff retaliate by ensuring productivity never goes above 22!

The result is always the same in these centres - productivity is locked in a band between 18.5 and 22 and never varies; and within 18 months to 2 years the management is invariably moved out because of lack of productivity improvement, high staff turnover and low morale.

In over 70 studies, the Galley Slave model has never been seen to work and the first sacrifice of this model is customer service and satisfaction.

The alternative - the Human Potential Development Model is very different.

It builds as its premise that each person has a huge potential; and, if encouraged, will bring along to work index potential 40 instead of 22!

The trouble with this model is that it is hard work for managers and supervisors. Do you know how to develop your people and encourage growth? This is called People Management.

In this model it is possible to see productivity increases of 100 - 300% in 6 months. Results are measured in revenue and costs terms - not the meaningless seconds and minutes!

So, why do we continue to hear of horror stories from Call Centres - mostly from the USA??

It seems that most people don't really believe in human potential and prefer the security of the galley slave!

A tip ... Managers in doubt about what kind of show they are running should find out whether their staff have a nick-name for them; and if that nick-name has any connotation of Gestapo or a photo on the notice board with a moustache drawn in - odds are it's the galley slave model. It's frightening how quickly managers get used to low morale and high staff turnover. Try reading "Customers Come Second" by Rosenbluth! ISBN 0-688-11466-0.

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Benchmarking I 

The purpose of benchmarking is to define a vision in measurable terms which are achievable. The controlled and measured discipline of Telemarketing lends itself well to this process. In order to build your call centre benchmarks, it is necessary to know and understand your operation well.

The three key benchmarking questions are ....

1. how can the call centre increase productivity in sales, marketing and service?

2. how can it cut cost per order?

3. a) how can it increase market coverage and customer retention?

& b) how will this reflect on revenue?

Defining "Telemarketing" for benchmarking purposes.

"The Telephone becomes a sales or service (marketing) medium when people or organisations with an affinity for given products or services are engaged by highly trained human beings in a controlled, transactional dialogue supported by efficiently designed work flow, measurement and fulfilment systems via telecommunications equipment and networks to achieve a defined marketing goal". Rudy Oetting, Montreux 1987

This definition outlines the conditional and necessary ingredients in any telephone activity; and presents a breakdown of the issues which need to be addressed regardless of the size of the operation and what product and service is being offered.

Suggest you read the article False Benchmarks.

 

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Benchmarking II - Customer Service Call Centres 

The danger inherent in the use of "Benchmarks", "World Class" and "Best of Class" concepts is that instead of understanding these concepts it allows the LIP-service crowd easy entry into a jargon; a jargon which should be reserved for Call Centre managers who are dedicated to improving profitability by helping customers do business. ( for more see The Tarp 1997 Benchmarking Surveys Review).

It is therefore with some reluctance, that we move into this minefield of illusion and pretence.

Three rules in the double talk world of World Class Benchmarking ....

1. Common sense based on experience is better than most benchmarks

2. Benchmarks should help focus the Call Centre on the customers and call outcome rather than on "call production".

3. Productivity issues are often driven by Telecoms and IT providers who are trying to sell new equipment. Remember that 75% of your productivity stems from your people issues.

This benchmark study focuses on comparing with Best in Class or World Class - published by Tarp in 1994.

1. World Class Service Reps are more likely to sell and are turning 25% of calls into sales.

2. World Class Call Centres are less likely to experience abandoned calls with 4% compared to the "normal" level of 7%.

3. World Class Centres spend more on training service reps, AUD6000 per annum compared with AUD1600 on average.

4. World Class companies pay around 10% higher annual wages than the average centre.

5. A service rep in a world class centre receives 170% more calls per day and converts 100% more calls into actual sales than the average service centre rep.

 

( suggest you also read the article False Benchmarks in the Managers Files)

 

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How Customer Service Became a Corporate Strategy

... the origin of Customer Service Call Centres. 

The idea that it pays (return on investment) to be nice to customers and handle complaints is a dramatically new idea anywhere in the western corporate world. Of course stories of successful businesses doing well by exceeding customer service expectations (Nordstrom's, Dell Computer, Viking Office Supplies, Fed Ex, Stew Leonard's Dairy, Perdue Chickens) were viewed as nice but not needed strategy for business in general.

The logistics of how to cater for millions of customers and engage in meaningful dialogue waited for new technology. This brief summary is not a historical account of what happened but an attempt to explain the evolution.

1968 (?). A US federal judge orders Ford Motor Company to establish a free phone line to facilitate recall of a faulty car. AT&T and Ford develop the 800 number in response.

1972. AT&T decline to develop an ACD for Continental Airlines because there is "no real market" for such a product. Instead Rockwell International designs and develops the world's first customer designed ACD - the Galaxy.

1977-78. The TARP studies carried out for the US Dept of Trade demonstrate a dramatic change in customer behaviour. This was confirmed by the update study commissioned in 1985.

1981. The GE Answer Centre is established to help customers get in touch with GE. Since it opened this centre has served as a model and World Class benchmark for other corporations. Between 1984 and 1989, GE established 52 different call centre operations within its many business divisions.

1984-5. AT&T embarks on the largest outbound Telemarketing campaign in history; 16 million households are contacted and offered to sign on with AT&T long distance. To facilitate customer enquires resulting from this project AT&T opens an 800 station call centre in Jacksonville Florida.

1986. AT&T publishes the book Successful Telemarketing and spends 20-30 million US dollars promoting the use of 800 numbers.

In the period from 1980 to 1990, the US labour department estimated that 4 million new jobs were created in call centre operations in the USA.

The largest concentration of such centres is in Omaha Nebraska; home of the Strategic Air Force Command and Norad Early Warning System. Resulting in the  largest concentration of optic cable in the world and subsequently very low trunk prices.

From a historic perspective, it seems fair to conclude that Call Centres became the focal point of customer service because of the cost effective way they could fulfil the three key customer needs identified by Tarp ... Easy Access, Closeness and Personal Information.

 

( If anyone has the exact year of these events please send them to me, editor @ callcentres.com.au)

 

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Changing the Work Culture of the Call Centre 

Managers and Supervisors often buy into the Galley Slave model, simply because they don't know any other way. The ACD provides statistics in a numerical fashion on every rep and every phone call. However, viewing calls only in this way, helps turn the Call Centre into a product focus - producing completed phone calls. Not looking from the customers viewpoint, leaves the customer behind!

This way of measuring was found in the old Soviet Union where shoe factories measured the weight of the total shoe production - regardless of whether the shoes were saleable. That is why the Galley slave model (measuring "productivity" as completed calls) is unworkable - because this doesn't reflect how the Call Centre adds value to the customers' experience with the organisation.

The trap of becoming a product-focused Call Centre may be avoided by redefining productivity as a measure of the improved value of customer interaction with the organisation and establishing Call Centre benchmarks measuring call outcomes

It seems the pressure to become a product oriented Call Centre nearly always stems from the lack of measures showing how the customers react to the interaction. However opting for the lazy solution and taking the quantitative phone particle measures (i.e., number of calls, length of calls, length of wait), to manage and motivate your people is the road to the Galley slave and disaster.

The effect of the phone call on the customer is what the centre produces; it can be revenue value, number of orders etc. The best way to start motivating your staff is measuring their performance in quality of added value to customer interaction.

 

 

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Moving from Service to Sales 

Many centres seem to have evolved as service centres and as such their value is invisible - appearing only as a cost centre on financial reports. Sooner or later comes the critical point where these centres are asked to become accountable for all this "expense" - and it becomes difficult to quantify the value - although you know that it is worthwhile.

It is extremely important to have a revenue measure of the Call Centre.

Turning a Service Centre into a revenue-generating centre; requires a turn-around in senior management views; a change in the role of the supervisory people; and the people on the phones to undergo a transition (often major) from provider of service to a sales person.

Schematically the change looks like this ....

 

Service Provider Sales
Provide relevant Information Close the sale
Nothing to lose Each call a potential customer
No pressure to perform Must perform at each call
No quantifiable product Number of sales
No result measurements $ value of sales

 

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