Over the past years most companies have recognized the contact center or customer services center as an important touch-point between the company and its Customers. This insight has been mostly driven by the recognition or discovery of Customer Experience Management. I very much welcome the interest of Marketing (and Sales) for the call center environment as much as I do the attention for improvement of the Customer Experience.
The main strategy of call centers has been to develop itself from a cost to a value center. From a terminology perspective this works for me, but the practice, in my opinion, is mostly focused on single value creation or value extraction. Let me explain my thoughts:
The main elements of the cost to value-center strategy have been focusing around generating additional sales, through up- and/or cross-selling. Also customer retention calls (inbound or outbound) are a good example of the value that companies are trying to achieve through the Customer services touch-point. Some pro-active companies are aiming to improve the customer experience with things like welcome calls or any other form of courtesy calls (generating another sales-opportunity).
I’m a firm believer in the great opportunities for value creation there are on the customer services touch-point. I also see that, in lots of cases, after a promising first starting year, companies forget that value-creation is not only about extracting as much value possible out of the Customer into the company. Hence companies start increasing the sales-targets and more importantly, they start increasing the “sales-per-hour” target, which is just another productivity metric not aimed at customer value creation. Which leads me to the following statement:
Deployment of a Value Center strategy will only have a chance to meet the desired result if one can leave behind Cost Center methodologies and metrics.
Becoming a Value Center is not about choosing to upsell or cross-sell when you want it. Becoming a Value Center is also not something one can decide to be by itself. Let the Customer be the judge of how much value is created through the Customer Services Experience, let the customer decide if your Call Center is a Value Center.
Call Centers are an important touch-point in the Customer Experience. It is also not the only point a Customer will touch in its lifetime. The design , delivery and decision making aspects within the Call Center change if a company thinks and manages the contacts as part of a lifetime of Customer interactions. If one factors a longer term of interactions, then there is an emphasis on consistency and sustainability of the experience, not single contact value distraction.
Thus, to conclude, I believe the best way to go is not with a cost-centered, not with a profit-centered and not with a flawed value-centered approach. The best approach to Customer Services Call Centers is the Customer-centered approach.
Any thoughts? Please share them in the comments.
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BTW, the correlations are very customized / personalized so I won’t even attempt to crack which ones to use… that is a case-by-case decision.
OK, got it. The solution that is.
The conundrum is that management wants to see operational metrics (I’ll include costs as operational) to justify the operations. They don’t know any better, they were never trained otherwise.
On the other hand, customers want value delivered, which cannot be measured by management the same way as operational.
I agree with Wim in what we have to do, but could not provide a solution before. I know, shame on me for posting a problem without a solution. Alas, I was thinking about it in the back of my mind the last couple of days and I think I can come up with a compromise that makes sense.
We shall continue the operational metrics since that is the only way that it is measured inside organizations (come on, even Zappos measures AHT and cost-per-call – and they are supposed to be the ultimate value-driven org). This is a transitional period and you cannot go cold-turkey on those metrics.
We will begin to measure value metrics – but making sure we track them to specific interactions. This is the key part.
Then we do correlation of metrics, and present that as a much more representative number than either of the other two. During this compromise period, while management gets educated and understands which correlated metrics corresponds to what previous metric they used to track, then we switch to correlated metrics only (continue measure the others in the background, just don’t use as KPI anymore) and – voila! they did not even know what hit them.
This is the method that was chosen by NPS to show the value of the “golden question” correlation to existing, tracking metrics. Statements like “promoters are x% more likely to accept offers on Tuesdays between 9 and 10 AM” (or whatever other inane statement has ever been made on the name of NPS) is a statement of correlation.
The switch to correlation, and eventually to new metrics, is going to be gradual. The reporting has to be transitioned slowly, and correlation is the best way I can think of to do that.
(and I will remove the shame from my existence now that I provided a solution).
The post is very intriguing. I think I am concerned about the “all or nothing” aspect of it. I think you can move to more of a value approach and a customer-focused approach w/o having to leave cost monitoring and cost control behind. I remember reading the BusinessWeek articles on top customer service companies and there are companies like USAA which create value to the client with freedom for the agents to support clients but they still closely manage the interaction. I believe that is key. Providing agents the ability to develop strong client relationships (and upsell) but also holding them accountable for those activities.
You make a good comment. The cost-side of the metrics is one thing that keeps me puzzled. I too believe it is important. There needs to be some nett value in for the company too ;-)
From a measurement point of view, I also state that results need to be measures. This also goes for financial results. Because of the absence of visible value to the C-level most contact centers get managed from a cost-control perspective or (partly) from a short-term sales-conversion perspective.
We need to come up with some solid proof of the value co-created for customers and the company to change the way most contact centers are currently managed. I strongly believe there is more value co-created than we currently measure. The research I mentioned in my comment on TriSynergyLLC-question to this post, provides a clear direction of that Value (Loyal Customers). The trick is now too make that visible.
The costs are there, no doubt. You need to add the top-line to show the value, at the bottom line, that is created for the company.
Defining how to measure the top-line value as a consequence of the Customer Services touchpoint is a great challenge, but is the only way, in the end, to have a good view of which costs in your contact center add value and which don’t. Only if you know that, you know where to push for more efficiency, or even carve out activities completely (much like lean-approach). And only then you know where to invest your working capital for best co-creation of value.
Am I making sense for you? Please share your thoughts.
We could always tell the emperor he has no clothes and that targets don’t work nor does the command and control style that gets in the way of good and efficient service. That way organizations can compete in this millenium.
Sounds like systems thinking is subliminally entering your brain, Wim. Tripp
this is a very interesting article.
one one hand i am inclined to agree with you, the value is not created by internal metrics.
on the other hand, i have to say what others have said: it is about internal metrics to get support from sr management or executives to make the necessary changes (at least through the rest of this generation’s term in sr management ranks, next generation will have a different view of commerce and your view will be more commonplace).
i think that for now you will have to be very creative with the approach you take to satisfy both camps: become customer-driven (better than centered – i wrote about this in my previous blog – http://bit.ly/DnyGq) and make the changes you need for them, while implementing a metric setup that will satisfy sr management.
how to do that? i don’t know, i am a thinker, not a doer :) seriously, this is where the creative part kicks in and we have to figure it out. if we can do that, show biz-value while delivering customer-value, then we can make the change we want.
Wim – I agree with the idea in theory. In practice, how do we apply it?
Let’s say you and I decide to start a new customer-centric business and are laying out the business plan and budget for the first year. How will we decide what we can budget for customer interactions? How will we measure whether we are under, over, or on budget?
I don’t raise these questions as attacks on your ideas – the adoption of a new approach for the customer experience in the contact center means we’ll need, as you point out, new metrics. How do we translate those into tactical, operational, and strategic measures as noted in Fred’s comment?
Thx for your time to ask some good questions and comments. Since they all tie together quite clearly, I think I best respond to you all at once. So here are my 2 penneth:
Frankly, much like Esteban in his comment below, I do not have all the answers (what metrics do I suggest) ready-to-go. Much like you all, I’m a thinker trying to co-create value with you in collaboration. This post, as my previous few posts have been, is all about starting the discussion on what I call Customer Services Dashboard 2.0 (from that perspective a successful attempt ;-). A new dashboard that drives improvement of what matters (to customers) at the Customer Services Touch-Point. I’m convinced that when you focus on improving what matters to customers, your results will also improve. What we are currently mostly doing is putting the results first (in our measurements and KPI’s) not the desired behavior or characteristics of the experience.
I’m not advocating to abolish results related measurements. Results will need to be measured. I do believe you have to be very careful with result oriented KPI’s: what’s measured gets managed and what’s managed gets done. I’ve come across numerous situations where agents lied to customers to make the sale, in order to meet their conversion/hour target. I do not need to explain how counterproductive this is.
I’m advocating to design measurements and metrics that drive desired behavior and characteristics (of the experience) and put them first in your dashboard. This requires thorough analytics, but is not impossible. There is already quite some research available that provides us with good direction on what matters to drive customer loyalty (which in return is tied to increased sales and profits). I have not yet finished my thoughts on this, but this is where I’m currently at:
Research from the Corporate Executive Board as well as Forrester shows that the characteristics of a good customer experience are:
– Ease of Use
– Low customer effort
(I regard these as “characteristics of effectiveness”)
Scientific research (see page 23) proves that there are mainly three behaviors of CSR’s (and they are the actual touchpoint) that drive customer satisfaction at the customer services touchpoint:
There is also research available that ties Employee engagement to Customer loyalty (unfortunately I do not have this available now with a link. Will work on that if you want). Thus, employee engagement should be on your dashboard as well.
Another research by CFI Group (also performing ACSI) proves that satisfaction with the customer services touchpoint drives loyalty. Take a close look at the table on page 8. The differences of loyalty levels are very significant when comparing a satisfactory customer services experience with not-satisfactory experiences. This is important when building a business case. “Costs of poor quality” begets a different dimension if you take it from this angle.
Now taking the above all together:
We know that customer loyalty drives revenue and profits. We know that a good experience at the customer services touchpoint is a driver for loyalty. Why not put loyalty of customers (that have contacted customer services) in as a primary metric for customer services management (as well as other member of the senior management team? ( We should be able to measure this with the help from CRM-technology). Of course this is also flawed if we look at it from an accountability point of view (other touchpoints also have influence on Customer Loyalty), but I consider that as a good thing. This “flaw” could drive tearing down walls between silo’s (and drive the need to analyze each touchpoints impact on loyalty).
If we put loyalty at the top of the food-chain my take is that customer services management should focus their efforts on increasing the level of the characteristics and behaviors of the customer services touchpoint as mentioned above. Specific metrics should be designed around those. At least it would involve acquiring customer feedback on the characteristics and behaviors on a very regular bases (and correlating them to the “internal loyalty-index”) to see where you are at.
Last but not least, the productivity or efficiency part needs to be measured too. Of course it does not make business sense if you need to invest more in improvement of your characteristics and behaviors than you’ll get back in loyalty increase. I have yet to think about how to relate investments (in the customer services touch-point) to increased loyalty to increased revenue and profits to a good measure for customer services management on the “efficiency” part. My general thought is that an increase of 1 % in loyalty (over the entire customer base) has a way better impact on the company bottom line than a productivity increase of 10 % in customer services or an increase of the number of sales per hour by 10 %. Maybe you can help me out here by sharing your thoughts and ideas.
To conclude: when Customers prove to be (more) loyal to the company as a consequence of the entire Customer Experience in general and the Customer Services Experience in specific I believe you can truly say that you are co-creating value. When arriving at that point, the Customer has decided you are a Value Center.
Well, that’s all I’ve got at this moment. My first attempt on (the framework for) Dashboard 2.0. Is this the right direction? Are there other characteristics or behaviors that should be included? How do you think the “efficiency” element could/should be included? Please let me know what you think and blow my thoughts to bits if you have to. I can handle it.
Customers may decide. But the board focusses on measurable targets. I would suggest that customer service managers should be aware that in their position they are accountable for operational, tactical and strategical targets.
Most customer service approaches are aimed at one of the levels.
But customer service is about integrating these three levels and enabling customers, employees, organizations, professional and other stakeholders to leverage their focused activities.
Thank you for stopping by and putting in time to make a good comment.
I understand and agree with you. My post is not aimed at customer services managers directly. My post aims to generate awareness amongst all stakeholders of loyal customers (which would include customer services managers too) that are aiming for short term success could harm the long term strategic goals.
Secondly it aims to increase awareness that customer satisfaction and loyalty is achieved not through the success of one touch-point, but through the success of the Customer experience throughout the combination of all touch-points over the lifetime of a Customer.
Moreover, I am of the opinion that Customer needs and wants, or the jobs that they are trying to achieve through the touch-point in general and the customer services touch-point in specific should be leading in what the touch-point offers.
This of course can be buying additional products or services, even when made aware of the availability during the customer service experience. This may even be considered a good, value adding, service by Customers.
One will actually only know that when asking the customer for feedback. On what he expects from each touch-point and which touch-point he considers more important over others, as well as on the so-called value adding up&cross sell parts. Considering the sale/conversion itself as feedback is not enough.
Putting customer’s needs, wants and jobs they are trying to achieve first, requires metrics that aim to tell you how successful you are in meeting those customer objectives. The number of conversions or sale per hour will not tell you that.
You may track (or may need to track) the conversion metric too (I would really not use the sale/hour metric, to avoid aggressive sales), to tell you how successful you are. It will not tell you though, what you need to do to improve. And that is what I think a customer centered approach towards measurements and metrics should be about.
What do you think?
Thx again for your comment.