Cancel the “Cost Center” Culture In Customer Service

In my past 30 years in the contact center industry at organizations such as 8×8, Genesys, IBM, and RingCentral, I’ve watched the same movie over and over and over again. Too many contact centers are laboring under the tyranny of being a cost center with schizophrenic goals of making customers happy while “doing more with less.”

This incessant focus on cost savings leads to a reliance on KPIs that oversteer on automation rates and average handle time (AHT), making contact centers “break bad” (for lack of a better term). You get what you measure, and all too often, we measure the wrong things.

For example, Cigna measured its reps on AHT and aggressively worked to drive handle times down. The result?

• Poor customer outcomes as a byproduct of trying to fit complex customer interactions into short time windows.
• A lack of first-contact resolution, leading to costly repeat calls.
• Agent frustration driving high turnover.

The costs of customer callbacks and increased agent recruitment and onboarding are much higher than any savings gained through shorter calls. All of that is before you get to the costs of the significant impact on customer satisfaction that these issues will surely drive. Companies that are too focused on expense management and that don’t invest in the customer experience are going to find themselves falling ever further behind their competition, with poor customer outcomes and expensive rework and recovery efforts.

Meanwhile, companies are increasing their investments in customer service; in fact, 66% of service providers report that clients are pausing or cutting down investments toward marketing, demand generation, and advertising, while 62% of their clients are growing their investments toward customer service. Without the right approach, many of these investments will fail over the long run.

This is not a technology change

More and more, customer relationships are the key competitive battleground, and poor customer experience (CX) can quickly damage your brand's reputation. Once customers are disappointed with a brand, only 18% will keep their business with the brand, and only 15% will recommend the brand to friends and family.

The path to differentiating customer experiences is not some massive digital transformation. The path to transformative customer engagement is a series of small, cost-effective steps that add to a significantly better customer experience, each with its solid ROI and benefit to the bottom line.

Contact centers need to look beyond narrow KPIs related to cost containment and take a broad look at the economics of running the contact center.

• Align priorities with a strategic framework. When company executives identify high-level goals related to customer service and the customer experience, it allows the contact center to build specific, operational KPIs that fit in the framework to serve these goals. It also gives the contact center team a framework to discuss and justify expenses based on priorities beyond cost reduction. Take a look at Forrester’s Customer Experience Index (CX Index™) for insights on how companies are judged for their customer experience — use this information to help form your CX strategy.
• Play the game of inches. The path to transformative customer engagement is a series of small, cost-effective steps that add to a significantly better customer experience. For example, when I call American Airlines and have a flight later that day, I don’t get the standard interactive voice response (IVR) menu — I get asked if I’m calling about my upcoming flight. One quick “yes,” and I’m in the queue for the right agent, who has all my flight information — great for me and great for the business. When American shaves 30 seconds off the thousands of calls they get on upcoming flights every day; it enjoys huge cost savings.
• Leverage your vendors for insight. Contact center vendors have a wealth of information on valuable solutions, use cases, and technology that provide solid ROI while improving the customer experience. Get them to share the insight, information, and tools you need to convey this value to your executives to drive significant improvement in the short run and over the long term.
• Measure the right things. First-contact resolution is an incredibly valuable metric, especially when customers’ callback satisfaction plummets and costs skyrocket. This is harder to measure than something as simple as AHT, but it’s where the rubber really meets the road. Customer satisfaction measurements are another key benchmark for customer service success.

We all owe it to our customers, organizations, and ourselves to look at contact centers through the right lens to provide the best, most cost-effective service.

The original article by Max Ball, principal analyst at Forrester, is here.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/BrianAJackson