624 — ‘CRM, the Call Centre, and Return on Investment’. The opinion of Keith Symondson, Commercial Director, Noetica, UK

Apr 30, 2003 | Conteúdos Em Ingles

It is the aim of most CRM strategies to emulate the old fashioned relationship between a shopkeeper and his known customers. The purpose of those conversations was to help the customer enjoy their time in the shop, convince them to purchase, leave them feeling satisfied with that purchase, and then encourage them to come back again. The shopkeeper wrapped up all the ‘front-end’ functions of the modern company – sales, marketing and customer service – into one ‘seamless interface’ (himself).

The process worked on a single database (his memory) which held information ranging from purchasing history, to satisfaction levels, to profitability, to customer tastes and preferences.

An effective triggering system (his observation of, conversation with, and knowledge of, his customers) put up-selling and cross-selling offers in front of customers on an appropriate, personalised, one-to-one basis.

The system was applied consistently throughout his organisation, because he knew full well that one inappropriate sales offer, or one badly handled complaint, could set in train adverse word-of-mouth publicity which could do untold damage to his business.

The importance of the call centre

Today’s businesses are increasingly using the call centre as the mouthpiece of the organisation. Many established businesses would like to introduce their CRM strategies on the retail floor, but this has proved difficult for a variety of reasons, so pressure has remained on the call centre.

Many modern businesses are established with no retail outlets at all, so their reliance on call centre functionality is even greater. As a result the website and the call centre are beginning to be used as parallel methods of customer communication and dialogue.

We have moved from a very personal way of doing business (face-to-face) into a less personal one (telephone), and have now added an extremely impersonal method (the wb).

So is it not all the more shocking that supposed CRM initiatives concentrate most effort on the knowledge base and the internal technology, without investing properly in the call centre – the main means of putting all this in front of the customer?

Simulating the shopkeeper – consistency

By its very nature, a call centre has a number of challenges (quite surmountable ones) to meet before it can effectively simulate the shopkeeper. Perhaps one of the most important aspects of CRM is that the organisation should make a consistent impression on the customer. Consistently effective, efficient and approachable, that is!

One factor that has previously obstructed this goal is the reluctance of some call centre managers to capture best agent practice in a script and then get every agent to follow that script.

The reason for this reluctance has been less the worry about ‘wooden’ call handling, than the extended time and IT resource needed to build a script.

The latest generation of call centre systems has basically taken the need for technical assistance out of the equation. Scripts are built by non-technical call centre and account managers, often sitting with the marketing and product professionals.

IT staff are then able to concentrate on strategic development issues, or other systems and support responsibilities. Scripts are built in hours and refined over a few days testing. CRM strategies find exact expression through the agent.
Agent best practice is captured and implemented through the script (even the best agents do not always remember to ask every question or explore every sales opportunity). This consistency ensures a standard rule against which actual agent performance can be effectively measured and improved.

Scripting does not ‘de-skill’ the agent’s job, it actually allows them to concentrate on applying their interpersonal skills, giving them a greater chance of simulating the shopkeeper.

Performance Uplift

Many companies have already made a considerable investment in their market segmentation systems, mainly to drive targeted direct mail campaigns. However, effective customer and prospect management requires this segmentation power to also be implemented in the call centre. That is the key to closing sales effectively, and indeed triggering up-selling and cross-selling opportunities.

In fact, there is now the opportunity to enhance the power of segmentation by collecting further information during a call. The system can then automatically prompt the agent to put further appropriate offers to the caller, when their profile and their live answers in combination reveal such an opportunity.

This all sounds good. But what does it mean in terms of hard cash? Let’s take a real life example.

One of our clients is a direct insurer. They run a 30-seat call centre operating sixteen hours a day, seven days a week. Agents handle on average four calls per hour, of which one is converted in to a sale. Average policy value is around € 750 per annum. With their new software solution, the company was able to institute agent best practice throughout the call centre.

Three months later, they had seen 5 per cent conversions to sale, without any extra investment in people or advertising. This represented an annual pro rata revenue increase of € 6.4 million.

Simulating the shopkeeper – staffing issues

We all know that even the best call centres are currently experiencing high levels of staff turnover. Although there are some extreme horror stories bandied around the industry, it would not be unreasonable to put average staff churn levels at some 20-30 per cent per annum. That doesn’t include turnover in the massed ranks of temporary staff that many call centres employ.

As well as the cost of agent turnover, there is training overhead. Training time is unproductive time for an agent – and it costs money. Typically agent training times a couple of years ago ranged from three weeks to two months – a worrying, but absolutely essential, drain on resources for the call centre manager.

One cannot pretend that call centre system capabilities will have as much of an impact on staff retention as competitive salary levels or poaching policies. So we have to use technology to compensate for the realities of call centre life. This means the one item we can affect is training time.

The latest generation of call centre systems, with their logical, intuitive scripting and their standard MS Windows look and feel, mean that agents can receive basic training in hours and be handling live calls on their first day at work.

Staffing issues – the return on investment

What, then, is the financial impact? Let’s take a real life example again.

An average agent salary is €19,500 per annum (€1617/month). One of Noetica’s clients is a twenty-four hour, seven-day operation employing 140 agents, representing a little above the average sized European call centre. They experience yearly staff turnover in the region of 25 per cent.

Training time on their old system took at least a month, representing an annual cost of around € 57,000 – a not inconsiderable sum for this size of operation. Scale that up to the very large call centres and you are looking at sums in excess of half a million euros.

And that’s before dealing with the fact that an agent being trained is also not answering or making calls – so they’re not generating any revenue. With their new software system, training time has been reduced from a month to a matter of hours. This significantly reduces their training bill and new agents are quickly handling calls and generating revenue – a win-win situation.

Conclusion

In conclusion, it is surely obvious that neglecting the task of bringing call centre capabilities up to date will seriously undermine, if not waste, any CRM initiative. There is little excuse for lack of investment, as ROI is so easily demonstrable, both in terms of extra revenue generation, and cost savings.

Reacting quickly to market changes, exploring every sales opportunity in a sensitive and informed way, and measuring the results of your strategies are all possible, but only if the call centre is up to scratch.

The combination of technology and people skills offers the chance of achieving a simulation of the shopkeeper’s approach (and the attendant profitable sales) without trying to drive everything onto the impersonal World Wide Web.

Indeed, as commodity information is put on the Web, the need for highly skilled, well informed agents in the call centre, developing and maintaining the sophisticated end of customer relationship management, will increase dramatically. All the more reason to give them the support they need to effectively manage the sharp end of CRM.

Keith Symondson
2003-04-30

Em Foco – Opinião