Friday, August 22, 2014

Contact Centers: The Land of the Lotus Eaters

I recently saw an art exhibit about Odysseus, so I have had that epic story on the brain lately.

One of Odysseus' many travails on his journey back to Ithaca was getting blown off course to the Land of the Lotus Eaters.  As the story goes, the Lotus Eaters were a group of people living on an island North of Africa dominated by lotus plants, which were narcotic.  When Odysseus' men ate the plant and its fruit given to them by the islanders, they forget about their friends and homes and lost all their desire to return to their native land in favor of living in idleness.

I believe that Contact Centers operate in the land of the Lotus Eaters and are completely complacent about performance.  They wouldn't admit it to people outside the industry or to the general managers they provide customer service for, but everyone inside this industry knows the performance is terrible today, was terrible yesterday, and will be terrible tomorrow.  Yet, the prevailing attitude in every center I have ever been in is "Oh, well.  Some days are better than others."  These are inflammatory accusations, I know, but I have some data to back them up.

A couple years ago, I taught an Operations class in the Stanford MBA program.  One objective was to show the students that the Lean and Quality principles they were being taught had applications far beyond the bounds of Manufacturing and were thus relevant to future General Managers like many of them.

I grouped the 200 students into smaller groups of 3-4 and had them buy a pre-paid cell phone from a discount retailer.  I won't mention the name of the telecom provider, but it was one of the major brands, as most of the major brands maintain a prepaid offering.  Though it is a declining share of the telecom market, contrary to popular belief, prepaid wireless is a very high margin business (

I had the students call to activate the cell phone.  You can activate the phone on the web, but the objective was to give them an experience of call centers and call center quality.  I should say that I have no idea if the students were reaching an agent employed by the company or an outsourcer agent.  I didn't care really as I just wanted them to collect data on their call, whomever it was with.  And also, of course, I had no idea what the defined call handling procedure was for this call.  However, as we had a client in this space, I had some idea of what it likely was.

One person in the group called and interacted with the agent while others, on speaker phone, collected data about the call.  The first thing I had the students track was how the agent opened the call.  Here, 50% of the time the agent said some version of:  "Thank you for calling [company name] Wireless.  My name is ______.  How may I help you?"  But 50% of the time they said something completely different, including some whacky openings... "You are #1.  How can I help you?" as well as some rather rude openings... no "Hello" "Thanks for calling"...just "Can I have your activation code?"

Now you might think "So what?  It's just the greeting!" and, to be honest, I kind of think "so what?" as well...up to a point.  In my mind, there are much more critical portions of the call than the greeting.  But the thing about the greeting that is important to note is that the customer hasn't even uttered a word and already we are seeing call variation.  As an aside, before I share more data about what happened on the rest of the call, if there is only 50% process adherence on the greeting, how sanguine are you about the level of variation on other parts of the call more causally connected to the revenue and cost of this call?  (Sotto voce:  smart money is on the sidelines.)

One of the key underlying reasons prepaid is so profitable is the up-selling of services like ringtones, unlimited calling to favorite number, etc.  So how did the agents do?  For the Stanford MBAs calling to activate their cell phone, the call center agents only tried to up-sell services 23% of the time.  Seventy-seven percent of the time the agents didn't even bother to make the offer.

Once you get a client's prepaid cell phone activated, you want to keep them using the phone as those prepaid minutes are some of the highest margin minutes in the industry.  Key to continued use are disclosures telling customers during the activation process how to check their balance of minutes and how to add more minutes.  Sadly, the Stanford students were only told how to check their balance of minutes 36% of the time and only told how to add minutes 23% of the time.

Many companies use the call experience to create a brand impression.  I asked the students to track how the agent ended the call.  This is where the agents performed the best, if you want to call it that.  On 64% of the calls, the agent said something like "Welcome to the [company name] Family."  But that means 36% of the time they did not.  For those keeping score at home, a 36% error rate represents about 1.1 Sigma and if we included all the other errors during the call, well, let's not go there.

"OK, fine," you say.  "There's some variation in performance."  And you go on to add:  "But I know this industry and it is all about keeping costs down to maintain those high margins.  We don't get the money we need to train and monitor."  Well, if cost is an issue, you would think there would have been a hyper vigilance on AHT.  Here again the data collected by the Stanford students will drop your teeth.  On this stone-simple, straight-ahead phone call, the AHT average was ten minutes.  Worse, the variation ranged from a mere six minutes to over fifteen minutes!

While the students were familiar with the company that provided the prepaid cell phone, only a minority had any direct brand experience.  When asked, post call, what their impression of the brand was, 50% of the students had a negative brand impression and fell into Fred Reicheld's "Detractor" category on his Net Promoter Score scale.

How can we let performance like this stand in the 21st Century? A cell phone activation call is one of the easiest calls a call center agent gets.  It isn't a credit card call where there can be 100+ reasons why a customer might call.  It isn't a tech support call, where just diagnosing the problem can be a challenge.  This is a very simple call with very simple up-sells and yet it was riddled with errors and sub optimizations.

I hear you howling out there.  "Fine.  It was a bad center or maybe just a bad day.  But this is just one example!  How can you claim the whole industry is in the Land of the Lotus Eaters, indifferent to the performance problems?"  I will answer that question in just a moment.  But first, I should add, I don't think the managers and leaders of these agents are the only ones who have gone to sleep.  Where was the GM or Product Manager running this line of business?  How did he or she tolerate up-selling only 23% of the time?  How did he or she tolerate a 10 min AHT?

I have spoken to many call center leaders who say the GMs of the products they support couldn't find the center where their customers are being served with a GPS.  They have literally never been there.  Further, I know the head of HR for a consumer products company.  I asked her, during business reviews, is the performance of the call centers discussed?  Her answer was, "Yes, for about four minutes and it is all about whether the costs will come in on budget."  It goes without saying, but I will say it anyway, until PMs, GMs, and CEOs wake up and put more pressure on call center leaders to drive continuous improvement, call center leaders can and will remain comfortably numb.

Now to answer the question about how I can claim the whole industry is indifferent to performance problems...because, just like the title of this blog, it doesn't have to be this way and yet, maddeningly, it continues to be.

I mentioned upfront that we had a client in this prepaid cell phone space.  When we started with them the calls were also averaging ten minutes in AHT, process adherence with disclosures was poor, and up selling was almost non-existent.  In other words, another company in the same space had the same atrocious performance from their call center agents taking cell phone activation calls.  In addition, After Call Work (ACW) was averaging 90 seconds (the Stanford students obviously couldn't collect this information.) 

Here were our results after six months of handling this call using agent-assisted automation:
  • Branding during Greeting and Call Closing...100% (this 100% performance was achieved on the first day and never dropped.)
  • Disclosures (e.g., how to check minutes and add minutes)...100% (ditto with the parenthetical comment above)
  • Up Selling services (e.g., unlimited calling to a favorite number)...100% (Floor revenue rose 5x over agents not using agent-assisted automation)
  • AHT was reduced from 10 mins to 6 minutes...a 40% improvement
  • ACW dropped from 90 seconds to 15 seconds...almost an 85% improvement! 
The performance on the last two bullets is what took us 6 months to achieve.  Every week AHT and ACW got better because we were continuously optimizing/improving the call flow the agents were using...not trying to fix the agents one at a time with coaching.  Once the agents were trained to use the system, all of these results were obtained without a minute of monitoring or coaching.

At the Quarterly Business Review, the results from the other outsourcers that were working with the end client were not even close.  Not only were they not even close, they didn't even know how the results our client (one of the outsourcers) was getting were even possible.  Though Call Center leaders cannot imagine it, perfect process adherence and the continuous improvement of call handling measurements can be achieved.  Our clients are doing it.

For Odysseus to get back on track, he had to wake his men out of their stupor:

"...nevertheless, though they wept bitterly I forced them back to the ships and made them fast under the benches. Then I told the rest to go on board at once, lest any of them should taste of the lotus and leave off wanting to get home, so they took their places and smote the grey sea with their oars."  (

Odysseus wouldn't rest until he got home to Ithaca.  It took courage for him to force his men back to the ship and make them not eat the lotus plants.  GMs need to keep the focus on getting "home" as well...growing revenues and lowering costs.  And they need the courage to stand up to their call center leaders and not accept their platitudes that "We monitor and coach and are doing everything we possibly can."  Look at the metrics.  If the measures are not continuously improving, then, no they are not doing everything they possibly can.  

And like Odysseus' men, call center leaders need to go on a fast as well...not from Lotus plants, but from monitoring and coaching.  As I have written about extensively elsewhere, monitoring and coaching have not fixed call center process adherence problems and they never will (See Call Center Coaching Remains a Labor in Vain and What is an Acceptable Error Rate in Call Centers?

Moreover, monitoring and coaching are improvement strategies based on hope the agents learn, you hope they remember, and you hope they feel like doing it at the end of an eight hour shift.  Not only is hope not a strategy, it is an insidious, modern day Lotus that keeps leaders from continuing to look for solutions that actually do drive continuous improvement across an entire call center.

So what's it going to be?  Have the courage to change and lead the life of the heroic Odysseus or go permanently to sleep in the Land of the Lotus Eaters?

Your call.

Wednesday, August 20, 2014

Deming Not DiMaggio

Call Center quality is abysmal.  And it has been for the entire forty years the call center industry has been in existence.  We can make cars with near perfect quality, but after 40 years, call center leaders are high-fiving each other up and down the hallway if call agents do what they are supposed to do 80% of the time.

If this is news to you, you have not had to call for tech support recently.  If you need some fresh perspectives, read the comments to this article published in the NYTimes November 26, 2011.

There are a stack of reasons why call center quality is so bad.  Pick the top call driver, ask what the Required Call Components (RCCs) are…what the agents need to do in their systems and what they need to say to the customers…and ask what % of time the RCCs are met just on that one top call driver.  (RCCs are as essential to call center quality as specs are to manufacturing quality.)

Here is what you are likely to get back.  The RCCs will not have been clearly defined or not agreed on by SMEs, training, monitoring, agents and most important, customers. On the outside chance that the RCCs are defined, you are more likely to find flying pigs than a center tracking RCC performance by call type.  As for seeing the data on run or control charts, they won’t even know what those terms mean, let alone have them.

Even if a center had all that data, and you produced a Pareto chart on the reasons why agents do not properly execute the RCCs, you would find the same reasons you find behind all human errors:  1) the agents weren’t completely clear on the requirements, 2) they were distracted by something else and/or just forgot, or 3) they didn’t want to (e.g., collectors often skip the required mini-Miranda warnings because they have learned they are more likely to collect if they don’t scare the debtor off at the top of the call…sad, I know).

Now at this point, with RCCs being missed right and left on call after call, a center is likely to spend a lot of time and money on a host of countermeasures, in a kind of “spray and pray” approach.  Typical shotgun strategies include posting signs (as seen in the photo in this article) reminding the agents what to do, putting an incentive plan in place, pulling the agents off the phone for training or coaching.  You also might find them trying to make the work place more enjoyable by hanging yellow smiley balloons or getting the supervisors to cook hot dogs for the agents (I am not kidding about either of these approaches.  And the centers that did these things honestly felt like this was an effective way to improve quality).

On the other hand, call center leaders could do what Manufacturing leaders do:  look for automation opportunities that can error-proof the process so it’s easy for the agents to do what they are supposed to and impossible to blow it even if they tried.  (Click here to read more about types of agent-assisted automation and results.)

Error-proofing or spray and pray, which do you think would be a better strategy?  Sadly, the number one call center quality improvement strategy is hope. They send an email and they hope the agents read it and remember to do it. They train and they hope. They coach and they hope. They come up with a fancy incentive comp system and they hope.  They cook hot dogs and they hope.  By choosing hope over error-proofing, is it any wonder call center experiences are a favorite whipping boy for late-night comedians?

Some of you are probably howling that I don’t know what I am talking about.  “Call centers don’t rely on hope!  They use scripts to make sure the call is right.”  Fair enough.  Scripts are better than a sharp stick in the eye, but this isn’t the stuff of Six Sigma quality.

There are dozens of failure paths that lead to the script not being executed as designed:
  1. the agents have trouble reading legalese, especially in a second language, so don’t read it correctly or skip it
  2. the agents memorize the script and then don’t even notice when things change.
  3. the agents are texting or surfing, and skip it
  4. the agents feel reading the script hurts their performance (think sales or collections where disclosures can result in the customer backing out)
  5. the agents blast through the disclosures to reduce their handle time…if they are speaking in a second language, the accent and speed can make the disclosures almost unintelligible.
You could, of course, just fire the bottom x% of agents that weren’t doing what you wanted them to. But there are at least two problems with this. First, how do you find the agents you want to fire? You have to hire a bunch of monitors (read as, inspectors…didn’t manufacturing get rid of the “end of the line” inspectors?) and they have to monitor lots of calls to get a large enough sample for each agent.

Second, focusing on and/or firing the bottom 20% is rather un-Deming-like, no? Ed Deming’s approach to quality is what transformed Japanese manufacturing from a backwater to the juggernaut that it is today.  Central to his approach was the notion that the system is the problem, not the individual workers operating in that system.  The bottom 20%, at any given time, are part of the normal variation of that system’s performance.  (As an aside, a consultant could make a lot of money taking call center leaders through Deming’s Red Bead experiment, showing how counterproductive, demoralizing, and futile it is to focus on the bottom x%.)

Speaking of Deming, I don’t know if there is a required reading list for call center leaders, but if there is one, I do know that Deming’s Out of the Crisis is not on that list.  What he wrote three decades ago in that book about the Quality crisis in American manufacturing and the way out of the wilderness is as true of and applicable to Call Centers today as it was to the automotive industry in the early 80s.  Specs.  Performance tracked over time against those specs.  Make changes to the “System” (error-proofing with automation).  Lather.  Rinse.  Repeat.  This is Quality 101.

In 1968, Simon and Garfunkel wrote Mrs. Robinson, where they captured the longing for guidance of a nation in the throes of a controversial war and social unrest with he lyrics, “Where have you gone Joe DiMaggio, our nation turns its lonely eyes to you.”

The call center industry is in the throes of a crisis too, one they have been in for decades that is showing no signs of appreciable improvement and one largely of their own making.  The call center nation does not need to look towards a towering role model of kindness, grace, and dignity like Joe DiMaggio. They need to turn their eyes to the writings of Ed Deming, a results-oriented pragmatist.  Joe DiMaggio entertained the world.  Ed Deming changed it.

Monday, July 7, 2014

Wag the Dog: Why are We Letting Agent Traits Have So Much Influence on Output Metrics?

I stumbled on a piece of research about how agent traits affect output measures of performance (When Conscientiousness Isn’t Enough: Emotional Exhaustion and Performance Among Call Center Customer Service Representatives).

Here is my high-level summary of the results of the study…if you use measures of conscientiousness to screen/hire, it will, in general, improve your center-wide quality scores.  However, when the agents start to get burned-out, (because of the fact that you hired agents that were more conscientious) your productivity will be even more sharply reduced. 

There are however broader implications from this study.  The paper highlights how agent conscientiousness and agent burnout affect performance.  Well, raw intelligence affects performance and degree of domain specific content knowledge affects performance and distractability affects performance and personality affects performance and "thickness of accent" affects performance and mood affects performance and motivation affects performance and on and on and on. 

Now of course there is nothing wrong with studying employee traits to find out the ones that have the biggest effect on performance and then using that information to design selection tests to try to raise the level of performance in your centers by raising the presence of that trait.  This approach has an unassailable track record of success (see Take the Guesswork Out of Hiring) and this approach has been the bread and butter of Industrial Psychology consulting firms large (see Personnel Decisions) and small (see All About Performance) for decades.

But the bigger question is this: why are call center leaders leaving their outputs (See:  What's an Acceptable Contact Center Error Rate?) at the mercy of so many variables they can’t control?  And the industry’s attempt to deal with the challenge…to attack the endless drivers of agent variation (motivation, knowledge, conscientiousness, mood, intelligence, etc) with one-off efforts...a new selection test here, a rah-rah team meeting there, free pizza and doughnuts, occasional coaching a fool’s errand at best. (See:  Call Center Coaching Remains a Labor-in-Vain and Why Your Turnover Reduction Efforts are Not Working.)

Agent output metrics in the call center industry will be permanently hog-tied at an embarrassingly low level until we can figure out a cost effective way to reduce the effects of between-agent variation (See:  Fixing Between-agent Variation can Make all the Difference). Selection tests help reduce this variation, but they are not enough.  Standardizing large swaths of our agents’ process using agent-assisted automation is not only the most effective and cost-efficient approach, it is the only sane solution I have seen to date.

Tuesday, May 13, 2014

The Future of Call Center Outsourcing and the One Question that will Determine the Winners

I don't have a crystal ball, and I don't know who will be the largest and most wildly profitable Call Center outsourcer in the next five or ten years, but I do know the one question the winner will have answered to get there. Before I tell you, I want to start with a story that captures the current dismal state of the Call Center Outsourcing industry.
A Story: A friend of mine, Alan Madison, who used to run customer service for H&R Block, was outsourcing a huge chunk of call handling business. He conducted due diligence with some of the biggest brand names in the BPO industry. During each interview, he said:  "I have X million minutes of calls that I have been doing myself with these levels of performance metrics for AHT, C-Sat, Issue Resolution, etc." Then he asked a simple question, "If I give you this business, what are you going to do to make me (i.e., my metrics) better?"
While this is a completely reasonable question, can't you just see the salesperson fidgeting and staring down at his/her expensive shoes after it was asked? They were squirming because they had no answer. In fact, Alan told me each of these leading outsourcing firms - the best of the best - all gave the exact same answer: "We monitor and coach agents."
Monitor and coach agents? Huh? Alan monitored and coached his agents too. Were they saying that their monitoring and coaching procedures were better than Alan's? Were they trying to argue that their monitoring and coaching process was better than the other outsourcers?  With a straight face?
If you have outsourced any of your business, as I have in the past, you know that there is nothing that differentiates the top tier outsourcers from each other. Tear the cover off their presentations and you wouldn't be able to tell one from the other.  They all have broad geographic footprints. They all hire agents using assessments designed by industrial psychologists. They all have the latest and greatest technology. Moreover, they all think they can improve on the results the client is currently getting by monitoring and coaching agents better than the client can.  If you have read any other posts on this blog, you know what low regard monitoring and coaching as an improvement strategy for agent output metrics is held in.  (See Call Center Coaching Remains a Labor in Vain for just one example.)
An Example Outside of Call Centers and The Shape of Things to Come: Other industries are not so me-too. There are many companies that make cars, but no one makes cars with the efficiency and quality as Toyota (current quality problems notwithstanding). As good as Toyota is, they don't do it all by themselves. They rely heavily on outsourcers for automobile subcomponents who have achieved their own stunning levels of quality and productivity.  The performance of Toyota's suppliers is no accident. Toyota has completely changed the game for how manufacturers work with suppliers to ensure these kinds of results.

To better understand the dramatic shift that is coming, let me give you a little of the history on vendor-supplier relationships in manufacturing. As recently as thirty five or so years ago, manufacturing in the United States had a brass-knuckles approach to negotiating with suppliers. They would give pieces of the business to multiple vendors and pit them against each other to get the lowest possible price. They had contracts that spelled out every detail of the relationship. When their outsourcers were punch-drunk from the contract negotiation process, they sent procurement in to squeeze out the last drops of margin. Quality and other performance variables often suffered.

Then Toyota changed the game. They didn't spread their business out; they concentrated it at one or two suppliers. This was a huge windfall of revenue for these suppliers to spread their fixed cost over and to invest against. Moreover, Toyota didn't squeeze the last drops of profitability out of the vendors. They asked their suppliers to open their books because they wanted to ensure that they were allowing their vendors to make a fair profit. In some cases, they paid them more than they had in the past!

But in exchange for this windfall of revenue and profitability, the bar went up dramatically on expected performance. Smaller, more frequent deliveries, billing changes, higher quality standards, and drastically improved cycle times were now required.  But Toyota didn't leave the suppliers twisting in the wind...they sent sent their own quality and production staff out to work with the suppliers to train them and help them improve their results.

Not only did the bar go up on current period performance, but the expectation was set that quality and productivity would continuously improve: the vendors were expected to experiment and deliver Year-over-Year (YOY) improvements. The gains that the suppliers were required to achieve were shared: Toyota got lower costs; the supplier got higher margins.  (For more, see The Machine That Changed the World.)
The Payoff Pitch: Turning to our own industry, the typical client-outsourcer relationship is closer to the old U.S. manufacturing model than it is to the Toyota model. Clients today typically don't concentrate the business with one or two outsourcers; they don't ensure they are making a fair profit; they don't put people permanently on-site, teaching them better ways to improve results; and they don't hold them accountable to hit and continuously improve performance measures. (There is some accountability, but it basically just comes down to not being the worst of the client's outsourcers.  If you are the worst, you will probably be replaced.  If you are in the middle or at the top, you will likely maintain the contract.)
The way Toyota works with their suppliers has proved to be best a practice for achieving YOY improvements, and they are coming soon to a BPO near you. The firms that are going to win and make real money in the new BPO world will be the ones who can demonstrably and continuously improve their clients' output measures.

By this definition, no one is winning today. Outsourcers, unless they are starting from a terrible place, are not showing dramatic YOY improvements in quality, productivity, and customer satisfaction. No one is delivering YOY improvements, and I can say with absolute confidence that the current "we monitor and coach agents" approach will never deliver the level of improvements that will soon be required.

The way the winning BPOs are going to deliver YOY improvements is the same way the manufacturers did. They are going to move away from managing the worker and focus on managing the process by augmenting the agents with agent-assisted automation.

This is not a theory. This technology ensures that increasingly larger portions of the call are 1) exactly correct, 2) every time, 3) without any monitoring and coaching.  On many call types the technology can be used from the beginning to the end of the call, with little need for the agent to use their live voice.  I know, you are thinking, "Yeah, on what kinds of calls?  Change of address?"  No, this technology has been used on phone activation calls, on credit card phone calls, and yes, even on the holy grail, tech support phone calls.  If you can define "correct," you can execute the call with agent-assisted automation.

With a single process for the agents to execute, the primary improvement focus is on the process, not on the agent. Any changes that are made instantly improve the performance of all the agents. Through this approach, average handle time and after-call work can be lowered, along with not just improved, but perfect disclosure compliance and cross-sells, all while maintaining or increasing C-Sat.  (You can read more here:  Can a Simple Focus on Getting Calls Right have the Same Far-Reaching Benefits Just-in-Time had?  Deming not DiMaggio, and What is an Acceptable Error Rate in Contact Centers?)   The effects on agent-satisfaction are also off the dial (see Why Your Call Center Turnover Reduction Efforts are Not Working.)
An outsourcer armed with a process-centric approach would easily be able to produce continuously improving client outputs on many measures, and the heretofore unthinkable, perfect performance on other key measures (disclosure compliance or cross-sells as examples). Further, because they would be absolutely kicking the asses of the other outsourcers they were pitted against on every single agent performance metric they would increase their share of wallet (what client would keep giving business to oursourcers that were so dramatically under performing?).  Performance like this would also enable them to increase their margins because the contract would be structured so that any gains the outsourcer achieved would be shared between the client and the outsourcer. This would result in a dramatic increase in both revenue and margins - and isn't that how we define winning from a shareholder perspective?
"What are you going to do to make me better?"  No outsourcer can answer this question today.  The ones who can in the future will take over the industry.

Friday, February 7, 2014

Driving Dramatic Improvements in Outbound Telesales with Lean/Six Sigma

Six Sigma leaders often struggle to maintain management's attention on the Quality effort.  There is a lot of management enthusiasm at the start, but if they aren’t being flogged by the CEO, interest can quickly wane.  There are many reasons for this but sometimes it's due to the fact that the projects are not focused on what the leadership team is most concerned about.
However, you would be hard pressed to find something that matters more to management than increased revenue.  And if you can increase revenue, while decreasing the costs associated with securing that revenue, you’re going to have a lot of interest and support.

A great revenue process to apply Lean/Six Sigma tools to is outbound telemarketing.  Every company does not have outbound telesales activities, but for those that do, it is a “target-rich” process full of waste, poor design, and variation that is ripe for the application of Lean and Six Sigma tools.

The Problems:  Muda, Muri, and Agent Variation
Value-added analysis is a bread and butter Lean tool.  With telesales, the thing going through the process is a potential sale to an existing or prospective customer.  One of the keys to deciding if something is "value-added" is whether the thing going through the process is changed.  Well the only changes to a potential sale are either a sale or a client who says they are "not interested."  "Call back later" or "My Mom's not here" or a wrong number or an answer left on an answering machine do not change the status of the potential sale.
The implication here is that most of the activity that outbound telesales agents engage in is non value-added (NVA).  For example, as good as outbound dialing technology has become a lot of "wrong calls" still come through....calls still get made to "Joe's Pizza" or you get the nanny's number by mistake.  When this happens the agent has to spend valuable seconds dispensing with that call.

Another example of “NVA But Necessary” work is reaching an answering machine, waiting for the message to play, and leaving a message.  While there can be real utility to leaving a message that motivates the prospect to call back, many agents just hang up because from their standpoint it is more valuable to move on to try to convert the next call.
Wrong numbers and answering machines are two examples of muda or waste in the telesales process, but they are the tip of the iceberg.  Table 1 presents a full assessment of waste we have identified in the telesales process.

Types of Muda
Telesales Examples
Process Defect
* Skipped sentences, phrases, steps, etc deemed critical-to-quality
* Incorrect path/response selected based on customer response
* Incorrect or no information entered into CRM
Extra Motion
* Wrong numbers (could be a process defect but adds to talk time)
* Reaching answering machine and leaving voice mail messages
* Talking more than necessary to make conversion
* Added/Excessive pauses in conversation
* Excessive time to complete a step
Over Processing
* Gathering data that is never used
* Call Monitoring (because it is not improving center-wide output measures and therefore over processing)
* Customer placed on hold
* Customer waits for agent to complete task
* Waiting for systems to complete processes
* Agents perform after-call summary work
* Agents off the phone being coached
Table 1:  Examples of Muda in Outbound Telesales Processes
For those familiar with call center operations, two examples in Table 1 may be surprising:  Call Monitoring and Agents off the phone being coached.  Despite its ubiquity, monitoring is clearly an inspection step that does not improve quality and only finds the lack of quality (#3 of Deming’s 14 Points:  Stop Depending on Inspection (Deming, 1982)).  And while coaching has the potential to reduce defects and other forms of waste, if you graph a center’s agent output metrics over time, you do not see continuous improvement in agent output metrics despite a huge investment in monitoring and off phone coaching time.  Therefore, empirically, coaching is not adding value (Adsit, 2010 and 2013).
While many lean practioners are familiar with muda in all its various forms, some are less familiar with muriMuri is a type of waste that occurs when people and processes are overburdened and unreasonable demands are placed on them.  A long list of factors can contribute to muri.  It can be production demands, poor work environments or process designs, lack of training, clutter, noise, poor tools/equipment, and on and on.
Along with multiple causes there are multiple indications of the presence of muri, but one is the amount of voluntary turnover.  Low turnover certainly doesn’t mean the process is free of muri. People get desperate and will hang on to brutal jobs when there are few alternatives.  However, high turnover almost guarantees the presence of muri (pay increases at competitive companies can drive turnover, but that can’t go on forever).  And the turnover numbers in call centers in general and telesales in particular will drop your teeth. 
In US-based call centers, the average turnover is in the mid 30’s percent.  This is higher than any other position in the corporation.  Moreover, mid 30’s is the average.  Many centers are much higher than that, especially overseas.  I spoke to the leader of a call center in Michigan at the height of the recession and her turnover was 100% annually.  Another leader I recently spoke with is running a 500 seat center that is mostly inbound sales.  Not outbound telemarketing, but similar.  His turnover is 350% annually.  One-hundred fifty to two hundred percent turnover in overseas call centers is prosaic.
Why is call center turnover so outrageously high?  In part because of muri…the unreasonable demands of the job.  Cold calling, fund-raising, and telesales work is physically, mentally and emotionally draining.  I don't care if you have the skin of a rhinoceros, people hanging-up on you, yelling at you to leave them alone, and just saying No to you and the cause you believe in, day in and day out, is draining.  You can sit in a Tony Robbins Sales Training class for four days out of five and it would still be hard to not "take it personally" after a day of "No's,” curses, and hang-ups. 
That, in and of itself, is tough.  However when you combine caller belligerence with the endless repetition of the job, all the administrative tasks, and the wear and tear of talking all day, you end up with an unreasonably stressful job and people quit…in droves.  And this turnover is enormously expensive (HR costs for recruiting, hiring, terminating, extra coaching costs, etc) and it completely precludes the ability to drive center-wide improvements in agent output metrics.  The turnover eats the agents’ gains and you start over with new, lower performing agents.

A final contributor to telesales sub optimization is between-agent variation.  I have discussed the between-agent variation problem in depth in this publication (Adsit, 2010) and only want to make a couple more points here.  First, it is really between and within agent variation as Sally making calls at the beginning of the day is not the same Sally that is making calls the end of the day when she is tired.  Nor is the Sally making a call after she has been cussed at the same Sally making a call after a sale.
Variation reduction has been more the domain of Six Sigma than Lean.  What is interesting about between/within-agent variation is that if you analyze the root causes of the variation on process adherence, disclosure compliance, AHT, etc, the bars in the Pareto are always the same though their relative influence changes across time and call types.  The drivers of agent variation usually boil down to:
  1. Relatively Stable Individual Differences (IQ, personality, accent, motivation, etc)
  2. More Temporal Individual Differences (mood, focus, fatigue, illness, etc)
  3. Knowledge & Skill Differences(training, coaching, experience)
Faced with these drivers of unwanted variation, most call centers try a combination of selection improvements, training, coaching, incentive compensation, and a host of efforts to gussy up the work environment (Adsit, 2013) and then sit back and hope they work.  There are a lot of tools in the Six Sigma tool box, but I have never seen hope listed as one of them.
The larger point here is this:  in call centers, the agents are the process.  And when the agents are the process, you have no process.  You are left with trying to improve each agent one at a time.  And that is the losing game call centers of all stripes have been playing for 40 years.
The Fix is In

The first thing that needs to happen is to get the scoreboard up.  If they don’t already exist,  start tracking the key output measures over time (run charts or, even better, control charts).  We need this “over time” scoreboard up because this is how we are going to track the effects of our improvement efforts.
On the revenue side, conversion rate is perfectly fine to start with and eventually it might make sense to add order size if that measure matters and if there is a wide variation in performance across agents.

You need a cost measure as well.  "No we don't.  My managers don't care about the cost of sales...they just want more revenue."  Really?  Well then why don't you staff your call center with people like Og Mendino, Zig Ziglar, Tony Robbins and Ron Popeil?  The fact that you are not willing to pay to staff your organization with high caliber sales people means that costs do matter.  So find a cost metric...Cost per Call, Cost per Conversion, Cost per Dollar of Revenue, etc.  Just find one that management or the finance team can get excited about.
With the scoreboard in place, start attacking the waste in its various forms.  The way to address NVA activities is to 1) eliminate them, 2) reduce the steps/time it takes to complete them or 3) find a way to get them done less expensively. 
The key technology for accomplishing all of these things is agent-assisted automation.  According to Wikipedia, Agent-assisted automation is a type of call center technology that automates elements of what the call center agent 1) does with their desktop tools and/or 2) says to customers during the call using pre-recorded audio. It is a relatively new category of call center technology that shows promise in improving call center productivity and compliance.
In telesales, agent-assisted automation can address two huge sources of Extra Motion muda:  wrong numbers and answering machines.  Pre-recorded audio and pre-programmed system actions allow the agent to politely end the call with a wrong number, update their system and signal to the dialer they are ready...all with a couple key strokes.  Agent-assisted automation can do the same with an answering machine...leave a message (instead of just hanging up), update the internal system and case notes to plan the next call to that prospect, and signal the dialer the agent is ready for the next call...again all in parallel.  Shaving 15 to 30 and even more seconds on every call like this adds up to more time spent on value-added immediate productivity lift.
The next two big areas of muda are process defects and waiting.  Telesales calls are fairly scripted, meaning they don’t branch in dozens of different directions.  There is some kind of greeting, perhaps some kind of verification, a pitch of some kind, a few ways to handle No’s, a close and a way to end the call.  That whole process including updating systems and case notes, but with the exception of “closing” an interested qualified customer, can be completely executed with pre-recorded audio. 
With the agents executing outbound calls with pre-recorded audio you’ve provided, the process defects are almost completely eliminated.  There is of course some training/coaching needed at the beginning to make sure the agents are making the right choices, but once the choice is right, the process is defect free.  Also eliminated is the bulk of the between and within agent variation (Madrigal, 2013).
So we did Process Improvement 101 (eliminating and streamlining non value-added work and driving out agent variation) and just made your outbound group 10-15% more productive. 
We have barely scratched the surface.

Extending the Productivity Gains
As with reducing inventory in a factory, the elimination and streamlining of the NVA has drained the swamp and revealed that there are really two calls or two process involved with telesales work.  There is a lot of pounding through numbers and admin work and a basic pitch to identify qualified and interested buyers and there is “the closing.”  The former requires virtually no real skill, while the latter requires the agent to be enthusiastic, well-spoken, and accent-free.  This suggests that there is a natural and potentially productive division of labor and in fact there is.
There is a British expression I have always liked, "horses for courses," which means different people are suited for different things and you have to get people doing work that is aligned with their skill set.  By splitting the job into a Tier I admin group that is pounding through phone numbers to get prospects on the line and a Tier II group of closers you create two different hiring profiles. 
The first group, using the pre-recorded audio provided by the agent-assisted automation, do all the dialing, waiting, leaving messages, dealing with wrong numbers etc.  When they get a prospect who expresses some interest, they transfer them to Tier II with a few button presses.  Tier I agents almost never even speaks with a customer.  Some of our clients even turn their microphones off. 
The Tier II team is your closer group.  This is job with a higher skill set requirement.  As mentioned, the agents need to be enthusiastic, have the ability to connect with people, be well spoken, know how to deal with rejection, etc.  They are harder to find and you have to pay more for them.  But the good news is you don't need as many of them as they are only taking the qualified calls being handed off by Tier I agents.
The news gets better.  Though we streamlined the Tier I work, there is still a lot of waiting time (dialer delays, phones ringing, etc).  As a result, most Tier I agents find they can easily handle two calls at once and some even three!  Remember the calls are all in different phases, the basic interchange with the customer is often very straight forward, and even though it is a cacophony of voices in their headsets, the agents don’t seem to have any trouble handling it.  In fact, if you are deploying a kind of piece rate compensation system the agents are super motivated and grateful to be able to handle multiple calls.

The productivity gains from this Tier I/Tier II change are incredibly multifaceted.  First, obviously, one agent handling three conversations is a big productivity hit (See Figure 1)!  Second, the Tier I agents are easy to source.  It is a low cost, entry level job and since the agents microphones are often muted, it can be off-shored for additional labor savings.  Third, training is also reduced since most of what needs to be done is baked into the automation.  Fourth, the Tier I monitoring costs and off-phone coaching time are dramatically reduced (or can be redirected to Tier II) because the agents aren't speaking, the process doesn't vary that much, and the automation is always correct.
Figure 1:  Revenue and Cost Improvements from the use of Multiple PCs

Finally, though it is too soon to have collected data on this, this redesign of the process and use of automation shows signs of addressing the muri (unreasonable demands) associated with telesales work.  It thus has the potential to reduce turnover and all the costs and corrosive effects on performance from that turnover.  This requires a bit more explanation.

Outbound telesales agents love agent-assisted automation.  The Tier I agents using pre-recorded audio for qualifying the prospect don't feel bad when the hang-ups and curses inevitably come.  They tell us that it doesn't feel personal to them.  The way they describe it, the customer is not saying No to them, he/she is saying No to the software.  Further, they don’t get yelled at because of their accents; they don’t get as fatigued because they don’t have to talk at all; and they make more money because of the piece rate incentives.  Agent satisfaction measures soar.

Also, your higher-priced Tier II closers are hearing fewer No's and virtually no cussing because they are only being handed calls where the potential customer has shown some interest.  You have also virtually eliminated non value-added activities for this important group.  They are selling on every call and their conversion rates go up (and their pay goes up too if you use variable compensation).  Satisfaction is way up in this group as well.
We hope to have data soon on the long terms effects on turnover reduction.  No one is ever going to make a career out of outbound telesales, but even small extensions in agent tenure can improve center wide performance metrics and reduce the HR costs associated with turnover.

The Icing on the Cake:  The Path to Higher Conversion Rates

There are two conversion rates we are interested in:  the conversion of someone who answers the phone into an interested prospect (the Tier I agent pitch and counters to the customers’ initial hesitance) and the conversion of a prospect to a customer (the Tier II pitch and counters).  Analyzing and managing existing variation and doing controlled experiments (DOEs) are the key Six Sigma tools for improving conversion rates. 
The first step at improving either of the conversion rate starts with graphing the agents on a p-chart.  At this point, you are looking to identify agents that are statistically better than the rest for best pitch/counter practices.
Now for the Tier 1 agents who are using a predefined process and pre-recorded audio, we have not seen as many statistical differences among the agents.  We have found agents that are converting less due to burning through too many numbers in an attempt to raise their piece rate, but even this is rare.

No between-agent Tier I differences is the bad news.  The good news is the fact that the Tier 1 pitch is completely automated which means that experimenting with different pitches is a snap.  You can run as many different pitch variations as 1) you have hypotheses about variables that affect the success of the pitch and 2) you have enough agents to run sound experimental designs.  And not only is the pitch something to experiment with, but the recorded voice becomes a variable that you can test as well.  Some voices convert better than others.  One company found that a women’s voice with a slight Hispanic accent converted better than all the others and they went with that for all agents.

Moreover, each agent running multiple machines enables you to run better experimental designs with more power.  Rather than run a randomized block design with half the agents running one pitch and half running the other, you can run a completely randomized design with each agent running the two pitches on his/her two machines.  It’s a better design with an extra degree of freedom (no blocking factor), which enables you to detect smaller differences.

As for improving the Tier II conversion rate, since they are not using automation, graphing them on a p-chart will likely yield agents that are statistically better (the Tier II group is smaller so you may not have enough of them).  Why is Sally converting at a higher rate than Jane?  Is it Sally's voice, her empathy, is there something in how she pitches and rebuts the initial "No", or is it her tenacity?  Just make sure you are using statistics to identify real differences and not just eyeballing the fact that Sally is #1 and Jane is towards the bottom of the pack.  Treating noise as a signal is a surefire way to develop superstitious behavior and make interventions that actually make things worse.

The p-charts of agent performance will also enable you to get better at hiring, training and performance management as well.  What is it about Sally’s approach?  Can we hire for that attribute?  Can we train and coach other agents to follow Sally’s approach?  Jane is worse, but is she statistically different than the rest?  We of course want to manage up or out those that are statistically worse, but it is essential that we get away from this capricious and inefficient “fire the bottom 20%" approach (See Figure 2).

 Figure 2:  p-Chart of Sales Conversations

Becoming better at 1) identifying the right attributes and selecting new hires based on those differentiating attributes, 2) training and cross pollinating best practices, and 3) managing out those that are statistically worse are great approaches for continuously lifting your center wide conversion rates.   (For more, please see these two articles in the reference section:  Taking the Guesswork and Gamble out of Hiring Call Center Employees and Call Center Coaching Remains a Labor-in-Vain.)

Companies know how to cut costs, but all companies are racking their brains for ways to drive revenue growth.  If you pick Six Sigma projects targeted at increasing revenue you will have management's undivided attention.  Using some of the recommendations here, when your projects actually deliver revenue increases while simultaneously driving down the cost of securing that revenue, well, I hope you won’t mind getting carried around the building in a sedan chair.


1        1.  Adsit, D.  (2010) The futility of call center coaching.
2        2.  Adsit, D (2010)  Fixing between-agent variation can make all the difference.,
3        3.  Adsit, D. (2013) Coaching Remains a Labor in Vain. It doesn’t have to be this way:  call center blog
4        4.  Adsit, D. (2013)  Why your turnover reduction efforts are not working. It doesn’t have to be this way:  call center blog
5        5.     Adsit, D.  & Bobrow, W.  (2007) Take the guesswork and gamble out of hiring call center employees.  Originally published in Call Center Magazine, now available at
6        6.     Deming, W. E.  (1982) Out of the crisis. The MIT Press.
7        7.     Madrigal, A. (2013). "Almost Human: The Surreal Cyborg Future of Telemarketing".