Attacking Call Volume
In the last post we did a show me the money analysis to seewhere all the untapped cost and in some cases revenue was lying:
(Direct Labor x DLRate) + (Indirect Labor x IDL Rate) + (Capital Expense X CE Rate) + (Other) =Total Opportunity Cost of Call Center
The keys from that discussion were:
The industry's efforts to date have been focused on rate reduction…move to lower cost markets and your labor and real estate costs go down.
2) Direct Labor is the biggest bucket of cost.
3) Though Indirect Labor and Capital Expense havetheir own drivers, the amount of Direct Labor is the biggest driver of thosetwo expenses.
4) The catchall “Other” bucket of cost and revenue in some cases drives the other costs and in some cases is a cost or revenue lost category of its own.
So the biggest opportunity area is the reduction of absolute amount of direct labor. To unlock thevalue, we will need to look at the drivers again. As stated, the amount of direct labor youneed is a function of Call Volume, Handle Time, Service Levels, and Shrinkage (Time Not Spent on the Phone). Let’stake each in turn.
Sine Qua Non: A CallVolume Pareto
That call volume is a big driver of cost is not news to callcenter leaders. They have been trying toreduce the volume of calls by implementing more self-service channels…websites,Interactive Voice Response, and Community Support Boards.
But the way to tell if a company is trying to systemicallyand systematically go after call volume is if they can produce a pareto chartof call volume…a graph that shows the call volume and handle time associatedwith exactly why customers are calling.
Tracking Handle Time and Volume together allows you to orderthe opportunities in terms of Volume X Handle Time. That way low volume calls that may take along time to solve have as much weight as high volume calls that are easy tosolve.
There are a lot of ways to proceed from here. One way simple way is to break the list intothree buckets: 1) Calls due to NotResolved the First Time or Call Center Errors, 2) Calls that are preventablewith a process/procedure change in call handling, 3) Calls that are preventablewith a change in another part of the business and 4) first time requests forservice that are not preventable.
Let’s take the last category first. You set up a call center to service yourcustomers. That is what you are therefor! If a customer has a change ofaddress or a death of a spouse or moves, it is perfectly legitimate for them tocall and request service. You should ofcourse offer web or IVR self-service, but some customers just want to talk tosomeone and that is fine. This is a lowpriority bucket to worry about.
The bucket you must focus on first is Calls due to NotResolved the First time or Call Center Errors. If customers are calling back because of an error you made, you areadding to your own cost and you just have to fix it immediately. An example is a customer calling to fixsomething about their bill only to have the same problem appear the next monthbecause the agent forgot to do something in their system. Another example is a tech support call thatdoes not resolve the customers issue due to the agent not following the properdiagnostic path. Both are pure waste.
The second bucket is Preventable Calls with a ProcessChange. A good example here is the highpercentage of customers that call after they get their first month’s bill. If the proper disclosures are done and stepsare taken to ensure understanding, many of these are likely preventable.
The last category to be discussed is calls that arepreventable with a procedure change in another part of the business. There are lots of examples here as callcenters are often the place where all the poor quality problems show up. Product defects generate calls. Problems with field work generate calls. Problems with billing generate calls.
Armed with a Volume X Handle Time Pareto Chart, you can goto other parts of the business or to the GM over the whole business andhighlight the cost associated with errors in other departments. Having specific cost detail helps increasethe focus on finding a fix.
Of course another approach is to just develop a strategy forthe top Volume X Handle Time drivers. Fromthere, assign resources to come up with coordinated strategies forsystematically attacking each driver, no matter what bucket it is in.
But at the end of that analysis, you will have a list of processchanges you want to make and you will a list of things you want to make surethe agents do/say every time. Whatnow? Pull the agents off the phone fortraining? More monitoring and coaching? Put a sheet of paper on the agent’s chairstelling them to do it this way instead of that way?
This is what we have been doing and it is not working. Call center leaders have to think aboutautomating and error-proofing work with agent-assisted automation (http://en.wikipedia.org/wiki/Agent-assisted_Automation). Build the proper “first bill” set ofdisclosures, prerecord them and let the agent play them. Automate the updates in a second system whenthey are made in the first system so the agent doesn’t have to remember to doit. Develop the proper diagnostic pathfor a particular problem and let the agent play the questions to the customerto ensure the proper steps are taken.
It is the overreliance on monitoring and coaching thatcreated many of these problems. Lookingto monitoring and coaching to fix them, is, well, you decide how smart that is.
But however you do it, the big picture idea to not lose sight of is that because callvolume is the big driver of Direct Labor and because Direct Labor is the bigdriver of Indirect Labor and Capital Expense, systematically reducing callvolume is going to have a multiplier effect on cost reduction.