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 (http://www.boozallen.com/media/file/Prepaid_Wireless_Final.pdf).

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"...no "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."  (http://en.wikipedia.org/wiki/Lotus-eaters)

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...you 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 plant...one 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.

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