What is an Acceptable Error Rate in Call Centers?

There are two diametrically opposed answers to the question posed in the title. Here is the first one: a jaw-dropping level of contact center errors is completely acceptable, even when those errors involve breaking the law. "Preposterous!" you say.  Please keep reading.

First the big picture: in contact centers no one talks about Six Sigma or Five-9s, or Taguchi's "on target with minimum variation." Those ideas are constantly being discussed in manufacturing, but are risible notions in call centers. Variation is everywhere...call volume, call arrival, call types, agent process variation, agent output variation.  Rather than try to measure it and reduce it, most call center leaders are just completely defeated by it.
 
"OK, we don't try to reduce variation.  So what?" you say. "Why don't we just go from center to center, get their error rate and call the average acceptable?"  You wouldn't even be able to do that because no one measures and tracks their error rate.  Why?  Because they don't want to know!  Next time you get an email from someone pitching call center KPI offerings or benchmarks, open it up and see if "error rate" is one of the metrics they suggest, offer or track.  It ain't in there.  

In manufacturing, specs, i.e., what constitutes correct, are sine qua non and performance against those specs is constantly measured. But for some reason, contact centers rarely define what a correct call is...what the agents need to do in their systems and say to customers...by call type...and even less often, measure performance against those standards, weight that performance by the volume of calls and/or track that performance over time.  It is absolutely astonishing and no one is talking about it.

As part of our work in this regard, we go into centers and we get agents, trainers, monitors, supervisors, etc together to help us map out how a call is supposed to go.  Inevitably, at some point, a food fight breaks out with the various groups arguing over how a call is supposed to be handled.  Obviously, if you haven't even bothered to define what correct is and your team is confused about the standards, "incorrect" has to be happening all the time.

Consider a quotidian price change for a service where we decide to check the agents' accuracy in giving the new price. Hate to break it to you, but on the day after the price is changed, there is no way all the agents will quote the right price 100% of the time. They have memorized the prices and disclosures and probably didn't read the email you sent out or the note on their chair that you left.  So then what would be an acceptable level of correct performance on a price quote? 75%? 80%? Would 45% be OK? What would be acceptable two months after the price change? 

We know of one consumer electronics company, one of the biggest technology companies in the world, that listened to 10 out of 10 of their outsourcer's agents give the old price for a service. The outsourcer didn't even know their agents were making so many mistakes. The client, of course, was none-to-happy, but the outsourcer didn't get fired. De facto, the outsourcer's performance was acceptable. (For more on the sloppy process changes in call centers and the flagrant errors that occur for months, see Inside Jokes:  What process changes in call centers and lost house pets in Tucson Arizona have in common)

I know what you are thinking. A price change? Come on! What's the big deal? If the agents get this wrong it is unfortunate, but not the end of the world. 

OK, then what would be an acceptable error rate on, say, debt collection calls which, in the US, are regulated by the Fair Debt Collections Practices Act (FDCPA)? 

According to the FDCPA, debt collectors are required to disclose to the debtor 1) they are calling from a debt collections agency and 2) their mini-Miranda rights ("...anything you say can be used to help collect this debt.").  Failure to disclose could result in lost collections and stiff fines against the agency. Here we might need to be a little better...how about 90%? Would 85% be OK? We work with multiple collections agencies and their performance on just these two disclosures (prior to deploying our software of course!) is highly variable and all are less than 90%, despite the fact that it is a law!  

You are thinking that is one highly specialized example and you are not convinced there is a problem here, are you?   Before using our software, one financial services center we worked with averaged 88% on legally required disclosures when they measured it and once got as high as 92%. This was their performance for years!

Since it is happening all the time and not improving in most centers that bring us in, you have to conclude that breaking the law 10-15% or more of the time is acceptable.  You can argue it is not acceptable, but when a problem exists for years with no change in tactics or results, it is, de facto, acceptable.

Let's talk a little more about defining correct.  I just described a call type where there was a legal definition of what constituted correct.  But that isn't the only thing that makes a call correct.  There are lots of things to get right on phone calls and it changes by call type, which is why I keep harping on measuring correct by call type .  Some calls have required consumer protection disclosures...this is huge in collections as mentioned but also in health care and financial services (financial service disclosures are becoming a huge issue is the US with the advent of the new Consumer Protection Bureau).  Sometimes these are required by law, but sometimes the company is delivering the disclosures to limit its own legal liability or to limit repeat calls or calls to another department.  This is a shareholder definition of correct.

Sometimes doing the right cross-sell based on the product and the customer profile is what constitutes "correct," and not doing it means a company loses revenue.  Again, the shareholders say correct means doing the right cross-sell every time.

On other calls, it is the customer who hopes you know what correct is and who is counting on you to get it right.  The right price.  The right address for returning a product.  The right diagnostic steps taken to troubleshoot their issue and get them up and running again.

Who is tracking "correct," by call type, from these various stakeholder perspectives...not just on a monitoring form for a single agent...but across agents.   Beyond the calls with legally required disclosures, I would bet few, if any.

The question about an acceptable error rate for call centers begs another issue: not just measuring it but tracking those error rates over time so 1) they can be improved, 2) so we can make sure our improvement strategies are actually working, and 3) so we can make sure we are getting a return on investment for those improvement initiatives.

For most centers, the only way to determine the error rate, just for a point in time, is to dedicate a group to listen to 50 or 100 calls with clearly defined Required Call Components (RCCs) and estimate the center-wide quality rate from the sample. This alone is a lot of work.  To track this error rate over time, you would have to repeat the process every day or every week. Fat chance.  And if you ever tried to do this, by call type, you would end up with a monitoring team larger than the size of your agent population.

So where does this leave us?  Ask a center leader, just for the most frequent call type he/she gets, what is the error rate (performance against legal, shareholder and customer RCCs)?  And, is the error-rate over the last year on that one call type getting better, getting worse or treading water?  They won't be able to tell you.  

Let that sink in.  They haven't defined correct, they aren't tracking correct performance over time, and they aren't doing anything differently to increase the percentage of correct calls.  Management won't say it with their "outside voice," but I hope now you understand the answer given in the first paragraph to the question posed in the title:  a jaw-dropping level of contact center errors is completely acceptable, even when those errors involve breaking the law.


Lowering the Error-Rate Once You Know It
Should you decide to wade into this murky water and try to determine the error rate for some call types, the number you come out with will likely not be too flattering. You may find yourself motivated to try to lower that error rate. You have a couple options.  One is terrible, hasn't worked, and will never work and one works perfectly every time.  Guess which one Call Centers use?


Call monitoring is the same as trying to "inspect in" quality in manufacturing, a practice manufacturing abandoned a long time ago (see What the Call Center Industry Can Learn from Manufacturing: Part II). The only way monitoring can drive increased compliance is if you monitor almost every call, publicly track error rates, and dismiss agents statistically worse. This is a lot of work in and of itself.  It would result in a lot of expensive turnover.  And it would only have a slight impact on your average error rate.  

Sadly, this is the go-to method for improving agent output metrics.  In my view, it is the reliance on monitoring and coaching that is huge contributor to the ridiculous amount of errors made in call centers every day.  In all the examples given in this post, every single one of these centers had extensive monitoring and coaching programs.  Do you think they weren't doing it right?  What sane person can argue that more monitoring and coaching will solve this problem when it hasn't solved it in 40 years?  (For a full discussion on why one-agent-at-a-time Monitoring and Coaching can never improve error rates or other agent output metrics, see this discussion Call Center Coaching Remains A Labor in Vain.)


Instead of paying for a bunch of monitors to act like cops with radar guns trying to catch people doing it wrong, why not just make it easy for the agents to do it correctly...every time? 


Stealing a page from manufacturing's playbook, centers can use error-proofing to make it impossible for agents to skip key steps. Desk-top consolidation and agent-assisted automation are the best practices here and with these approaches, error-free quality is easily achievable. (See Fixing Between Agent Variation Can Make All the Difference and Agent-assisted Automation.) 

For example, disclosures are pre-recorded and integrated into the CRM so that the agent cannot complete the call until the information is "read" to the customer.  In the case of the collection calls mentioned earlier, once the debtor was on the line, the agent could not open the record and begin to discuss the debt until the two legally required disclosures were provided to the customer using the pre-recorded audio.  Once the software signaled the CRM that the messages had been played, the record opened up and the collector could see how much was owed and could discuss options with the customer.  Legal disclosures at the end of financial services and health care calls work the same way...the call cannot be completed and the order cannot be submitted until the software signal the CRM that the required information has been played to the customer. 

Think the customers wouldn't like this?  Think again.  We have experience with thousands and thousands of agents handling hundreds of millions of phone calls and the customers rarely even comment, let alone complain.  In the rare instance a customer does comment, the agent says something to the effect that "I am using software to make sure the call is 100% correct and easy to understand.  Is that OK?"  Customers are delighted by that.

Think the agents wouldn't like this?  Think again.  They hate having to read the same information over and over again....80 calls a day...five days a week.  This approach gives them a chance to rest and do some of the After Call Work and lets them worry a little less about having to get everything right.  The boredom and repetition and stress is one of the reasons the turnover is so high in call centers.  (See Why Your Turnover Reduction Efforts are Not Working.)  Letting the agents use automation is one of the most anodynic tools that has ever been implemented in call centers.

Some days it seems as if there are an overwhelming number of problems in this world. So many you almost hate to turn on the news.  But you know what? Polio isn't one of them (though sadly it is making a comeback (Polio's Return after near Eradication Prompts a Global Health Warning). It used to be a huge problem until they invented a vaccine. Asking what is is an acceptable number of polio cases in the world and making excuses for the cases you do have makes no sense, because the answer is that since polio is completely preventable, there shouldn't be any cases.

Arguing and worrying about what level of contact center agent errors we should tolerate also makes no sense because there is a way to deliver error-free performance every time.

An alternative answer then to the question posed in the title? Zero.

The Unturned Stone: The Profits Hiding in Plain Sight amidst Poor Call Center Quality

No matter how much you have already saved with customer self-service, offshore outsourcing and workforce optimization, there is an astonishing amount of operational profit remaining to be tapped from your call center operations.  The cause of this untapped profit:  agent call handling is still wildly inefficient and error-prone.  This white paper will go into detail about the specific drivers of excessive costs and lost revenue, how to systematically and permanently fix them, and will share real results.  The bottom-line?  Your call centers can be 40% more productive.

Click on this link to download my free whitepaper originally published at CFO.com.  We won't even make you do that annoying registration step:

http://www.kombea.com/docs/WP-CallCenters_Uptapped_Profit_Vein.pdf

Collection Agencies, It's Gut-Check Time

You have been promising your clients and maybe even the regulators that you are working to get your disclosure and mini-Miranda percentages higher:  you know you have a problem and you are implementing changes to fix it.  Your colleagues have heard you whine about why HR keeps hiring recalcitrant agents that can't get this stuff right.  And they have also heard you joke about public humiliations and executions for non-compliance as a way to "get [the agents'] attention."

Let me say up front that collector compliance is actually an easily fixable problem, but the first step is a gut check:  Do you want to fix this problem or not?  I don't care what it is, but inside your own head, give an honest answer.  Yes or no?

It seems weird that this would be a choice, but with any longstanding problem, you have to wonder if there are incentives reinforcing the undesirable behavior.  And in fact, there are perfectly good reasons to say no.  One reason to say no is that you have tried to fix this problem and you haven't been able to do it and you are not willing to put any more effort and investment into doing it.

While it's a little disingenuous, it is perfectly normal to talk about wanting to do something and not be willing to make the effort.  I had always wanted to be the bass player for the Allman Brothers Band, but I haven't seriously practiced the bass in almost 20 years.  And truth be told, I wasn't all that good to start with.

Being the Allman's bass player is something I talked about wanting to do, but I never really did anything about.  The truth is, I think it would be fun, but I never did anything to make it happen...didn't practice that much, didn't get into bands that played that kind of music, didn't network in the industry, etc.  I might have wanted it, but I never made the effort and needed trade-offs.  Maybe this is your story with the disclosure compliance of your collectors?

There is another reason not to fix your compliance problem.  This one is a little more self-serving.  Your experience and perhaps even some data you have indicated that when you have agents with high disclosure compliance, they collect less money.  You believe that what logically follows is that if you increase your compliance rate across the center, you are going to lower your collections.  I am not saying that is true, but you might have concluded that and therefore have decided not to do anything more to improve compliance.  The lost revenue is not worth it.

Again, perfectly normal.  Businesses make trade-offs all the time between their various stakeholders.  They short-change customers to return more profit to shareholders.  They "liberally interpret" regulations to do something for their customers or again to lower their costs and return more to shareholders.  Sometimes it is just a tradeoff that is made while trying to balance short-term and long-term objectives and sometimes it is a decision you have to hope you don't get caught doing or not doing.  Cue Morpheus from the movie The Matrix saying:  "Welcome to the real world."

I am not here to judge your decision or the reasons behind your decision.  I am suggesting that you and those around you will be happier if you make conscious decision about your choices and stop pretending it is important when it is not.

On the other hand, there might be some agencies who have really tried to fix this.  They have recorded calls, they've hired monitors, they've taken the agents off the phone to coach them, they've used speech analytics, they've installed complicated variable compensation schemes that pay a certain percentage for revenue collected and another percentage for compliance, they have recognized and rewarded the best agents with preferred parking places, and even fired the worst offenders despite the huge expense associated with hiring and training a good collector.  And after all this, their compliance rate hovers in the 80th percentile.  These agencies have made a real investment and seem to have earned no return whatsoever.

Is this you?  You want to fix it, you have tried to fix it, but you don't know what else to do?  If yes, there is a way out of this wilderness.

The solution is so simple and so bullet-proof that you will wonder why you lived with the problem for so long.  It involves the use of pre-recorded audio, linked to the CRM so that the agent, literally, can not get access to the rest of the data in the file or advance/complete the call until the mini-Miranda is read to the customer and acknowledged.  Not expensive.  Works every time.  Problem solved.

If you don't want to address agent compliance, no problem.  Just acknowledge it.  My friends were glad when I finally stopped talking about being The Allman's bass man.  If you really do want to fix it, the problem can be permanently fixed in a matter of days. You don't have to live with this problem for even one more day.

Inside Jokes: What Process Changes in Call Centers and Lost House Pets in Tucson Arizona Have in Common

Before I talk about an inside joke in call centers, I need to tell you about an inside joke in Tucson, AZ. 

Tucson is teaming with wildlife and I don't mean at the University. Many homes are built up against mountains and washes. Some of the denizens include mountain lions, bobcats, bears, coyotes, javelina, hawks, owls, and rattle snakes.

One implication is that should Fluffy the cat or Toto the lap-dog wander the property line for more than ten minutes, there is a good chance they will end up as a puff-pastry for one of the locals. When Fluffy or Toto don't come back, Mom and Dad know what's happened but the children don't. The kids insist on putting signs on poles that say "Lost Cat: White. Furry. Responds to Fluffy. Call if you find her." When you see those signs, you feel bad, but you also kind of chuckle imagining Mom and Dad going through the motions.

The inside joke in call centers occurs when someone wants to make a change to a live call handling procedure. This change could come from a regulatory change, a best practice that has been discovered, or because Marketing decides they want to brand calls differently. Marketing might say, "Let's just get all the agents to change and start doing it like this."

Though the call center leaders agree to it, anyone who manages agents knows that getting hundreds of agents, often in different centers, "to change and start doing it like this" is, as they say, "a long putt." The leaders know it is going to take a lot of effort and a lot of time and it is never going to be 100%. At best, without heavy policing from call monitors and big rewards/sanctions, it will take months for that process change to become fully adopted, which usually means it is being done about 85% of the time.

In a center handling credit card calls, Marketing decided they wanted to brand the end of every call differently depending on what happened during the call. They took 250 agents off the phones for an hour (which turned into almost two hours off the phones). They trained the agents on the reason for the change and the change itself, gave them some time to practice, put them back on the phones, updated the monitoring forms, and began sample monitoring.

After over 500 hours of lost productivity and lots of training/monitoring effort, the compliance rate was less than 70% after two months.

This is not surprising. Behavior change is extraordinarily difficult. You know this if you ever made New Year's resolutions or if you have ever tried to take off a little weight. Even people who have faced death as a result of a heart-attack are very often unable to change their health jeopardizing behavior.

Processes are constantly being changed in call centers. It is almost impossible to put in the required effort to communicate, change the scripts, monitoring forms and training, and follow through to make sure all the agents know and make the change. Some leaders just resort to using email or a "chair drop" note or a single team meeting. In the heat of a constantly changing battle, who can blame them? But trying to change agent behavior with a chair drop? Let's not kid ourselves.

We have to get better at this. When a change comes down for any reason, the rest of the organization needs to be able to count on us to get it right, not in a few months, not at 85% compliance, but at nearly 100% the very day the change is announced.

Impossible, you say. We can't get agents to change that fast nor be that perfect.

In the credit card example, a subset of agents was using agent-assisted automation. The new endings were built right into the flow which made it almost impossible for the agents to not play them when they were supposed to. In fact, the pilot agents were 97% compliant with Marketing's new endings on Day 1 and were at 99.999% compliance after three days and stayed at that level for the remaining month of the pilot. This was accomplished without any effort from quality monitoring.  A simple report showed what recordings were played on every single call.

Possible, I say. And long overdue.

Can a Focus on Getting Calls Right Have the Far-reaching Benefits that Just-In-Time Had?

This is a post about how the commitment to one simple idea can launch a thousand ships of change and a virtuous cycle of profit improvements. After reviewing the far-reaching effects that Just-in-Time, a key element of the Toyota Production System, had in manufacturing, I will argue that a focus on getting calls right in call centers could have a similar wide-ranging effect on organizational performance and profitability.

The Toyota Production System (TPS) really is The Machine that Changed the World (see the book of the same title by Womack, Jones and Roos that has sold over 600,000 copies). TPS has changed how almost every single product is manufactured in every part of the world. One key pillar of the TPS system is Just-in-Time.

Just-in-Time is a production strategy that seeks to improve a business’ Return on Invested Capital by reducing the carrying costs associated with work-in-process (WIP) inventory (see Just in Time). It is a pretty simple idea: If we order from our suppliers just what we need for today's production, our WIP inventory goes way down, and that is a cost savings right there.  With less WIP however, we need less space, so maybe we can avoid building a new plant.  JIT was of course closely tied to demand, which meant practitioners ended up with less finished goods inventory, less need for storage and more savings. 

There's more.  When you take away the safety stock, all the production abnormalities such as machine reliability, excessive changeover times, and production bottlenecks, start to rear their ugly heads. So implementing JIT unveils production issues that management may not have even been aware of and forces them to improve those inefficiencies to avoid production outages.  Taken together, JIT had an almost immediate positive effect on ROIC.

But this is, as they say, the proverbial tip of the iceberg.  With only enough parts on hand for the production scheduled for that day, assemblers no longer had a choice of which part to use. Every part available had to work perfectly. If it didn’t, the line would shut down and increase costs.

Further, improving the quality of supplied parts was not always enough. Many companies were also forced to redesign the product to widen tolerances. This had the effect of further improving the quality of finished goods.  As quality improved throughout the entire supply chain including finished goods, scrap, service and warranty costs were all reduced which lead to further improvements in ROIC.

The biggest effects of JIT may have been the impact on the customer. JIT factories were better able to predictably deliver goods on the promise date. They were also able to be more responsive to customers' needs (JIT is really the key enabler of Mass Customization, an idea that is just as relevant for call centers as it is in Manufacturing.  See Is it Time for Mass Customization of Call Centers). Customers no longer had to, in the case of cars, “take what’s on the lot.” You could choose from a blizzard of options and get the exact car you wanted with remarkably little wait time. The quality improved, the choices improved, the responsiveness improved, and guess what? So did customer satisfaction, loyalty, and revenue.

 

The commitment to this simple idea of Just-in-Time drove dramatic improvements in results across the supply chain and throughout the organization...improvements felt and responded to by customers.  

So then here is the question:  Could handling every call that comes into a call center correctly have a similar, virtuous cycle of quality and C-Sat improvements and lowered production costs?

Let’s conduct a simple thought experiment. What would happen if we defined what a correct call was (Required Call Components), by call type, and our combination of people and technology guaranteed that the RCCs of every call would be exactly correct, every time?

Additionally, what if we further defined "correct" in terms the most efficient way to handle each call type?  And while still allowing the agents the flexibility to respond to the customers' needs, what if we increased the percentage of calls that followed the most efficient path?

What follows is a list of benefits that would accrue if we got the calls right in the two ways just defined. As you go through the list, actual results achieved using agent-assisted automation are shown in parentheses.  (Agent-assisted automation involves the use of pre-recorded audio files and pre-programmed system actions integrated with the CRM to allow error-proofing that are directed by the agent. The agent is live on the call, following the pre-defined path as appropriate, but intervening with his/her live voice whenever what is happening on the call requires it.)

1) If we are using some automation, there is less to teach the agents. If there is less to teach the agents we could reduce the lead time we need for hiring agents in advance of when they need to be on the phones. (One client reduced training time by 30% and completely paid for their investment in our software with these savings alone.)

2) If the automation is ensuring the calls are correct, we do not have to pull the agents off the phone for training/coaching as often which means we don’t need as many agents to hit service levels. (For one client, call volume is up due to the growth of the product, but the number of agents has been reduced.)

3) If we know the calls will be right, we don’t need to do as much monitoring, which means we need less monitors.  (Monitoring costs at a financial services giant have been reduced by 50%.)

4) If the call is right, we will get higher First Call Resolution and less repeat calls, which means we will have less volume and need less agents. (same as #2)

5) Because we have engineered the calls, the Average Handle Time is less and there is less After Call Work. This reduces the number of agents we need. (We have reduced AHT by 40% and ACW by 90%.)

6) If the automation is handling the boring and fatiguing parts of the job, the agents may be happier which will delay turnover. No one stays in the job forever, but delaying turnover is the same as reducing it. (We have dramatically improved agent satisfaction, but we do not have long term data on turnover effects.)

7) If we have less agents and potentially less turnover, it means we:

a. don’t need as much HR staff to hire, fire, and administer

b. don’t need as many managers/coaches

c. don’t need as many seat licenses for software and hardware

d. don’t need as much space

8) When agents make mistakes costs often occur outside the call center. There can be big groups handling improper warranty returns and letters to the CEO, calls get escalated to supervisors, legal gets involved to handle mistakes made by agents, fines have to be paid, etc. If the calls are handled correctly, all of this work goes down and may result in the need for less staff. (We have reduced fines, legal fees and accent escalations for clients.  Disclosure compliance on Federally required disclosures are now 100%.)

9) Often times the steps agents skip or don’t do correctly are cross-sells. If these are done every time, revenue goes up because the agent makes the right offer at the right time, every time. (We have increased cross-sell by 5X over agents not using the automation.)

10) As mentioned, when calls are streamlined it means less AHT. But when the calls you are streamlining are collections calls, handling more calls per day means collecting more revenue. (Record revenues have been achieved by agencies using our solution…up 25% pre/post.)

In manufacturing, all the WIP lying around were wasted resources that covered a lot of other problems that contributed to increase cost and poor C-Sat. Similarly, there is a lot of waste in and around call centers that is a direct result of a failure on the part of call center leaders to make sure that what they do hundreds of thousands or millions of times a day is correct (see What is an acceptable error-rate in contact centers?)

Let me be clear.  I am not blaming the agents for the landslide of incorrect and inefficient calls we see today. Call handling work is poorly designed, the job is fatiguing and stressful, the pay is low, turnover is high, and humans make mistakes. Call centers try to solve these problems with coaching.  The thought that sporadic coaching could solve these issues and result in more calls that are 100% correct is risible (See Call Center Coaching Remains Labor-in-Vain)

I am guessing that when Japanese and other companies first started with JIT, no one imagined that a simple commitment to reduce the waste associated with excess inventory would have the far reaching effects it had.  Could a simple focus on getting calls right hold the same potential?  


Share your thoughts below.