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Management Demands Meets Demand Management

By John Cockerill and Colin Taylor
For many corporations now is the start of the budget and planning season. For people charged with developing budgets for the customer service or contact centers these are challenging times. Line management is often put in “no win” positions with various demands for: cuts to budgets, increased “targets” and “goals”, pressure to reduce costs and or cuts to the headcount plus the gratuitous admonishments to do better with less. Many managers know instinctively that “across the board” cuts hurt in both the short and long term. You can no more “cut” yourself to profitability, than you can improve service by not answering the phone. The challenge for most line managers is how to approach these topics without getting to the “because I said so!” point.
Here is one that approach that has served many managers well. Believe that all in the contact center is about balance, lightness and flexibility. Yes take deep breathes, slowly exhaling, shift into the downward dog, yes, the Yoga approach can be relaxing. At least now you are calm, but unfortunately you haven‟t solved any problems.
We know that call and contact centers are about constant change. The same is true with budgets and trying to manage through cuts.
Let‟s be frank here, there are situations where there is no room to maneuver with a hard mandate coming down from „on high‟ that says “Cut, cut, cut!” and 10 – 30% of the headcount is gone. For these cases little can be done. Fighting such an edict can simply offer just one more potential candidate for the pink notice pile. For the rest of the cases there is often some leeway where how the goal is achieved is more open and a little more creative thinking is required.
Being freed of an „edict‟ we can look at the situation from a number of creative points of view. First ensure that there is a forecast of the contact demand for contact center services and one that is signed off and agreed to by senior management. Hopefully this was completed before going into the budget cycle. This creates a „baseline that is understood and hopefully accepted by all involved in the budgeting process. This forecast should be grounded in reality and is more than marketing‟s usual wishfully thinking about what they would like to achieve or the “goal” for the new campaign. With the baseline forecast in place changes and variations can be considered including: marketing, technology changes; new products and services; and of course policies and practices. By examining the baseline forecast and adjusting based upon known and expected events, campaigns and occurrences.
The resulting demand forecast should enable management to see 18 months into the future regarding call and contact volumes with
clarity. This forecast can then be divided into monthly, weekly, hourly parts to adjust for season and campaign effects. With these numbers for the demand by hour or part thereof (day-parts) it is just a short step to calculate the number of people or man hours required to complete the work. The total hours can then be aggregated by period to determine the full time equivalents or FTE‟s are required to do the work.
Now in that last paragraph that “short step” is of course the calculations that are well known in contact centers for handling: a given number of calls/contacts (Volume) of a given length (AHT and Average Handle Time) with a standard of service performance (Service Level). For example, if the standard of service (Service Level) is that 80% of calls must be answered in 20 seconds and the call length (AHT) is 180 seconds (3 min) with a 30 second `wrap` after each call (total handling time 240 seconds), and the load (Volume) for a given hour is 1000 calls then 67 agents are needed. For comparison if the same stats hold but the load was only 100 per hour the number of agents is 7.
This exercise can then be extended to other work types that are not `live„ and are therefore delay-able demand; such as email, web chat and even white mail (correspondence). To the resultant calculation add the overhead requirements for staff turnover, training, quality assurance, meeting, coaching.
With the above completed the center management has to sign off on the anticipated or forecasted load or demand and has an accurate idea of what it takes, in terms of resources to complete that expected work at the desired service performance levels employing the systems and practices in place in the center today.
This is the point where flexibility and creative thinking enter into the process. What can be changed, moved, adapted and even dropped in order to meet the demands of senior management for the savings or improvements asked for?
Some ideas for consideration:
1. What call or work types could be avoided all together? Are there information request calls that could be avoided by providing more information on the website or through more frequent customer updates? In one instance a charity issued thank you notes by email following each donation, and included in each a brief summary of donations year to date and a mentioned that tax receipts would be issued the 3rd week of January in time for tax time. This reduced the overall requests which keep asking when the tax receipts would be issued.
2. What call or work types could be handled using a less expensive channel? For example could some of the calls be handled through self-service on the website or through an informational IVR? Can live voice calls be shifted to chat or email?
3. What changes to practices and policies could be made that would reduce the call or work times? One firm realized that it‟s staff authority matrix was so tight that front line staff could not authorize a $40 refund even though none had been rejected in the past 3 years. Changing the front line authorization levels to 85% of the range of refunds processed reduced the overall work, and increased customer satisfaction immediately. As a side note the number of refunds went down in this case, because agent felt they were trusted and handling the company‟s money. They became more careful about where and how they gave money away.
4. What would the effects of shifting the work to different periods have on the required work force? Many organizations are caught with limited staff, space and equipment. If work space is shared across different shifts, then work like email, white mail processing can be done in hours outside the usual call handling times.
5. What modification in communications would change or reduce the demand and load of calls or work? A better description online or in catalogue can go a long way to eliminate calls. One client consistently received calls asking how tall a medium heel was. Citing the height or providing an image that would relative size would eliminate most of these calls.
These questions should be asked all the time, but at budget time they become much more important to ask. A budget cut of any kind helps focus everyone`s attention on potential answers that may have been unacceptable without the threat of staff, service or other reductions.
The other side of this discussion is what is the value of the center(s) and the services those people deliver? With the cost to hire and train new staff exceeding $8,000 per agent now in most centers, increased turnover is often hidden from senior management who only see the headcount and the absolute salary numbers. Surface these underlying numbers. Challenge the current ways of doing things that might reduce turnover, improve staff retention and/or performance. Demonstrate how cutting staff will actually increase turnover and the costs?
Discuss what and how reducing service staff affects customer perceptions, value of brand and show how reducing service levels increases costs. This last point is counter intuitive for many people, including managers not familiar with customer service math. A reduction in call service standard (the 80% of calls answered in 20 seconds) can mean that calls pile up in queue, take longer to be answered, which increases telecommunications (long distance) costs and call length because callers want express their dissatisfaction with the degraded service level, by taking longer to complain about the service and how long they have been holding.
The example presented in pervious newsletter, showed the before and after impact for a major publisher. The calls before with bad service and high abandon calls cost 140% more to serve. Good service reduced calls, by solving the calls the first time, and call length by answering promptly.
Regardless of the demand volume and the demands of management, every manager has choices and can make; changes that minimize the damage done to the center staff, the brand, its customers. It takes foresight, planning and frank discussion with a range of alternatives and consequences that everyone in the decision can see, understand and weight the options. It all begins with the demand from customers and the demands from the business.

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