Revenue Generation: Profit from Pain
One of the biggest challenges facing contact centers today is supporting Managements’ goal to shift the contact center from a cost center to a profit center. This can often be akin to pushing water uphill for Center managers who are under resourced and lack an understanding of the basics associated with up-sell, cross-sell and ‘save’ campaign effectiveness.
The following article sets out the parameters, drivers, sequence and value associated with the model hierarchy and its development.
There is a progression and hierarchy associated with the implementation of a revenue generation process within any call or contact center. This progression or process must begin by identifying where the center is, what the drivers for change are, the pre-requisites and sequence in which those activities must be accomplished and what the impact is of those activities have on the success and profitability of the revenue generation initiative.
Broadly stated the drivers would include:
Adequacy of current staff,
Availability of current staff,
Skills & Competencies related to sales versus customer service,
Level and type of training received,
Competence or proficiency level,
The complexity of the processes required,
The speed of process completion,
Replication and error rate of the process,
Database access, vision and robustness,
Scripting and sales support tools,
Relevance to customer
Affinity to customer,
Perceived value & relationship,
These broad areas will each perform at differing levels dependant upon the combinations of the above in relation to Offer percentage (the percentage of callers that receive an offer) and conversion percentage (the percentage of callers that agree to an additional transaction). The Offer percentage in most contact center is controlled by the agent or CSR: they determine if it is appropriate to extend and offer to a customer. The latter point will be influenced by the offer the affinity to the customer and the perceived value by the customer.
The following chart illustrates the sequence of activities related to maximizing revenue generation.
Each of these elements builds upon the previous ones. It is possible to operate without following this hierarchy, but the results will suffer.
Against this hierarchy we can classify operations across four bands, which we have categorized as: Base, Level 1, Level 2 and Level 3. These bands represent and categorize the activities and results achieved in the center related to the progress achieved moving up the hierarchy.
As shown above at the Base level the existing staff is generally customer service staff that has been hired to handle customer inquiries. These staff members in service focused centers often were not selected or assessed based upon their sales focus or sales (potential) competencies. The staff will have often received little if any training opposite up-sell cross-sell activities and as a consequence they rate 1-3 on a scale of 1 to 10.
The organizational processes have in most cases been designed to process orders and sales in a one-off fashion removed from the call/contact center. There may be no processes in place to manage add on orders or shipments within the fulfillment operation. In some cases no policy exists for partial shipment rules (ship partials versus hold for complete). The processes are adequate and effective for the business as it has operated but are not optimized, nor necessarily aligned with supporting an up-sell cross-sell environment. The processes at the Base level are generally in 3 – 5 range on the 1 to 10 scale.
Technology in most organizations has not been designed to support up-sell and cross-sell initiatives. Often it is campaign centric and not customer centric. The systems have been designed to support mass selection of names for mailings or other campaigns and not on an individual basis. The result is the database can often not display much detail regarding the actual customer: their history likes/dislikes or affinities. Similarly most inbound customer service support applications feature access to customer records for billing and account status inquiries, not to offer or support specific scripting for offers etc. As a result technology suitability for up-sell, cross-sell initiatives in the Base band is generally between 2 to 4 on a scale of 1 to 10.
As staff selection improves: skills, competencies and sales ability the base values for staffing and People improve. The addition of specific and detailed sales skills training, role playing and use of the existing technology improves the values for Training. As does refining and aligning the operational processes to support up-sell and cross-sell activities also improves the Process values.
As the elements outlined as Drivers above the overall scores will improve. With the skill/competency improvement the center will see improvements in both the Offer % and the Conversion %.
As outlined on the table the Conversion % in most centers converting from a customer service environment will be in the 3-5% range and suffers from a low Offer % as well. In these centers the decision to offer or not to offer an up-sell/cross-sell is usually left to the discretion of the agent. It is common that their fears, concerns, lack of training, knowledge of the customer and support negatively impacts their perception of up-sell cross-sell programs and leads them to find reasons to rarely offer the up-sell.
A structured, planned and consistent approach can move the center up the effectiveness curve and begin to achieve superior results is required.
The proof is in the results, employing this approach has already helped a number of organizations move from cost focus to revenue success. This is always a challenging journey, but can be the difference between success and failure for the center manager.