What is Poor Service Costing your Call Center?
Anyone that operates a call center consulting firm has heard this question before: what is the cost of poor service to my organization? According to recent research the answer may be $243. Is one call, email or chat in your center worth $243? That’s the cost that a Greenfield/Ovum study found in a 16 country survey completed last December. $243 is the average value of a lost relationship based upon the 8,800 consumers surveyed. Where do these lost relationships go you might ask? According to the survey 63% of relationships are lost to competitors while 37% are abandoned completely.
We know inherently that there is a cost to poor service, but it has been difficult to pin down. Of course this is a survey and is still not specific enough to each of our businesses or companies, but it is yet another data point. To get a sense of how appropriate this figure is to your organization, look at this figure ($243) and compare it to your own estimate of Lifetime Value (the amount of money a customer is expected to spend with your company over his/her life), if your Lifetime Value is higher than $243, then the $243 figure may be on the low side. Regardless of your actual cost and whether or not you can pin it down to the penny, it is a significant figure.
You as a call center operator can influence this cost. In fact you can look at the call center’s role as protecting hundreds of thousands or even millions of these $243 relationships. The call center is the front line. This is where the rubber meets the road. Customers call and email and chat and write letters because they want and or need your help. On each and every contact your agents are the company to the customers. These agents are the individuals who are guarding the bank $243 at a time. Are you treating each call or contact with center as if it could be worth $243 to the company?
Probably not, few organizations are. Call centers are designed to efficiently manage a number of call and contact types that are recurring and similar. When handling these types of contacts the center generally does well and meets the customers’ expectations. For many center the problems do not lie with the 95% of calls or contacts that reflect their common contact types, but is with the 5% that are infrequent, unusual or complex. We know customers can be fickle and we know that even if the `customer isn`t always right, they are always the customer`. We cannot please 100% of any population. We inherently know this but if the majority of our customer churn occurs in 5% of our contacts then the price we need to attach to these calls/contacts maybe far higher than the $243 price tag. While I do not have empirical data to support this point of view I do have 30 plus years experience in operating and managing contact centers.
The key to addressing this 5% problem is to fully understand the problem or situation or in the absence of experience with any particular problem to have the processes in place to ensure that these inquiries are addressed rapidly, completely and communicated to the customer. These processes include escalation and root cause analysis. By ensuring that a defined escalation process is in place the company gains an opportunity to listen to the customer, confirm that their situation is not simply another retelling of an existing call type told from a different perspective and to probe to fully understand the situation. Once the situation or problem is completely understood a solution can be sought. This solution often is found through a detailed root cause analysis to drill down through the customer’s experience of the product or service to identify the underlying issue(s) that have created or allowed this situation to be created.
Of course poor service costs companies millions of dollars annually, by ensuring that your center has ‘bullet-proof’ escalation processes and employs root cause analysis you can go a long way to protect your customer relationships and succeed on those $243 calls.
Thank you for sharing this information. We’re always looking for smart resources to send to clients and the accounting community, and this post is absolutely worth sharing!