November 1998

Banish The Barriers To Personalized Customer Service

BY ED ARNOLD AND MICHAEL HOFFMAN,
OMNITECH CONSULTING GROUP, INC.

Call centers, where many customers experience, for better or worse, the human touch of many organizations, have become the cornerstone of the customer service function. Despite a lot of expectations and predictions to the contrary, however, personalized customer service - the attempt to increase sales and strengthen loyalty by treating each customer as a "market of one" - remains more hope than reality.

Think of your own experiences. How many calls to place an order, make a reservation, correct a bill, get something repaired, ask a question, (insert your own example) … how many of these calls, when they were over, actually left you feeling special, unique or in any way impressed?

One out of ten calls? One out of six? Maybe. Personalization is happening, yes, but not consistently. Why? Why is personalization so important? In today's hypercompetitive marketplaces, personalized service is the centerpiece of many companies' customer loyalty programs. It's a key to being more "customer-centric." Savvy organizations recognize that superior customer service can be a genuine source of competitive advantages in business, especially since pricing and product innovations are all too often quickly replicated. Companies and customers alike recognize that personalized contact can strengthen loyalty and make a real difference.

So why isn't personalized service happening all that much in call centers?

Technology Is A Limited Enabler
Lack of adequate technology could be the culprit, given the recent growth of call center equipment sales. Take, for example, computer-telephony integration (CTI). (Estimates place CTI as close to a $2 billion industry, with projected growth rates in 1997 in the neighborhood of 40 percent.)

One would expect all those call centers that have made large CTI investments to be producing only those coveted "one of ten" or "one of six" calls that are providing memorable, personalized service. Right?

Wrong. As consultants, we've sat next to call center agents who have the benefit of CTI. And yes, when a call comes in, the customer's name and address appear on the screen and the customer's service record, detailing everything the customer has ordered in the past or has on order now, is just a keystroke or two away. Some customers are indeed impressed when the agent magically addresses them by name. Others find it eerie. On a few occasions, some techno-savvy customer actually inquires if the agent has the "screen pop" in front of them.

Based on our observations though, while CTI can help an agent personalize the beginning of a contact, it does not have much of an impact the rest of the way. It is one thing to have personalized information at your fingertips. It's another to be able to use that information throughout the give and take of a complicated interaction.

In truth, technology is an enabler of personalized service, but not the key. The key to personalization is the user of the technology, the call center agent.

Competitive Edge And Call Center Agents
The real differentiation in customer service leaders is how well front-line employees use available technology. (This is particularly true in complex service environments such as healthcare, financial services and telecommunications.) If the people who staff call centers - the agents, service reps, customer consultants - are developed and managed properly, a call center can provide a tangible competitive edge. Efficient technology by itself can't provide the differentiation. Sometimes technology can even be an obstacle; or worse, an expensive white elephant.

To illustrate this clearly, consider this example: one of our clients had invested in a state-of-the-art GUI ordering and billing system. The system included an elaborate series of customer profile screens with space for entries detailing everything from the customer's relatives to the customer's hobbies to the customer's favorite restaurants. Flows were set up so the agent would have to go through these profile screens before any contact with the customer (i.e., if the customer called in to adjust a bill amount, the profile screens would appear before the agent could get to the adjustment screens).

The idea, obviously, was that this wealth of personal information would help personalize service to the customer and increase satisfaction, loyalty and sales.

There were two problems: First, populating the profile screens was next to impossible. On average, only about 10 percent of the total entries for any customer were used. The second problem was, again, that despite the wealth of system information available in one place, agents did not know how to use the information effectively - throughout the complete contact - to personalize the interaction. Users of increasingly popular data marts, which pop up or give access to easy-to-query customer profiles for a given call, face the same challenge. Users must know what to do with information to make the information valuable.

If not technology then, what is fundamentally responsible for the failure of personalized service in call centers?

Recently, OmniTech Consulting Group undertook a research study to explore organizational issues in the call center industry. In-depth interviews with managers from 62 call centers across five complex service segments revealed several findings that shed light on this issue.

• Call Center Organizations Are In A State Of Flux
  The vast majority of respondents in our study (95 percent) had undergone some type of major structural change, either consolidation, restructuring, new process implementation or new information systems in the last six months. And most (64 percent) had undergone at least three such changes in that time. Even more significant is that more changes are anticipated - 86 percent of those interviewed expect to see at least one additional structural change in the next six months.
  
  It is extremely difficult for agents to be customer-centric when the ground is constantly shifting. The emphasis is on how to adapt to the change - how or where to find information or follow new procedures, for example, rather than how and what to do to personalize contacts. The fact that change itself cannot (and should not) be halted, clearly defines the need to create an effective internal communications program that smoothes the transition to the new organization, system, process, etc. Providing agents with what they need to get up to speed quickly on the impacts of change allows them to keep their attention focused where it counts most - on the customer.
  
• Turnover Is A Chronic Problem
  Call center managers often cite turnover as their key organizational issue. OmniTech's study found a mean annual turnover rate of 24 percent. Other studies have estimated much higher percentages. Whatever the actual percentage, everyone agrees it is too high.
  
  High turnover has a number of direct, undesirable impacts, including: drain of expertise, higher recruiting and training costs, and disruptions to operations and morale. The harder-to-measure impacts to customer service may be even more damaging.
  
  Turnover usually is a symptom of deeper issues. Call centers are stressful environments. The culture includes relentless activity combined with heavy regimentation and supervision. The prime question is: What will motivate agents to accept the pressure-cooker of a job and still feel empowered to do their personal best for the customer. For some, the answer is performance-based compensation. For others, it's a strong sense of purpose and mission. For still others, it's the confidence of thorough preparation.
  
  Often, in our experience, the best and most loyal employees - the agents who are able to attract and retain the best and most loyal customers - are those who develop the ability to treat every call as an adventure. The key to that ability is learning to tune into each customer's special story or uniqueness. (As United Parcel Service CEO James Kelly has said: "Good customer service may come from the heart - but it always starts with the ears … we're afraid not to listen.") Tuning into a customer's uniqueness is also a way to add variety to what some would call a monotonous job. And it is an example of how employee retention and personalized service techniques can sometimes go hand in hand.
  
  Finding and exploiting more of the links between employee retention and customer satisfaction can kill two very big birds - high turnover and the high costs of customer defection - with a single stone.
  
• Training Hasn't Yet Provided The Answer
  Training is a major expense item for call centers. OmniTech's research indicates that initial employee training lasts almost five weeks on average, which again highlights the seriousness of the turnover issue (i.e., a big investment is lost when a new hire leaves). For call centers in the OmniTech study, estimated training cost for new employees, on average (including development and delivery), is more than $150,000 per year. The hidden, indirect costs, such as lost productivity while in training, escalate that figure even higher.
  
  Existing training programs for new employees are largely classroom-based (62 percent) or ad-hoc. Similarly, training programs for existing employees are 81 percent classroom efforts. Other training programs - most likely on-the-job training (OJT) - are 36 percent for new employees, and 16 percent for existing employees. The use of technology-based training (Web-based or CD-ROM-based) is surprisingly low -about 2 percent for new employees. (This is far less than the 68 percent of multimedia use found for overall training programs in Fortune 1000 organizations, according to an earlier study of multimedia training conducted by OmniTech.)
  
  The call center study findings suggest that despite much time and money spent, the training area has not been a success story. Relative to the attention given innovations in equipment technology, and despite state-of-the-art technology and scenario-based training that can allow reps to gain vital on-the-job experience before going live, call center training today can be characterized as a low management priority that is procedural and systems-focused. To succeed, the training mission needs to center on problem solving, refining "soft skills" and adding more customer focus into the mix.
  
• The Art Of Personalized Service
  Because of the nature of what is expected of a call center agent, adding customer focus into the mix can be difficult. In a client program we recently created, agents were required to learn how to use 12 different systems. Each agent had to be familiar with dozens of different (and often complex) products and services. And each had to know how to find information in thousands of pages of granular policy and procedural detail.
  
  A solution in these situations is to offload all the system, product and procedural information into a performance support system. Once that occurs, training time (whether technology-based or classroom-based) can be devoted to: (1) Teaching agents how to use the performance support system; and (2) Teaching agents the art of personalized customer service.
  
• The Right Metric And Management Models Have Not Emerged
  Our study showed that the two most widely used metrics of call center performance were speed of answer (used by 74 percent of respondents) and abandonment rate (used by 51 percent of respondents). Not surprisingly, these also happen to be easy metrics to measure. Certainly these metrics have merit, but it is questionable that they are the most important when it comes to customer loyalty and customer satisfaction. An analogy is trying to manage a limousine service business using primarily speedometers and fuel gauges. You need these measures, of course, but are they really getting at the quality of the ride?
  
  As a solution, call centers can determine what their customers really consider critical to an effective or personalized contact, and then build metrics around those criteria. Determine the key drivers of customer loyalty and customer retention, and then measure and manage call center operations around those drivers.
  
  Once an organization determines the criteria for customer satisfaction and customer loyalty, every learning or performance support solution the organization implements should be designed to ensure that all personnel who interface with customers make these criteria part of every customer contact.
  
• Conflicting Agent Goals
  One last thought about metrics and their relationship to personalized customer service and customer loyalty. Anyone who has ever worked in a call center knows that call center agents are almost always balancing two diametrically opposed goals. On the one hand, agents are expected to do everything possible to satisfy a customer (in other words, talk with the customer until the customer really is delighted with the quality of service). On the other hand, agents are expected to keep talk time to a minimum, so the center can meet speed-of-answer and availability objectives. This problem is another tough one, since it's just not practical to throw call-length objectives out the window. It does, however, suggest another "stressor" contributing to turnover, and another factor for learning and performance support solutions to address.

Key Priorities For Call Center Managers
Despite the large interest and investment in the technology side of call centers, technology is only part of the answer for achieving the personalized service that increases sales and strengthens customer loyalty. For many organizations, inattentiveness to the nontechnology side of the equation has hindered, and will continue to hinder, the success of customer loyalty, retention and satisfaction initiatives. To counter this, key priorities for call center managers must include:

• A focus on the "soft side" of applying the advantages of technological advances such as computer telephony and data marts,
• Proactive training and communication programs that keep employee attention focused on the customer as systems, processes and organizations change,
• Finding and exploiting links between employee retention and customer satisfaction,
• Shift toward scenario-based training models allowing students to build experience and confidence before going live with customers,
• Management models that better integrate drivers of customer satisfaction and customer loyalty into call center metrics,
• Learning and performance support solutions that leverage technology-based approaches to balance skill development with information access.

A focus on these priorities will better integrate call center management into core sales/marketing processes and go a long way toward making personalized customer service more reality than myth.

Ed Arnold is associate principal and head of OmniTech Consulting Group's Boston office. He has more than a dozen years of U. S. and international consulting experience.

Michael Hoffman is a principal at OmniTech, headquartered in Chicago. He has extensive experience in all phases of consulting, from performance improvement and performance support to marketing communications and strategic research. For the past 10 years, Mr. Hoffman has specialized in managing large-scale and strategic projects related to client initiatives in customer care, sales and service delivery. He has also conducted significant applied research in technology-based learning.

Copies of the OmniTech study - "Training Drivers And Opportunities In Call Centers" - are available by contacting [email protected], [email protected] or [email protected].