September 1999

Increasing A Call Center's Effectiveness

BY PETER BENDOR-SAMUEL, THE EVEREST GROUP

The call center is often the first and only link a customer has to a business. Because a customer's experience on the phone can directly affect the way the company is perceived, it is critical for the customer's experience to be positive. When companies treat their call center as a liability or as a "cost of doing business," its effectiveness is limited. Employee morale may dip and technology may lag behind the times as a result of managers who will not finance the call center appropriately. One option to consider is outsourcing. This enables outside experts to handle the process -- experts whose core function is the proper operation of a call center.

In some ways, the call center is the customer's life-support system. The technology and the employees who use it support the product that is delivered. To deliver the best-possible product, it is important to stay on top of technology and training. Because technology is in a state of continual evolution, the overhead needed to keep up with changes can be tremendous. Outsourcers, however, have the ability to keep IT costs to a minimum by spreading their technology expenditures across a number of clients. Outsourcing high-tech and other programs not only provides added resources to stay on top of technology, but eliminates the need to spend funds for recruiting, paying and retaining a staff -- and these savings are often passed on to the customer.

Putting a company's IT functions in the hands of qualified professionals also provides a business with the ability to concentrate on its strategic functions. Instead of spending time and energy operating a call center, a company can invest those resources in marketing strategies or improving the company's product, which in the process may reduce the calls that come into the call center. With both sides, the customer and the vendor, specializing in the activities they do best, the highest-quality product can be produced and marketed.

Using these leverage points, a company must determine if it makes sense to outsource. If there is enough leverage and outsourcing is considered, a company must then learn how to get the full potential out of an outsourcing relationship.

Maximizing The Value Of An Outsourcing Relationship
The outsourcing of any technology-oriented business process is similar. Whether a company is outsourcing the call center or the entire IT department, there are certain steps that must be followed to ensure a successful outsourcing relationship. First, set the project scope through strategic planning and defined business objectives. Narrow the scope as much as possible to ensure that the company is getting exactly what will meet its needs. If the goals are too broad, the foundation will be loose and the outsourcing structure will eventually crumble. Have a clear understanding of what the company’s cost drivers and requirements are. This understanding allows managers to create initiatives that are realistic and review a prospective outsourcer’s proposal with real cost figures in mind.

Once the scope has been identified, a company can begin the bid process. Before sending out requests for proposal (RFP), a company should first send out requests for quote (RFQ) to potential vendors. Find an outsourcer that is within your budget, but consider that the lowest cost bidder might not be the most effective if it cuts too many corners to meet your company’s needs. The lower costs may be a result of inadequate technology or an underpaid and undertrained call center staff. Paying higher prices does not necessarily guarantee satisfaction, either. Do the prerequisite research and look for a close match to your company’s needs. Look for an outsourcer with a qualified staff of agents and managers, cutting-edge technology, the financial backing to stay on top of the latest hardware and software, an effective methodology and a proven track record.

It is also important to find a vendor that is proactive and can identify problems before they happen or at least resolve problems before they become a disruptive force. The vendor should also be able to provide you with detailed analyses of call center statistics and complaints. The outsourcing process can be confusing, but external outsourcing consultants are available to assist you from the beginning to the end.

Ensuring High Performance
Metrics that closely match the client’s business objectives should be implemented into the contract. Additionally, meaningful penalties should be developed for insufficient service, along with rewards for continuous improvement. These service level agreements help keep performance at a consistent peak. It is very hard to hold a vendor accountable for unsatisfactory service without metrics and performance measures. Typically, a portion of the monthly bill should be withheld for poor performance.

Customer satisfaction is one of the most meaningful metrics, but it may have a broader index based on the product quality or the difficulty of the question. So, overall customer satisfaction is hard to measure and therefore would be difficult to associate with a penalty system. Penalties should be assessed for measures that are directly under the control of the supplier.

These controllable measurements can include the average time callers spend on hold, the amount of calls that are resolved on first contact, the number of callbacks and the total amount of time spent on the phone. Penalties should be based on averages instead of individual incidents, as no company has the ability to guarantee the absolute effectiveness of every instance of a process. However, the outsourcer should be able to manage the process effectively and efficiently within statistical boundaries.

Managing The Contract
A company gets what it manages in outsourcing and this is particularly true in the case of call centers. An outsourcing arrangement is managed through metrics and communication. The most effective form of communication takes place through billing, so a company must have easy-to-understand service levels and billing algorithms. Never allow the relationship to go unguided. Work with the supplier to increase the quality of the product. Both sides are accountable for the success of the call center.

The final issue is the length of the contract. Purchasing services for a long period of time is not recommended. Long relationships are beneficial, but long-term contracts are not. If a company isn’t sure what the call center function is going to look like in two years, then it is very unwise to purchase services for that long. Technology and volume can change considerably in a short period of time. Consider a series of one-year deals that fall into a master contract. New service agreements and terms can be dropped into the master contract annually. Using master contracts helps minimize transaction costs, but keeps the outsourcing relationship flexible.

Call center outsourcing has been sufficiently standardized now, so it is possible to go to an outsourcing consultant and get an integrated procurement package. Consultants help the customer develop service descriptions, negotiate the contract and implement the services. Some consultants also have monitoring software so that companies can check the vendor’s performance. Because the call center has become so standardized, companies should keep transaction costs to a minimum; however, they should take the necessary care to ensure that they are getting the best-possible service at a competitive price.

Peter Bendor-Samuel is the editor and CEO of the Outsourcing Center and president of the Everest Group, an outsourcing services firm.