4: Contact Centres and IVRs
Call centers began as a convenience for customers and a cost-savings to organizations when compared to branch offices. Unfortunately, it has devolved to a place that provides bad service to customers and a "soul destroying" occupation for employees, which is evidenced by an employee turnover that averages 25% and can be as high as 60% to 80% at some firms. Such high turnover results in staff that is perpetually inexperienced, not fully trained, and poorly motivated - and there is a commensurate impact on the customer service they deliver.
In addition to employee turnover, there are several key issues affecting the modern call center: poor information (staff is task with selling a product that's not appropriate to the customer), inconsistent communication (each call or transfer means "starting over" with a new rep), poor access to information (the customer must be transferred to a different department)., poorly designed navigation systems (the "voice menu" to get to the right department), outdated technology (no support for chat and video interaction), a penchant for hard-sales (even when the customer calls for another reason), customer dissatisfaction (with the speed and quality of service received), and high cost (while cheaper than a branch office, the cost-per-transaction remains higher than other channels).
Clearly, the call center channel is "broken," and from a customer-service perspective, the instance when calling a company results in a prompt and effective resolution to a problem has become exceedingly rare. It's worth noting that call centers are not a new phenomenon - they have been in use for over three decades - which would seem to be ample time to identify and solve the problems ... but instead, they seem to be deteriorating.
Capitalizing on Sales Opportunities
Initially, contact centers were designed with the intention of servicing existing clients, to save the cost of extending service hours and brick-and-mortar branches or the higher cost of building new ones. Shortly thereafter, outbound service centers sprang up, and it was found that calling prospects at home was a more effective way of selling certain products than traditional advertising and mail promotion.
Outbound promotion was so cheap and effective that it was overdone - customers felt harassed by the barrage of inbound sales calls, and eventually, legislators stepped in to regulate the practice of telemarketing and impose "do not call" lists - effectively enabling customers to place a restraining order of firms that sought to do business with them.
In reaction, firms moved selling initiatives to inbound calls - such that a customer who called a number (at their own expense) to deal with a service issue was subjected to strong-arm marketing tactics to obtain additional products, and customers who sought to cancel accounts were routed through a process designed to keep their business at any cost. The notion of customer service took a back-seat to sales.
The main cause of failure in telemarketing, and the chief objective to address, is better targeting: find the right customer for the product and contact them at the right time. Second is the need to shift from hard-selling products the customer does not need to "service-selling" the products that would be beneficial to them.
While cold-calling masses of customers on the premise that some percentage will buy has been the mantra of telemarketing, it's been found that there is a long-term detrimental effect to both customer acquisition and customer loyalty: a customer who receives a bad pitch for a poorly selected product becomes less likely to listen to any future offer, even one he might otherwise of accepted. And customers who feel badgered by a firm with which they do business will, over time, take their existing products elsewhere.
Especially for inbound solutions, where the information about the customer's existing products and buying behavior is known, it should be possible to better target an offer to the customer. This requires the implementation of customer analytics, business intelligence, and offer management, to identify (and create) offers that would be appealing to each customer.
A few loose notes on offers: "offers" are differentiated from "campaigns" in that the former are targeted to individuals (not demographic segments), consider the benefits to the customer rather than the sales goals of the company, and there generally is not a scripted sales-pitch for an offer.
The author differentiates between three types of scripts for sales conversion: (1) acquisition of new customers, which is the most difficult because you are dealing with an unknown party, (2) cross-sells of products, based on those already owned by the customer, and (3) up-sells to convert a product from one line to a substitute (e.g., matriculating a "gold card" holder to a "platinum card" account).
There are also various objectives for offers: get a customer to re-purchase products they are no longer buying, get a customer to make greater use of a product he owns, get a customer to purchase a product that would be of immediate use, get a customer to buy a product that would grant him more capabilities, swap out one product for another that would be a better deal, suggest a product that is complementary to one the customer presently owns, or identify a product that meets a time-specific need.
When an offer is well thought-out, the customer has the impression that the salesman is attempting to help him (rather than push a product), and is more amenable to listening to the offer and, ultimately, to purchasing the product.
The author gives the example of an auto loan: his bank should be able to tell, by his account transactions, when he is in the market for an automobile - and should be able to call him at the right time to offer him the product. Moreover, if the bank went the extra mile, offered to meet or beat the dealer financing offer, and even assist him in the negotiation process, he'd be more likely to give them his auto loan business. But since his bank doesn't do such things, it's likely he will go with dealer financing.
The author suggests that there should be, within the bank, a dedicated "customer dynamics team" charged with analyzing customer data to identify what products a customer might need, when they might need them, then preparing the offer for a service rep to extend. And moreover, that the service representatives who handle inbound calls should refrain from belaboring inbound callers with solicitations except in the case where there is an appropriate offer to extend.
Staff Turnover and Employee Engagement
The value of call center staff is vastly underestimated by banks: these are the individuals on the front line of service, who represent your company to customers and prospects, and who handle the customers at key decision-making points and in difficult situations (a customer who calls with a problem is not happy, and their future business is in jeopardy). The author heaps on a few anecdotes about egregious customer service that he and his acquaintances have had dealing with banks via phone.
There is a description of a typical call center: a hectic and intense atmosphere of constantly ringing, handled by low-wage workers who are pressured to handle calls quickly. Most of them are fairly routine transactions, but some of them are people with special needs or bizarre problems that the reps have no training or authority to solve.
(EN: This is not unique to call centers. In many industries, such as retailing and food service, the employees who interact directly with the customer, and who represent the brand and have the greatest influence on customer satisfaction, are often part-time minimum-wage workers whom the company treats very poorly, and who in turn treat the customers rather badly.)
Some of the causes of turnover, such as economic conditions and the local labor market, are beyond control - but most of them can be controlled: non-competitive compensation, stress, unpleasant working conditions, monotony, poor training, poor hiring, and poor supervision. All of these can be improved. And while the common excuse for neglecting them is expense, remedying such problems is cheaper, in the long run, than constantly hiring and training replacements for workers who have left.
Team leaders need to be taught to lead more effectively, and they need to demonstrate vision. It's not enough to say "we are customer-focused" or "service is our business". The culture of service needs to start at the top and filter down through the organization every day. If you create an organization that lives and breathes a positive service culture, it will also create a positive working environment.
Primarily, banks must seek to establish a "culture of service" in their call centers. While it's a popular notion firms pay lip-service to, few invest budget dollars in training and development, and even fewer have performance metrics related to quality of service rather than quantity of calls. These measures not only improve customer service, but reduce turnover.
(EN: The author refers to an acquaintance who specializes in re-tooling customer service in call centers, but gives this very superficial treatment, not wanting to disclose the content of the person's book/course. I'm skipping it in note-taking, because it's random and staccato, and while it's germane to the present book, the author doesn't go into sufficient depth.)
In the end, employee turnover can be reduced by addressing the same problems that cause customer service to be poor: a customer-service focus gives the employees responsibility, authority, and a sense of purpose - all of which are key to job satisfaction and employee retention.
Consistency and Quality of Communication
While some banks are developing strategies for call quality, it's largely fractured, and there is no consolidated strategy that addresses all channels and all products. From the organization's perspective, products are the demesne of specific departments, and different staff is assigned to different channels. From the customer's perspective, it's all one company, and it seems disorganized and unprofessional when the people they communicate with don't have access to the same information.
The author mentions e-mail as being dangerous, as it's the one channel that creates a record of extemporaneous communications by low-level staff (most written communication is heavily vetted, or at least is prepared by someone who puts greater consideration into the content of a letter). As such, it can lead to public service problems (and legal ones) of "epic proportions."
(EN: The author rails against e-mail a while: there's too much of it, employees approach it too casually, and it's a "dysfunctional way to work" and is to be blamed for the "deterioration of communication skills." He lays it on too thick and seems to be on a rant, and so loses credibility. To substitute a rational perspective: e-mail is a valid channel, which is preferred by some customers, and is not inherently evil. However, it should be assigned to employees who have passable writing skills, and they should be trained and coached to ensure they take an appropriate tone with customers.)
Quick Access to the Right Information
Lack of information is an organizational issue. Call center staff often do not have access to information because it is not germane to the product(s) they handle, and the information systems are designed to follow a very specific service path, and does not account for the natural patterns of conversation.
On top of that, the IT department generally exercises great authority, to the point of autocracy, in determining the systems that are available and the "rights" of each user to access information, and does so on a need-to-know basis. And typically, the systems in use are a succotash of off-the-shelf software geared toward specific needs (a bank system, a credit card system, etc.) that do not share information with one another and make it largely inaccessible outside the system itself. Many of them are run in DOS mode, even to this day.
Ironically, the customer who visits the company Web site can often very easily pull up a single-screen interface that shows all of his accounts and provides ready access to each one. The call service staff would have to use several different systems to get the same information.
There is not presently a single-view customer dashboard available on the market, largely because there are a myriad of systems from competing companies that are designed not to share information externally (EN: the main reason for this is suppliers do not play nicely - and either do not see a value in cooperating, or seek to use opacity as a way to retain customers or encourage them to use their brand for everything, even those operations they do not do very well.)
The author proposes a design for a single-screen customer dashboard that presents personal information, account information, a contact history for all channels, and sales opportunities. (EN: he provides a sketch that is very primitive and quite lousy - a good notion, but really bad interface design, so I'm skipping the particulars of his dashboard design).
The IVR System
Many banks use "Interactive Voice Response" systems to enable customers to direct their own calls through a menu of options to reach the right department - and which customers universally hate because it's often a lengthy process just to get through the labyrinthine phone system to someone who can help.
It's ironic that when you call a sales number, someone picks up right away - but for service, you have to run the gantlet. It seems companies are aware that the IVR system is rotten, and while they don't want people to be frustrated when they want to buy something; it's entirely acceptable to treat them this way when they need service on a product they already own. And to add insult to injury, many sales numbers are toll-free calls, where as the service desk is a call for which customers must pay long-distance fees - and some companies even use premium calling (the equivalent of a 900 number) with a per-minute charge.
This types of problems ultimately occur because companies see the IVR system as a method of saving the cost of an operator to route calls appropriately, and do not consider how negatively this impacts the customer's perception of service. In fact, the metrics are geared to score a "success" if the customer gets so frustrated he hangs up on the system (it's added to the count of customers whose issues were addressed by the system, without having to talk to a rep).
The short answer is to provide customers a direct way to get to a human operator - and it's noted that customers have figured out ways to "hack" around the IVR menu, and have shared these tricks online. But to the business seeking to save salary costs, this is undesirable.
The author then goes into extensive detail about how to design an IVR menu system, providing a quicker and more natural path to the solution they need. (EN: and again, the concept is good, but the execution is bad, so I'm skipping much of the details about the author's specific solution.) It's to his credit that he mentions some of the basic principles of user interface design: consider the most common queries, provide a logical path, build a prototype and test it, monitor the performance of the production system with an eye toward improvement.
Making New Technologies Pay
In the last few decades, there has been an explosion in communication technology, providing an array of new technologies that can be used by a contact center to support customers. From the institutional perspective, the major issue is the cost-effectiveness of adapting technologies, and assessing whether each emerging technology constitutes a new channel that will have longevity beyond a temporary fascination.
It's noted that financial institutions are particularly skittish about new technology: web-based mail services, social media, and other developments are often cut off internally for fear that employees will misuse them (to waste time, or disclose privileged information). In addition to being unable to get service through the channel of choice, the customer is left to wonder: whether it is prudent to place your trust in employees who are not trusted by their own company.
The author mentions the seedy beginnings of the digital channel: the bulletin board systems that began in the 1980's as ways for computer nerds to exchange stolen software and tips for hacking into corporate systems, the pervasive interest in pornography and salacious conversation, and the obnoxious loudmouths who dominated even general-interest forums. Naturally, this was entirely unappealing to commerce. But as the dot-com universe expanded, and attracted "normal" people for "legitimate" purposes, commercial interest grew - but always with an air of reluctance and suspicion. By now, it should be clear than the digital media have matured and entered the mainstream, but its seedy origins still color public and corporate perception.
The author goes into great detail about government resistance to technology - in effect, seeing the Internet and other communication technologies as a threat to their moral or political agenda (attempting to control the flow of objectionable ideas) or as a tool of espionage. This persists in totalitarian regimes such as China and Saudi Arabia who, while deaf to the objections of civil rights activists, are also under pressure from free-trade organizations such as the WTO, who see censorship as inconsistent with trade agreements such as GATS.
And while companies, particularly the telecoms that provide internet access, have attempted to control communication for more practical than political reasons (chat, especially video chat, is bandwidth-intensive), they are more subject to censorship charges. However, outside of ISPs, companies have been successful in defending their "right" to select which channels they wish to support - demand to be able to access service by "chat" has been dismissed as representing a small minority of customers.
Ultimately, it is consumer demand that will drive banks to adopt and support new technologies. More conservative banks will refrain from supporting a channel until there is sufficient customer demand - but by the time stodgier institutions reluctantly accept a new technology, it will have been adopted by more innovative and nimble firms that have used their support of new channels as a competitive advantage to wean customers away. It is therefore in the interest of banks to be more proactive in adopting emerging technologies and supporting emerging channels before the customers are lost to others.
Many of the technologies today are easily leveraged - but placing some code into your site, a customer can launch a chat session using a free, open-source client. The author asks: Why not do it? Just allow the customer to enter their Yahoo or Skype ID and begin chatting to customer service. (EN: Sadly, this is not one of those rhetorical questions that leads the author to discuss why it's a very bad idea - the information that follows stresses how great and cheap the technology is, the benefits to be gained, and advocates an aggressive implementation schedule, choosing to ignore rather than address legitimate concerns about privacy and information security.)
On the other hand, the author discusses problems with voice recognition, and the level of frustration customers have with technology that is conceptually nifty, but in spite of a few decades of development, remains awkward and inaccurate. And so it's a balancing act: if you wait too long, customers may leave for a competitor who supports a technology, and if you jump too soon, customers may leave for a competitor whose service is more reliable.
Going Green
Digital operations can contribute to green-friendly corporate initiatives by eliminating paper forms and statements, a notion supported by customers that also has the benefit of significant cost savings from printing and mailing.
In some instances, paperless transactions can also streamline processes. For example, a customer who has been with a bank for ten years expects is still required to fill out an application form for a credit card or a loan - when the bank should know, from the activity in their bank accounts, virtually all the information that is requested by the form (name, address, annual income, etc.)
It's also noted that providing an application form in a digital format boosts product sales. While some statistics indicate a higher drop-rate for electronic forms (a person who comes to a bank in person is less likely to bolt and run in the middle of filling out an application), the gross number of applications is significantly higher, and the necessity of visiting a physical location during store hours is a significant barrier to shopping for financial services.
To take things a step further, digital application should be implemented in the branch as well as online. In many instances, a customer who could complete an electronic form online is still presented a paper form in a branch office. It makes no sense, and providing a terminal where an application can be submitted electronically is certain to justify its cost-savings (printing, paper, data-entry labor).
The largest obstacle to going paperless are regulatory: paper forms and physical signatures are required by the law and regulatory agencies, and the legal system is built on the need for a paper trail. That said, digital transactions, e-signatures, and the like are gaining acceptance by regulators, and increasingly unnecessary for banks.
Outsourcing
Since call centers are seen as a standard rather than a differentiator, and since the cost of operating a center is mostly labor, banks sought to minimize the expense of cost-centers by outsourcing labor to other countries. It's noted that this was a "compromise" that recognized customer rejection of IVR systems.
The trend has been tremendous. For example, 52% of the GDP growth in India is attributed to call centers that support customers in more developed markets (75% of that is US alone). Other developing countries are looking to get into the market, fueling competition and driving costs down. But on the other hand, there is significant "customer backlash" against outsourcing.
The main advantage of outsourcing is cost reduction. Due to lower labor costs, the average cost of handling a call in India is $0.65 compared to $2.28 in the US. This leads to cost savings which can be collected on the bottom line, invested in increasing service, or used to offset more competitive product pricing.
Also, while telemarketing is considered an undesirable job in the USA, it has greater appeal overseas, where the salaries are higher than other options in the local market. Call centers can therefore attract high quality staff, turnover is low, and employee motivation and morale is high.
It's also noted that there are secondary benefits to outsourcing: the ability to offer around-the-clock service, the ability to flex workforce to deal with peak demand periods, etc.
On the negative side, customers report they don't feel they get the same quality of service from offshore representatives, which is generally a matter of language, and the author presents statistical evidence for the former (a study that found that 18% of calls included some difficulty due to language, and average call times to overseas centers is 40-100% longer than domestic call centers).
(EN: customer service is also a matter of culture. This is not entirely unique to outsourcing, as there are cultural differences domestically, but it is greatly pronounced when the customer and service rep are half a world apart, and can contribute significantly to customers' perception of service quality.)
A larger concern is the higher incidence of fraud in overseas call centers, and there is anecdotal evidence of detailed person information that is easily obtained by bribing employees of offshore call centers.
There si also the notion that, as the economy of foreign countries improves, the cost of living increases and wages must also increase. Currently, the wages offered to offshore reps have steadily risen by 15% per annum, such that over time the cost advantage may no longer be appreciable.
(EN: The author stays well clear of the political issues surrounding outsourcing - which is probably just as well, as it's a quagmire. However it's, worth mentioning that public perception and the sentiment against "exporting jobs", has the potential to influence regulators to place firmer restrictions on the practice.)
The author mentions the trend of "home sourcing" or "virtual call centers" - in which companies enable employees to work from a home office rather than a call center. This saves the overhead cost of office space, and is assumed to be more appealing to individuals who are not in the current labor pool because of their physical location or other needs (such as physical disabilities) that prevent them from commuting to an office environment.
Early experiments suggest that home-based workers are more flexible and tend to be more loyal. However, the drawbacks include having less data security, being unable to closely monitor staff, and inefficiency in training and staff communications.
Customer Advocacy
The author uses the term "customer advocacy" as a superlative of customer service, in that it entails empowering the employee to act on the customer's behalf, not merely provide "service" within the prescribed guidelines permitted by the company. To be direct: it means the employee is expected to negotiate and act in the best interest of the customer, even if it means talking the customer out of a sale.
It's suggested that enabling customer advocacy requires an additional layer of technology and support staff: the technology to track communications across channels, and staffers who are authorized to act as customer advocates (EN: other sources recommend this power be delegated to the rank-and-file and not held by a special caste of super-representative)
Of particular importance is a shift to solving problems: a customer advocate must accept end-to-end responsibility for solving a problem - they may engage other personnel to assist, but do not disengage. This includes keeping track of progress and updating the customer during delays, "owning" the problem until it is solved to the customer's satisfaction, then performing after-action analysis to determine if the problem will be ongoing and a systemic solution is needed.
This differs greatly from the procedural approach, where the employee is limited to specific functions, must follow procedure regardless of the nature of the problem, and is generally motivated to dispose of the customer as quickly as possible, by either referring the customer to another employee or closing the call without solving the problem to the customer's satisfaction.
Ultimately, the goal is for the customer advocate to develop a relationship of trust between the customer and the company, which is done by acting with genuine intent to serve the client's best interest. This may be detrimental to sales and profit in the short term, but improves the quality of service, with the long-term benefits of increased lifetime value (from retention) and share of wallet (additional products, or additional usage of existing ones, over time) .
Tactical Channel Improvement
The author provides a list of ideas for tactical initiatives to improve the quality of service in call centers, but it's repetitive of the information above (consider home sourcing, be aggressive in adopting new technologies, reconsider the flow of IVR system, provide a customer "dashboard", empower customer advocates, etc.)