My how the mighty have fallen. Nortel shares once traded at over $124 each, yesterday fell as low as 8 cents apiece. Frankly they are likely overvalued at that. Please don't misunderstand me I don't believe the company is wothless, just that the current shares are likely to be effectively wiped out as Nortel goes through their reorganization.
For the employees it is business as usual. Those who are still there, about a quarter of the staff that Nortel had just a few short years ago, will carry on and to a large degree so will the company. Seeking bankruptcy protection allows Nortel to avoid making interest and other payments and plan a structured return. The plan will likely involve selling off assets and whole business units.
Nortel has good products and customer base, but I suspect that they will lose some deals due to uncertainty about the future. If you are spending millions on telephony you want to know that the vendor will be around to support their equipment.
I expect Nortel to survive, but it will be a much smaller shadow of its former self.
Thursday, January 15, 2009
Thursday, January 8, 2009
Inadequate Training Costs
Thomas Noftall thought he was a big winner with four scratch and win tickets totalling $135,000. Originally the Ontario Lottery and Gaming Corporation (OLG) said the tickets were misprints and and not winners. Mr Noftall however phoned the OLG call centre and asked if there would be a payment made if there was an error, and he was told there would be. According the OLG CEO Kelly McDougald "that was an erroneous statement."
Because of that "direct miscommunication," OLG "made him a payment in acknowledgment of that pain and suffering."
The amount paid to Mr Noftall was not disclosed.
This story underscores the importance that all agents in a centre understand the policies and procedures and also the risks of inaccurate communication.
Because of that "direct miscommunication," OLG "made him a payment in acknowledgment of that pain and suffering."
The amount paid to Mr Noftall was not disclosed.
This story underscores the importance that all agents in a centre understand the policies and procedures and also the risks of inaccurate communication.
Friday, November 21, 2008
Facts, Figures and Trends
A few more or less random observations on the call and contact center space that has come across my desk in the past few days;
-According to Accenture 68% of respondents to a recent survey reported that they had moved their business to new companies as a result of poor service received at the incumbent firm. This is up from 59% last year. This is even a higher percentage than moved due to price (68% to 53%), in the US in particular this trend was even more pronounced with 73% switching providers due to poor service, compared with 47% who switched based on price!
There is a cost to these defections with half of the respondents reporting moving $4,000 worth of business to new providers.
-33% of consumers said their service expectations were higher this year than they were 12 months earlier, 50% said their expectations were higher than they were 5 years.
-20% said they would leave a company immediately over poor service versus 13% in last years survey.
- Embarq the telecommunications company spun off from Sprint/Nextel has announced that they have replaced their IVR with live agents, due to customer dissatisfaction with automated service. In addition these call are answered domestically.
It looks like it is finally beginning to dawn on companies that superior service can be not only a differentiator, but also one of, if not the primary driver of customer loyalty.
Colin
-According to Accenture 68% of respondents to a recent survey reported that they had moved their business to new companies as a result of poor service received at the incumbent firm. This is up from 59% last year. This is even a higher percentage than moved due to price (68% to 53%), in the US in particular this trend was even more pronounced with 73% switching providers due to poor service, compared with 47% who switched based on price!
There is a cost to these defections with half of the respondents reporting moving $4,000 worth of business to new providers.
-33% of consumers said their service expectations were higher this year than they were 12 months earlier, 50% said their expectations were higher than they were 5 years.
-20% said they would leave a company immediately over poor service versus 13% in last years survey.
- Embarq the telecommunications company spun off from Sprint/Nextel has announced that they have replaced their IVR with live agents, due to customer dissatisfaction with automated service. In addition these call are answered domestically.
It looks like it is finally beginning to dawn on companies that superior service can be not only a differentiator, but also one of, if not the primary driver of customer loyalty.
Colin
Thursday, November 20, 2008
Piss off the Call Center Agent at Your Peril
The following article was published recently the UK Press and I found it to be very chilling.
Whenever any organization outsources work to a third party organization, in tranferring the business they also transfer a great deal of power. Power to mimprove or erode customer relationships and as this news story indicates power that can be used in a punitive manner. Let this story be a wake up call for all of those firms that outsource to ensure that they have appropriate controls and audit trails on changes made to their customer records.
Colin
Indian call centre worker 'froze customer's account and changed his identity' as revenge for having service criticized
By Luke Salkeld
Telephoning a bank's call centre can be a frustrating experience. And after he was finally put through to a 'rude' and 'arrogant' operator, George Bates felt justified in making a complaint. Taking part in a follow-up survey to monitor customer satisfaction, the 23-year-old made clear his opinion of the call centre employee - who took revenge by putting all of Mr. Bates' finances on hold. When he contacted the bank later that day, the self-employed carpenter was unable to access his account for 'security reasons'. He then visited his local branch and was horrified to discover his identity had been swapped to that of a Ugandan divorcee ten years his senior. Mr. Bates also discovered his overdraft facility had been withdrawn and several direct debits had been cancelled - landing him with £60 in charges. He said: 'This arrogant phone operator has obviously seen that I've given him bad feedback and decided to change all my details in revenge. 'I rang up and I couldn't understand a word of what he was saying. He was rude, arrogant, and very pushy. 'He was really unhelpful but he had the cheek to pester me to give him a good rating after the call.' He continued: 'When I heard my details had been changed to Ugandan I was errified that my account had been emptied by somebody else and I'd never have my money ack. 'His spiteful actions have caused me a massive inconvenience and I've changed banks now because I'm scared he could still access my account.' Mr. Bates' rang Abbey's telephone banking service last month to extend his overdraft by £200 to cover direct debits which were due to come out of his account. The operator, who spoke with an Asian accent, extended it from £1,500 to £1,700, but refused to extend it a second time in one day. Mr. Bates claims the worker then pestered him to give maximum scores of seven in an eight-question automated survey which customers take following a call. The frustrated bachelor answered the questions with ones and twos, the lowest scores, because the phone operator had been so unhelpful. But when he rang up the following day to try and extend his overdraft again, he failed to access his account using his correct name, date of birth and account number. He was advised to visit his local branch but was unable to get there during the working week - and then had his cash card swallowed by a hole-in-the-wall dispenser.
The next week he visited the Abbey branch in Broadmead, Bristol, where a manager informed him he was listed on his account as a 33-year-old Ugandan divorcee born in July 1975. The bank manager corrected his details but over the next few days George discovered his overdraft and six direct debits totaling £750 had been cancelled - incurring 4 different charges totaling £60. Mr. Bates, who is single and lives in Bristol, then went back to his bank to demand his overdraft and direct debits were reinstated. All the changes have now been rectified, and Mr. Bates offered £200 in compensation. But he is still not a satisfied customer. He said: 'I am not happy with the service and the fact that the call centre Abbey uses is in India. They offered me £200 compensation but that's not a good apology to me. 'I've been forced to take lots of time off work which has costs me several day's wages and the stress of it all is really frustrating. 'Even though they did eventually sort everything out I'm still unhappy and I'll be switching back to a bank with call centres in Britain.' Abbey, who have five call centres in Britain and two in India - one in Bangalore and one in Pune, say they have 'fully investigated' the incident but refused to confirm whether any disciplinary action has been taken against the worker involved. A spokesperson said: 'An error occurred on Mr. Bates' overdraft. We have since returned his account to the correct position and refunded any charges relating to this error.
'In relation to Mr. Bates' other claims, we can confirm that we have fully investigated these complaints but we do not comment on individual employees.' In 2004, the bank came under fire after announcing plans to close three UK offices, which affected 1,300 jobs and
saw the majority of call centre work transferred to India. The following year following a barrage of complaints from customers, the former building society pledged to bring the jobs back to
Britain.
Originally published on MailOnline
Whenever any organization outsources work to a third party organization, in tranferring the business they also transfer a great deal of power. Power to mimprove or erode customer relationships and as this news story indicates power that can be used in a punitive manner. Let this story be a wake up call for all of those firms that outsource to ensure that they have appropriate controls and audit trails on changes made to their customer records.
Colin
Indian call centre worker 'froze customer's account and changed his identity' as revenge for having service criticized
By Luke Salkeld
Telephoning a bank's call centre can be a frustrating experience. And after he was finally put through to a 'rude' and 'arrogant' operator, George Bates felt justified in making a complaint. Taking part in a follow-up survey to monitor customer satisfaction, the 23-year-old made clear his opinion of the call centre employee - who took revenge by putting all of Mr. Bates' finances on hold. When he contacted the bank later that day, the self-employed carpenter was unable to access his account for 'security reasons'. He then visited his local branch and was horrified to discover his identity had been swapped to that of a Ugandan divorcee ten years his senior. Mr. Bates also discovered his overdraft facility had been withdrawn and several direct debits had been cancelled - landing him with £60 in charges. He said: 'This arrogant phone operator has obviously seen that I've given him bad feedback and decided to change all my details in revenge. 'I rang up and I couldn't understand a word of what he was saying. He was rude, arrogant, and very pushy. 'He was really unhelpful but he had the cheek to pester me to give him a good rating after the call.' He continued: 'When I heard my details had been changed to Ugandan I was errified that my account had been emptied by somebody else and I'd never have my money ack. 'His spiteful actions have caused me a massive inconvenience and I've changed banks now because I'm scared he could still access my account.' Mr. Bates' rang Abbey's telephone banking service last month to extend his overdraft by £200 to cover direct debits which were due to come out of his account. The operator, who spoke with an Asian accent, extended it from £1,500 to £1,700, but refused to extend it a second time in one day. Mr. Bates claims the worker then pestered him to give maximum scores of seven in an eight-question automated survey which customers take following a call. The frustrated bachelor answered the questions with ones and twos, the lowest scores, because the phone operator had been so unhelpful. But when he rang up the following day to try and extend his overdraft again, he failed to access his account using his correct name, date of birth and account number. He was advised to visit his local branch but was unable to get there during the working week - and then had his cash card swallowed by a hole-in-the-wall dispenser.
The next week he visited the Abbey branch in Broadmead, Bristol, where a manager informed him he was listed on his account as a 33-year-old Ugandan divorcee born in July 1975. The bank manager corrected his details but over the next few days George discovered his overdraft and six direct debits totaling £750 had been cancelled - incurring 4 different charges totaling £60. Mr. Bates, who is single and lives in Bristol, then went back to his bank to demand his overdraft and direct debits were reinstated. All the changes have now been rectified, and Mr. Bates offered £200 in compensation. But he is still not a satisfied customer. He said: 'I am not happy with the service and the fact that the call centre Abbey uses is in India. They offered me £200 compensation but that's not a good apology to me. 'I've been forced to take lots of time off work which has costs me several day's wages and the stress of it all is really frustrating. 'Even though they did eventually sort everything out I'm still unhappy and I'll be switching back to a bank with call centres in Britain.' Abbey, who have five call centres in Britain and two in India - one in Bangalore and one in Pune, say they have 'fully investigated' the incident but refused to confirm whether any disciplinary action has been taken against the worker involved. A spokesperson said: 'An error occurred on Mr. Bates' overdraft. We have since returned his account to the correct position and refunded any charges relating to this error.
'In relation to Mr. Bates' other claims, we can confirm that we have fully investigated these complaints but we do not comment on individual employees.' In 2004, the bank came under fire after announcing plans to close three UK offices, which affected 1,300 jobs and
saw the majority of call centre work transferred to India. The following year following a barrage of complaints from customers, the former building society pledged to bring the jobs back to
Britain.
Originally published on MailOnline
Wednesday, October 29, 2008
Outbound, Outsourcing and the New World Order
Outbound, Outsourcing and the new world order
With the introduction of the Do Not Call (DNC) list most people both within the call and contact centre industry and those outside of it, assumed that this would be the death knell for outbound calling. The DNC eliminated huge volumes of people who you couldn’t phone and while there are exemptions and exceptions it forced many firms and organizations to change the way they did business.
Telemarketing or outbound calling was once the primary activity of call centres. Companies employed outbound telemarketing because it works; thirty years ago people often were genuinely happy to receive a call from hundreds or thousands of miles away. Over time more and more companies and organizations began to use to outbound telemarketing themselves or contracted with a third party outsource agency to place call on their behalf. The introduction of predictive dialling greatly improved the number of calls that an agent in a call centre could make and the number of calls soared. Pretty soon consumers were receiving two, three five calls a day and their frustration with telemarketers calling to ‘sell them something’ became common.
Enter the Do Not Call list and the frustration with telemarketing calls crystallized into 150 million Americans signing up. In Canada a DNC list has just been launched and on the first day the number of people calling overwhelmed the operator. It is likely that we will see more than half of all Canadian phone numbers registered under the DNC.
According to Contact Babel Legislation has had an impact on outbound telemarketing activities “14% of respondents said that their outbound calling had greatly
reduced due to legislation, although 56% said that it had reduced in some way (which is up from 41% last year)”. This reduction of outbound activity has been seen over the past decade from approximately a 50/50 split between inbound and outbound to today only an estimated 18% of call centres would define themselves as exclusively or primarily as outbound.
So with fewer people to call what are companies and organizations doing? Perhaps surprisingly they are still calling. Sales calls to new customers are still the number one activity even though the universe of ‘call-able’ numbers has been greatly reduced, cross selling and customer service activities represent other significant segment of outbound telemarketing.
Increasingly companies and organizations look at outsourcing and off-shoring their outbound calling requirements and much of this activity is provided through third party outsource agencies. There are a number of reasons for this:
Outsourced firms tend to cost less than completing the work internally (much less if an offshore provider is employed),
Access to skills, staff and technology that the company may not possess internally,
Compliance issues related to legislation (DNC)
Outbound calling completed by third party firms will generally be completed on a cost per hour basis, on a dollars per sale basis, often called ‘pay for performance’ or P4P, or on a base plus bonus structure. These rate structures reflect risk and which of the parties (outsourcer or client) is accepting the risk. As expected cold call selling is often outsourced on a P4P model as it does not cost the company any money unless the outsource firm actually makes a sale. Of course this is not completely true a company the sponsors high volume P4P campaigns does run the risk of eroding Brand value due to the volumes and/or quality of the calls. Hourly rated programs tend to be service and customer satisfaction type of calls and Upselling, cross-selling and renewal activities are often structured on a base plus bonus basis.
There is a high correlation between P4P programs and offshoring. A casual study completed by the author found that more than 75% of P4P program opportunities reviewed were targeted to offshore firms calling into North America. The reason for this is cost. While it is virtually impossible to make a cost comparison on P4P activities as the unit price varies by product and/or service it is possible to look at hourly costs to establish as baseline. A recent survey completed by The Taylor Reach Group, Inc. found that hourly rates varied across Canada from a low of $20 per hour to a high of $32 per hour for outsource firms located in Canada. Generally Toronto (and other major urban centres) had the highest rates and more distant and/or rural locations had the lower rates. This compares with hourly rates in the $12 to $14 dollar range offshore.
There are challenges and risks to bear in mind before you rush to offshore your outbound telemarketing activities. From an effectiveness perspective these include; language issues, geography issues, inflexible scripting , issues understanding the product or service if it is not prevalent in the culture of the off shore location and issues of context if the offshore agents are not familiar with the culture in North America. There are also risks from a financial point of view; the stated rates do include the cost to source, vet, negotiate nor contract with an offshore service provider, nor do they include the 20%-30% premium to manage an offshore partner. Lastly offshore outsourcers generally have a lower sales conversion rate due to the challenges above. Once these considerations are taken into account to costs offshore become similar to those onshore.
If you are presently completing outbound telemarketing outsourcing to a third party firm should certainly be considered, but you need to ensure that the rate structure is appropriate to the type of calls you wish to have placed (sales, service, satisfaction services etc) that the technology employed is appropriate (predictive, progressive or preview dialling) and that you risks related to legislation are mitigated through a compliance program. The first organization to be fined for violating the US DNC was AT&T, through one of their outsource partners. This is not what you want to have happen.
Outbound telemarketing is not going away any time soon. Companies and organizations that employ or wish to employ outbound calls will need to be vigilant and know and mitigate the risks. Third party outsource firms have developed compliance programs to ensure that their actions are compliant with the rules. Outsource firms have significant risk to their livelihood if they are not operating under the rules, far more than most of their clients would have. And as a result these companies will have and continue to invest in maintaining their compliance.
With the introduction of the Do Not Call (DNC) list most people both within the call and contact centre industry and those outside of it, assumed that this would be the death knell for outbound calling. The DNC eliminated huge volumes of people who you couldn’t phone and while there are exemptions and exceptions it forced many firms and organizations to change the way they did business.
Telemarketing or outbound calling was once the primary activity of call centres. Companies employed outbound telemarketing because it works; thirty years ago people often were genuinely happy to receive a call from hundreds or thousands of miles away. Over time more and more companies and organizations began to use to outbound telemarketing themselves or contracted with a third party outsource agency to place call on their behalf. The introduction of predictive dialling greatly improved the number of calls that an agent in a call centre could make and the number of calls soared. Pretty soon consumers were receiving two, three five calls a day and their frustration with telemarketers calling to ‘sell them something’ became common.
Enter the Do Not Call list and the frustration with telemarketing calls crystallized into 150 million Americans signing up. In Canada a DNC list has just been launched and on the first day the number of people calling overwhelmed the operator. It is likely that we will see more than half of all Canadian phone numbers registered under the DNC.
According to Contact Babel Legislation has had an impact on outbound telemarketing activities “14% of respondents said that their outbound calling had greatly
reduced due to legislation, although 56% said that it had reduced in some way (which is up from 41% last year)”. This reduction of outbound activity has been seen over the past decade from approximately a 50/50 split between inbound and outbound to today only an estimated 18% of call centres would define themselves as exclusively or primarily as outbound.
So with fewer people to call what are companies and organizations doing? Perhaps surprisingly they are still calling. Sales calls to new customers are still the number one activity even though the universe of ‘call-able’ numbers has been greatly reduced, cross selling and customer service activities represent other significant segment of outbound telemarketing.
Increasingly companies and organizations look at outsourcing and off-shoring their outbound calling requirements and much of this activity is provided through third party outsource agencies. There are a number of reasons for this:
Outsourced firms tend to cost less than completing the work internally (much less if an offshore provider is employed),
Access to skills, staff and technology that the company may not possess internally,
Compliance issues related to legislation (DNC)
Outbound calling completed by third party firms will generally be completed on a cost per hour basis, on a dollars per sale basis, often called ‘pay for performance’ or P4P, or on a base plus bonus structure. These rate structures reflect risk and which of the parties (outsourcer or client) is accepting the risk. As expected cold call selling is often outsourced on a P4P model as it does not cost the company any money unless the outsource firm actually makes a sale. Of course this is not completely true a company the sponsors high volume P4P campaigns does run the risk of eroding Brand value due to the volumes and/or quality of the calls. Hourly rated programs tend to be service and customer satisfaction type of calls and Upselling, cross-selling and renewal activities are often structured on a base plus bonus basis.
There is a high correlation between P4P programs and offshoring. A casual study completed by the author found that more than 75% of P4P program opportunities reviewed were targeted to offshore firms calling into North America. The reason for this is cost. While it is virtually impossible to make a cost comparison on P4P activities as the unit price varies by product and/or service it is possible to look at hourly costs to establish as baseline. A recent survey completed by The Taylor Reach Group, Inc. found that hourly rates varied across Canada from a low of $20 per hour to a high of $32 per hour for outsource firms located in Canada. Generally Toronto (and other major urban centres) had the highest rates and more distant and/or rural locations had the lower rates. This compares with hourly rates in the $12 to $14 dollar range offshore.
There are challenges and risks to bear in mind before you rush to offshore your outbound telemarketing activities. From an effectiveness perspective these include; language issues, geography issues, inflexible scripting , issues understanding the product or service if it is not prevalent in the culture of the off shore location and issues of context if the offshore agents are not familiar with the culture in North America. There are also risks from a financial point of view; the stated rates do include the cost to source, vet, negotiate nor contract with an offshore service provider, nor do they include the 20%-30% premium to manage an offshore partner. Lastly offshore outsourcers generally have a lower sales conversion rate due to the challenges above. Once these considerations are taken into account to costs offshore become similar to those onshore.
If you are presently completing outbound telemarketing outsourcing to a third party firm should certainly be considered, but you need to ensure that the rate structure is appropriate to the type of calls you wish to have placed (sales, service, satisfaction services etc) that the technology employed is appropriate (predictive, progressive or preview dialling) and that you risks related to legislation are mitigated through a compliance program. The first organization to be fined for violating the US DNC was AT&T, through one of their outsource partners. This is not what you want to have happen.
Outbound telemarketing is not going away any time soon. Companies and organizations that employ or wish to employ outbound calls will need to be vigilant and know and mitigate the risks. Third party outsource firms have developed compliance programs to ensure that their actions are compliant with the rules. Outsource firms have significant risk to their livelihood if they are not operating under the rules, far more than most of their clients would have. And as a result these companies will have and continue to invest in maintaining their compliance.
Tuesday, October 7, 2008
Incentives in your Centre, What is right for you?
Incentives in your Centre, What is right for you?
How do you motivate your call or contact center agents? I have been asked this question hundreds of times. The questions keep coming up because centers are constantly struggling with how to engage their staff. Engaged staff is more productive, has lower attrition and positively impacts the overall center morale.
Motivation in many centers is a purely tactical activity; Tactical, short term programs and incentives. Other centers take a more strategic approach with over arching incentive, compensation and recognition programs. Tactical programs are generally implemented to drive productivity increases, strategic programs drive productivity, quality and compensation alignment.
There are number tactics and tools employed in both tactical and strategic programs. In this article we examine theses options to provide an overview to what works, what doesn’t and why.
The choices are almost endless: cash, coupons a multitude of gift cards, recognition and rewards schemes and programs. But what are the most effective programs to put into place and what will work best in your center to help you achieve your goals and objectives?
First let’s divide incentives into groups of similar types of incentives: Cash or similar, Travel, recognition and hybrid programs. Cash and similar programs are by far the most popular form of incentives. They are employed both in tactical short term programs as well as on-going and strategic programs. Cash program employ actual money, similar programs employ rewards that are tied to money, but are not cash. These would include gift cards (Amex or Visa cash cards, Retails cards: Best Buy, Sears, Wal-Mart etc., coupons or passes for Restaurants or movie theatres. The most prevalent form of agent incentives is still cash. As the old saying goes “it is always the right size and color”. Cash programs are the easiest to implement, no issues or discussions are required to determine if your staff will be able to use the reward and it is easy to budget and track. Though always welcomed cash incentives can present a number of challenges. These challenges can include the appropriateness of the level of incentive: if the cash level is too low, agents may feel that the incentive is not worth seeking or may even feel insulted by a $0.25 incentive which will actually erode morale in the center and can depress rather than incent improved productivity. In setting a cash program there is instant transparency regarding the value of the incentive a dollar is a dollar, unlike other programs where the value or perceived value may be unknown or variable. So it is critical that the incentives be targeted appropriately to incent the actions or behaviours you wish to reward and not be set too high or too low. At both extremes agents may not be motivated as they perceive the targets to be unattainable or to require too much effort for to little reward. This can be a particular problem with short term tactical programs, strategic programs often are geared to permanent change of behaviour and as such are often commission based or structured on a similar model. These commission models are less incentives and more part of the compensation model.
Gift cards are employed by many centers and this type of incentive often is perceived to be more effective than cash as it the reward doesn’t get frittered away. In the hands or pockets of most agents cash incentives vanish, the money just get spent with no attributable purchase or result. Gift cards and coupons on the other hand generally result in some specific purchase or event being associated with the reward: a book, CD, DVD, dinner out etc. The connection with a tangible purchase or acquisition positively reinforces the value of the incentive each time the agent thinks about what they did with the incentive/reward.
As outlined above caution must be taken in developing the criteria for the reward and specifically with gift cards and coupons the suitability of the incentive to your staff base. For example in a center where the staff earns minimum wage and incentive usable only for electronics may be less well suited to staff that are having trouble buying groceries and cash or grocery gift cards may be better suited to your staff.
Travel incentives are generally employed in long term or on-going strategic programs. Often they are structured to reward the top X performers with a trip to a nice destination (resort or similar). Suitability and appropriateness for your staff is critical in programs of this type. Common in sales call centers travel incentives generally require longer periods of time from start to finish and can be challenged to retain relevance throughout the program. If the trip is for the top sales person and the same person wins each time, other staff will quickly (and sometimes instantly) lose interest in the program as they do not feel they can win. This perception can be a challenge with any ‘all or nothing’ program structure.
Studies regularly inform us that agents value recognition equal to or above cash compensation. As any centre manager will tell you it is important to recognize achievements by agents if you wish to keep your staff motivated. There are too many recognition programs to address all of them individually here but some of the most common programs would include: Employee of the month awards, choice parking privileges, choice of shifts, choice of lunch or break schedules. Some of the most interesting programs can involve contact centre radio stations where the reward is selecting the programming and or coaching the CEO or similar senior executives as they take calls for a day.
Hybrid programs will involve one or more of the above incentive models. These are often structured to reward points for various achievements and performance results. Hybrids can incorporate short term incentives for tactical objectives within the overall point structure. Hybrids can be extremely effective as they can evolve constantly so they are never perceived to be boring or mundane. As they can reward various activities sales, volume, most up-sells, highest customer satisfaction, peer mentoring etc. they hold a broader appeal to agents versus an ‘all of nothing’ incentive. This said Hybrid point systems require more design and management time to build and operate these programs.
So which type of program is right for your centre? Incentive and reward programs can be wonderful tools for centre management to get more from their staff when properly implemented, but they can also increase costs, reduce efficiencies, increase staff turnover and erode employee morale when they are poorly conceived and executed.
While there is no one-size fits all solution, the following checklist can help you to determine what will work best for you in your centre.
Analyze your staff and the suitability of reward types,
Align the objectives of the reward program to centre objectives,
Determine if you should employ a tactical or strategic program,
Identify the behaviours you wish to incent and improve,
Quantify how you will measure these improvements (always employ objective over subjective measurements),
Quantify the impact of the program on the centre, what will we realize as a result of the reward program,
Assess the amount of time it will take to build and manage the program,
Quantify the costs to operate the reward program (hard costs: the rewards themselves and Soft costs: management and reporting),
Develop a Return on Investment (ROI) model for consideration by management.
Whatever programs you choose to implement consult your staff in the development of any program, it the agents after all that you wish to engage through the incentive program.
How do you motivate your call or contact center agents? I have been asked this question hundreds of times. The questions keep coming up because centers are constantly struggling with how to engage their staff. Engaged staff is more productive, has lower attrition and positively impacts the overall center morale.
Motivation in many centers is a purely tactical activity; Tactical, short term programs and incentives. Other centers take a more strategic approach with over arching incentive, compensation and recognition programs. Tactical programs are generally implemented to drive productivity increases, strategic programs drive productivity, quality and compensation alignment.
There are number tactics and tools employed in both tactical and strategic programs. In this article we examine theses options to provide an overview to what works, what doesn’t and why.
The choices are almost endless: cash, coupons a multitude of gift cards, recognition and rewards schemes and programs. But what are the most effective programs to put into place and what will work best in your center to help you achieve your goals and objectives?
First let’s divide incentives into groups of similar types of incentives: Cash or similar, Travel, recognition and hybrid programs. Cash and similar programs are by far the most popular form of incentives. They are employed both in tactical short term programs as well as on-going and strategic programs. Cash program employ actual money, similar programs employ rewards that are tied to money, but are not cash. These would include gift cards (Amex or Visa cash cards, Retails cards: Best Buy, Sears, Wal-Mart etc., coupons or passes for Restaurants or movie theatres. The most prevalent form of agent incentives is still cash. As the old saying goes “it is always the right size and color”. Cash programs are the easiest to implement, no issues or discussions are required to determine if your staff will be able to use the reward and it is easy to budget and track. Though always welcomed cash incentives can present a number of challenges. These challenges can include the appropriateness of the level of incentive: if the cash level is too low, agents may feel that the incentive is not worth seeking or may even feel insulted by a $0.25 incentive which will actually erode morale in the center and can depress rather than incent improved productivity. In setting a cash program there is instant transparency regarding the value of the incentive a dollar is a dollar, unlike other programs where the value or perceived value may be unknown or variable. So it is critical that the incentives be targeted appropriately to incent the actions or behaviours you wish to reward and not be set too high or too low. At both extremes agents may not be motivated as they perceive the targets to be unattainable or to require too much effort for to little reward. This can be a particular problem with short term tactical programs, strategic programs often are geared to permanent change of behaviour and as such are often commission based or structured on a similar model. These commission models are less incentives and more part of the compensation model.
Gift cards are employed by many centers and this type of incentive often is perceived to be more effective than cash as it the reward doesn’t get frittered away. In the hands or pockets of most agents cash incentives vanish, the money just get spent with no attributable purchase or result. Gift cards and coupons on the other hand generally result in some specific purchase or event being associated with the reward: a book, CD, DVD, dinner out etc. The connection with a tangible purchase or acquisition positively reinforces the value of the incentive each time the agent thinks about what they did with the incentive/reward.
As outlined above caution must be taken in developing the criteria for the reward and specifically with gift cards and coupons the suitability of the incentive to your staff base. For example in a center where the staff earns minimum wage and incentive usable only for electronics may be less well suited to staff that are having trouble buying groceries and cash or grocery gift cards may be better suited to your staff.
Travel incentives are generally employed in long term or on-going strategic programs. Often they are structured to reward the top X performers with a trip to a nice destination (resort or similar). Suitability and appropriateness for your staff is critical in programs of this type. Common in sales call centers travel incentives generally require longer periods of time from start to finish and can be challenged to retain relevance throughout the program. If the trip is for the top sales person and the same person wins each time, other staff will quickly (and sometimes instantly) lose interest in the program as they do not feel they can win. This perception can be a challenge with any ‘all or nothing’ program structure.
Studies regularly inform us that agents value recognition equal to or above cash compensation. As any centre manager will tell you it is important to recognize achievements by agents if you wish to keep your staff motivated. There are too many recognition programs to address all of them individually here but some of the most common programs would include: Employee of the month awards, choice parking privileges, choice of shifts, choice of lunch or break schedules. Some of the most interesting programs can involve contact centre radio stations where the reward is selecting the programming and or coaching the CEO or similar senior executives as they take calls for a day.
Hybrid programs will involve one or more of the above incentive models. These are often structured to reward points for various achievements and performance results. Hybrids can incorporate short term incentives for tactical objectives within the overall point structure. Hybrids can be extremely effective as they can evolve constantly so they are never perceived to be boring or mundane. As they can reward various activities sales, volume, most up-sells, highest customer satisfaction, peer mentoring etc. they hold a broader appeal to agents versus an ‘all of nothing’ incentive. This said Hybrid point systems require more design and management time to build and operate these programs.
So which type of program is right for your centre? Incentive and reward programs can be wonderful tools for centre management to get more from their staff when properly implemented, but they can also increase costs, reduce efficiencies, increase staff turnover and erode employee morale when they are poorly conceived and executed.
While there is no one-size fits all solution, the following checklist can help you to determine what will work best for you in your centre.
Analyze your staff and the suitability of reward types,
Align the objectives of the reward program to centre objectives,
Determine if you should employ a tactical or strategic program,
Identify the behaviours you wish to incent and improve,
Quantify how you will measure these improvements (always employ objective over subjective measurements),
Quantify the impact of the program on the centre, what will we realize as a result of the reward program,
Assess the amount of time it will take to build and manage the program,
Quantify the costs to operate the reward program (hard costs: the rewards themselves and Soft costs: management and reporting),
Develop a Return on Investment (ROI) model for consideration by management.
Whatever programs you choose to implement consult your staff in the development of any program, it the agents after all that you wish to engage through the incentive program.
Tuesday, September 30, 2008
Recessions and Contact Centers
Impact of a recession on contact centers
The US economy is generally thought to be in a recession today the Canadian economy is slowing and many fear is heading towards a recession as well. In the face of declining consumer confidence and spending many companies and organizations are looking to reduce expenses and improve efficiencies to help them weather the upcoming economic storm. What are the prospects for those of us employed in the contact center industry given the uncertain economic times? In this article we will examine the prospects for call and contact centers in the coming uncertain economic and potentially recessionary times.
Call and contact center were born from efficiency initiative: by gathering all of the staff that dealt with customers in one place a company was able to provide centralized management of staff, gained the ability to employ premise based technology such as Automatic Call Distributors (ACD’s) and provide more consistent responses to customer and prospect inquiries. All of these elements drove improved staff effectiveness and operational efficiency.
As companies realized the value of call centers as a lower cost method of providing customer service and support many of the traditional channels for customer service were scaled back or eliminated…when was the last time you went to your cable company’s office to speak to someone about your bill? The consolidation of service delivery channels spurred even more growth in call and contact centers.
In the past ten years an increased focus on efficiency has led to organizations working diligently to try to further reduce expenses in their contact centers and/or generate revenues to help offset or defray these expenses. The drive for ever increasing efficiency has led to a dramatic increase in outsourcing and offshoring of customer service and technical support activities, an increase in technologies to support self service and service automation within contact centers.
What is the prognosis today for contact centers in recessionary times? They say that those who ignore history are condemned to repeat it and in this case the past presents strong themes which will govern the call/contact centers in the near term. The recurring themes have been: efficiency, technology and outsourcing, all three of these themes will continue to govern the landscape as we move forward into an economic slowdown or recession.
All three of the themes (efficiency, technology and outsourcing) will continue to combine and drive changes in contact centers. Companies faced with uncertain economic prospects will tighten their belts and look for ways to reduce costs. This cost reduction exercise will lead to increased examination of outsourcing as a potential solution. Outsourcing can, when it is well researched and executed can reduce operational costs and at the same time maintain or even improve service quality. Offshoring the call or contact center activities can further reduce the costs, but carry a significantly increased risk of service and quality erosion. Outsourcing can reduce costs through three primary organizational traits: labour arbitrage (they operate in lower cost environments and pay less than in-house centers), technology (they employ state of the art technologies that in-house centers may find difficult to fund) and process management (outsource agencies only provide outsource services and as such they have developed very robust operational model and highly efficient processes that are often absent form in-house centers).
The primary reason for an organization electing not to outsource their call or contact center activities is political, they have determined that they must serve their customers directly. Such organizations will look to technology as a driver for increased efficiency. Where once technology and the desire for efficiency motivated companies to create call centers to centralize and simplify service management, today technology and the desire for increased efficiency now leads companies to promote tele-working and home based agents. Home agents can access all of the tools that are generally available in a contact center and are delivered via the internet, often through a secured VPN. The voice can be delivered through the internet and/or through assuming the agents home phone line. Home or virtual agents reduce or eliminate the need for ‘bricks and mortar’ contact center saving the company on real estate and operating costs and further since the most common model is to employ home agents as ‘independent contractors’ the company eliminates their benefit and burden costs associated with employees, finally home agents have reduced expenses versus agents who work in a contact center: no transportation costs, reduced meal and wardrobe expenses and this often leads to lower labour related costs. Technology also can play a role in improving efficiency and reducing costs through the increased use of self-service options and non telephone contact channels. We are all familiar with the dreaded Interactive Voice Response (IVR) system, that prompts us to enter one for this and two for that yet never somehow actually seems to have the information we seek nor any easy or logical way of getting to a live agent. IVR’s are ubiquitous today and are increasingly being replaced by voice enabled systems and systems such as Bells’ Emily that mimic a live agent interaction. More and more companies will direct inquiries to the web and reduce or eliminate access to live agents. Alternate communication technologies will also see increased use in poor economic times as they offer lower costs while still providing a level of service. These technologies include email integrated into the contact center, web chat and even SMS messaging.
Companies and centers’ under economic pressure may intentionally degrade the quality of service they provide: increasing the average speed of answer, the abandon rate or the resolution rate and laying off staff. These tactics can reduce costs, but it is a dangerous strategy to risk customers’ ire in this way.
Some companies will degrade service and, many companies will adopt or pursue Outsourcing, home agents, and technology enhancements and a few organizations may seize upon service as a key differentiating factor separating their contact center from those of their competitors. We have seen this happen already in the UK where a major bank in their television ads focuses on the fact that their contact centers are in the UK and not offshore. In the ‘Book of Five Rings’ it states “in chaos there is opportunity” and economic slowdowns and recessions can create chaos in contact center and service focused organizations. With most of the companies scaling back, degrading service, increasing automation there is likely a great opportunity for other firms to increase and improve service quality, and promote this as a key element of their value proposition. These same companies can employ outbound tele-sales and direct marketing to target competitors’ customers and increase share while the competitors have ‘hunkered down’ to ride out the storm.
Regardless of the tact your company elects to pursue in recessionary times, your contact will likely change and continue to evolve and each company must determine their own equation to calculate the impact on their company and brand of reduced service, increased automation on their customers’ loyalty. Regardless of the strategy employed we will be experiencing the Chinese blessing or curse of “living in interesting times”.
Contact Colin Taylor @ ctaylor@thetaylorreachgroup.com
The US economy is generally thought to be in a recession today the Canadian economy is slowing and many fear is heading towards a recession as well. In the face of declining consumer confidence and spending many companies and organizations are looking to reduce expenses and improve efficiencies to help them weather the upcoming economic storm. What are the prospects for those of us employed in the contact center industry given the uncertain economic times? In this article we will examine the prospects for call and contact centers in the coming uncertain economic and potentially recessionary times.
Call and contact center were born from efficiency initiative: by gathering all of the staff that dealt with customers in one place a company was able to provide centralized management of staff, gained the ability to employ premise based technology such as Automatic Call Distributors (ACD’s) and provide more consistent responses to customer and prospect inquiries. All of these elements drove improved staff effectiveness and operational efficiency.
As companies realized the value of call centers as a lower cost method of providing customer service and support many of the traditional channels for customer service were scaled back or eliminated…when was the last time you went to your cable company’s office to speak to someone about your bill? The consolidation of service delivery channels spurred even more growth in call and contact centers.
In the past ten years an increased focus on efficiency has led to organizations working diligently to try to further reduce expenses in their contact centers and/or generate revenues to help offset or defray these expenses. The drive for ever increasing efficiency has led to a dramatic increase in outsourcing and offshoring of customer service and technical support activities, an increase in technologies to support self service and service automation within contact centers.
What is the prognosis today for contact centers in recessionary times? They say that those who ignore history are condemned to repeat it and in this case the past presents strong themes which will govern the call/contact centers in the near term. The recurring themes have been: efficiency, technology and outsourcing, all three of these themes will continue to govern the landscape as we move forward into an economic slowdown or recession.
All three of the themes (efficiency, technology and outsourcing) will continue to combine and drive changes in contact centers. Companies faced with uncertain economic prospects will tighten their belts and look for ways to reduce costs. This cost reduction exercise will lead to increased examination of outsourcing as a potential solution. Outsourcing can, when it is well researched and executed can reduce operational costs and at the same time maintain or even improve service quality. Offshoring the call or contact center activities can further reduce the costs, but carry a significantly increased risk of service and quality erosion. Outsourcing can reduce costs through three primary organizational traits: labour arbitrage (they operate in lower cost environments and pay less than in-house centers), technology (they employ state of the art technologies that in-house centers may find difficult to fund) and process management (outsource agencies only provide outsource services and as such they have developed very robust operational model and highly efficient processes that are often absent form in-house centers).
The primary reason for an organization electing not to outsource their call or contact center activities is political, they have determined that they must serve their customers directly. Such organizations will look to technology as a driver for increased efficiency. Where once technology and the desire for efficiency motivated companies to create call centers to centralize and simplify service management, today technology and the desire for increased efficiency now leads companies to promote tele-working and home based agents. Home agents can access all of the tools that are generally available in a contact center and are delivered via the internet, often through a secured VPN. The voice can be delivered through the internet and/or through assuming the agents home phone line. Home or virtual agents reduce or eliminate the need for ‘bricks and mortar’ contact center saving the company on real estate and operating costs and further since the most common model is to employ home agents as ‘independent contractors’ the company eliminates their benefit and burden costs associated with employees, finally home agents have reduced expenses versus agents who work in a contact center: no transportation costs, reduced meal and wardrobe expenses and this often leads to lower labour related costs. Technology also can play a role in improving efficiency and reducing costs through the increased use of self-service options and non telephone contact channels. We are all familiar with the dreaded Interactive Voice Response (IVR) system, that prompts us to enter one for this and two for that yet never somehow actually seems to have the information we seek nor any easy or logical way of getting to a live agent. IVR’s are ubiquitous today and are increasingly being replaced by voice enabled systems and systems such as Bells’ Emily that mimic a live agent interaction. More and more companies will direct inquiries to the web and reduce or eliminate access to live agents. Alternate communication technologies will also see increased use in poor economic times as they offer lower costs while still providing a level of service. These technologies include email integrated into the contact center, web chat and even SMS messaging.
Companies and centers’ under economic pressure may intentionally degrade the quality of service they provide: increasing the average speed of answer, the abandon rate or the resolution rate and laying off staff. These tactics can reduce costs, but it is a dangerous strategy to risk customers’ ire in this way.
Some companies will degrade service and, many companies will adopt or pursue Outsourcing, home agents, and technology enhancements and a few organizations may seize upon service as a key differentiating factor separating their contact center from those of their competitors. We have seen this happen already in the UK where a major bank in their television ads focuses on the fact that their contact centers are in the UK and not offshore. In the ‘Book of Five Rings’ it states “in chaos there is opportunity” and economic slowdowns and recessions can create chaos in contact center and service focused organizations. With most of the companies scaling back, degrading service, increasing automation there is likely a great opportunity for other firms to increase and improve service quality, and promote this as a key element of their value proposition. These same companies can employ outbound tele-sales and direct marketing to target competitors’ customers and increase share while the competitors have ‘hunkered down’ to ride out the storm.
Regardless of the tact your company elects to pursue in recessionary times, your contact will likely change and continue to evolve and each company must determine their own equation to calculate the impact on their company and brand of reduced service, increased automation on their customers’ loyalty. Regardless of the strategy employed we will be experiencing the Chinese blessing or curse of “living in interesting times”.
Contact Colin Taylor @ ctaylor@thetaylorreachgroup.com
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