Many call centers have been in a cost-controlling, cost-cutting mode, in response to their organizations’ efforts to remain strong in an uncertain economy. Some have been successful, but many others have seen cost-control and cost-cutting efforts backfire in the form of new and/or hidden costs, frustrated employees and dissatisfied customers.
One thing is certain: Because of the nature of random call arrival and the reality of queues, simply “reducing costs across the board” does not work well in the call center environment. Insufficient staff, trunks or other resources can quickly lead to long customer queues, additional contacts (e.g., when customers use multiple numbers or contact channels to reach the organization) and intolerable agent occupancy rates.
It is, however, possible to control and cut costs successfully while maintaining optimal service levels if you adhere to the following principles:
• Reassess The Organization’s Customer Access Strategy
• Identify Organizationwide Opportunities
• Work to Prevent Contacts at the Source
• Optimize Staffing and Schedules
• Consider Staff and Telecommunications Costs Together
• Pool Agent Groups as Feasible
• Work on Process and System Improvements: Now and Forever
Reassess The Customer Access Strategy
A prerequisite to any major effort to control or reduce costs should be to review and, as necessary, refine the priorities identified in your organization’s customer access strategy. The customer access strategy must define:
• Customers you will serve (e.g., customer segments)
• Access channels (telephone, email, Web, etc.)
• Telephone numbers, email addresses, URLs
• Hours of operation
• Service level and response time objectives
• Services provided
• Tracking and analysis (the methods/systems required to capture information on customer interactions to strengthen customer profiles, identify trends and improve products and services)
Before making any major change, be it implementing new systems, changing processes, adding services — or, in this context, cutting costs — it is essential that your internal management team agree on the services the call center will continue to provide. Without this foundation, cost control efforts are likely to head off in many unrelated directions and may be at odds with your organization’s larger customer service objectives. Such efforts may also have the opposite impact on costs, as witnessed by numerous organizations that have reduced email staffing and response time, only to discover that some customers both call and send an email — multiplying the workload and driving up costs.
Identify Organizationwide Opportunities
Often, an organization’s overall expenses can be reduced by investing more in one area, to the benefit of others. Rather than focus on cost-cutting in a departmental vacuum, effective cost-cutting efforts maximize crossfunctional resources.
For example, corporate lawyers are increasingly going to bat for technologies such as email response management systems. These systems enable the legal team to help the call center develop consistent and legally defensible responses to customer inquiries, saving the legal department time, improving the call center’s responsiveness and minimizing the chance of legal trouble. Similarly, marketing managers are often willing to provide the call center with budget to capture and analyze information on consumer trends and expectations, because they can save substantial money on target marketing.
These kinds of organizationwide initiatives to improve quality and control costs create powerful results. By viewing the organization systemically, optimum value and impact become possible.
Work to Prevent Contacts at the Source
Chances are, about 20 percent of call types account for about 80 percent of the call load your center handles. Tracking contacts for each channel (phone, email, chat, etc.) by type can lead to pivotal questions, such as:
• Should the call center be getting so many calls of that type?
• Where can IVR/speech- or Web-based services handle more of the load?
• Would better product literature help reduce contacts?
• Would a campaign to educate customers on contact alternatives help shift traffic to less expensive channels?
Even calls you get few of can significantly impact costs and productivity, e.g., by overflowing to specialized groups or by being transferred to experienced agents who can ill afford the extra work. In the context of your customer access strategy, explore options for handling or deferring these contacts without bogging down secondary and tertiary agent groups — e.g. by pulling in specialized assistance from other departments.
Optimize Staffing and Schedules
Service level (“X percent of calls answered in Y seconds”) ties the resources you need to the results you want to achieve. As illustrated in the first figure, 30 agents in the example scenario will provide a service level of about 24 percent answer in 20 seconds. With just one more agent, service level jumps to 45 percent answer, a quantum improvement. Adding an additional person yields another big improvement. Keep adding, and additional agents bring proportionally decreasing benefit — the law of diminishing returns.
This principle underscores the importance of getting the “right people in the right places at the right times” each increment (typically, half-hour) of the day. Being even slightly understaffed will cause big problems in terms of low service levels, high agent occupancy and heavy telecommunications network usage. Further, those increments producing a service level of 100 percent in Y seconds may indicate that you have far more agents than you need during those times of day. Getting workforce planning — forecasting, staffing and scheduling — tuned up is a sure path to better cost performance. In our consulting assignments, we found almost without fail opportunity in tightening up this area and finding significant savings.
Consider Staff and Telecommunications Costs Together
The last column of Figure 1 provides the hours, or erlangs, of traffic that the telecommunications network (trunks) will carry for various staffing levels. It is the product of:
(Talk Time + Average Speed of Answer)
X Number of Calls in an Hour
Note an important principle: Staffing and trunking needs are inextricably associated; the more staff you have handling a given call load, the less the load on the telecommunications network. Investing in staff for the right times of day and week can bring savings in reduced network services costs. The tradeoff between staff and network costs is direct and predictable. Knowing these tradeoffs will lead to better decisions. And you’ll be equipped to diffuse the faulty logic that cutting staff inherently cuts costs.
Pool Agent Groups as Feasible
The powerful pooling principle is an immutable law that states: Any movement in the direction of consolidation of resources will result in improved traffic carrying efficiency; conversely, any movement away from consolidation of resources will result in reduced traffic-carrying efficiency. Put more simply, if you take several small, specialized agent groups, effectively cross-train them and put them into a single group, you’ll have a more efficient environment (see Figure 2).
However, the pooling principle is not an all-or-nothing proposition. Different types of callers often have different needs and expectations, and different agents with a mix of aptitudes and skills may be required (e.g., via skills-based routing or specialized agent groups). There is a continuum between pooling and specialization, and the objective should be to keep things as simple and pooled as possible without jeopardizing the services specific contacts and customers require.
In one example, a company with 24x7 technical support wisely combined several large daytime groups into a single pooled group at night equipped to handle a broad range of transactions. Although handling time is higher at night, quality remained consistent with daytime service. The organization decided that the ability to reach an agent —albeit one who may need a bit more time handling the contact — should win out over the high costs of maintaining small, specialized groups during off hours.
Work on Process and System Improvements — Now and Forever
The relationship between staff, trunks and service level reveals why errors and process inefficiencies are particularly troublesome in call centers. They consume valuable staff time, drive up network costs, and contribute to repeat calls from customers. This cycle is further compounded in a multichannel environment, e.g., when poor telephone service levels result in email messages from customers — or vice versa.
Conversely, even modest improvements to technologies and processes can yield dramatic results. For example, a company which boosted computer response time and improved screen layout cut just under 10 seconds off of average handle time — and though that sounds modest, their service level went from 60 percent answer in 20 seconds to about 80 percent answer in 20 seconds during busy half hours. In another case, a bank which improved self-service systems, reduced traffic to its customer service group by around 5 percent — again, sounds modest and yet service level improved by over 15 percent (with no change in staff). These kinds of improvements are almost always there for the taking — deeper improvements bring commensurate impact on costs and results.
Control the right costs
These strategies create powerful results. They needn’t entail cutting staff across the board, mandating reductions in average handling time or forcing callers into automated systems. Rather, they harness principles that ensure you are controlling costs in the right places, while equipping the call center to sustain valuable services for the benefit of customers and the organization.
