Customer Satisfaction or Cost Savings – Which is More Valuable?

Source: Silicon India

They used to be called call centers – in-house or outsourced organizations that handled incoming and outgoing phone calls. Then came the ‘90’s, and with it the Digital Age. Now, they’re called contact centers – and rightfully so, because it’s not just about handling calls anymore. Today’s contact centers need to be adept at multi-channel communication including chat, email – even social media. Contact centers come in various shapes, sizes and flavors – they can be outsourced companies specializing in multiple verticals and products, or they can be internal operations focusing on specific proprietary brands. They can provide customer service for Fortune 500 enterprises or handle inbound sales inquiries from consumers driven by direct response advertising. Whatever form today’s contact centers take, they all share the common goal of achieving the highest possible customer satisfaction, while remaining profitable operations and/or containing costs. To that end, several methodologies and technologies have emerged – from offshoring to self-service via IVR or web to revenue enhancement via cross-selling & upselling. However each of these approaches has tremendous difficulties and drawbacks.

Shipping contact center operations offshore is a double-edged sword…with initial cost-savings being the attraction, but often to the detriment of long-term sales and customer service levels. The effects of offshoring – both positive and negative – are well-documented.

With advances in technology, enterprises have increasingly rushed towards customer self-service, where IVRs and websites serve as the main tool for customer interaction. Self-service systems – while certainly a cost effective option and ideal for certain applications – simply cannot deliver the best customer service experience. After all, if you are a consumer with a product question, would you prefer to navigate through an IVR and/or go online and read through the FAQ’s and online Help features, or make a phone call and get a human response? In a recent article in Customer Management IQ, author Tripp Babbitt describes: “These sorts of broad assumptions [around replacing phone calls with a cheaper channel like self-service] lead to costly mistakes. Not talking to customers may be cheaper, but where is the relationship? Or the ability to find answers quickly? The focus usually turns to refining the self-service rather than re-evaluating it. Ever find a FAQ on a website that takes too long to find the answers to your question? If you are in the midst of a self-service strategy that lacks evidence or knowledge, stop and take account of your customers! You may find that costs – not the customers – are driving your thinking. The result will be increased costs.”

I tend to agree with Mr. Babbitt’s thesis and would argue that the combination of telephone and live operators continues to deliver the customer experiences and sales revenues that businesses strive to achieve.

Another method used by some enterprises to mitigate contact center costs is by turning each customer contact into a revenue generation opportunity through implementation of cross-selling and up-selling – an opportunity to create revenue after the main transaction (either sale or customer service) is complete.

However, several problems plague the traditional cross-selling/upselling processes used by contact centers. A recently published survey of contact centers conducted by International Customer Management Institute (ICMI) revealed several sets of statistics underscoring pitfalls associated with cross-selling:

* Associated costs: According to the ICMI survey respondents, the most critical investment their center made to enable cross-selling was training, with 68 percent describing the investment in special training for agents. Other associated costs include additional compensation/incentives, increased supervisor/coaching time, and new and/or enhanced technology.

* According to respondents, the three biggest challenges associated with implementing a cross-selling program are helping staff with the transition (40 percent said ‘very challenging’; 39 percent said ‘moderately challenging’); defining appropriate measures of success (24 percent very challenging; 42 percent moderately challenging); and finding/training staff (21 percent very challenging; 35 percent moderately challenging.

Agents need to be trained on the cross-sell product…coaches need to supervise them…Average Handle Time increases…management needs to review the cross-sells and when to implement them…working with third party product marketers means Contact Centers need to handle paperwork and payments, while maintaining compliance with FTC and other local, state and federal laws. And the regulatory landscape is becoming increasingly treacherous to navigate, with new consumer privacy and protection laws being passed in Washington.

Therefore, the question becomes: can contact centers have it all – excellence in customer service, maximized profitability, and ease of implementation?