Friday, November 02, 2007

Is cost a contact centre issue or a symptom?

One recurrent theme in contact centres is that of cost.

Mostly, the complaint is that contact centres cost too much. I would argue that this is because the cost is calculated for the contact cnetre operations alone and with little reference to the value that the contact centre might bring for the wider enterprise. I've touched on the idea before that cost is not only operational metric to consider (mostly in the post "Offshore - why I would go for South Africa over India") and that doing the same function at lower cost is not going to solve many of the bigger and more expensive problems. I would argue that cost is only a symptom of problems in the wider enterprise, a symptom that is shown in call centre.

The CMP magazine is taking another approach and trying to change perceptions by having an award ceremony to recognise the top 50 call centers in the UK. The difference here is that the adjudicators will be customers rather than industry peers, and so recognition will be based on absolute customer service outcomes with no reference to the cost of achieving those outcomes.

This seems worthy, in terms of understanding and demonstrating how much contact centres can achieve. It also go me thinking, though, about something I've seen for a while. What often shows up as cost in the contact centre is actually a problem in a completely different part of the organisation. For example, it's obvious that badly made products lead to returns and complaints. The call centre of the organisation making those products would therefore have to be quite large, yet the problem isn't the call centres' ability to handle calls efficiently, rather it is the products that generated those calls. Similarly in financial services if a product is too complex for its target market that will generate extra service traffic. The problem there is not the cost of handling calls, but of insufficiently well designed products for a given market.

The cost conscious retort might still be "so what?". The products were sold, the revenue was booked, why worry about handling the calls on any level other than cost? Two good reasons come to mind immediately, but I'm sure readers will have many more. The first is that the cost of handling customer complaints well is far less than the cost of reputational risk and brand damage. Compare call centre costs with the marketing costs to rebuild a troubled brand and the sums are heavily in favour of good customer service. The second point is more subtle, but is about the ability of the organisation to adapt. If an organisation can understand what customers think of it in real time (that would be the contact centre that does that) then it can adapt and change in response. The cost savings from withdrawing a product or altering an internal process that is causing problems can be far larger than the cost of the call centre.

In short the value of the contact centre is in its ability to make the organisation responsive. That and the brand value it adds are key yardsticks against which to measure its cost.

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