Technology Lends a Hand
In a recent study published by the University of Michigan’s National Quality Research Center, the following statisticsstrongly support the case for loyalty:
1. A 1% decrease in cost improves profitability by 1%.2. A 1% increase in sales improves profitability by 0.25%.
3. A 1% increase in customer satisfaction or retention improves profitability by 5%.
Clearly, loyalty pays and pays big for companies. With the continued reliance on multi-sourcing and the use of new technologies that make the call center more virtual than ever before, the head of customer care is facing anenormous quality and customer loyalty challenge which, for the first time, can be directly tied to profitability.
Because CFOs are measured on profitability, if left to their own devices, they would drastically reduce the callcenter labor force and shift the remaining call center staff to the lowest-cost alternative (some combination of outsourced, at-home agents, or off-shored staff). However, this approach has traditionally resulted in a drop inquality in the call center—a direct threat to customer loyalty. The quality drop usually results from a company’sinability to maintain consistency in hiring, training, communication, coaching, and incentives among an increasingly remote and disparate call center labor force.Conversely, because heads of care are measured on customer satisfaction, if they called all the shots, companies would boost their investment in labor improvements—perhaps through intensive performance improvementprograms or by maintaining a strictly premise-based workforce—to increase quality as a means to enhance customer loyalty. But increased competition and aggressive cost-cutting goals have left limited dollars to spend in theseareas. What is needed to restore harmony in the executive suiteis a method to simultaneously reduce labor costs whilemaintaining customer loyalty. As in the past, modern technology can do much to resolve the apparent conflict between the need for cost containmentand the imperative to deliver great service. Modern, on-demand technology, which is available across the Internet,significantly improves a call center’s ability to manage itsremote agents and analytic solutions can pinpoint whereagents need improvement whether they are down the hallor on the other side of the planet.
T h e L a b o r v s . L o y a l t y D i l e m m a