Perfecting Service Management

Issue #21 Tuesday, June 24, 2003

Welcome!

topical index

Welcome to this edition of the Customer Centricity newsletter, where we explore ways you can improve the performance of your service organization.
 

In this issue:

Join us TODAY at the New England Call Center Forum

The Second Annual New England Call Center Forum Vendor Expo will be held on June 24, 2003 at the Four Points by Sheraton, in Waltham, MA.

Stop by our booth to learn the 10 ways to maximize the performance of your call center, without having to make additional investments in technology, to:

  • Increase customer satisfaction

  • Improve operational efficiencies

  • Increase employee morale

The NorthEast Contact Center Forum (NECCF) is a non-profit organization dedicated to addressing the needs of contact center professionals in the region.

To learn more or register for this event visit the New England Call Center Forum online at:

www.neccf.org/pages/3/index.htm

If you were unable to attend the expo, and would like a copy of this presentation, feel free to email your request to us at: info@customercentricity.biz.

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Avoiding the Death Spiral While Reducing Operating Costs - Part 6
(Perform Elements of Work With Lower Cost Labor)

By Lauren Weiss

This is the 6th article in the series “Avoiding the Death Spiral While Reducing Operating Costs” covering approaches to reduce operating costs while maintaining customer confidence and increasing customer satisfaction. Topics in this series include:

  • Cease activities that provide no value-add
  • Implement efficient and repeatable processes
  • Focus on existing product quality instead of new features and functions
  • Enabling customers to self-serve
  • Perform elements of the work with lower cost labor
  • Segment the customer base and provide “appropriate” levels of support for each
  • Make informed, not random, cuts
  • Cease big, expensive projects with long-term ROI
  • Renegotiate vendor contracts

In this edition we will cover: Perform Elements of Work With Lower Cost Labor.

For most companies the largest expense item is labor. Thus, when it comes time to cut costs, labor is often a major consideration. One way that you can deliver the same (or better) service to your customers, at a lower cost, is by performing elements of the work with lower cost labor. For the purpose of this discussion, we will focus on call center activities, although other functions present similar opportunities.

The 4 considerations we will review include:

  • Outsourcing specialized tasks
  • Leveraging resources in lower-cost markets within the US
  • Outsourcing the work to offshore labor pools
  • Increasing the skills of your Level 1 staff

Outsourcing specialized tasks

Often companies have service offerings that depend on the effective use and performance of an end-user’s desktop workstation. When the end-user encounters a problem using the service, he or she calls/emails your customer service function to get help. It is often determined that the issue is somewhere “between the seat and the keyboard” or the workstation is not properly configured. Having your team of highly paid technical experts working on desktop issues can be an inefficient use of your most valuable resources. It can also be demoralizing for a staff that would rather focus on the more challenging opportunities inherent in the support of your core product.

Solution: Consider engaging a firm that offers desktop support, thereby allowing your technical support team to focus on your core product / service offerings.

Leveraging resources in lower-cost labor markets within the US

A downsizing situation that I was involved in required our review of the relative cost of labor across our operations throughout the US. One observation we made was that personnel performing a specific function in the Boston-area were being paid 30% more than personnel in the mid-west performing similar work. It was not a hard decision to determine where we would cut first.

Solution: Identify a specific skill-set, create a defined job description (if you don’t have one already) and determine if you can hire to that role in a lower-cost labor market within the US.

Outsourcing the work to offshore labor pools

There has been quite a bit of publicity on this approach to lowering the cost of labor. Like other options, there are benefits and drawbacks. What I will share are specific considerations, for you to include in your evaluation of this option.

Accent – Offshore outsourcing providers promise accent smoothing. You should ask to perform test calls to their call center and speak with their agents. You be the judge…

Inflation – Use care to consider the economics of the country you are outsourcing to. What may be an effective cost structure today could turn unattractive if the country has a high rate of inflation.

Logistics – You should consider any outsourcer as an extension of your staff. You must be able to coordinate activities, work issues and have overall open communications on an ongoing basis. Time-zone and distance should NOT become a challenge for you upon making the decision to go offshore.

High-volume / low-tech – Most successful offshore outsourcing situations involve high-volume/ low-tech transactions. If the service function that you are considering outsourcing is moderate to high-tech (specific to YOUR service offerings) carefully consider how these resources will be brought up to speed and remain current and effective. Synergy – You need to determine how your offshore service provider will effectively perform as an extension of your organization, such that customers experience the same business philosophy and “culture” as your company’s Sales and Marketing efforts.

A final thought regarding outsourcing…When making the decision to outsource consider the value of your call center personnel. These are often entry-level individuals, which become highly skilled in your company’s products and services. After 1-2 years in the call center, these personnel can be some of the most insightful members of your company when they are placed in the position of influencing key decisions related to your product and service offerings. They have been on the “front-line” with your customers, products and services and probably know these better than MOST in your company. It can be difficult to place a dollar value on this; never-the-less, the value is extremely high.

Increase the skills of your Level 1 staff

You can reduce the number of Level 2 and Level 3 staff, to whom issues are escalated and who have higher salaries, by training Level 1 staff more thoroughly and by giving them more responsibility. The morale of Level 1 staff will soar as they gain valuable skills and are seen as more valued by the company. Customers benefit as well because fewer problems will be escalated, so their questions will be answered more quickly by more knowledgeable staff.

If you would like to discuss further any details related to the above opportunities, feel free to give us a call. We have the “scars of experience” to know what works, and what doesn’t…

Upcoming newsletter editions will cover additional items on the topic of “Avoiding the Death Spiral While Reducing Operating Costs”.

Previous articles in this series:

Part 1   Part 2   Part 3
Part 4   Part 5

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More About Customer Centricity, Inc.

Customer Centricity is a business consulting firm that partners with companies to improve the performance of their service organizations. We leverage our real-world experience to help our clients manage their customer relationships in more effective and satisfying ways.

Customer Centricity delivers on this promise by optimizing the interaction between people, process and technology to achieve higher levels of customer satisfaction and increased operational efficiencies. We provide:

  1. Comprehensive assessments to identify the actions that will yield the greatest return;
  2. Skills Training to enable customer-facing personnel to deliver exceptional levels of customer service;
  3. Design and Implementation of business process techniques to serve the customer in efficient, effective and consistent manners; and
  4. Identification of the appropriate business processes to automate, enabling companies to get the most from their investments in technology.

In addition to our core practices, we also maintain a network of strategic partnerships to provide end-to-end consulting across your organization with a commitment to seamless execution.

Click on the following link to see what our customers have to say.

To learn more about Customer Centricity:

call: 603.491.7948

send e-mail to: info@customercentricity.biz 

or visit our web-site: www.customercentricity.biz

In Closing

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