Reducing Contact Center ExpensesProspering in a Negative Economy

Executive Summary

During the past several years, companies focused on growth potential by securing competitive advantages, often in customer service and support. Many companies have made considerable financial and resource investments in their contact center technology to provide a specific feature or address a specific need.

Now, in times of negative economy, cost reduction is the common thread. IT budgets are shrinking or frozen and many companies are charged with operating budget cost reduction goals. At the same time, end customers are choosing to spend less, bringing less revenue into the business to maintain services. AT&T Consulting has found several common areas of opportunity for cost reduction, control or avoidance in the contact center, often without any reduction in customer services, which are detailed in this document for individual consideration.

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If cost reduction, cost avoidance, cost containment or revenue-to-contact improvements are on your contact center agenda for 2009, you’re in good company. Funding is harder to come by for new projects, and existing budgets are getting slashed to meet business mandates. In the recent past, companies have strategically focused on growth opportunities in a bull market and many enterprises invested significantly in their contact center technology to gain a competitive edge. Now, facing an uncertain economy, an important step to realize the greatest return on the initial technology investment is to optimize the contact center by analyzing your customer’s experience and your center’s performance.

For example, a common key business imperative is to reduce costs while simultaneously improving relationships with existing customers, and providing additional services to attract new ones. Seemingly an oxymoronic position, but still achievable with holistic analysis. Likewise, a common technical challenge is how to achieve cost effective contact load balancing and labor force consolidation while providing geographic resiliency. However, for any of these optimization initiatives to be successful, all facets of the contact center need to be assessed thoroughly, including call treatments, agent performance evaluation, business processes and the voice and data infrastructure.

So, for purposes of this discussion, we’ll focus on suggestions of areas that require minimal or no initial capital expenditure outlay to realize our plan for future.

Enhancing the Customer Experience1. Analyze how you treat your customer and what you communicate to them in your ACD and IVR with such traditional and enhanced Key Performance Indicators (KPIs) as:

• Service levels

• Average Handle Time (AHT)

• Abandon rate

• Average Speed of Answer (ASA)

• Occupancy

• Cost per call

• First Call Resolution (FCR)

Improving any of these criteria can positively and immediately affect your agent productivity and related utilization to your toll-free access numbers, trunks and networks. Be sure you are getting reports that represent the KPIs that matter to your cost and service affecting variables. Customer experience improvements in your contact center can also improve your bottom line. When you consider the cost to acquire a new customer is often 10 times the cost to retain one and that the profitability of a customer relationship begins after two years of recouping acquisition costs and base operating margin, customer loyalty is a highly important aspect to maximized profitability.

Analyzing and Optimizing Contact Routing Analyze your resources.

2. Skills Based Routing (SBR) Find the right agent who can answer your customer’s needs intelligently without time wasting manual transfers.

3. ICR Does your CRM have information that identifies certain customer segments, such as products purchased or location? Many do or can readily be adapted to provide it. If so, use that information to route customers to product or regional specialists to reduce internal transfers and improve first call resolution.

4. Optimize Call Routes/Treatments Any unneeded delays to answer or requests for information can decrease your customer satisfaction and increase your usage on your entire infrastructure. Analyze all of your ingress points and call treatments for potential improvements.

5. Utilize Remote Office Agents If your organization has resources that are under utilized during the average workday, such as counter service, administrative workers, etc., use the extended reach capabilities of an IP contact center to let the employees functions as agents. This enhancement is particularly valuable in multi-channel support where an administrative worker can address emails and Web contacts while still prioritizing their primary assignment.

6. Adopt Home Based Agents Use of home agents can allow you to broaden your labor pool to use potentially excellent and economically advantageous resources as agents (college students, stay-at-home moms, housebound seniors and handicapped). They can also save you on real estate costs and improve your business continuity plan. Be sure your QA processes are solid to ensure high customer satisfaction and your support structure is prepared to handle the extended reach.

Streamlining the “End-to-End” ProcessAnalyze your procedures for potential cost savings.

7. First Call Resolution (FCR) Not only is maximized FCR a key ingredient to customer satisfaction, as discussed earlier, but low FCR is an immediate drain to your efficiency. Picture it this way – if you’re achieving 50% FCR, that means for every customer getting an answer in the first attempt, there’s another customer that is calling a second time, talking to (at least) a second agent, using your full architecture a second time in complete duplication! An obvious resource waste.

8. Quality Assurance (QA)

• Plan a regular effort by trained contact center resources to evaluate the tactical performance of the contact center. Focus the evaluation to meeting the service levels. Remember, satisfying the customer is a finite goal. Exceeding the answer service level expectations rarely makes the customer happier at the end of the interaction, and may have a diminishing return on investment.

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• Evaluate not only your tactical performance to your objectives, but also your customer experience to ensure your targets are in fact accurately set. Listening to a caller’s reactions during call treatments is a telling way to gauge their dissatisfaction and possible a sign your service targets need to change.

9. KPI Evaluations Perform an efficiency and efficacy evaluation of contact center metrics and performance analysis. Are you measuring your agent’s performance to the right target? If your goal is increased FCR, don’t use your agent’s AHT and the primary evaluator. Your agents and customers may need the added talk time to ensure the customer concern is completely resolved.

10. Analytics Evaluation If you have an advance Digital Recording system, use the analytics feature to evaluate difficult customers and develop better techniques to use in agent training as prevention.

11. Agent Training Training classes not only potentially improve your agent’s performance but also allow reciprocal input from your agents on how to improve processes. Control your costs by developing the curriculum internally and focus the curriculum on areas affecting AHT and revenue per call:

• Call handling – Reinforce training with your agents on how to navigate your CRM and related systems to speed addressing customer issues. Training classes also allow input from your agents on how to improve the desktop cockpit for speeding their effort

• Difficult customers – Develop case studies of difficult customer interactions and recommend future ways to manage them effectively and efficiently

• Up-sell/X-sell – Increase your agent’s knowledge of your product set, sales promotions and target customers to increase your revenue to customer ratio and potentially improve your agent retention if you incent your agents to sell

• Cross train – Improve your utilization and economies of scale, which will positively affect your ASA and related trunk/network utilization

• Sales training – Demonstrate and imitate a model of sales excellence

• Team working – Use case studies on tough situations which challenge the team

12. Agent Retention/Turnover Contact centers have a reputation for “churn and burn”, but this practice not only loses excellent calltakers to competitors, but also causes you to find a replacement, interview and research them, hire them (often at an equal or higher salary) and train them. The cost to replace a contact center agent averages $5,000 and $17,000. Added soft expense is the negative impact employee turnover has on overall contact center performance, customer satisfaction and employee morale. Focus your training on the agent needs and enable full communications to the entire workforce to prevent the evacuation.

13. Staff Acquisition and Training Costs Contact centers are also reputed to hire off the street from classified ads, while trusting their customer contact to poorly vetted and trained talent. Use your senior agents as trainers to solidify their skills, provide advancement opportunity (reducing the churn) and free up leadership to address the more immediate needs of customer contact management.

Matching the Resource to the Task14. Analyzing the answer resource options available to respond and satisfy your contacts. Many organizations have multiple methods available for answering contacts, such as:

• Virtual and traditional skills based routing

• Traditional “brick & mortar” vs. remote office/home based agents

• Business value, demographic specific premium service levels

• Enable data directed contact routing to allow for priority contact handling

• Contact center automated self-service best practices

• Automated services vs. live agents

• Touch tone vs. speech recognition enabled IVR

• Outsourcing, in-sourcing, on-shoring, off-shoring, near-shoring and right-shoring answer option evaluations

• Multi-channel contact support

• Point of sale contact support

Should you use your top-notch, senior agent for answering a call on the second ring for a customer who has only a double-digit bank balance, while your customer with many high-value accounts is anxiously waiting in queue? Many companies are spending significantly on customer loyalty programs (how many store member cards do you have?) but not translating the investment into supporting the manner they ask their customers to contact them – their contact center! Get to know your customer’s requirements for each segment type and match the service levels and resources accordingly to their sensitivities and requirements.

Similarly, web contacts are often the least costly method for your customers to gain information when compared to voice alternatives. Younger demographics are not only more technology savvy, but increasingly requiring their vendors to provide email, Web and text contact enablement. Steer your customers to where they want to go, especially when it reduces your cost per contact.

You can positively affect your operations and related cost by:

• Improving utilization of existing contact center technology resources by improving adherence percentages

• Reducing cost by maximizing customer compliance with alternative answer resources (IVR, off-shore/near-shore agent, etc.)

• Reducing costs by routing and maximizing self-service customer care channels where appropriate

• Improving customer satisfaction and related loyalty by increased first call resolution

Maximizing Revenue Generation Potential15. Analyze Your Revenue Generation

• Revenue per call handled per minute/second

• Percent of sales conversion per agent

• Agent cost as a percent to revenue demand

• Agent/skill group/enterprise performance to revenue generation

Your contact center provides an immediate communication channel to your end customers. Use this to address their desires and needs, both stated and unstated. This is an ideal opportunity to educate your customers (based on segment) of other services that may be of interest that you can sell with minimal cost to improve your potential for added revenue per contact.

Aligning Resource Capacity with DemandAnalyze the scale of your resources to meet your current and near term projected needs.

16. Agent/Supervisor Staffing Ensure your staffing meets the contact needs as the demand changes by daily peaks, seasonal cycles, planned events, etc. Don’t overstaff just to exceed a service level target. Your targets should be designed specific to your business needs and to meet customer expectations. Labor averages 70% of the operating budget of most contact centers, so don’t miss this key and immediate savings potential.

17. ACD Licenses Technology licensing for agents, supervisors, administrators and reporting analysts is often billed annually. Right-size your center licensing for your peaks and near-term projected growth.

18. IVR Ports Similar to the ACD licenses, most IVR port licensing is billed annually but also with an added service component, so only pay for what you will truly use.

Consider additional tools to expand and manage your contact center answering resources. These may be additional Capital Expense items if you don’t have them in place today, but you can plan now for budgeting for these at a later time:

• Work Force Management (WFM) – For centers with more than 100 agents or in multiple sites or with advanced call skill segments, a WFM system is an effective way to control your costs while meeting contact needs. Advanced systems allow for agents to define their schedule and manage work-time while allowing for vacations, training and personal requirements. This enables easier staff modeling and potential improved agent retention.

• Unified Communications (UC) – Enable Knowledge Workers to be a resource to address specialized information with defined accessibility. Your senior agents are likely doing this already, but

with no defined way to access the knowledge worker. This often results in an information request parking in a voice mailbox, hurting your FCR. Use UC to let the entire team know how to answer the customer’s request, but with the knowledge worker determining how and when best to reach them.

Evaluating and Optimizing Your Infrastructure Analyze your contact center technology.

19. Convergence If you haven’t yet converted to IP in your contact center, you may be missing out on cost savings. Consider improving all of the earlier features inherent to an IP contact enter and support costs such as streamlined processes for MACD and reduced licensing costs, for example. A comprehensive evaluation across the full infrastructure should be planned to analyze your requirements and environment and budget for this eventuality, with a full ROI/TCO to ensure accurate planning.

20. Virtualize the Contact Handling This is possible in both TDM and IP configurations but inherently available when designed appropriately in IP WAN architectures. This model uses a common, centralized ACD configuration that supports agents not only in traditional brick and mortar locations, but enterprise locations geographically dispersed throughout the enterprise. Remote agents or home-based agents are also part of this model. Allows saving by converting to enterprise wide queuing and resourcing, providing grater economies of scale when compared to traditional site queuing.

21. Outsource Often the third rail for contact centers (just ask a leading computer manufacturer in central Texas about potential for negative customer backlash), but strategized outsourcing CAN provide budget relief if done with prudent planning and customer evaluations.

• Call taking – You must consider if your customers are internal or external, competitive or captured, and their sensitivities to outsourcing. We’re also seeing a trend of returning strategic customers to domestic or near-shore resources, but on a selective basis, so outsourcing doesn’t have to mean overseas. Also consider workforce and union impacts. Use the scalpel, not the hatchet.

• Support – A potentially expensive piece of contact center management (particularly for non-virtual contact centers) is the need for on-site technical support for managing the contact center platform and to make changes to suit your needs. Consider the costs of your internal dedicated resources versus those of a provider who manages and maintains solutions for multiple customers. You may see reduced cost in the gain of economies of scale which should outweigh the loss of control and potential increase in the speed to market of new technologies.

22. Consolidation For this discussion, consolidation is the reduction of the number of locations housing agents from multiple contact center sites to geographically fewer “regional” sites or even to a single “mega-center” site. Combination effort of people, process and technology.

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For more information contact an AT&T Representative or visit www.att.com/business.

23. Centralization This is the practice of using servers in a central location(s) to support the contact center functions for agents in multiple locations. Can also be reduction of the ingress points for customer contact. Staff does not move in this transformation. Potentially reduces the equipment needed to deliver the contact and the resources needed to support the infrastructure.

24. Architecture Models Review your contact center architecture model, particularly if you have not yet migrated to an IP environment. When you factor parts, labor and the high prices of repeated short-term contracts, you may be paying a higher support cost maintaining an obsolete infrastructure over current models. With the new generation of contact centers, financially flexible models may be available to suit your budget needs (not to mention the added risk you are subjecting your business for lost customers and related revenue in the event of outage or service reduction). The following models all have significant financial, delivery, feature and management risks and benefits and should be evaluated based on your requirements and current situation:

• CPE premises based – Traditional CapEx purchase of infrastructure; high initial cost, but may be low TCO depending on capabilities. High ability to control and manage, but presents higher potential risk for single point of failure. Don’t forget to consider leasing to move this to an OpEx model also.

• CPE hosted – Still owned by the end user, but allows similar controls, but with greater disaster prevention safeguards with full management and diversity.

• Shared/hosted – Greatly reduces CapEx investment by billing based on monthly use, but can reduce capabilities and controls and speed to market for application changes.

25. Desktop Optimization

• Workflow automation – We’re not talking complex CTI here (potentially a significant productivity enhancement but we’ll leave discussion for when budgets are less restrictive). Workflow automation is the ability for a contact event or even a click of a

mouse to automate repeatable and potentially complex agent tasks, such as copy and paste a caller’s phone number into the CRM screen or create a confirmation email from the CRM screen data on file. This is an inherent capability in many IP contact center platforms. If you have a repeated activity in your contact center, this option should be considered if your platform has this ability.

• Customize – If your agents use multiple screens to find information, changes in your agent interface can help reduce the amount of effort and related time needed to find the needed screen and fields to answer your customer’s questions. Likewise, adding an internal browser to the agent client (also an inherent capability in many IP contact center platforms) allows adding agent scripting to help them know how best stay on top of product changes and market promotions in cross selling and upselling.

• Virtualize – Instituting a Virtual Desktop Infrastructure (VDI) will have a CapEx outlay to begin, but allows for lower costs by centralizing management of the desktops. A VDI stateless device provides lower cost by using lesser equipment, 15 watts of power and contains no data, so it provides:

– Effective support for remote office/home based agents

– Reduced technician dispatches

– Reduced power consumption and cooling required

– More efficient patch updates

– Reduce security risks for sensitive customer information (not a direct cost benefit here, but a valuable consideration)

26. And an Obvious Extra One – Plan Before You Execute All of these infrastructure and architecture models have inherent risk to them, but offer great potential. Even if these are a slam dunk, a comprehensive roadmap not only significantly heightens your potential for success, but reduces your risk in implementation and improves your chance for funding when budgets become less inhibited. A comprehensive evaluation and strategy specific for contact centers should be performed by an experienced and trusted partner to evaluate the potential benefits and financial implications.

05/04/09 AB-1585© 2009 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. The information in this document is provided by AT&T for informational purposes only. AT&T does not warrant the accuracy or completeness of the information or commit to issue updates or corrections to the information. AT&T is not responsible for any damages resulting from use of or reliance on the information.