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Performance Measurement for Call centers

Long gone are the days when customers were not empowered. In this new age the customer is empowered. We keep on reading in various books of marketing and management that customers are always right. The new buzzword in all industries is customer relationship management. It is basically how well you are able to build relationships with customers and manage them. Customers are no longer to be thought of as customers but are now being thought of partners. They are the ones who are the lifeblood of any organization and it is customers’ money that helps run an organization.

You need to build relationships now with customers and manage them properly. You need to know how to manage your time effectively and need to decide how much time is to be given to customers. You also need to understand what kind of customers demand what amount of time. The companies that are able to understand this are able to build better long lasting relationships with customers that eventually help in creating repurchases by the customer. The services industry specially is customer focused and customer driven.

The needs of customers are given priority at every point and they are the one of the primary concerns of any company in the telecommunications industry. All company’s focus on bringing products and services that would help meets customer’s needs and demands. The companies that do not focus on their customers relationships lose out in the end as their competitors take advantage of such situations whenever given an opportunity. The telecommunications industry in most corners of the world is one with immense competition.

There is no room for error in such a fast paced industry and thus it is imperative for companies to satisfy their client’s needs or else someone else would. Customer satisfaction is one of the main areas from which one can measure performance in a telecommunications industry. If customers are happy with the services provided by a company then it would be profitable or else it would lose out to its competition. Broadly speaking we can further divide how companies cater to satisfying their customers can be assessed by the quality of their call centers and the manner in which they market their service to its prospective and current clientele.

Call centers are the focal point at which customers contact the company. It is basically a centralized office used for the purpose of receiving and transmitting a large volume of requests by telephone. Thus, the importance of a call centre cannot be overemphasized when we are looking at performance measurements in the telecommunications industry. Call Centers have various functions in the telecommunications industry. Nowadays most call centers are automated but company operators are always present so as to give a human touch.

The human aspect is more important because some clients are more comfortable in talking to another human being rather than talking about their problems with a machine. There are many different roles that are being played by a call centre. Call centers are used for handling complaints, giving information about new or existing products available, for assisting in technical problems, for answering queries, after sales services and are also a tool for marketing. All these various functions have one thing in common: The call centre is extremely important for satisfying the needs of customers.

The quality of a call centre helps determine its performance in giving customer satisfaction. A call centre which is automated and uses technology but is not user friendly will annoy a customer and might even cause the company to lose him. There are many different determinants which one can look at to judge the performance of a call centre being used in the telecommunications industry (Sterling, Bernt & Weiss 2006). 2. 4. 1. Wait Times One way to judge the performance of a call centre is through its wait times.

It is one of the most important KPIs when judging the performance of a call centre. Customers get irritated when there are longer wait times. They get impatient and it badly reflects on a company. Companies in the telecom sector need to reduce their wait times. The more the wait times the worse it reflects on how much the company cares about their customers. A longer wait time depicts that the company does not care for its clients as much as they would want to. Companies should look at the industry average and the benchmarks so as to decipher if their wait time is acceptable or not.

Managers can test their own call centre by contacting them as a customer and he would be able to judge if the wait time is alright or not. If problems are being faced in the sense of longer wait times more people may be hired or shifts may be divided in such a way that more agents are available at busier times of the day. 2. 4. 2. Average Speed of Answer Another KPI that helps judge the performance of a call centre is average speed of answer (ASA). ASA is one of the key metrics related to “accessibility”, the measure of how easily a customer reaches an agent.

Average speed of answer is defined as the average speed in which a customer is reached by an available agent after being placed in queue. ASA does not include the time it takes for a customer to go through the maze of options. ASA has a very high correlation with customer satisfaction. The longer the ASA happens to be the lower the customer satisfaction. Customers get irritated very fast especially when they have to listen to the irritating music during queues. The longer the ASA the more likely it is that the customer will feel unimportant and he usually ends up abandoning the call.

An interesting fact that is related to ASA is that a higher ASA leads to lower customer satisfaction but a lower ASA does not necessarily lead to higher customer satisfaction. It is an important KPI and companies in the telecom industry need to understand that this is a sure shot way of reducing their customer satisfaction and eventually it hurts the company. Priority of a call centre is always to answer the phone and serve its customers. A longer ASA will lead to people hanging up after getting impatient. A high ASA also affects the overall efficiency of a call centre.

A customer is likely to get irritated because of a long ASA and when he does get a chance to speak he generally vents out anger on the agent for a few seconds to a few minutes. This in turn demoralizes your employees and it also hampers the level of communication that would have otherwise taken place between the customer and the agent. There may be many different reasons for higher ASA and they need to be worked on so as to give better results (Mani, Romijn 2004). A high ASA may be because of staffing problems, training issues, inefficient responses or system response time, and a poor routing system.

One has to identify which area is weak and then one might be able to improve the quality of the call centre and help in increasing the customer satisfaction. 2. 4. 3. Complaints Another KPI used to judge the performance of a company through the use of a call centre is the number of complaints received by the call centre. The call centre acts as a medium in which the customers complain about the service and quality of the company. The more the complaints lodged means that something is definitely wrong. The lesser the complaints means that customers are more satisfied with the quality of the services provided by the company to its customers.

Companies can use the complaints lodged in the call centre and learn from their mistakes. It is a very good medium to understand their customer’s needs and requirements. Criticism should be taken positively and the company needs to make sure that they learn from their mistakes. Each and every complaint lodged in the call centre should be taken seriously. The company needs to realise that if the problems or issues faced by their customers is solved this would lead to higher customer satisfaction and would encourage a pattern of repeat purchases.

The company needs to realise that if it is receiving more complaints than their competitors then they need to understand that changes will have to be made. A company’s main aim should be that it learns from their mistakes and rectifies it. The number of complaints is an honest feedback from the end user (Green 2001). 2. 4. 4. Cost Per Call Cost per call is a call centre KPI which is calculated by dividing the total operational costs by the total number of calls for a given period of time. It is certainly a measurement of efficiency, but can reflect other things as well.

It cannot be viewed in a vacuum because other factors would definitely affect this KPI. Rather, you need to consider it in the context of your business goals, and your initiatives based on those goals. A higher cost per call can definitely be borne by a company if it at the end of the day helps in generating overall revenue. If this factor is looked upon in isolation a higher cost per call is definitely not something that a company would desire. A higher cost per call means that the call centre is not doing its job efficiently. There is a higher margin for improvement.

Best practices in the industry can be adopted to improve the level of efficiency. One thing is still to be kept in mind that cost per call is not a KPI that is to be seen in isolation, if a higher cost per call is helping improve revenues then one needs to bear the cost so as to increase the level of customer satisfaction and customer profitability (Green 2001). 2. 4. 5. Average Call Length Average call length is another KPI which is basically found out by dividing the total call time by the total number of calls. This KPI can also give a fair idea of how the telecommunications company is performing.

It basically tells us how much time on average does a customer talk to the company’s agents in a call centre. The higher the average call length one is able to decipher that the agent is unable to handle the queries of the customers and is having problems in dealing with the customers. If it takes longer for an agent to clarify the query of the customer it means that the communication process is not being done correctly and the agents needed to be trained more. The communication process is one that takes place between two people. One transmits a message and the other receives and encodes the message.

Proper communication is one in which both parties are able to understand the meaning of the message that is being passed. If communication is clear then it means that both parties are able to understand what the other party meant. If the communication process is not being done correctly then many clarifications are required and thus the communication process becomes lengthy. From this we are able to understand that if the average call length is longer than the rest in the telecommunications industry then the agents of the company in the call centre are not effectively communicating with the customers.

More experienced and trained professionals are able to grasp the meaning of what the customer requires of them and thus he is able to handle their query in less time. This KPI helps us assess how quickly and efficiently the agents are able to understand the customer’s needs and meet it. A lower average call length would mean that the agents are able to understand customers more easily and cater to their needs in a more efficient manner. This would eventually help in enhancing the level of customer satisfaction. 2. 4.

6. First Call Resolution First call resolution (FCR) is a very important KPI which has not been given as much importance as it should have been given. Service Quality Measurement Group (SQM)’s definition of FCR is the “Customer’s inquiry or problem is resolved in one call. ” FCR is the call centre measure that matters most because it reduces operating cost, increases opportunities to sell, and improves both employee and customer satisfaction. No call centre measure has as much impact on call centre performance as FCR.

This is something that has been proven in a research done by SQM. It reduces operating costs as the services of the agent can then be used for handling different queries of other customers. It helps improve efficiency as the customers problem is being solved in one go. A higher FCR helps show that the agents being used to deal with customers is well trained and is able to communicate well with the customer. He is able to receive the message of the customer correctly and he is also able to transmit his message across to the customer in a better way.

It helps improve the customer satisfaction because the customer does not have to keep on calling the call centre to have his issues sorted. It also enhances the confidence of the company agents as it helps in increasing their self belief. They are more confident that the message that they intended to send to the customer has been delivered correctly. Overall this KPI helps to ensure that the customer satisfaction is high. (ORZESSEK, MARTIN 2010) suggests that there is one thing that needs to be kept in mind when using this KPI to measure performance.

FCR needs to be measured externally not internally. You are unable to grasp the true situation when this KPI is being measured through internal sources like call backs, as they are less effective and accurate in depicting the truth. External methods such as a telephone survey needs to be used to gain a clearer picture of what really is the true FCR. Companies in the telecommunication sector need to focus on measuring this KPI accurately so as to be able to judge the true customer satisfaction. 2. 4. 7. Abandoned Calls Another KPI for a company in the telecommunications sector is abandoned calls.

Abandoned calls are as the word implies calls that are hung up in between. It is not a very good measurement of performance for a call centre. This is mainly because you cannot pinpoint specific reasons as to why calls were abandoned. It is mainly dependent on the customer’s level of patience about how tolerant he or she is. This can also be due to many different factors and cannot be attributed on specific factors. If you have a toll free line and still a high abandoned rate is prevalent then you might have to look at how well your call centre is dealing with its customers.

An abandoned call may be because of a high price attached to the call, it may be due to the mood of the customer, a wrong number may have been dialed, it may be because the customer has been distracted for something which demands more attention, it may be because the queue is very long and the customer is not patient enough to wait for an agent, and it may also be because of poor handling skills by the agents. Most of the factors that lead to call abandonment are external and are not something which the company has any control on.

If call is being abandoned because of poor handling by the agent or because the wait time is very long then that is a serious issue which needs to be tackled. As mentioned earlier it is hard to attribute or pinpoint call abandonment to any single factor. But if the rate of abandonment is very high then it is in fact something to be worried about. You need to make sure that you do not breach the tolerance level of a customer in queue. If soothing music is played whilst a caller waits it may increase his tolerance to a level but the main focus should be on reducing wait time.

Agents should also be trained in effectively handling the customers so that abandonment rate falls. According to (Lee 1997) this KPI is not very effective but still it should be kept at a minimum. 2. 4. 8. Agent Efficiency Agent efficiency is another KPI which needs to be looked upon and is one of the most important ways to judge the performance of a call centre in a telecommunications industry. Agent efficiency basically measures the efficiency with which the agent handles the customers. He is the voice of the company and thus his performance is extremely important in determining the level of customer satisfaction.

Call centre efficiency can be maximised if the agents working in your call centre are motivated. A motivated workforce is much more likely to perform well than if they not happy and feel unappreciated by the customers they deal with and the management they work under. Highly motivated agents are the ones that are more productive than the rest. Managers at call centres should strive to build an operating environment where their agents feel encouraged, motivated and supported. For this they need to be recognized and rewarded for their performance.

Agents who receive an outstanding quality assurance review or a good performance appraisal are likely to perform better than their previous performance. This helps us realize that it’s not just good management to reward agents for outstanding performance, but it’s essential for improving efficiency. This also helps reflects in overall customer satisfaction and customer loyalty which is generated. Successful call centre managers use a variety of techniques to motivate their staff. Some of the techniques that are used are long term in nature whilst others are short term.

A highly motivated workforce will do wonders for the company. Another way to have a highly efficient workforce is when you start your hiring process. You need to invest enough time and resources so as to find the right match for your company. Call centre agents should be ones who have the right temperament for this job. They are good at communications skills and are able to bond well with the customers that they interact with. Another way to improve efficiency is to train your employees well (Gable 1993).

Proper training would help them respond in a much better manner when facing a problem. All in all it could be derived from this that the agent’s efficiency is highly dependent on the human resources department of a company in the telecommunications sector. In conclusion, call centres efficiency is directly related to customer satisfaction. By setting KPIs based on customer satisfaction, customers are empowered and they get their demands met. It helps business assess performance from the viewpoint of customers as customers are any company’s main asset.

At the same time management should be wary of feedback that is mainly dependent on customer tolerance as that may be attributed to external factors. Thus, bad performance on KPIs that are not in the control of staff may lead to low employee morale. It is also important to communicate the purpose of each KPI to staff members to make sure there is complete clarity on what needs to be achieved. KPIs should not just be percieved as tools for evaluation, but also as tools to find gaps in capabilities so that proper training can be provided where necessary.

Hence, it is imperative for management to be careful in selecting KPIs as well as implementing them. 3. Case Studies A case study approach has been adopted to research Performance Measurement techniques being practiced in the real business world. Case studies are ideal to explore detailed contextual information for a limited number of conditions and their relationships. According to researcher, Robert K. Yin, the case study approach is ‘an empirical inquiry that investigates contemporary phenomenon within its real life context(Susan K.

Soy 2006). It is useful in situations where boundaries of phenomenon and context are not distinct and also where multiple sources of evidence are being used. There are three types of case studies: Exploratory, Explanatory, and Descriptive (Winston Tellis 1998). Exploratory case studies are often used as a starting point for research. Explanatory case studies are used to conduct casual investigations, whereas Descriptive ones require descriptive theories to be developed before starting off.

For the purpose of this paper, a number of Explanatory case studies have been conducted to understand how different call centers use performance measurement techniques. One of the greatest drawbacks of the case study approach is that there are often never enough case studies to establish reliable and generalized findings. That is why it is often considered as an inconclusive tool for conducting research. However, case study can be used as a strategic methodology when used to focus on a particular issue or unit of analysis viz-a-viz studying the entire organization (Khairul Baharein Mohd Noor 2008).

In this case the particular issue in focus is the adoption of performance measurement tools by call centers across various regions and industries. As call centers vary in size and customer diversity, a number of case studies have been investigated to appreciate in detail how call centers employ performance management systems. 3. 1. Case #1: One of the companies that were studied was The Brisbane City Council Call Centre. Data was collected from an online Call Center forum hosted by Resource International (BBC 1998), the Brisbane City Council website, and a website dedicated to Information Technology in Australia.

Company Background: Brisbane is the largest local government in Australia and the implementation of the Call Centre was an initiative to improve Citizen Access and Service Delivery. The scope of the project was to offer service delivery and customer service by phone and over-the-counter. It intended to achieve this in a faster, better, and cheaper way. Findings: KPIs were established for each customer interaction process and they were defined in collaboration with staff responsible for their delivery. Customer satisfaction was ensured by reducing wait times and improving ASA.

KPI was set to 90% of calls answered in 20 seconds (Niels Kjellerup 1998), and a ban was set on the use of IVR because the citizens found it annoying (Bushell 1999). Agent efficiency was also maintained by setting a cap at 90% for calls to be handled at point of entry without transfer(Niels Kjellerup 1998). 3. 2. Case#2: The second case study was on Unified CallSoft – a call center provider based in Toronto, Canada. Data was collected from the case study hosted by the website of AKS Labs – a Performance Management Consultancy (Niels Kjellerup 1998).

Company Background: With rapid growth in operations across 17 countries all over the world, Unified CallSoft was having trouble tracking dips in employee progress and in revenue. Essentially, management was interested in improving performance tracking and in optimizing delivery processes. The tracking and reward system was not very transparent as a large degree of subjectivity was involved in the appraisal process. Also, different delivery centers had employed different processes and had employees of varying skills and qualifications. Findings:

A Balanced Scorecard was implemented as there was a great need to implement a quantitative performance management system that was competent enough to measure qualitative criteria. Some of the KPIs employed were ‘Response Time’, ‘Call Abandonment Rate’, ‘Employee Proficiency’, ‘Revenue per Successful Call’, and ‘Cost per Call’ (AKS-Labs ). 3. 3. Case#3: The third case study was done on LA County’s Child Support Call Center. Data was collected from the website of Los Angeles Child Support and from the website of International Customer Management Institute (ICMI) – the consultancy hired for improving the Call Center operations.

Company Background: The LA County Child Support Call Center is a high tech center – one of its kind in the country. It can be accessed from anywhere in the United States, provides case information 24 hours a day and 7 days a week, and has live operators servicing at extended working hours. During the tenure of former Division Chief, Dean Degruccio, there was a general lack of expertise with call center management, agent morale was low, and wait times were excessively long (Holley ). Findings: The most important change they made was a shift from focus on individual call stats to averages.

They also changed their focus to customer satisfaction rather than ‘talk time’. Operators were instructed to do whatever in their power to resolve customer issues. The idea was to satisfy customers so they do not call back again – increasing wait times. The lesson learnt was that by investing a few more minutes on each call there was more customer satisfaction and fewer call-backs. They also started using KPIs as a guide to improve service – for example where an agent had very high talk time he was trained to improve his problem solving skills (Holley ). 3. 4. Case Study Observations:

From the above three case studies, there is one thing that is clear: Each Call Center required some form of Performance Management System to tackle the issues they were facing. Most of the KPIs adopted were similar to the ones discussed in the Literature Review even if they were given different names: Brisbane initially focused on Wait Times and ASA when they first established the call center. Later on they focused on Call Abandonment by removing the use of IVR in their system. Unified Callsoft implemented a far more rigorous system that included Agent Efficiency, Wait Times, and Call Abandonment.

However, LA County mainly looked at FCR and Agent Efficiency to improve their problems with extensive waiting times. Whether it was a city council implementing a call center from scratch, or an established call center looking to improve its operations, the setting of KPIs helped management streamline operations and improve service delivery. The third case study was especially interesting regarding the approach the management took to implementing KPIs because it was counter-intuitive: increased call length to reduce call-wait times. It worked for them because such was the nature of their business.

Thus, it is important to consider that Performance Management Systems should be customized to tailor to the needs to each business. 4. Conclusion The literature review and the case studies both helped us decipher the importance of performance measurement in the telecommunications industry. We looked at different KPIs and learnt how they can be measured, the pros of using it, the cons of using it and what exactly they help us measure. Performance measurement is important because it helps companies in making decisions. It helps them assess performance and understand strengths and weaknesses.

If proper performance measurement is done then you can easily find out ways in enhancing your overall performance. Performance enhanced can turn into higher levels of customer satisfaction and loyalty. It may also lead to a better financial position. Performance can be measured for any area in the telecommunications sector. They need to be compared with other companies in the industry so as to give a proper picture of where your company stands. Proper performance measurement also can be used as a motivating factor for the employees.

Goals need to be set intelligently about achieving KPI targets. One statement to sum up the importance of being able to accurately measure performance could be “you can only enhance performance if you are able to measure it properly, and assess it properly. ” (Drucker 1954) Bibliography Ahn, H. 2001, “Applying the Balanced Scorecard Concept: An Experience Report”, Long range planning, vol. 34, no. 4, pp. 441-461. AKS-Labs , The best ways to measure and improve call-center performance [Homepage of AKS-Labs], [Online]. Available: http://www.

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