Creating A Customer Focused Culture

Alvarez & Marsal Business Consulting, LLC

LEADERSHIP P R O B L E M SO L V I N G VALUE CREATION

Creating Top-Notch Quality through a Customer-Focused
Culture
ICMI Contact Center Management Conference & Expo
Austin, Texas
June 2, 2009

Copyright 2008. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
Copyright 2009. Alvarez & Marsal. All Rights Reserved.

How is “Trust” Defined?

CONSUMER TRUST is the driver for CUSTOMER AUTHENTICITY


The Trust Gap Between Companies & Consumers Widening


So Let Me Ask a Question…..

“Thinking about our experiences
with call centers, what drives us to
‘love’ or ‘hate’ a particular
experience?”


The Financial Impact of Quality Customer Care

• Shareholder Value
– Anecdotal evidence suggest there is linkage between bad customer
service/call center experience and declining stock price
• Customer Value
– Customers are “literally” sick of poor service experiences
• Brand Equity
– Significantly diluted; unmet customer expectations
• Call Center Profitability
– It costs more to run the center e.g. hiring of more call center agents

Copyright 2008. Alvarez & Marsal Holdings, LLC. All Rights Reserved. 5

The Financial Impact of Quality Customer Care

# Calls to % Overall Calls # Problems # Calls Offered
Resolve
1 60% 60,000 60,000
2 20% 20,000 40,000
3 15% 15,000 45,000
4 5% 5,000 20,000
40% 100,000 105,000

Company Assets 200,000 customers x $200M
$1,000 annual revenue per
customer
Cost per Call 5,000 extra calls x $5.00 $25,000 extra cost per
cost per call quarter
Failure to resolve 15% of calls Results in a CSAT drop $80M protected assets or
from 50% to 40% a loss of $20M per
quarter
Quality & Customer Care ….and the survey says $20,525,000/quarter or
Profitability Impact (per $82.1M/annum
quarter/per annum)

Defining the Customer Experience

Sales Fulfillment Service
Process
“Keep Meeting
“Interest Me” “Meet My Initial Need”
My Needs”
1. Account issue raise by phone
1. Marketing web site 1. Apply by phone or email
1 Determine critical customer
touch points
2. Advertisements 2. Apply by website 2. Complain by web mail
3. Get notification of decision 3. Receive solution to complaint
(aka, “Moments of Truth”)
4. Close financial transaction 4. Hear about other products
from customer’s viewpoint
5. Take part in surveys

1a. Average hold time < 2 min
2 Document Expected Customer 1a. Website available
> 99.99%
1a. Average hold time < 2 min
1b. Application time < 10 min
1b. 1st time resolution > 95%
experience (incorporate VOC
and benchmarking) 1b. Website satisfaction 2a. Website available > 99.99%
> 4.5 2b. Application time < 15 min
2. Recognition factor > x

3 Determine actual 1a. Website available = x%
customer experience 1b. Website satisfaction = y
2. Recognition factor = z

4 Develop tactics to close the
expected-vs.-actual gap
1a. Review SLAs with hosting vendor
1b. Minimize size of graphics to speed page loads
(incorporate VOC and
benchmarking)

5 Develop reward & recognition
for achieving or exceeding Develop appropriate set of rewards and recognition
expected customer experience

Strategy Articulation Map

Drivers
Contact Center
Mission
Statement
Vision Core Values

Market
Differentiators Customer
Brand
Ease of Doing
Quality
Attract/Retain
Service Business Best Employees

Strategic Financial Customer Process Organization
Objectives
• Generate revenue • Cross-selling/ • Responsive • Effective training
• Manage budget Solution selling • Eliminate bureaucracy • Foster a win-win
• Lower cost per call • Partnering • Reduce errors environment
• Grow targeted customer • Attract and retain best
segments associates

Key Financial Customer Process Organization
Performance
• Contact Center ROI • CSAT Index (Top 2 Box • Response Time • Agent Peak Performance
Indicators • Cost per Call • Customer Churn Rate • Forecasting Accuracy Index
(KPIs) • New Products Sold/100 • # of Net New Customers • Service Level • Employee Satisfaction
calls • Abandon Call Rate Index
• Average Handle Time • New Hire Speed to
• Sales per Hour Competency


Creating Top-Notch Quality through
a Customer-Focused Culture
Austin, Texas
June 2, 2009

How to Create an Effective Quality Monitoring Form

© Copyright 2008. Alvarez & Marsal Holdings, LLC. All Rights Reserved.

Quality Monitoring Form Discussion

1. Describe the process for designing your quality monitoring form

2. What metrics comprise the quality monitoring form? What percent of your
metrics are compliance related versus customer satisfaction?

3. How do your agents feel about your current quality monitoring form & process?

4. How well does external or internal customer satisfaction results marry with your
current quality monitoring form?

5. If you can make any changes or enhancement to your existing quality
monitoring form, what would those changes be?


Introduction

• Quality Monitoring is an essential part of call center management

• While the intent of the quality monitoring process is designed to evaluate an
agents’ effectiveness in providing good customer service, in some cases the
quality monitoring metrics are having negative affects on agent behavior and
some erosion in customer satisfaction

• How do we design a quality monitoring form that balances the right agent
behaviors that foster customer satisfaction & retention while ensuring internal
conformance to policies & procedures?

• Capturing & understanding your customer satisfaction drivers and aligning them
with quality metrics is one way of marrying agent behaviors with customer-
focused outcomes


Three Customer Value Levers

• Know Me
– A company or agent has knowledge about my problem without me having to state again
– A company has visibility to my behaviors, patterns, trends and sensitivities

• Hear Me
– When I have a problem, an agent can hear “the problem behind the problem” and
demonstrates a willingness to fix it

• Help Me
– The agent has the will, skill & knowledge to interpret my problem and owns my issue to
resolution
– Since the company is capturing my trends, usage and patterns, the company/agent
proactively offers products/services that will help me


Quality Monitoring Form Design Case Study

• Voice & Email quality monitoring form placed heavy emphasis on compliance
metrics i.e. security questions as well as metrics “we thought” were customer-
focused i.e. saying a customer’s name twice

• The organization was undergoing a transition from transaction based service to
relationship management

• Help deploy an organization-wide customer program for both internal & external
customers as well as guidelines that underpin the behaviors for customer-
centricity

• While deploying the program, we realized the current voice & email quality
monitoring form needed to be aligned with the organization customer initiative to
ensure consistency and integrity with the firm-wide initiative


H.E.R.O Program

• Hear and Respond Appropriately

• Ensure accuracy and consistency

• Respect & treat each other with empathy

• Own customer issues to resolution

• Redesigned the quality monitoring guidelines, evaluation forms & scoring
methodology to align with the firm-wide customer initiative


New Call Quality Monitoring Guidelines


New Email Quality Monitoring Guidelines


Tips for Creating an Effective Quality Monitoring Form

• Make the form easily updateable
– Customer needs change; product & services change; YOUR business changes
– I would reevaluate the quality monitoring form every quarter
• Make the form specific down to the skill & knowledge level of the agents
– Take an a subject area like “Listening” and break it down into smaller components
– Consider trending specific areas of your QA form to be used for future coaching and
training opportunities
• Develop the quality monitoring form based on the competency of the job
• Consider “graded” and “non-graded” measures
– There may be specific areas you want to grade to drive behavior change, but there may
be other areas that you want to note but the score is not relevant to driving the right
agent behavior
– Example: Will the customer choose to take their business elsewhere because the agent
didn’t use the proper greeting?


Tips for Creating an Effective Quality Monitoring Form

• There is no right or wrong way to score a call or email
– You do need to think through what behaviors you are trying to cultivate and measure
the agents against those
– You want to balance efficiency & effectiveness metrics
– Consider applying a weighting system to your quality component

• Think about what you call your quality monitoring form and QA process
– Anecdotal evidence suggests that agents perceive the QA program in different ways
based on the way the program is delivered; what the QA form is called
– Example: “Call Assessment QA Form versus “Customer Experience Form”


Austin, Texas
June 2, 2009

When Your Customer Speaks, You Better Listen!


Voice of the Customer Discussion

1. How many of you have a formal process for disseminating voice of the customer
insights to key decision makers & stakeholders? Please Explain

2. How many of you have dedicated operations resources devoted to voice of the
customer analysis and reporting?

3. How many of you marry quality assurance scores with voice of the customer
results at the call center agent level?


…You Are Not Crazy If You Are Listening to Your Customers

“The voice of the customer IS NOT
in your head; it’s the ACTUAL
voice of the customer!”


Voice of the Customer Benchmarking Facts

• Despite the economy, 55% of organizations have made zero cuts for customer
feedback initiatives while 19% have actually increased spend in this area

• High performing organizations are 18x more likely than low performing
organizations to increase customer satisfaction, and 45x more likely to increase
customer retention

• High performing organizations are 7x more likely than low performing
organizations to improve customer advocacy

• 3x more high performing organizations than low performing organizations enjoy
above-average performance in their ability to rate individual employee
performance based on customer satisfaction


Drivers & Strategic Actions for Implementing VOC


Business Context: Regional Online Bank Case Study

• Acquisition, share of wallet and retention are top priorities
• Execution of world class relationship management and seamless
customer service across multiple channels
• Organizational focus on customer churn
– Growing competition from other retail banks
– Customer service inconsistency
– Defend high value and most growable consumer base
• Were there quality improvement projects in our control to make a
difference in the attrition?


Methodology: Regional Online Bank Case Study

• Sent out a random email customer satisfaction survey to 21,673
customers
• Random sampling excluded any customer that received a survey in the
previous quarter
– Included 5,000 high value customers
• Survey questions were targeted to 5 specific areas
– Product/Service
– Account features
– Customer Service
– Repurchase Intent
– Customer Advocacy


Initial Results: Regional Online Bank Case Study

• Satisfaction with Customer Service
– Secure e-mail support – 33.2% rated 5 followed by 29.3% rated 4
– Timeliness of response – 29.8% rated 5 followed by 27.9% rated 4
• Frequency of Use of Service Channels
– Secure e-mail 47.3% use occasionally followed by 31.2% who seldom use


Initial Results Led to an Internalization Effort

• Strategic decision to internalize secure e-mail support
– Better, faster, cheaper
– Opportunity to “own” the customer experience by delivering on brand
promises and reduce response time volatility
• Completed the internalization within 90 days
– Developed the business case and ROI model
– Hired 24 Customer Fulfillment Associates
(CFA’s) and 1 Team Lead
– Developed an augmentation strategy


Improved Email Response Time & Quality of Service by 82%

• Drastically reduced the secure e-mail response time
– March – 52.60 hours
– April – 26.60 hours
– May – 9.79 hours
• Initiative led to other strategic and expense management initiatives to
improve customer service
–Internalized Tech Support
–Internalized Security Channel
–Implemented an After Call Based Survey program


Post Call Customer Feedback Program

• Receive alerts in real time when the customer expresses a pain point
– Bank Contact Center and Outsourcer are copied on all alerts
– Team Lead from NetBank contacts the customer to resolve issue no later than
48 hours from the time the alert is received
– Once issue is resolved, Team Lead shares the information to customer care
management team and outsourcer
– Quality improvement initiatives are created to close gaps
– Agent coaching is administered when necessary


Three New Quality Metrics

• Two new value creation measurements have been created
– Contact Center ROI
– Agent Peak Performance Index
• Contact Center ROI
– Measures the value creation/destruction of customer interactions
– Triangulate measurement view; overall outsource relationship and center by
center
• Contact Center ROI Calculation
– {[% Delighted calls x Customers served) x Avg. Revenue per customer] minus
[% Dissatisfied calls x Customers served) x Avg. Revenue per customer]} / Fully
loaded costs for the period x 100


Three New Quality Metrics

• Contact Center ROI Calculation Example
– {[.60 x 100,000) x 50] minus {.05 x 100,000) x 50]} / $2,083,33 x 100 = 132%
• Agent Peak Performance Index
– Each agent that a survey is conducted is scored by the actual voice of the
customer
– If the index is falling, it raises a red flag to supervisors/trainers for additional
coaching/training
– If the index is rising, it demonstrates which associates are providing customer-
centric support
• Agent Peak Performance Calculation
– Agent ROI x Accuracy (QA Score) / % Delight Treating Customers as Valued


The ROI of Voice of the Customer

Provided by marketing
Captured by monthly VOC

Formula for calculating Contact
Center ROI

227% ROI within 12 months of
implementation (Aug 05 - Aug 06)


Voice of the Customer Steps to Success

• Define performance metrics for measuring voice of the customer effectiveness
• Proactively inform customers of changes made as a result of customer feedback
• Tie voice of the customer results to employee performance where applicable
• Make voice of the customer results part of your leads/supervisors/managers
incentive compensation
• Analyze customer feedback results to create actionable insights
• Create a process to enhance quality metrics over time
• Where applicable, involve, incentivize and hold your outsource vendors
accountable results


Austin, Texas
June 2, 2009

Agent Empowerment & the Effects on Quality


I Want You to Walk Away With One Simple Truth…..

•“…..Be Afraid of Customers Not Competitors”
•Jeff Bezos, CEO, Amazon.com


Types of Agent Empowerment

•Agent Empowerment in Hiring
1 in 4 centers that empower agents to assist with hiring have a
formal hiring task force.
Of those centers, 77% report a “positive” or “very positive” impact
on agent engagement and retention

•Agent Empowerment in Quality Assurance and Coaching
41% of centers surveyed reported their more experienced agents
serve as quality monitoring assistants
“Agent Empowerment” 2008 ICMI Research
89% of centers that utilize peer monitoring helped improve the Report”

overall engagement and retained skilled tenured agents

•Agent Empowerment to Manage “Moment of Truth” Interactions
58% of centers that empower agents to make non-routine decisions at the point of
interaction positively affected customer satisfaction


The Conflicted Contact Center

In a recent benchmarking study, contact centers focused on providing customers an
“experience” versus treating customers as a “transactions” measured “Customer Satisfaction,”
“Total Cost of Customer Support” and “Average Call Wait Time” as the main key performance
indicators (KPI)
90% Best In Class
Average
80%
Laggard
70%

60%

50%

40%

30%

20%

10%

0%
Total Cost of Average Call
Customer Satisfaction
Customer Support Wait Time

“The Conflicted Call Center: Customer Experience versus Transactions” Aberdeen Group,
March 2007


“Moments of Truth” Defined

•Moments of Truth high
Pivotal moments of
Surprises, trials and
customer dialogue that
tribulations Predictable customer
have the ability to create

Customer Engagement
(Contact Center Agents making lifecycle events
or destroy customer
non-routine decisions)
value
Typically critical and
unpredictable
Customer is emotionally
vested in the outcome
Threats to cost efficiency Business as usual

low
low high
Process Standardization


Contact Center Experiences Influences the Brand Promise

• Customer Experience
Attributes
Agents are
knowledgeable about
all customer
interactions
regardless of channel
Decisions regarding
problems are made at
the point of interaction

“The Call Center’s Impact on Company Brand and Image” by Dr. Jon Anton and Anita Rockwell


Establish an Empowerment Service Level Agreement

•Objective SLA
Approval from Legal / Compliance
Grant additional authority to conduct certain types of transactions
Make sure system changes match SLA
Routinely review reports to ensure compliance
(make changes as needed)
Focus heavily on quality assurance and monitoring

•Subjective SLA
Mistakes may be made on the way
Communicate the value of the customer
Focus heavily on quality assurance and monitoring
Reward the right behavior
(even though it produced the wrong result!)

Integrity + Intent + Capabilities + Results = TRUST


Alignment of Performance Management Systems

• Quality Assurance should evolve its measuring criteria from compliance to internal
conformance to behaviors that drive customer satisfaction
– “You said my name like 4x’s on the call. Whoop-Dee-Friggin-Doo! I still don’t have my
issue resolved! Get me your supervisor!” - Crazy “But Good Point” Customer

• Rewards and Recognition programs should motivate, recognize and incentivize
agents that demonstrate “going above and beyond for the customer”
– It’s important to define what this means to your center or organization

• The inbound / outbound call center process is one of emotion. Partner with Training
to develop targeted soft skills training
– Do you know there are actual reports of customers getting physically sick from poor
service?!


Summary

We are no longer in the service economy but have entered into the dimension of the
experience economy

Customers are the most valuable (yet scarce) asset to any organization

A shift is required for contact centers to function as strategic assets.


Let’s Keep in Touch

Art Hall
– Alvarez & Marsal Business Consulting
3399 Peachtree Road, Suite 1900
Atlanta, Georgia 30326
– ahall@alvarezandmarsal.com
– Direct: 404-260-4152
Mobile: 404-759-9158


Creating A Customer Focused Culture

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