This document discusses the role and importance of call centers in building customer relationships and managing customer interactions. Some key points: - Call centers handle a large volume of daily customer interactions and have more contact with customers than any other part of an organization. This makes them critical for strengthening relationships or damaging them. - Many organizations do not understand why they lose 15-25% of customers each year or where those customers go. Poor service is often the reason 65-85% of customers leave. - While call centers are often seen as necessary costs, when managed well they can become strategic assets that provide competitive advantages through customer insights and responsiveness. - Establishing performance standards and continually improving processes, employee capabilities

1. Call Centres
A Necessary Evil or Strategic Asset?
The future success of most organisations is all about their ability to build and effectively manage
customer relationships. We hear this every day, but many organisations are still struggling to do it
effectively and with some degree of “passion”. Too often, the discussion about customer relationship
management (CRM) gets bogged down in the “sterile” world of databases, software and broader IT
solutions – often losing sight of the fundamental processes that are the critical underpinnings of an
excellent customer relationship. “High touch” and “High Tech” must work in synergy.
A vital element of any customer relationship excellence strategy is the “customer response
component”. In many cases, this response component is characterised by a contact centre or
solution centre. Such a centre can have more interactions with customers in a day than any other
single part of your organisation. In some large organisations, such centres may handle as many as
10,000 to 20,000 or more customer interactions per day. That’s 10,000 to 20,000 “moments of truth”
or opportunities per day to strengthen relationships or destroy them. How many customer interactions
take place each day in your organisation’s call centre(s)? How many are positive? Research has
shown that it is not unusual for an organisation to lose 15-25% of their customers a year.
Unfortunately many organisations do not really understand why they are lost or where they go from a
competitive perspective. Moreover, research also shows that 65% to as many as 85% of customers
leave due to poor service or an attitude of indifference on the part of employees. What does your
contact center contribute? In a number of proprietary studies conducted for utilities and some high
tech organisations, one can track the negative correlation between satisfaction and the number of
service contacts the customer has with the organisation! Is that what is happening in your
organisation?
Organisations in the private as well as public sector tend to have numerous contact centres for any
number of issues – customer service, enquiry or help lines, technical support, customer relations,
telemarketing and more. Siemens alone, for example, at one time had nearly 100 contact centres
around the world. In the U.S., the State of New York has about 95. The unfortunate thing about
many of these contact centers, even within the same organisation, is the inconsistent approaches
which are utilised and the lack of economies of scale that occur. Moreover, if you read the studies by
Sue Fernie of the London School of Economics, the trend in frighteningly many organisations is
toward the creation of “sweat shops” akin to those of the old industrial revolution. People in these
centres are being compromised as a matter of routine in the interest of cost reduction. This can be
seen by the massive outflow of jobs to countries like India. Why pay an agent £25,000 per year in the
U.K. when you can pay a young capable person in India £7,500 to do the same thing (supposedly)?
Whilst the math is deceptively simple, many organisations remain clueless about what they are giving
up to achieve those cost savings.
Yes there are horror stories. Take the telemarketing operation where the manager made all his
people stand on their chairs and make their calls for orders. You could only sit down once you got an
order. The last person standing was fired. Then there’s the one about the call centre where the
manager forced an employee to wear an adult size diaper on the outside of their clothing as a
deterrent against them going to the toilet too often. I certainly believe that these situations are the
exception and not any sort of a nefarious trend of evil doing as Sue Fernie might suggest. But clearly
these types of incidents, even if they are truly small in number, get a great deal of “hype” from the
media as the following diagram illustrates.
© August, 2000 Marra Quality, Inc.

2. ““ WelcomeWelcome
to hell.to hell.
Can I putCan I put
you on holdyou on hold
please? ”please? ”
Call Centre CultureCall Centre Culture
21st Century Sweatshop - The Media Image
Courtesy of Ventura
So let’s get beyond the “hype” to the “reality”. When you do this, what seems to float to the surface is
the question, “Do organisations really understand what a call centre is all about?” In the past 18-20
years, I’ve seen a lot of call centres and one conclusion from all this experience is that in so many
cases these centres are the organisation’s most undervalued and/or underutilised asset.
Then too there were those hopeful souls that imagined that with the advent of e-commerce, call
centres would become a thing of the past. Not so! There are still, it seems, many customers who
crave a human interaction to feel fulfilled. While it may be that some call centres have shrunk
because routine non-valued activities have ceased or been outsourced or driven to the ineternet,
higher value activities remain – hopefully with a higher caliber of agent to be of assistance.
The Starting Point: Build a Foundation of Performance Excellence
So where do you begin? Our feeling is that if you are going to think about doing anything useful with
your call centre, you have to do it by building on a base of performance excellence. Inevitably,
however, you are faced with answering questions such as, “Where are we now and how do we
know?” or “How do we compare?” No question – one needs to establish a baseline for performance.
What do you utilise? Where do you look to find a measuring tool to help?
The Call Centre Association has developed a Standard Framework for Best Practice. It represents
an operating guide to help call centres fulfill their goals of efficiency and customer service. This
framework reflects the views on call centre management of successful companies, experienced
individuals and serious players in the call centre industry.
By addressing some 25 areas of operation, one can begin to build the foundation for performance
excellence that can distinguish your call centre operation as a true “value add” to your organisation
and move it a step closer to becoming a strategic asset. Let’s have a look at some sample issues
addressed in the framework. As we do, think about what your call centre operation is doing in these
areas:
Your People
 How is training effectiveness measured and the outputs acted upon?
Communication Within The Call Centre
 Are processes in place to gather employees’ views, disseminate information and take
appropriate action?
Culture
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3.  Is there a commitment to provide an honest forecast of potential for progression and
development?
Policies & Legislation Affecting Your Operation
 Is there a process in place to ensure that developing legislative requirements are brought to
the attention of management?
Service Performance & Organisational Efficiency
 Customer complaints are logged and reviewed. Action is taken to eliminate recurring
complaints.
Using this as the first step to build a foundation of consistent performance, one can then move to the
next level.
Where do you go from there?
Building on the foundation of performance excellence, we now look to where we can go in terms of
enabling our call centre to add ever increasing value to our organisation and to our customers. In
fact, to continue evolving to the point that our call centre is transformed from a cost centre to a
solutions centre into a strategic asset (see below).
Evolution of Contact Centres
to becoming a Strategic Asset
Call/Contact
Centre
Cost/Efficiency
Damage Control
Many Agents
Solution
Centre
Relationships
Loyalty
Brain
Centre
Competitive Advantage
Agility
Innovation
Fewer Agents
Brain
Centre
Brain
Centre
Brain
Centre
Brain
Centre
Correspondence
E-commerce
Telephone
Data Bases
CRM
Real Time Data and Information
flowing continuously to all parts of
a global organisation
Value Value
Fax
SMS
In its ultimate configuration, a call centre can become the “brain centre” of an organisation – the
confluence of streams of all the various types of customer information from multiple sources.
Integrating and analysing these streams and then continuously refreshing your organisation’s
CRM information system allows your call centre to provide enormous value to your
organisation and to helping you gain the competitive advantage you need in the market place.
If your organisation is like most today, you’ve noticed that everything is more dynamic than ever. In
fact, if we just look at a few dimensions, most notably customers, competitors and technology,
we see that all organisations are migrating (if not already there) into the most uncomfortable
box in the matrix below – namely the upper left quadrant.
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4. Changing Market Conditions
Rapidly Changing Stable
Stable
Rapidly
Changing
MarketConditions
(customers&competition)
Technology
Where is your organisation today? How fast is your operating and
market environment changing? How are you leveraging your call centres?
Increased need for
“real” time
data & information
•Customer
•Market
•Competition
Today, quite clearly, there must be more of an external focus than ever. All of your customer facing
employees and processes are more critical than ever for success. The emphasis is on “real
time” data and information to allow your organisation to be more proactive, more responsive
and agile. Once again, this is precisely the type of business issue your call centre can help
you address.
But where do you start? You are concerned about cost issues. The reality on this point is that,
inevitably, poor service ends up costing more than good service – any day of the week. When
estimating the cost of poor service one should also include the “cost of lost opportunity”. This is the
often hidden cost that comes as a result of any decline in customer satisfaction or loyalty or negative
references being given by those who have contacted your call centre and gone away dissatisfied with
their experiences. What helps ensure good service, aside from good capable people, is a sound
operating system. In that regard, you can almost view a call centre as a “microcosm” of the
organisation as a whole. As such, one can obtain an understanding of baseline performance and
opportunities for achieving performance excellence. So what sorts of questions would you pose and
what method would you employ for such a performance assessment? It could be done one of two
ways, with or without external assistance – the latter only if you can maintain objectivity! By
assembling a Team consisting of people from within the centre as well as some from “internal”
customers or suppliers of the centre, address questions such as the following:
Leadership:
• Describe the process for call centre review (e.g., what is reviewed, how often reviews are conducted, who is involved
in the review at each level, what actions for improvement are taken based upon the review, how are employees
informed of and involved in the actions taken?
Policy and Strategy:
• What do you believe are the most challenging business issues currently? How effectively are they being addressed?
What will they be over the next three years? How do you plan to address them? What might be some of the barriers
to to addressing them successfully? How will you overcome those barriers?
Partnerships and Resources:
• Who are the key suppliers/business partners (internal or external) you depend upon for critical inputs (information,
tools, systems, people, other) to ensure caller satisfaction and transaction efficiency? How do you manage the
relationships with these suppliers/business partners? How do you evaluate their performance, impact on your
customers and provide feedback in a timely manner? How do ensure they are making needed improvements in their
performance?
Without belaboring the point, you probably get the idea here. The second method, which could be
done over your organisation’s intranet, for example, would be a survey that could be sent to all
employees. In this case it is suggested that two different levels of survey be utilised – one for team
leaders and agents, the other for supervision and management. Illustrated below are just a couple of
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5. examples. Employees would be asked to rate the practice or behaviour described on a 1 to 5 scale.
These would also be structured according to the EFQM Excellence criteria.
Leadership:
• Team Leader and Agent Question
o My supervision and management keep me informed of everything I need to know to do my job well.
• Supervisory and Management Question
o Call centre supervision and management ensure regular, effective 2-way communication with all centre
employees to keep them properly informed of everything they need to do their jobs well.
Again, without going into too much more detail, one can see where this would lead. Clearly there
would be a number of such questions under each Excellence criterion. In total, there may be a total of
75-100 questions.
Beyond all that, most organisations have a number of engagement processes in play each day.
These are the ones which bring your organisation and the customer together – the “moments of truth”
or “touch points” as they are sometimes called. Your ablilty to manage the relationships with
customers effectively depends upon your ability to manage these engagements effectively – day in
and day out. Below is a diagram of an “engagement map” for a telecommunications organisation.
Managing the Customer Relationship:
Customer Engagement Map
Sales Process Delivery
Customer
Purchase
Decision
Customer
Purchase
Consideration
System Design
Installation Repair Service / Maintenance
First
Invoice
Order
Submission
Credit
Review
Purchase Cycle
Customer
Purchase
Consideration
Training Technical Support
Account Maintenance
“Telecommunications”
Where are the “Points of Pain?”
How often do you step back and assess where and how your call centre can be providing support or
adding value in these engagements? What information or insight could be obtained that
could be helpful to your organisation becoming more proactive? Moreover, are you delivering
service excellence across all these engagements? Is your call centre delivering service
excellence? How do you know? What do we mean by service excellence? At a high level it
is integration of three key items –process, people and the service itself. Have a look at the
diagram below:
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6. Service Excellence
Service
Excellence
People
Process
Service
Characteristics/Scope
Benefits
Innovation
Easy to do business (simple)
Responsive/Short cycle time
Knowledge
Skills
Behaviours
Attitudes
Capability
+
Support
HR Systems
Alignment
First you must have the right people. So recruiting and selection must be given a top priority as you
look for the proper profile of individual. Ensuring that they have the right knowledge, skills, attitudes
and behaviours then becomes critical. If so, they will be fully capable – capable of ensuring each
interaction with customers reinforces the relationship they have with your organisation. Aligning the
HR systems (recognition, performance appraisal and compensation) to ensure reinforcement of the
desired behaviours is also central to the effort. Everything must be done to ensure your organisation
(contact with your call centre) is simple and hassle free. Interactions must be efficient, but not be
lacking in the “human aspects” – a delicate balance. Your service must reflect innovation and a scope
broad enough to move your centre toward becoming a “one stop shop” for as many customer needs
as possible. There must be true benefits which the customers perceive they are getting through their
contacts with your centre.
I once asked an organisation which was receiving 10,000-15,000 calls per day which of two scenarios
they preferred. Scenario number one: The customer hangs up with a smaile on their face and thinks
to themselves, “Wow, I really like to do business with that organisation! The people are always so
responsive and professional. They always seem to find an effective solution to whatever problem,
issue or enquiry I may have and without keeping me dangling on the line forever”. Scenario number
two: The customer slams down the phone and screams in agony “Oh, I hate doing business with
those people! They are so nonresponsive as if they don’t care a damn about me. All I get is “this is
our policy” and a description of what they can’t do for me. All they do is waste my valuable time and
never give me what I need.” Well, which of these scenarios is going on in your call centre today?
Let’s try to quantify this a bit to see if it really may be true that better service and call centres can pay
off. Let’s suppose that we have a situation where 2% of complaints come to Head Office or
Corporate, 40% go to some field location (e.g., branch, retailer, district office or otherwise) and 58%
are not communicated (the silent majority!). If the loyalty of each of these groups is, for the sake of
argument, 50%, 40% and 20%, respectively, then out of every 1000 customers with a complaint, your
“recovery” capability, measured in terms of retained “souls” would be only 286. Not a particularly
good score. With the advent of a call centre at Head Office or Corporate delivering service
excellence, one could easily hope to obtain a distribution something similar to the following: 20% of
complaints now come to Head Office or Corporate (you have made it easier to complain with the
advent of a well publicised centre), 50% are handled at the field level (but training in service
excellence has been conducted) and now only 30% fail to communicate their displeasure. If the
loyalty of these groups is now shifted to (not at all impossible by the way!) 80%, 50% and 20%,
respectively, you will now be retaining 470 out of every 1000 or an additional 184 customers per
thousand. Given the long-term economic value of a customer, this represents significant incremental
turnover to the organisation. Let’s say a customer is worth £5,000 over their period of loyalty, this
represents almost £1 million!
To deliver service excellence, we believe that the following approach should be given consideration if
you are at all serious about enhancing customer relationships and building loyalty:
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7. Customer Relationship Model
Service
Excellence
Recovery
• Customer
Loyalty
• Stronger
Relationships
Prevention
+
Understand
Assess
Negotiate
Be an
Advocate
Prepare
Listen & Learn
Be a
Resource
Be an
Advocate
As you can readily see from the above, service excellence plus recovery leads to stronger
relationships and higher loyalty. Operating in the background are several systematic approaches.
The first is the systematic cycle of customer engagement: Be prepared (to interact with the customer
by telephone), listen and learn (build understanding, verify and clarify), be a resource (provide a
solution) and be an advocate (take the initiative within your organisation to follow through on behalf
of the customer). Then there is the systematic cycle of customer recovery. Here one must first
understand the real issue (or issues) the customer is contacting your organisation about, assess its
severity, negotiate a solution –there’s that word again (not assuming what the customer wants, but
by asking them what they would like you to do on their behalf!) and then being an advocate (following
through by taking ownership of the issue and meeting commitments). In the process, one must
ensure that proper codes are captured (the fuel for the value generation of the centre) so that not only
the issues are identified, but that root cause analysis is conducted on those which are most severe
(those which are most likely to lead to customer disengagement) so corrective actions can then be
taken to prevent the problem from reoccurring.
This is all very well and good, but how do you begin to elevate the centre to becoming a strategic
asset? It has been said, and quite wisely, that the quality of a person’s life is directly related to the
quality of questions they ask. The same may well also be true for organisations. The quality of the
organisation can be directly correlated to the quality of questions which management asks. Think
about it. In that regard, nothing will change for call centres until management begins to pose more
strategic issues. What might some of these be? Allow us to suggest a few for your consideration.
1. How are you enhancing customer loyalty as a result of how you have chosen to operate and
focus your call centre? What methods and indicators do you utilise to determine if you have
been successful?
2. How effectively have you been able to integrate your call centre into your organisation’s sales
and marketing mix? That is, how has your call centre helped to support achievement of your
marketing strategy? What benefits have been realized and how do you know?
3. How have you positioned the centre to enhance your market competitiveness? Have you
been able to utilise the centre to bring about an important level of differentiation between your
organisation and your competitors? What methods and indicators do you utilise to determine
if you have been successful?
4. How effectively have you utilised your call centre as a real time “listening post” to the market
to gain competitive intelligence, identify emerging trends, understand changing customer
requirement and drive innovation in your organisation’s processes, products and services?
What examples of innovation can you cite?
5. How does your call centre add real value (provide benefit) to your own organisation? If the
call centre went away tomorrow or was shipped off to India, would anyone notice? How do
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8. you or should you assess the value the centre adds to your organisation? What value does it
add for customers? Can you quantify the value being added?
The list goes on, but again we hope you see the direction we are heading. Again, to emphasise the
point raised earlier, as unfortunate as it is, call centres in many organisations are just viewed as an
operational cost centre and necessary evil. A vision of how they can help provide strategic advantage
and the investments to get there do not always seem forthcoming. As a result, we believe that many
call centres are truly an underutilized and undervalued asset in many organisations.
What can management do? The agenda for change would be as follows:
1. Get more familiar with your call centre. Start by visiting it! In the best companies,
management are required to listen in on customer calls monthly for up to four hours. In
others they actually are trained (Yes, even Management requires training occasionally as
hard to believe as that may be) to take calls from customers. Talk about receiving the
unfiltered voice of the customer! Wow!
2. Get involved. When was the last time you went down to your centre and invited a random
selection of agents to gather around a table with you so you can ask things like: What are our
customer saying? Where are they having the greatest difficulty in doing business with us?
What are the new issues you are hearing about? Do we know about what competition might
be doing based on what we are hearing? Are there any new ideas coming from customers
(or you here today) for product, service or process improvements? And so on!
3. Ask the right questions – not just what is this operation costing us, but some of the strategic
issues raised above. We are not saying that you need to ignore the operational issues. In
fact, we said earlier that forward progress and evolution of the centre should be based on a
firm footing of operational performance excellence. But why continually complain about cost
issues, for example, when you know as well as we do that if you always ask the same
questions and always do things the way you’ve always done, you will forever and a day get
the same results! You are in a negative spiral and need an intervention to break it. Here is
where finding a baseline is key – utilising Business Excellence or the CCA standard. Identify
the high leverage action items for improvement and move forward.
4. Ensure that the centre engages in an effective internal marketing programme to let other
departments or functions understand the value which the centre could add to them. For
example, there was situation at General Motors where certain vehicles with V6 engines were
having hard starting problems at high altitudes. Engineering asked the centre if they could
help. What happened then was that anytime a customer with that configuration of vehicle
called in and they lived in a high altitude area (utilising the customer database at their finger
tips) and the issue they had called about was resolved, they were asked if they would mind
participating in a product improvement effort. If they said yes, then they were asked a short
series of questions given to them by engineering. This was compiled weekly and shared with
engineering. As a result a “fix” was determined in much less time.
5. Ensure you have the right people and that you are delivering service excellence as this is
what will help create competitive advantage for your organisation based upon differentiation.
Remember that service quality buys you nothing today. It is simply meeting minimum
requirements and allows you to continue to stay in the market. Support your people, not only
through aligned human resource systems, but through the information and
telecommunications systems you have in place.
© Dr.Ted Marra
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