Performance Management Is The Key to Success in Contact Centers

Dr. Baumin Lee, 95teleweb, cowrote this post.

Of course we are too busy and don’t have enough time! When we go into work each day and see crisis and problems coming in like a tidal wave, it is difficult to feel that there is enough time to manage performance. Moving out of crisis-mode is essential to your success – Performance Management is the key.

Why? Managing Performance focuses our attention on the things that matter: To our Contact Center Clients and to our Contact Center Customers. We cannot steer a ship without a compass and a map that shows where we want to go. Of course we know we can be busy all day long making sure the ship is “ship-shape and ocean-worthy”. In the end, though, we have a destination which we want to reach in the shortest possible time and with the ship in good shape and the crew in good health and responsive at all times.

Let’s take a look at the ocean in which we are sailing, take a look at the diagram below. Wow, that’s a lot to deal with, which is outside of the span of our control, just like the waves and the weather which can one day be ocean storms and another day calm weather.

Figure 1: Business Continuity issues keep changing in importance from day to day

Figure 2: The Service Profit Chain

The Harvard Business Review has provided a very good picture of the Service Profit Chain that focuses our attention on what we need to do to perform well and reach our destination. What we do in Contact Centers is to deliver SERVICE. In order to offer high service standards we must measure internal and external service quality. How are you doing that today? Internal and External Service Quality are areas where Performance Measures have been neglected in the past, because most performance measures have been focused on having the organization focus on the activities directly related to achieving financial objectives while neglecting to pay attention to selecting the RIGHT internal and external Quality measures.

Figure 3 Who is the Customer?

In the Contact Center we get caught up in a confusing challenge as we get direction from many parts of the organization. So who is the Internal Customer of the Contact Center?

As Figure 3 shows, Marketing is the ears, Sales is the voice, Service is the eyes, production the nose and the Call Center employees integrate all the pieces to deliver a consistent message to the external customer. So internal customers of the Contact Center are all of the pieces and our challenge is to create a new and integrated approach to performance management in the Contact Center. To do so, we need to create a framework so that we can develop competencies and capabilities to track and manage performance within the Service Chain. Focusing on delivering Value is crucial.

1. Performance in Product Quality is the most basic:
   1. Did marketing understand the needs of the customers, well enough that they have correctly defined a product that meets their needs?
   2. Did sales set up the expectations for the customer about what they could expect the product to do?
   3. When service was performed, was it delivered on time, with a good experience, and did it meet the customer’s expectations and customer’s reason for requiring service?
   4. Does the product as produced, shipped and received perform as expected by the customer?
   5. Did the Contact Center develop the relationship into a customer that would come back?
2. Performance in Customer Value is rarely measured and most critical for the company in improving performance.

   Do you have enough information about your customers that you can divide them into these groups?

   1. Customers who received value that was less that what they paid in the most recent transaction with our company.
   2. Customer who believe that they have consistently received fair value from our company.
   3. Customer who would speak well about our company because they consistently receive value from our company that greatly exceeds what they paid.
   4. Customers who would refer other customers?
   5. Customers who would like our company to do well and continue to serve them.
   6. Customers who are champions for our company because they receive products and service that cannot be offered by any other company.
3. Even though so much of the time is spent focused on Financial Performance, it is often directed at measures that are backward looking. Forecasting financial performance gives us time to change what it is we do, so that we can improve financial performance before it is too late.

   We have invested accounting time and effort to define standard product costs which allows us to forecast factory performance. In this way we have been able to improve product manufacturing systematically each year.

   1. Have you paid that attention to forecasting and improving service profitability?
   2. Do you know how much it costs to perform each type of service that may be required?
   3. Do you examine your processes by “activity cost” so as to streamline processes taking into account the activity costs?
   4. Do you perform “revenue allocation” so that you know the profitability of how you organize each of your activities?
   5. Have you examined the investment required to improve service delivery in terms of prevention of problems and reduction of frustration by customers?
   6. Have you matched the investment required to the increase in lifetime value of customers?
4. As products become commodities where pricing and margins are squeezed, Service is the new frontier of Competitive Advantage. Yet focus continues on the financial performance of products in terms of their product profitability, and contact centers and service are often treated as cost centers whose costs have to be reduced.
   1. Do you know if your costs saving measures in the Contact Center have resulted in increasing customer trust in your company?
   2. Do you evaluate if your customer policy increases or decreases trust in your company?
   3. Do you know if employee motivation is low or high?
   4. Do you know whether the employees trust our company to do the right thing for the customer?
   5. Does our company expect our employees to constantly bring us the customer’s complaints so that they can be quickly resolved?
   6. Do you reward employees for offering suggestions that can prevent future problems and reduce customer frustration?

Conclusion to Part 1

The Service Chain Management Value Framework provides a new focus for integrated performance management in Contact Centers that allows us to anticipate the future and improve our Contact Center’s ability to be ship-shape, ocean-worthy and reach our destination of profitably delivering value to our customers, today, tomorrow and into the future.

In Part 2, we will look deeper into the Service Chain components so that you can develop your own performance measures that can prepare your Contact Center to compete in the 21st century.