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Accenture

Companies now recognize that improving the performance of their customer care workforce plays a critical role in creating more profitable customers.

Over the past decade, organizations have accepted two truisms. First, improving the performance of their people improves the performance of their business. Second, superior customer relationship management capabilities are key to building customer loyalty and enhancing revenue streams. These ideas rarely overlapped. But today this is changing. Organizations now recognize that improving the performance of their customer care workforce plays a critical role in creating more profitable customer relationships.

To realize significant bottom-line improvements when deploying resources to develop their people, companies must focus on those workforce segments that add the most value to the enterprise. Some workforces — for instance, those responsible for significant revenues or cost — are more critical to business performance than others. Investing in improving their performance is more likely to return immediate bottom-line benefits.

The importance of a particular workforce segment differs across industry and workforce sectors and is also influenced by time of year or geography. For example, a worker responsible for handling product inquiries will experience a higher call volume from a region where special purchase terms have been advertised in the local press. A company that launches a new product targeted to a specific consumer segment will receive more calls from customers of that type.

A well-informed customer care worker will handle these information and service requests quickly, enhancing the caller's perception of the product's quality and the value of the company's service. A well-informed, well-trained worker will also be able to steer callers toward additional services or product upgrades designed for their particular needs, not only providing a more satisfactory customer solution, but also extending the revenue produced from these customer relationships over time.

So, why are organizations so slow to boost the performance of their customer care workers? One reason is the traditional focus of CRM investment. Over the past decade many companies focused their CRM budgets on automating sales force operations and adding new customer channels rather than on maximizing the performance of their customer representatives.

These efforts produced significant savings and improved customer satisfaction, but, ironically, they also may have reduced the opportunities for competitive advantage. The widespread availability of software applications that allowed companies to know their customers better created a level CRM playing field. Indeed, the leading CRM applications that once differentiated company A from company B a couple years ago are now commonplace.

Recasting the Customer Care Workforce

Companies are now recognizing that their customer care workers do, in fact, make up a critical workforce and that they must reengineer workforce performance alongside customer care processes and systems.

Consider this: Every second that a customer care representative spends talking with customers or potential customers is another opportunity to build the company's brand or increase the company's share of the customer's wallet. In fact, these two specific opportunities to create economic value for the organization are what make customer care workers critical to an organization.

If the workforce is ill-equipped or unmotivated, this opportunity quickly disappears, making the brand vulnerable to ever-higher customer expectations for fast service and knowledgeable responses. Although it may not be featured in their job descriptions, customer care workers are actually frontline brand managers. Delivering consistent messages and accurate information to customers will impact customers’ perception of service quality. A broad market reputation as a company that delivers superior service helps differentiate the company and increase the value of its brand.

In addition to exposing their brands during customer calls, organizations often miss significant revenue-generating opportunities when agents fail to make connections between the customer's call and a company's products and services. Even small improvements in the performance of customer care workers can result in greater operating efficiencies and additional revenue. This is especially true among interaction-intensive businesses, such as financial services companies that depend on cross-selling, upselling, and constant customer vigilance to drive their products into the marketplace.

For these companies, customer care workers are just as important as the direct sales force. And while simple transactions should continue to be driven toward low-cost self-service channels, a company's best customers should be routed to its best representatives — those representatives trained to cross-sell, upsell and think strategically.

Companies that depend heavily on customer interactions have been among the first to see their customer care workforces as more than just costly overhead. And they are now looking for ways to develop the revenue generating potential of those same workforces.

With the right tools and training, customer care representatives can identify, develop and capture revenue opportunities during every customer interaction. For example, Accenture projects that improved training programs, which utilize new e-learning approaches to improve sales and service skills, will boost sales revenue by an average of 30 percent while, at the same time, reducing training costs by 10 percent.1 This projection is supported by Accenture research, which shows that improved customer relationship capabilities can generate up to $40 million in new revenue for billion-dollar organizations.

Improving Job Performance

Innovative companies are making workforce performance a strategic imperative for customer care, treating issues such as learning, organizational design, and scheduling as critical factors in optimizing the quality and the financial performance of customer interaction. The types of questions these companies continually ask themselves include: "What is the impact of hiring the right employees, better enabling the workforce, and sustaining an improved level of performance?" and "What is the most appropriate way to staff and operate the customer care centers to deliver effective customer interactions?"

A telecommunications company, for example, asked these questions before setting out to transform its customer-facing network operations. It wanted to improve customer service and build new, competitive skills in its workforce. Once the company had assessed its customer-facing workforce in light of these goals, it designed a solution with two thrusts: new deployment centers focused on improving the customer experience and a skilled field-service and customer care workforce to help launch new products. This initiative has produced business results in three areas: improved customer experiences, reduced cost of operations, and an increased capacity to change.

Improved Customer Experience

• Improved customer transaction scores by 10 to 15 percent
• Increased first-time completions by 50 to 100 percent

Improved Operational Effectiveness

• Increased quality by 20 to 30 percent
• Increased productivity by 10 to 15 percent
• Reduced turnover by 20 to 40 percent

Increased Capacity to Change

• Reduced cycle time to train by 20 to 25 percent
• Decreased time to proficiency by 20 to 75 percent
• Increased knowledge application by 30 to 60 percent
• Increased organization-wide consistency by 30 to 50 percent
• Increased employee satisfaction by 10 to 50 percent

This is just one example. Executives in any industry who are interested in transforming their customer care operations need to incorporate an increased focus on "people issues" into their CRM strategies at every stage of the employment lifecycle for the customer care workforce.

There are many tools available for improving workforce performance, including process improvement, performance feedback, e-learning, knowledge management and mobile applications. Every company will need to configure a solutions package for the particular performance needs of workforces targeted for improvement. But any solution should address the following four core areas: Attracting top talent, building core skills, continuously improving performance, and retaining top performers over time.

Attracting Top Talent

While centralizing or standardizing processes can improve the efficiency of customer care operations, the quality of customer-company interactions depends largely upon the talents of the customer care representatives themselves. These workers are frontline brand managers, and as such, they are among a company's most valuable workers. An organization can realize significant value simply by improving the quality and "fit" of new hires, thus reducing the costs associated with employee inexperience and staff turnover (which, for many outbound call centers, can reach 150 to 200 percent annually).

In addition, the cost of training the best and most qualified recruits is significantly lower than the cost of training the average new hire — especially when companies factor in the revenue lost while their workers are spending time coming up to speed. Consider the case of the world's largest specialized placement service for accounting and financial professionals. By implementing an intelligent agent Internet application, this company has streamlined its job candidate identification process and, in turn, now devotes more time to focusing on those individuals best qualified for a particular job. As a result, the company has increased the number of qualified recruits and reduced the cost of employee acquisition from $30 to $1 per candidate.

Despite the new strategic interest in talent acquisition and management, it's becoming more and more difficult to attract and retain the types of employees needed to drive organizational success in the customer care sector. Gartner estimates that the percentage of the American workforce that works in call centers will grow from 3 percent to 5 percent by 2010.2 The analyst also reports that customer analytics and data management are among the fastest-growing IT-related jobs, as well as major areas of investment for enterprises through 2005. Yet, the number of qualified candidates for these jobs continues to dwindle.

In this competitive environment for talent, customer care organizations need to reassess their entire hiring process — from workforce planning and design to talent sourcing to "best fit" candidate selection to hire.

A number of tools, techniques, and service providers are available to help customer care organizations recast their hiring processes, which can result in significant annual savings (Figure 1).

Building Core Sales and Service Skills

Once a company has the right people in place, focusing attention and resources on helping these employees develop the right sales and service skills can pay big dividends. But making sure these critical workers develop and maintain the right skills requires more than simply implementing a new course of training. It means:

• Conducting "learning needs" analysis — Several needs analysis tools are currently available. They provide a holistic view of existing customer care capabilities and enable companies to identify specific learning goals that are aligned to customer care objectives and the overall business strategy.
• Designing the curriculum and developing specific courses — Again, several tools are available to help organizations create the appropriate curriculum for various learning environments. These tools allow companies to make optimal use of resources to deliver training via traditional classroom methods, computer-based training, e-learning technologies or performance simulation.
• Managing the learning process – Content architectures, such as those provided by Docent, and new training channels, such as portals, allow organizations to administer their learning programs effectively and efficiently.

In addition to ensuring that customer care workers are better able to serve their customers, these techniques can deliver cost-saving benefits. Streamlining course content can lead to substantial savings for new hires. E-learning solutions decrease instructor time (and, therefore, cost), as well as increase instructor-to-student ratios. These benefits translate into greater organizational efficiency and additional revenue. Figure 2 illustrates the potential impact of an e-learning solution on a 5,000-seat telecommunications call center.

Here a new e-learning program helps customer care representatives develop the skills they need more cost-effectively than with traditional training methods. The new program reduced training time and costs by 33 percent and time-to-proficiency by 50 percent. With additional hours to perform their jobs, customer care agents are able to generate $30 million in additional revenue. For this company, the return on their e-learning investment is more than 600 percent.

Continuously Improving Performance

To maintain competitive advantage in the customer care arena, companies must also focus on continuously improving the performance of their workforces. Customer care organizations must not only evaluate the performance of their workers, but also create programs to improve workforce performance. Examples of continuous improvement solutions include:

• Portals and knowledge management — Ensuring that the customer contact workers have full access to the information they need, when they need it
• Coaching — Comprehensive, one-on-one coaching and feedback processes create performance improvement opportunities
• ust-in-time learning — Programs that build the skills customer care workers need, when and where they need to learn them

By focusing on these training components, customer care organizations can be more effective. Figure 3 illustrates how customer care representatives can better leverage sales opportunities when supported with improved training opportunities and tools. Many factors influence an employee's decision to stay, including:

• Rewards and incentives
• Supervisor performance
• Career opportunities
• Corporate culture
• Quality and number of training activities

To ensure that customer care workers stay, companies must implement programs that address factors most relevant for their workforce. A workforce diagnostic can quickly identify reasons for leaving.

Retaining Top Performers Over Time

With turnover rates in some customer contact centers approaching 200 percent each year, a company's workforce performance improvement program must include an executable plan to retain its best employees. When employees leave, so does the considerable investment in time and money made in getting them up to speed. In addition, the time it takes to recruit, hire and train replacement workers will cut into revenues that fully-trained employees would generate.

The potential value of solutions that improve employee retention is significant. As figure 4 shows, educing yearly turnover by just 2 percent can yield a value of $6 million in the form of reduced hiring and recruiting costs and increased workforce proficiency.

A number of factors influence an employee's decision to stay. Among these are:

• Rewards and incentives
• Supervisor performance
• Career opportunities
• Assimilation activities that make workers feel part of a larger team
• Corporate culture
• Quality and number of training activities

To ensure that customer care workers stay, companies must implement programs that address factors most relevant for their workforce. A workforce diagnostic can quickly identify reasons for leaving.

Customer Care + Workforce Care = Revenue

To recap, although not always considered an organization's most important workforce, customer care workers can drive significant revenue and cost savings to an organization's bottom line — particularly if the organization relies on heavy customer interaction to deliver goods/services and maintain relationships. Today, businesses are transforming the performance of their customer care workforces to tap into this until-now hidden value. To accomplish this, companies need to focus on integrating people-related issues into their CRM strategies at every stage of the customer care employment lifecycle. When companies devote the same level of care to their workers as they do to the customers they serve, the result will be significantly increased revenues, cost savings, and even greater customer satisfaction.