Seven Keys to Cutting Costs Effectively

Because of the nature of random call arrival and the reality of queues, simply reducing costs across the board does not work well in a customer contact environment. Insufficient staff or other resources can quickly lead to long customer queues, additional contacts and intolerable agent occupancy rates.

Those who get the best results are more savvy – they focus on leverage points, and have an organizationwide perspective. Here are seven key principles to keep in mind as you look for ways to minimize and reduce expenses:

1) Clarify your strategy and approach. Before making major changes, it is essential that your internal management team agree on the services the call center will provide. Your “customer access strategy” should define issues such as the customer segments you will serve; access channels (telephone, email, Web, etc.); telephone numbers, email addresses, URLs; hours of operation; service level objectives; services provided; and how you will capture information on customer interactions to strengthen processes, products and services. Without this strategic framework, cost cutting efforts are likely to head off in many unrelated directions.

2) Identify organizationwide opportunities. Rather than focus on cost-cutting in a vacuum, look for ways to maximize cross-functional resources. For example, marketing managers may be willing to provide the call center with budget to capture and analyze information on consumer trends and expectations, when shown they can save money on target marketing. Similarly, maintaining effective after-sales services can provide valuable research and development input, leading to sustained market share, better sales and money-saving process improvements throughout the organization.

3) Redouble your efforts to prevent unnecessary and unprofitable contacts before they happen. Chances are, about 20 percent of call types account for something like 80 percent of the call load your center handles. In the context of your customer access strategy, explore options for preventing, handling or deferring a greater percentage of these contacts – versus trying to cut back across the board.

4) Pool agent group resources as feasible. The powerful pooling principle is an immutable law – all things equal, if you take small, specialized agent groups, effectively cross-train them and put them into a larger group, you’ll have a more efficient environment. The objective should be to keep things as simple and pooled as possible without jeopardizing the services specific contacts and customers require.

5) Optimize staffing and schedules. Being even slightly understaffed will cause big problems in terms of low service levels, high occupancy and heavy telecom network usage. On the other hand, those increments (i.e., half hours) of the day producing service levels of 100% may indicate that you have far more people at those times than needed. Getting forecasting, staffing and scheduling tuned up is a sure path to better cost performance – and customers, employees and shareholders all come out ahead.

6) Work on process improvements. Errors and process inefficiencies are particularly troublesome in call centers – they consume valuable staff time, drive up network costs, and contribute to repeat calls. The good news is, even modest improvements to processes can yield dramatic results.

7) Keep your eye on the biggies: customer loyalty, revenues, and market share. Customer expectations are evolving rapidly and customers are more sensitive to perceived value and service than ever. In an uncertain economy, customer care has become a key battleground, and it’s important to assess decisions in the context of how your customers will be impacted. In other words, don’t let short term measures undermine longer term success. These decisions require foresight and a healthy dose of good instinct.

Brad Cleveland
Senior Advisor; former President/CEO ICMI

Brad is passionate about helping organizations improve the effectiveness of their customer contact services. As former President/CEO and longtime owner of ICMI, Brad led the firm to international recognition and an eventual sale to Think Services. He now serves as a Senior Advisor to ICMI/Think Services and delivers keynotes and consulting across the globe. Brad is author/editor of eight books, including Call Center Management on Fast Forward, which received an Amazon.com best-selling award. He can be reached at bcleveland@think-services.com.