Professor Merlin Stone
We live in a world of call centres. Employment in call centres is still rising. In B2B markets, the call centre may be as large as a consumer call centre, or as small as a few desks. Whatever size they are, they’re usually professionally run, with statistics about their effectiveness pouring out of the computer.
Although they are rarely the customer’s favourite method of contact with companies, they are usually their preferred method for ensuring things get done. Of course, the Internet is rapidly taking over that role, leaving the call centre as the preferred channel for more complex transactions and resolution of the most difficult problems.
However, for many companies the call centre is still the main channel for managing customers. Now, I’ve discovered a new function of the call centre. Just as the eye is a window of the soul, the call centre is a window into a company’s customer management culture. If what you see is good, then the company is likely to be managing its customers well – and profitably. If what you see is bad, then the opposite usually applies.
Establish a relationship
In many projects I’ve worked on, a key problem is that call centres are driven by measures that – when you examine them – turn out to have little or no relationship with business performance.
The worst call centres are driven purely by cost measures ranging from call length to cost per call. Not much better are ones measured by customer satisfaction or recommendation. There are many ways a customer can be satisfied – or dissatisfied – with a company, and most have little bearing on business results, despite claims to the contrary. Fortunately, the latest usurper – net promoter score – has been trashed for its claims, particularly that it’s the only measure you need.
In fact, the lesson from most studies is that a balanced scorecard is the best way to drive a call centre. However, even these are theoretical constructs which are uncorrelated with business results.
So we need something better. Traditional measures do not tell us what we need to know to build customer loyalty and company profitability.We know that branding and brand equity are important for profitability, but we also know a brand’s success depends as much on emotional as technical factors. Consistent emotional measures are hard to find. However, knocking existing measures doesn’t solve the problem. Call centres cost a lot of money. They make a big difference to how customers relate to a company, and vice versa. So how should we measure them?
Cost and satisfaction are legitimate parts of a balanced scorecard, but they don’t tell us how customers feel. If how customers feel about your call centres determines what they’ll do through them – from getting service issues resolved to buying more from you – then how can you measure how they feel? And how can you show that what customers feel is as important as you think?
Call on expert advice
To answer these questions, I turned to the UK’s most comprehensive research on customers’ experience of call centres, Harding & Yorke’s ERIC (Empathy Rating Index Company) service.
In 2004, Harding & Yorke built a benchmarking programme measuring how it feels to be processed as a customer, through various channels including call centres and retail. The ERIC programme measures 200 companies from 13 different industries twice a year. Companies are selected because they have a large market share in the sector, they subscribe to the service (subscribers are called ‘members’) or a member has requested their inclusion.
The research is carried out by calling an advertised number identified as the main brand contact for the company. I asked Jamie Lywood, Harding & Yorke’s MD, to share his data and a colleague, Dr Yuksel Ekinci of Surrey University, to see if there was a relationship between how customers felt and return on capital. And there was. We’re still investigating this and the reasons for it.
Are we naïve? After all, return on capital is a general measure, resulting from the efforts of managers in all functions. The ERIC measure is very specific. Today, we can only hypothesise why we have found a good fit. The primary reason is because of what is measured. Customer satisfaction measures usually quantify either the process of satisfying customers (e.g. did they say ‘good morning/afternoon? etc.) or the physical result of an interaction (e.g. did they get what they wanted?).
Steady as you go
While the process element of ERIC is comparable to some of these measures, the empathy element measures something very different – how customers are made to feel by the attitudes and subsequent behaviours of call centre agents. And it’s the empathy element that’s closely related to profitability. This is closely related to the ‘gut feel’ we have but find hard to articulate. It makes us buy more and stay loyal or bad-mouth the company and leave.
ERIC measures the results of the culture we encounter as reflected by its call centre agents and translated into an emotional state – or put simply, how it feels to be a customer.
What does this mean for companies with contact centres? The answer is simple. Some aspects of call centre behaviour are linked with profitability. It seems that companies that focus on creating empathy with their customers, as defined by ERIC, are more likely to be profitable. However, creating or improving empathy demands changing or improving culture, so ‘steady as you go’ is a good rule to follow.
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