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The Virtual Contact Center: Alleviating the Burn From the Churn

By Bruce McCracken, Beagle Research

Reprinted by permission of Beagle Research

Despite all of the analytics, sales and marketing empowerment--and the techno toys--for CRM, the front lines of the battle are customer facing. Without a skilled, well-trained and savvy soldier, how effective will the best weapons be?

Beyond the product or service itself, the tipping point is where two people, the customer and company representative, intersect. The customer service representative may not necessarily bring in new business, but the rep can prevent an organization from losing existing customers. With the annual turnover rate in U.S. call centers hovering at around 40 percent, businesses are vulnerable.

By its very nature, the brick-and-mortar call center is a pressurized work environment. Technology has advanced sufficiently to offer an alternative-- telecommuting. With the virtual call center, a company can save the infrastructure cost of providing a seat for the agent; the agent enjoys a far more pleasant work environment; and the turnover rate can drop to below 10 percent.

The natives are restless
Customer expectations are rising, in part because of the belief that technology should increase the customer service capabilities of an organization. But decision-makers often have opted to adopt technology and/or move customer care to call centers offshore to reduce costs instead of enhancing customer service. The results can be a reduction in costs--as well as a reduction in customers. Losing dollars chasing dimes does not make for a sound business strategy.

Companies that had been using offshore centers may follow Dell's lead by bringing the contact center back home. Cultural differences, language nuances and communicative styles can add to customer frustrations. Rightly or wrongly, many Americans want to speak with another American.

Research shows that customer service is not always getting high marks and that customers are quicker to pull the trigger, ending a relationship.

Most people expect good service but don't feel the service they receive meets their expectations, according to research by consulting firm Creative Strategies and market research provider Connell Associates. The companies surveyed 750 people on their views on service. According to the July 2004 report, 89 percent of the respondents felt that it should be easy to provide customer service, but 45 percent felt that companies failed to provide good customer service. Charts from the report, supplied by eMarketer, demonstrate consumer perception.

In February 2004, Portland Research Group reported that a third of the 841 respondents in a survey it conducted were dissatisfied with the customer service they had received. The likelihood that respondents who were dissatisfied with customer service would continue to purchase a company's goods or services dropped from 78 percent to 23 percent, according to the researchers.

CRM vendor Amdocs queried 1,000 customers in June 2004 concerning customer service in the banking, cable, retail and telecommunications industries. Only 44 percent said the customer service was good or great, and 43 percent felt customer service has gotten worse compared to five to 10 years ago. Fifty-eight percent indicated that they would leave their provider after two or fewer negative customer service interactions.

In August 2004, Accenture, a consulting, technology services and outsourcing company, reported on customer satisfaction a survey of 1,000 U.S. adults in 17 industries. The highest figure of customers generally satisfied with service was in postal services, at 44 percent. The results also revealed that 27 percent of those surveyed would switch providers to talk to a live representative instead of through other means.

The virtual solution
Technological advances in web services architecture, telephony, multimedia, broadband and high-speed connectivity, plus a myriad of other capabilities have, literally brought the concept of telecommuting up to speed. Even training can be done virtually now that the trainer can sit in on a call remotely.

A major key in the feasibility and appeal of the concept is the rate at which potential home offices have become empowered technologically. Various reports suggest that nearly a quarter of all adult Americans have broadband Internet access at home.

Additionally, there are no geographic restrictions on recruitment because of the inherent nature the virtual call center. The fixed costs in a brick-and-mortar call center for office space and the desktop are greatly alleviated, with savings in the cost-per-agent seat from telecommuting translating to up to 30 percent. The value proposition is magnified when you consider the flexibility telecommuting gives businesses with seasonal fluctuations.

Perhaps most importantly, telecommuting results in contented agents; consequently, turnover plummets to 10 percent or less . The upside for the agents that reduced the turnover involves the improvement in their quality of life stemming from working at home in the virtual call center environment.

Tammy McMahan is a 20-year veteran of the insurance industry who telecommutes for ARO from the serenity of the country in northwest Missouri. "My business suits and heels are now collecting dust in the closet and have been replaced with shorts and sandals. My commute to work now consists of simply walking down the hall," she says.

Heidi Jeanne Hess of suburban Dallas, who works for Working Solutions, echoes McMahan: "The reduction in stress of working in an office building full time is probably the most important thing to enhance my quality of life. I don't have to worry about inclement weather, traffic or if my car will start.

Hess sends the industry a message. "As I would miss being a CSR and miss the daily contact with customers, I would first search for work in another field that would allow me to telecommute before taking a traditional brick-and-mortar call center position."

With a six-month churn rate in contact agents, the words of Albert Einstein apply: "Insanity is doing the same thing over and over again and expecting different results." ARO and Working Solutions both have a turnover rate under 7 percent.

Bruce McCracken is a business and technology writer specializing in outsourcing, CRM, ASP, eCommerce, supply chain, IT and IT security. His articles have appeared in Internet.com, CRMBuyer and the Outsourcing Center. McCracken has a master of arts degree from the University of North Texas and resides in Irving, Texas. He may be reached at abatar@bsn1.net.

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