In recent years, call centers have begun to deliver more value. In industries like banking where call centers can generate up to 25 percent of total new revenues or telecommunications where they can contribute up to 60 percent of revenue, it’s easy to see why. But even without the sales component, the link from satisfied customer to loyal customer to increased revenue is not hard to make.
The call center organization has made significant progress in what is measured and accomplished, but across the industry, the returns seem to have hit a plateau. Customer satisfaction has held steady at about 75 percent for years, and customer service satisfaction, at 71 percent, has also seen little progress. It seems that call centers are finding the proverbial last mile an insurmountable hurdle. Agent attrition, interestingly enough, has also stayed constant, generally hovering around 30 percent. Since attrition always makes the list of top things to improve, it seems that leaders are making the connection between attrition and other business challenges, but most are seeing little progress.
This lack of progress in the battle against attrition has real, quantifiable costs. While most organizations may track the hard costs of attrition, with line items such as recruiting and training costs, the opportunity costs such as customer churn are harder to quantify, but more critical. Research was conducted in the form of a survey and executive interviews to discover the real impact of attrition in August 2007. This executive white paper includes those findings and will prescribe a comprehensive approach to solve the root causes of attrition across the agent lifecycle.
What Part Does Attrition Play?
It stands to reason that the biggest opportunity for improvement in customer service lies in working towards an optimal customer experience with every interaction. While not all satisfied customers are loyal, all loyal customers are satisfied.
According to a BenchmarkPortal report, customer service affects chances for repurchase. When done poorly, there is a significant drop in probability of re-purchase (32 percent). When there is a service issue and it’s handled well, the repurchase probability is greater (89 percent) than if there were no service issues at all (78 percent).
According to widely reported industry attrition rates, one out of every three agents answering the phone at any time is new, and typically less than proficient. Call center leaders indicate they are aware of the problems this phenomenon causes. When asked to indicate the obstacles to achieving their key goals, 53 percent of respondents selected attrition, outranking all other choices.
The hard costs of agent attrition are well known and are accounted for in almost any call center’s operating budget. Typically accepted as a fact of life, attrition is dealt with in a pragmatic fashion. Acceptance of the high costs associated with attrition such as recruiting and hiring, new hire training and productivity losses have become ingrained in the call center culture. Figure 3 below illustrates these costs at different points towards reaching proficiency.
While the hard costs of attrition often justify investment in retention programs on their own merit, the opportunity, or hidden costs, of attrition are more difficult to quantify but provide business incentive. Most people would agree that new agents do not provide the same level of service as experienced agents. With the large percentage of customers who churn solely based on customer service, the impact of less than proficient agents is enormous. The following chart (Figure 3) adds these hidden costs to the hard costs of agent attrition to show the true costs of reaching proficiency.