Companies can generally increase their bottom line in two ways: making money and cutting costs. Cutting costs is sort of like panning for gold (since most of you probably can relate to gold panning…). You focus on an area, look at the costs, look at the value those costs are bringing (in the form of revenue) and then you look at alternatives. If the cost is already worth it, then maybe an alternative would be more worth it. If the cost is not worth it, then maybe an alternative would be.
This is a simple thing to do in a lot of cases: box costs, materials cost, payment terms, waste numbers, etc. But a lot of times, the biggest savings are hiding in places that aren’t so simple.
One more complex example is Customer Service and what they do with their time and what size team is best. Given the sporadic nature of calls and their tendency to come in large chunks rather than a smooth curve of call and chat volume, most companies will hire a customer service team that is scheduled to overlap during the ‘busy’ periods and thin out during the sparser call/chat times. This means that your team will have an abandonment rate of greater than 0% (people who get tired of waiting for someone to answer and hangup — after 30 seconds, 1 minute or 5 minutes, etc). The question becomes, how much are those calls you are missing worth to the company? Is it worth doubling the size of your customer service team to answer an extra 100 calls a day? 10? 1?
Even tracking all calls (abandoned and answered) to their final purchasing decision won’t answer this question completely. It might tell you that an answered call typically spends $5 dollars more than an unanswered one but it won’t tell you how upset that potential customer might be that their call wasn’t answered and how many people they won’t tell about your company’s great responsiveness.
There are obviously a lot more variables than what I’ve just discussed, but it makes the point. Drawing the line at the right balance for answering calls and chats is a difficult problem, but easily one that holds large gains for even medium sized companies.
When I think about customer service and call volume, I wonder how much effort it would take to reduce call volume to near zero. Identify the reasons for the call, and find ways to solve them.
Is it better descriptions of all products, and how-tos on using them?
More automated messages about the status of an order?
More up front information on the site?
And then how many resources would be expended on fixing the issues, the resource cost, and the opportunity cost.
I did a whole project on call centers while at Accenture looking at metrics like ASA, AHT, Abandonment rate, Call volume, % of calls resolved, etc.
I don’t remember too much but let me know if you ever want to chat.
I may take you up on that, Jacob. It’s always interesting to talk about how these issues affect other companies and what their recommended steps forward are.
no problem. the biggest takeaway i had from that project is that you have to look at all your metrics holistically. for example, let’s say you’re focused on a metric like % of calls resolved and you notice that this % starts going down. this might not be a bad thing. if your company put a lot of effort into solving customers problems ahead of time, then you’re more likely to see this % decrease. the reason is because now it’s only the more difficult customers who are calling in to get there problems resolved. this can also be true with a metric like AHA (average handle time). just because it goes up is not a bad thing as long a metrics like # of calls are decreasing. again, that’s probably an indication that only more difficult questions are coming thru and you’re doing a better job of answering easier questions online or thru some other method.
again, just make sure you’re looking at everything. don’t get focused on just one metric.
i hope this helps some.