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Contact centers due for an extreme makeover

Two CRM industry observers say outmoded thinking masks the true beauty of the contact center: profitability.

SAN FRANCISCO -- Conventional wisdom once held that contact centers existed simply to service existing customers and keep profits stable. Two CRM industry watchers say that kind of thinking underestimates the value of a contact center.

Contact centers can reduce costs and increase profitability, according to principal analyst John Ragsdale of Forester Research Inc., Cambridge, Mass., and Becky Carroll, a senior consultant with the Peppers and Rogers Group, a consultancy in Norwalk, Conn.

While they offered attendees at the recent Smart CRM West conference different strategies to increase contact center profitability, both agreed that companies should change their philosophy.

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"The contact center needs a customer-focused makeover," Carroll said. And Ragsdale added that companies "need to view service interactions as part of a customer's overall experience."

Ragsdale considers each instance of customer contact as an opportunity to cross-sell, "closing the gap between service and sales maximizes the value of each customer interaction," he said. To that end, Ragsdale recommended increased sales training for contact center agents.

Other approaches work as well

Carroll takes more of a CRM approach to contact center profitability. She said that companies should use each interaction as an opportunity to acquire information about a customer. And in the process, they should ask a "golden question" – one that will help them identify their best customers.

Once that data is gathered, Carroll said, customers should be grouped. "Different customer levels get different service," she said. Using a tiered approach allows companies to spend resources on their best customers and less on their least valuable customers.

That doesn't mean that good service is not a primary consideration.

"It is great when a customer receives good customer service, but there has to be a procedure to make acts of good customer service repeatable," Carroll said. And the best procedure is to measure a contact center's performance.

Metrics are essential for measuring the effectiveness of customer service, but both Carroll and Ragsdale believe that certain metrics can actually hinder customer service.

"Companies need to move from measuring efficiency to measuring effectiveness," Carroll said. "If agents are getting paid to get off the phone, that's what they will do."

She cited an example of a company that had a plan to increase what it got out of its customer interactions, but failed because "there was no adoption." Carroll said. "The agents did not have metric incentive."

The biggest obstacle

Debbie Kinslow, a conference attendee and programmer from Synopsys Inc., of Mountain View, Calif., agreed with the contact center recommendations she heard, but she saw a fundamental barrier to implementing them: "Many organizations are averse to change."

But for those committed to changing the way they do business, they must be prepared for a long journey. Ragsdale recommended that companies determine who is in charge of the customer's overall experience and then entrust them with maximizing contact center value. And Carroll suggested making changes incrementally rather than trying "to swallow the elephant in one gulp."

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