Right-Size the Service Level of your Contact Centre
By Carlos Munoz, Senior WFM Consultant and Project Manager, Teleopti, Inc.
What then is the right service level for your customers? When a call is not answered within the patience threshold, do customers call back? Does an abandoned call represent a missed service opportunity? Are they defecting to competitors? Is your business bad-mouthed as a consequence? Aim to right-size your service level — in line with budget
If your aim is to right-size the service level so that you meet the needs of your customers while, at the same time, optimise operational expenses (especially the salary base), then the next question is: How much? Wouldn’t it be refreshing to find a simple, statistical model or equation that shows the net impact of raising or lowering the service level on staffing and operational expenses? Well, now there is.
First and foremost, your customer wait-time threshold must be accurately defined; this cannot just be picked out of a hat. It differs greatly among industries and service types. Customers calling, for example, emergency services or their bank will wait a lot longer in the queue than when calling a pizza shop for delivery. This can easily be determined by the slopes and intercepts on a regression line chart that correlates the historical abandonment rate and average seconds to abandon in relation to varying service levels, pulled from your automatic call distributor (ACD). Find that sweet spot or tipping point where abandonment turns critical.
Having done this, now consider the following imaginary sales environment of a contact centre: Figure: Sales Environment of Contact Centre
- Monthly volume forecast: 48,000 calls of which 45,004 handled at abandon rate of 6.24%
- Revenue per call: $34.24 (monthly revenue divided by the number of handled calls)
- Full-time equivalent (FTE) requirement: 129
- Average yearly salary: $48,700 (commission, sourcing, on-boarding, training costs not incl.)
- Work week: 40 hours (all full-time staff); net working days: 21 – no holiday pay assumed
- Average abandon time in seconds: 371.46 Average Handle Time (AHT): 1,350 seconds
- Shrinkage rate: 15% Occupancy rate (OCC): 92%
- Estimated service level: 80% in 30 seconds
Of a 48,000 monthly call volume at an abandon rate of 6.24%, 45,004 calls are handled by 129 full-time equivalent (FTE) agents. A service level of 80% means 80% of calls are answered within 30 seconds. Revenue generated per call comes out to be $34.24.
Now let’s adjust the service level upwards by 5% to 85%. How much will this cost you at the end of the day? This knowledge equips you for making informed decisions about the customer service experience you want to offer and at what expense. Assuming non-mentioned parameters remain static, at a 38% service level, the abandon rate drops to 4.77%, meaning 705 additional calls will be handled, which, in turn, requires two full-time headcounts. Now simply calculate the revenue generated by the additional calls and subtract the headcount cost.
Monthly cost of 2 FTEs: $48,700 yearly salary/12 mo. = $4,050.33/mo. x 2 heads = $8,116.67
Net profit: 24.158.55 – 8,116.67 = $16,041.88
Voila, there you have it: the impact on your overhead for bringing on board 2 full-time headcounts is a net profit of 16,041.88. Note, however, that while the abandonment rate decreases, so does the average seconds to abandonment: by 45 seconds. Considering, however, that the hold-time tolerance moved from an initial 6 minutes and 11 seconds to 5 minutes and 27 seconds, in the larger scheme of things, this is not earthshattering but rather a trade-off.
Drawback in measuring customer satisfaction
A drawback to this method to calculate the service level is that it assumes time spent in the queue is the primary factor of customer satisfaction. A call may be answered within the threshold, yet is subsequently poorly handled, owing to lack of agent expertise or resources available. In this case, First Call Resolution (FCR), rather than the service level, may be a better metric for evaluating customer satisfaction. Bake in resources for improving the skill base and focus on providing callers with the answers they need (the nature of calls are often quite predictable), and eliminate or reduce the need for callers to phone again. In a sales environment, increase resources for an additional FTE if the goal, for example, might be to drive customer behaviour and improve the rate of customers deciding while on the phone, rather than getting information and call back.
Contact centres without revenue-generating component
Even contact centres in a cost-centre environment without a revenue-generating component have a cost-per-call impact. You can go through the same exercise without an eye on revenue. Focus on quality of service and define if there is a marked tipping point or sweet spot; for example, if there is a spike in the abandonment time between 120 and 160 seconds. If that requires extra staffing, does that put you way out of the ballpark? Look for the tipping point that reduces the number of abandoned calls with an aim to increase overall customer satisfaction. Then make that adjustment there, aligned with your overall budget.
Carlos Muñoz is a Sr. WFM Consultant and Project Manager at Teleopti Inc. In this role, he is responsible for improving our customer’s operational performance by implementing Teleopti solutions across North America. Carlos is no stranger to such tasks, having spent 13 years in Workforce Management, Finance and Operations leadership with Verizon Wireless and Allianz Global Assistance; he knows the importance of adding value to an organization, not just saving cost.
To contact Carlos please email Carlos.Munoz@teleopti.com or go to www.linkedin.com/in/carlosmunozwfmprofessional/
Teleopti, a top-five global WFM vendor operating in 70 countries, is used by many Fortune 500 companies (as well as smaller call centers) and offers the industry’s most flexible, adaptable, sophisticated and easy to use WFM solution available today. We help our highly satisfied customers automate and optimize their scheduling to save costs and improve customer service. For more information, please visit www.teleopti.com