The average multichannel merchant reports that up to 40% of direct sales come through the Internet, according to research conducted by my firm, F. Curtis Barry & Co. The percentage of direct sales from the Internet can range from as low as 15% to as high as 70%.
Regardless of the exact percentage, what’s clear is that merchants today are challenged to balance Internet and telephone order-taking and customer service, providing the same high service levels for each channel. And that translates to an increased burden for the contact center, the front line of direct-to-buyer operations.
You might not at first understand how this creates more work for contact centers. After all, for many, if not most, the number of order calls has declined in recent years in inverse proportion to the growth of the Web. Yet numerous centers are taking more customer service calls, even with an increase in the use of e-mail and online chat.
Attendees of our 2006 Contact Center ShareGroup reported that on average, 15% of their calls can be attributed to customer overflow from their Websites. And many have seen a rise in the amount of off-phone work related to online orders that require extra attention — customers having difficulty navigating a Website, shoppers who need help with technical questions about products or company policies, buyers who still don’t trust the credit integrity of the Internet.
This channel shift is causing contact centers to reevaluate traditional ways of doing business in many areas: staffing, agent skill sets, customer service expectations, online self-service, the appropriate use of technology. Contact centers weighing the traditional methods of operation with newer skill sets and technologies need to juggle multiple tasks (phone, mail, e-mail, chat) while continuing to keep costs down and provide exemplary customer service. This juggling can more or less be broken out into six service challenges; here they are, and more important, here’s how to overcome them.
- DOING MORE WITH LESS
This phrase has become the mantra of many companies, yet labor rates in contact centers are steadily increasing. Whereas the average hourly rate of pay in contact centers five years ago was $6.53-$13.00, today many centers must pay qualified agents $7.25-$14.00 an hour to stay competitive. There’s more competition for the same customer service skills in the available labor pool, so finding qualified contact center agents is difficult in many parts of the country, particularly in areas of low unemployment.
One way businesses try to accommodate more with less is to lower service levels — for instance, from 80% of the calls answered in 20 seconds to 70% of the calls answered in 20-30 seconds. Although lowering the service level may help reduce staff, you must consider carefully whether this step really saves money, taking into account the measurable costs of call abandonment rates and lost orders.
Say a business takes 1 million calls annually with an abandonment rate of 5%, an average order of $100, and a call-to-order ratio of 1.5 (every 1.5 calls taken result in one order). This means the company is missing 50,000 calls a year. If 60% of the callers who had hung up never call back, then the merchant is missing 30,000 calls and potentially 20,000 orders. Multiply that by the $100 average order, and the company is losing $2 million annually.
Some multichannel contact centers trying to do more with less have embraced the universal agent concept. Universal agents can perform a wide variety of tasks, from taking phone orders to responding to customer service e-mails. Universal agents are typically scheduled to work on a specific task at a designated time; they can be particularly valuable assets during off-peak periods because they can then switch to work at whichever particular tasks need to be completed. This reduces the requirement of dedicated staff during these times.
Although workforce optimization programs can help determine the most efficient use of staff, the universal agent concept does add another level of complexity to the contact center. Many contact center software programs used for performance tracking are designed around calls. With universal agents switching tasks, it becomes more difficult for such programs to track the actual time spent on each task.
- SHIFTING FROM AN EXPENSE CENTER TO A REVENUE CENTER
Among their other functions, contact centers now are likely to be generating sales through daily or weekly specials; upsell/cross-sell programs; outbound selling of complementary products; calling customers back on cancelled orders when backordered goods become available; and serving as an overflow call center for other businesses. All these types of programs require agents who are more highly trained than agents had to be just five years ago, since reps today must be able to use the information being made available through increasingly complex technology.
To succeed at this level of multichannel activity, contact centers should focus on attaining a higher call-to-order conversion rate. A contact center with a call-to-order ratio of 1.5 or higher should track and analyze the nonorder calls to see if there is a way to convert them into order calls. The most common nonorder calls include “Where is my order?” (WISMO) queries, requests for information about the nearest store, catalog requests, questions about product information, requests for Website help, and questions about returns. You can try to decrease the number of these calls with better in-stock positioning, prominent catalog request forms and store listing information on your Website, and more clarity in your catalog and online copy.
- USING NEW TECHNOLOGY TO COMMUNICATE WITH CUSTOMERS
One of the greatest customer service challenges today is simply keeping up with the technological changes. Along with the growth of the Internet, customer service has expanded so that it now frequently functions as a miniature help desk. E-mail, chat, and click-to-call have changed the way service reps can communicate with the customer. Contact center agents must be comfortable using the Web — they must know how to conduct online searches, understand the functions of ISPs, and be conversant with ancillary technologies such as instant messaging.
Web chat, for instance, can be a great tool when used effectively, but many companies have difficulty in showing a return on investment with this technology. Multichannel businesses that have more-complex product lines — electronics or hunting and fishing gear, for example — tend to benefit more from the use of chat, as their customers often want more in-depth knowledge of the product than can be printed in a catalog. The Internet allows customers more access to detailed information, but a dialogue with an experienced agent really closes the sale.
Click-to-call is a relatively new Web technology, compared with e-mail and chat. It lets online buyers transition seamlessly within the context of their Web session into an immediate telephone or PC-based voice contact. Website visitors simply select a click-to-call button and choose PC-to-phone or phone-to-phone to connect in real-time with a sales rep or a customer service agent. It provides another vehicle for customers to communicate with contact centers, but it remains to be seen whether it will become a staple among the methods of communicating with the customer.
There’s no question that the multichannel contact center is changing, and a review of your operation’s technology may be in order. Are you using a traditional circuit-switched infrastructure or a software-only IP environment? Are you using a traditional ACD (automated call distributor), or do you need a fully integrated workforce management solution? Are you looking to integrate e-mail, chat, and click-to-call functionality into your contact center? These are just a few of the technology questions you should consider as the Internet evolution continues.
- DEALING WITH CHANGING SKILL SETS
Amazingly, few multichannel companies require customer service staff to be proficient at e-mail responses. Many companies transform existing customer service reps or phone agents into e-mail service agents by decree rather than through screening and training, and this is not a good idea. Training in proper online etiquette, or netiquette, and the ability to communicate through short, concise, and friendly written responses are vital to responding properly and effectively to e-mail inquiries.
- PROVIDING CONSISTENT MULTICHANNEL CUSTOMER SUPPORT
Providing cross-channel support is vital, yet many customers frequently fail to find a consistent shopping experience across channels. Proper cross-channel support assumes that contact center agents know what promotions are active by channel (e-mail blasts, affiliate programs, in-store sales), understand item pricing differences by channel, and have the ability to see Internet order activity on their terminals.
We recommend including all promotions on a corporate-wide marketing and advertising calendar. In many companies, for instance, e-mail blasts have not consistently been included in such lists. Multichannel merchants should also incorporate cross-channel strategies for returns, in-store product pickup, and consistent product pricing into their planning.
- HELPING CUSTOMERS TO HELP THEMSELVES
Customers want immediate gratification and will use the communication vehicle with which they are most comfortable in order to receive that satisfaction. Providing self-service capability on a Website is an important element in putting immediate gratification within reach of the customer.
To that end, your Website must be navigable and easy to use. It must provide FAQs, along with a search engine that allows for flexibility, misspelled keywords, and responses to the types of questions customers typically ask. Good self-service also requires having extensive product information and company policy statements available to the customer, preferably in greater depth than catalog copy can supply. Offering product information, chat, and FAQs on a Website can decrease the number of e-mail requests for information.
With all the challenges, technological and human, that continue to face multichannel merchants, contact centers need to find the optimal mix of technology and skilled staff to enhance the customer experience.
Curt Barry is president of F. Curtis Barry & Co., a Richmond, VA-based consultancy specializing in catalog/Web operations.
CONTACT CENTER BENCHMARKS
Calls per hour: 10-12
Call-to-order ratio: 0.5%-1.5%
Call abandonment rate: 3.5% or less
Upsell/cross-sell rate: 4.5%-20.0%
Call answer service level: 80% in 20 seconds; some movement to 70% in 20 seconds
E-mail turnaround time: Typically 8 hours; very good service is within 2 hours
Agent in-seat occupancy: 85%-90% for larger contact centers: 70%-80% for smaller centers
Source: F. Curtis Barry & Co.
CONTACT CENTER COSTS
Average fully loaded cost per order: $5.99*
Average fully loaded cost per call: $5.89*
* Contact center accounts for 50% of the total cost of an order excluding shipping cost; fully loaded cost per order includes direct and indirect labor, management, benefits, credit-card processing costs, facility occupancy, and telecom costs.
Average direct labor costs: $1.83 per order, $1.79 per call
Incentive costs per order: $0.01-$0.10
Customer service rep labor rate: $10.69-$13.65 an hour
Telesales rep labor rate: $7.25-$14.00 an hour
Planning for shifting seasonality
Multichannel merchants that do most of their business during the holiday season are seeing a shift in seasonality from mid-October to early December. The Internet, same-day order processing, and expedited shipping have helped train customers to order items ever closer to the actual holiday, with the expectation that their packages will arrive in time.
This shift is causing orders to spike later in the season, and the contact center that traditionally began hiring and training in July/August now begins hiring in September/October and in some rare cases in as late as November. This condensed season plays havoc with the hiring and training cycle for agents.
To deal with hiring for the ever-shortening holiday period, many companies try to develop a pool of employees who return every year. You can build loyalty by keeping in contact with seasonal staffers throughout the year. You could offer them guaranteed hours during the peak or simply pay returning seasonal workers more than than new employees.
Another technique to buffer seasonal spikes is to use incentive programs to retain and reward seasonal staff. This could be in the form of hourly wage increases, additional discounts on merchandise, or electronics giveaways such as TVs and DVD players.