Contact

When the call center meets CRM, everything changes.

On the way to the 21st century, the traditional call center encountered the Internet, and the synergy between the two begot an evolutionary process. First came the ubiquitous corporate Web site, bringing a new capability: Customers could view their bills and find answers to frequently asked questions online. In some cases, they could reach a CSR or forward an e-mail inquiry with one click of a computer mouse.

Then a new moniker emerged. Some vendors and service providers began labeling their call centers “contact centers,” signaling that the operations’ focus no longer rested exclusively on interacting with customers through the telephone.

Now evolving call centers have become one of many cells in the customer-relationship management (CRM) strategies of some wireless companies. Visions of lower churn rates and higher profits propel service providers toward CRM. But completing the journey requires changes in corporate culture and creates a profusion of challenges for the call center.

In the past, call-center operators reacted to customer complaints and queries. But that’s changing.

“A true contact center is pro-active,” said Ruben Cota, inServ e-customer solutions’ president & COO.

In Cota’s lexicon, pro-active means capturing, storing and analyzing information about every aspect of a customer’s interactions with the company. With this kind of real-time information at their fingertips, CSRs can serve customers based on each customer’s value to the company and take into account any unique circumstances, such as previous service problems or credit issues.

Inserv’s call centers strive to empower customers with Internet self-help tools rather than relying solely on phone contact, Cota said. The company’s first task on this front is to convince customers to move away from the phone and toward more consistent use of the Web site.

Cota rationalizes that customers eventually will warm to the technology and realize they often can get quicker, more consistent service via the Internet. Convincing wireless customers to use self-help tools today compares to the banking industry’s efforts to get people to use ATMs when that service medium emerged, Cota said. He added that many customers who initially resisted using the ATMs ultimately chose the machines over standing in long lines in a bank lobby.

But the COO issues one proviso about self-help tools. The tools should be flexible, easy to use and programmed with answers to basic questions. Electronic knowledge repositories draw customers to the self-help model because the information remains consistent, he said, as opposed to human operators whose levels of understanding about products and services differ. If, however, customers have an unpleasant experience, they will shy away from the self-help tools.

Despite technological advances, many wireless companies’ call centers continue to operate the old-fashioned way, according to Cota. “Right now, wireless-service providers’ focus is not on self-help tools and creating a knowledge base,” he mused. “They’re just hiring a lot of people and having them answer the phone.”

Nonetheless, an impetus for change flows from the needs of today’s market.

“Retention is an issue, and service is one key way to retain customers,” Cota said. “You can get cellular service through a thousand different companies. I think customers are looking at the service element and asking, ‘Are they willing to support me as a customer?’”

In addition to retention, the use of CRM tactics in call centers can boost sales, according to Don Tiedeman, DMR Consulting senior management consultant.

“What’s happened is this whole notion of CRM has changed the mission of the call center and added tools that make the call center a part of the overall marketing plan,” he said.

Another function of CRM in the call center is pairing customers with the appropriate CSRs. Some companies instigate this pairing by tracking the originating numbers of incoming calls to identify the customer, Tiedeman said. Then the calls can be sent to representatives trained to handle the kinds of concerns associated with specific customers. For example, if the identified customer places a lot of international calls, he or she would be forwarded to a representative that specializes in international phone services.

But with sophistication comes the risk of confusion.

“Make sure that you’re updating your databases with the most current information,” Tiedeman advised. “If the systems aren’t synchronized, the CSRs can give customers old information.”

He said that many companies are doing online updates to ensure the timeliness of information, rather than relying on the overnight processing of customer data.

The P Factor
The metamorphosis of the call center doesn’t end with new methods of interacting with customers and new machines to log those interactions. There’s also the personnel factor — how CRM has changed companies’ relations with and requirements of their CSRs. According to Tiedeman, training has become a big issue. Accessing and using the information that’s now available to CSRs requires a significant amount of training, he said.

But he doesn’t think the knowledge level of people filling CSR slots has changed much, although he conceded that employees’ needs have changed in the Internet age.

“Employers have had to use more flexible working practices, such as flex-time and part-time hours, to attract more people,” Tiedeman said.

Jeetu Patel, Doculabs vice president of research, has another perspective.

“The type of people being hired is being affected,” he said. “Employers are expecting people with diverse skill sets.”

Patel also said that CSRs’ salaries and retention costs are increasing. But the biggest problem, in Patel’s estimation, is retaining employees who possess the diverse skills needed in today’s call centers.

Some insiders predict that as customers become more comfortable using self-help tools to answer basic billing questions, the requirements for CSRs will rise.

“The main trends will be that call centers will be fielding questions and customer issues that are Tier 2 and above,” said Steve Schmitchel, edocs director of product marketing. “CSRs will have to be skilled at writing e-mails. They’ll need to be trained or hired with those skills.”

At that juncture, calls centers will be able to differentiate themselves by the quality of their CSRs, Schmitchel said.

A U.K. Encounter
In the United Kingdom, wireless companies’ call centers have changed dramatically over the past five or six years, said Graham Ramsden, Syntegra executive consultant, CRM practice. Syntegra, a subsidiary of British Telecommunications (BT), specializes in systems integration and provides services to BT as well as third-party clients. Ramsden said that yesterday’s call center focused on answering the phones in a timely manner and resolving concerns in one call.

Now, consumer adoption of wireless devices has skyrocketed, and companies like BT are responding by creating highly organized call centers capable of handling peak call volumes. Five years ago, most European providers employed approximately 100 to 150 CSRs at one site, Ramsden said, but today most run three or four call centers with 500 to 600 reps in each.

In addition, the type of people calling the centers has changed from a majority of contract holders to a predominance of prepaid customers. Consequently, the volume and nature of call-center inquiries has changed. For example, a prepaid customer may call to replenish an account with a credit card rather than simply asking questions about billing.

“If you combine that with the fact that call centers generally have grown over that same period, you’ll find that there’s a real challenge there — not only in managing from a technology point of view, but from the point of view of recruitment and retention of employees,” Ramsden said.

The executive consultant noted that customer retention has gained much industry attention while employee retention has gained little.

“The more new people you bring into the call center, the more you’ve got occupied with training,” he commented.

BT has found that providing agents with training and technological tools improves retention rates by providing a challenging and rewarding work environment, Ramsden said.

“You can draw a conclusion that it’s going to cost more money,” he said. “That could be true, but I don’t necessarily see that as a higher cost of salary. I think you’ll require more investment in training and more investment in tools to support individuals.”

The British company recently made a change that has transformed the duties of CSRs who support its Web site, BT.com.

“We previously had hundreds of Web sites, which had different images and different messages,” Ramsden explained.

Within the past year, BT has consolidated those sites into BT.com and added personalization features such as the capability to view bills.

Because the consolidated Web site includes information about various BT products, CSRs supporting the site began receiving requests for detailed information that spanned product lines.

“People asked lots of difficult questions,” Ramsden recalled. “We found that having this interactive capability across products, you need a super-powered call-center agent. That’s not to denigrate the people who were in the standard call centers. It’s just a different challenge.”

The major challenge of CRM is its organizational scope.

“You have to cut across departmental boundaries and channels,” Ramsden said. “That’s a major political challenge to an organization. Particularly, you have to change the way people are measured and rewarded.”

The idea centers around evaluating how much an agent contributes to customer satisfaction rather than simply measuring performance by the number of calls handled.

CRM has many potential benefits, Ramsden said, but the approach requires big changes and possibly a large investment. In the light of the recent quest for 3G and the associated spectrum and build-out costs, another colossal expenditure may not be feasible for many providers.

Instant Gratification
Ramsden also sees cultural resistance to adopting CRM.

“Increasingly, businesses are seeking instant results,” he said. “The Internet paradigm has set expectations about the instant delivery of results, you know, building $40 billion companies in weeks rather than years. But CRM is a much more subtle issue. It takes longer to deliver true adoption of the CRM culture than it does to implement a new e-commerce initiative.”

The costs involved in implementing CRM can include software licenses or fees to application service providers, custom-izations of licensed software and systems integration costs. The “big ticket” item is front-office software, according to Ramsden.

“The key problem is that there really are no single, complete front-office systems,” he said. “So you’re always in the situation where you have to do extensive customizations.”

But Ramsden estimates expenditures for technical solutions account for only one-third of the costs involved in adopting CRM.

“You get into the more subtle things like process re-engineering and organization change, which have more subtle costs associated with them in terms of losing employees and the knowledge that they have,” Ramsden said. “Also, when you implement big change, productivity always suffers. That’s a kind of hidden cost that you have to account for that wouldn’t be a big ticket item that you’d have to pay to an external vendor.”

Despite the costs, Ramsden calls CRM a win-win situation for customers and service providers.

“I think people get the wrong idea sometimes about CRM,” he said. “They think that it’s based on an organization secretly knowing everything about the customer, what they do and where they live. It’s really about understanding what kind of customers want what kind of relationships, cross-selling products to customers based on their capacity to buy them, spotting when they’re going to churn based on analytics and winning back customers once they’ve defected.”

Ramsden admitted that no large service provider he’s aware of has achieved total adoption of CRM, not even BT. But the British service provider is continuing the evolutionary process, which has taken it from what Ramsden calls the survival stage through a stage of efficient customer-service delivery. Now the relationship-effectiveness stage, during which providers will strive to form trusting relationships with customers, has begun, Ramsden said. He predicts a 2-year life span for this phase.

“Beyond that is anybody’s guess,” Ramsden said. “Certainly one important thing is going to be dynamic partnering between wireless telcos and other providers, such as financial service organizations.”

The executive consultant envisions the call center two to three years from now as a seamless network of call centers formed by partnerships between several companies.

“That’s already happening now in a very simple way,” Ramsden said. “But I think it will become even more dynamic and complicated as we go maybe one or two years out. Either it means combined call centers into a virtual whole or the ability of one call center to access information that’s relevant to a dynamic partnership in real time, across more than one business system.”

The model will be similar to today’s travel-industry portals where consumers can arrange every aspect of a trip online, from plane reservations to sightseeing tours. But the portals Ramsden envisions would be seamless; each part of the service chain would have the same branding consistency.

“Delivering (integrated call centers) is going to be a very complex thing to do, from a people point of view as well as from a technology point of view,” Ramsden said. “It’s hard enough right now for these organizations to deal with their own back-end systems.”

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Call-Center Concentration

Companies should evaluate the efficiency of their call centers before spending time and money on e-commerce applications, a recent Gartner Group report concluded.

The report revealed that companies rank e-commerce as the No. 1 investment priority, with call-center investments ranking fifth in importance. At the same time, companies rank call centers as the most important business function. Gartner partially attributes plans for low call-center investments during the coming year to previous call-center investments and to IT funds being allocated to e-commerce initiatives.

But Gartner cautioned that call centers should be an integral part of expansion projects for e-commerce.

“Ideal CRM occurs when old-fashioned call centers with state-of-the-art applications maintain customer loyalty while new e-commerce applications lower CRM costs and yield increased revenue,” said Fred Landis, Gartner Consulting’s director.

Gartner’s report also identified customer loyalty as the mecca of CRM initiatives in contrast to the traditional hub of corporate dogma where increased revenue per customer and market share reigned supreme. According to the report, almost 80% of business leaders name customer loyalty as one of the primary drivers of CRM integration, along with increased sales and profitability.

In addition, the report noted that more than three-quarters of enterprises rank retaining customers and expanding the business with existing customers above increasing market share by acquiring new customers.

Gartner also found that customers still consider the salesperson the most important way to interact with companies.