Call Centers: New Look at Old Model

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A few years back, when the Internet was just a shiny new toy, I described a model of call center development that tried to show how the center evolves in its relationship with the organization of which it is a part.

It was a good model, describing with a fair degree of accuracy the struggles that a call center goes through to deliver better service at a consistently high level of efficiency and lower cost.

The reason you create a model is to explore the general principles that guide a process - in this case, the process of service delivery. Since I created the Six-Stage Model, much has changed in the outside world that affects how call centers operate and how they change over time. The very idea of customer relationship management tries to grapple with the consequences of the later stages, not always successfully.

The difference between the Six-Stage Model and other descriptions of how call centers work was that my explanation had less to do with what technologies are used, and more with the way the center interacts with the rest of the company. Here's how it worked:

Stage 1: Start-up. This is also known as the informal or departmental call center mode. Organizationally, you find this in either small, growing companies that have not created a structure yet for service delivery, or in larger ones that allow diffuse, fractured approaches to spring up ad hoc.

This is one of the most haphazard steps. It's the point at which a company is operating with little or no strategic view of the value of customers, or of the consequences of good or bad service delivery. In this environment, you might find a marketing department answering calls or a voice mailbox set up to handle customer inquiries. What you will not find is any kind of measurement, coordination or support from the higher levels of the company. You also will not find any specific service-related technology investment. Instead, you find people on the fringe of the organization trying to make do with existing tools such as private branch exchanges.

The people doing the call handling are not, at this stage, professional representatives. They are low-level, perhaps entry-level people, filling in where gaps are found. Unfortunately, in this case, service delivery can be seen as one large gap.

Stage 2: Triage. At some point someone notices that something has to be done. You have to respond in some way to the customer base. Even the upper managers know this. But often their first response is an inadequate one. It is reactive and often guided by a single horrible metric such as hold time, or products being returned in droves.

The response usually takes the form of traditional call center tools: automatic call distributor features added to a PBX, even a stand-alone ACD, and an organization of the service delivery hierarchy. Someone is assigned to address the problem. That someone is given a budget, a mandate and little else. This is the first step toward creating the call center as we know it today, an infrastructure built to receive and handle customer inquiries.

Often, the problems that drove the process in the first place can be alleviated - note that I did not say solved - through the application of tools that are very mature and easily controlled.

Stage 3: The organized center. The people in charge become more professional, gaining a better grasp of the array of tools at their disposal and the pros and cons of each one. The agents also become professionalized. It is at this stage that training, monitoring, incentives and career pathing become factors in agent management.

Call center management is still focused on cost control, usually at the behest of corporate policy planners. Here's where you start to see some of the more interesting technology making its appearance as managers try to squeeze operations to make them more productive in response to the fundamental call center paradox - the need to simultaneously cut costs and improve service. You see attention paid to all the cheap, reliable technology that's become very standard, like front-end interactive voice response processing and the first glimmer of the possibilities of bringing the telecom infrastructure together with the database. (We used to call this CTI or computer telephony. Now it makes more sense to lump it all together into CRM.)

And, of course, you see a lot more attention paid to reporting and analysis at this stage. But that analysis is mainly at the level of the call and the agent - not the customer.

Stage 4: Continual improvement. This is the point at which the tension between the external needs of the company and the internal needs of the center are most apparent. From outside comes the imperative to cut costs as well as the need for more real, useful information about what is happening with customers. This is where you begin to see the CRM mentality creeping in - not always emerging from within the center.

Just as often it comes from the need that outside departments have for organized, coordinated information relating call center activity to what the rest of the company is doing in marketing, product development, shipping, financial analysis and so forth.

It's also the stage at which call centers become really rigorous internally about things like monitoring and training programs, and about work force management software, and sometimes they begin experimenting with things like skills-based routing and simulation.

Stage 5: Strategic asset. The forces at work in Stage 4 have matured a bit, and, as a result, outsiders at the organization have come to see the call center more as a strategic asset than as a money pit or a drag on the rest of the company.

At this point, people are starting to cast about for a set of metrics they can use to define the relationship between the company and the customer; often, the best they can do is to frame that relationship in terms of call center statistics - number of calls, how satisfied those customers are, and the nexus between customer value and customer cost.

Stage 6: Mass customization of service. In this stage (as defined three years ago), the importance of the physical call center dropped away as the focal point became that company-customer relationship. Prefiguring CRM a little, it was argued that in this stage, which was called mass customization of service, the call center and its company become a tightly integrated whole.

A situation was positioned in which each representative would have at his disposal all the information needed to handle the customer at the point of interaction - no more and no less information than needed, at the precise moment of contact. And the caller and rep would be as precisely matched as possible, with the agent empowered to do whatever is necessary to meet the customer's needs, within the context of knowing what business rules to apply and what the value of the customer is.

It was said that Stage 6 was not here yet in any meaningful way; that it was a theoretical end point at which the boundaries between call center and company are indistinguishable; and that it was a largely unattainable goal based on the technology and business contingencies of the day.

While in large measure this model still fairly describes the well-beaten path most companies take over their lifetime, it has become clear that this model works best looking backward at centers that already exist. For companies starting out on this road in 2000 and beyond, more factors come into play.

Three "side stages" seem to have evolved in the past few years - alternative tracks that include some aspects of what was just described above.

First, the dot-com online retailing boom-and-bust cycle we have just gone through revealed some things about online customer service - mainly that it isn't any good. Small companies that came out of the Internet industry sometimes thought that Internet-based tools for service delivery were adequate for their customers - that customers would be satisfied asking for help by perusing a Web page and sending an e-mail. Many invested in front-end e-mail processing tools, and even a back-end customer management system, only to neglect the telephone infrastructure. And people being people, they do still like to pick up the phone and call when something goes wrong (especially when it goes wrong with Christmas presents ordered online).

So that first side stage involves what we call back-pedaling to the phones. It's a stage that could occur in any industry that sets itself up to handle customer interactions through nontelephony modes, and belatedly realizes that customers could not care a whit about a hi-tech Internet service strategy, but demand satisfaction by phone. In these cases, though, the company doesn't backpedal all the way to start-up or triage anymore. It goes full-bore into Stage 3. That's because unlike 10 years ago, or even five, it's reasonably fast to throw together a technically robust call-handling infrastructure using what are now mature, proven, well-integrated tools.

The second side stage is more of a decision point that a lot of call centers find themselves reaching very early in their life cycles nowadays: multichannel choices. What do you do about e-mails? Or Web interaction? Before you even get to the question of how, all call centers face the question of whether to integrate these alternate modes of customer interaction into the telephony center at all. Which road you go down influences which set of technologies you will buy, what face you will present to the customer, how your internal management will be structured, how much you will spend to integrate the different channels, and even how you train agents.

It is immensely important and something that is side-stepped all the time, because it is so profoundly complicated and affects so many different aspects of business planning, that it is often decided by accident or default or both, often from outside the center. We are not talking about the technology decision here - we are talking just about the raw gut choice of, do you handle e-mails in the call center, or do you create a separate center to handle them? Do you make telephone reps lead Internet chats, or do you leave it to a separate group?

Because it is so hellishly complicated, a lot of companies head straight for the relative safety of the third side stage: outsource the whole mess. It's a fairly clear proposition, especially when it is clear that there is no industrywide operational consensus for how best to run a center under multichannel conditions. And when it is clear that what you are looking at buying is a set of very expensive and very transitional technologies that will look quite different five years hence. More than at any time since I have been covering call centers, outsourcing all or part of these multichannel components and the CRM overhead is a popular way to cut uncertainty's Gordian knot.

Obviously this model will not look right to everyone; not all centers are created equal, and not all company agendas are the same. It is just trying to paint (with a very broad brush) some of the common choices made by people grappling with similar problems. As things get more complicated, though, and as the modes used to connect with customers multiply, the call center will be harder and harder to describe in a universal way.

• Keith Dawson is a technology writer and editor at Call Center News Service, New York.

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