Reducing any one of these three variables will reduce the cost of
operating a contact center. This framework is critical to
systematically analyze your contact
center needs. Before we introduce the specific steps to identify
potential cost reduction initiatives, it is important to understand each
of these three variables. The following sections will introduce
the primary strategies for each driver of reducing call center costs.
Reducing handle time
Handle time refers to both talk time and after-call work time for
telephone contacts and the handle time for other media including fax,
email and mail. Reducing the contact handle time includes three
primary areas. The major branches include:
-
Improve
agent capability
As a general rule, the more capable and experienced
the agent, the lower the handle time. This is why turnover
is so costly to call centers. However, agent capability is
not just a matter of length of service. Remember to also
consider training, incentives and feedback from quality
monitoring as factors in this strategy.
-
Improve
systems support
This branch has proven to be an effective way to
reduce handle time (and improve first time resolution rates at
the same time). The desktop tools available to agents and
the routing methods for contacts have a direct impact on handle
time.
-
Improve
contact processes
This area can dramatically reduce contact handle
times. The call process and required activities
immediately impact handle time.
In other words, you can reduce handle time by addressing the people,
the processes or the systems.
Reducing the cost of resources
Reducing the cost of resources also includes three primary areas.
Cost of resources includes the cost of people, equipment or facilities
necessary to handle customer contacts. The major branches include:
-
Drive volume to lower cost channels
Whether it involves changing customer behavior,
updating technology or outsourcing, this is one of the most
effective ways of reducing the cost of resources.
-
Reduce agent payroll costs
This is a more problematic area for cost reduction but should
not be overlooked given that payroll costs make up 70% to 80%
of the total costs for a majority of contact centers. In
some cases, reducing payroll costs can be achieved without
adverse affects on service quality or turnover. In other
cases, there is a clear trade-off between cost and service
quality.
-
Reduce overhead costs
Overhead costs include all cost elements other than direct agent
cost, such as facilities, management, tool and network costs,
training, IT, human resources and any other support functions.
Reducing the volume of contacts
Reducing the volume of contacts has three primary areas. The
major branches include:
-
Eliminate reason to contact
The best way to reduce contact volume is to remove or eliminate
the root cause of the contact. This strategy does not
necessarily apply to contact centers oriented toward sales
unless they can identify a way to close the sale without the
contact taking place.
-
Minimize misdirected contacts
Some fraction of your contacts are most likely misdirected
contacts intended for some other part of the organization.
These contacts not only add to the queue, but they also take
time away from handling other contacts.
-
Reduce repeat contacts
Call volume can be reduced by minimizing the number of repeat
contacts (referred to as call-backs for phone calls).
Identifying potential cost reduction initiatives
The three main drivers for reducing the cost of call center
operations and their strategies combine to form a
cost
reduction diagram, as illustrated in Figure 2.
Figure 2 - Centerserve's Cost Control Roadmap
Interested in a
systematic approach with over 50 initiatives to reduce
costs?
Given this framework, you will need to brainstorm ideas to reduce
costs within each area that are applicable to your call center. A
suggested process for completing this task is:
- Form a
project team from
your organization of open-minded and creative individuals
including front-line agents, supervisors or managers from other
areas.
- Begin by selecting an
area of focus
from the cost reduction diagram.
-
Brainstorm ideas to
impact that area.
- Organize these ideas into
categories (group common suggestions).
- Identify the
root causes
whenever possible - look beyond the symptoms.
-
Repeat for the next area
from the cost reduction diagram.
- Create a
master list.
After
completing your master list, you will need to prioritize and select
specific cost reduction initiatives for your call center. This
step will be covered in-depth in the next module of this tutorial
series. To get
started on cost reduction planning in your call center immediately, a
complete set of more than 50 proven cost reduction initiatives are listed and
explained in the toolkit
Controlling the Cost of Call Center Operations.
