One of the most pressing questions put to me is “How can the call centre support customer relationship and customer retention strategies?” This article looks at how customer retention can be deployed in the call centre.
Following a speech at a recent call centre conference I heard three different suppliers say, “it is five times more expensive to recruit a new customer as to retain an existing one.” However when quizzed on how the call centre could help to improve customer retention, the answer was little more than providing better customer service or buying a software suite.
Senior management knows that the call centre has a role to play in customer retention, but has no direct experience in how to put it into practice. The link is not obvious and relies on changing the view of customer service into one of customer relationships. It also requires a whole new way of thinking towards the customer.
Customer Lifetime Value
To get to the heart of customer retention it is necessary to adopt a lifetime view of the customer. This involves looking at the customer over their complete life – from birth to death – as this is ultimate customer retention. The needs of the customer will change as their circumstances change from leaving school, first job, getting married, buying a house, having children and retiring. The service that you provide needs to map to the different lifestyle phases of the customer.
The customer will also react differently depending upon their history with your organisation. These could be characterised as prospective customer, new customer, mature customer and churning customer. Again, the call centre needs to tailor service for these different phases.
Some organisations are also looking at the lifetime value of their customers. Customer lifetime value is an estimate of the likely long-term profit that you could derive from a customer over their complete lifetime. For example, a student may have a low current value to a bank, but their long-term value could be very significant. Lifetime value is a predicted value derived from the total spend to date, cost of service to date, expected lifetime within the organisation and probability of churn.
The link between marketing and the call centre
“All men are created equal” drafted Jefferson in the American Declaration of Independence – and in a large number of call centres, this is held to be the guiding principle. All customers are dealt with strict rotation – the longest waiting principle – irrespective of their value to the organisation.
“Why should I treat callers differently?” I am frequently asked. In most service-related businesses, segmentation by value is employed. The restaurant owner will always find a table in a full restaurant for their regular customers and airlines have adopted frequent flyer programs tiered into different levels – but many companies do not use customer segmentation in the call centre. Within these companies, sophisticated customer profiling and customer segmentation information will be used. But these are typically retained in the marketing department, which uses these to develop new products, special offers and to produce direct mail. However, in almost all companies they are not linked into the call centre.
The key to customer retention in the call centre is to be able to deal with different customers in different ways based on their lifecycle stage and customer value. In essence the call centre has to transform into a relationship centre.
To build a relationship centre will probably require a substantial level of investment. However, there have been a number of “quick wins” that some companies have used to help support customer retention.
Review customer defection points.
Identify the discernible customer churn points, where a telephone call can help? You could either use an outbound call or perhaps tail end an existing incoming call.
An organisation that has adopted a link between the call centre and customer retention is the mobile phone Company, Orange. They have analysed the customer lifetime and have identified two very distinct churn points. At both of these points the customer is highly likely to churn. The churn points are at the end of the 14-day money back guarantee and at the nine-month break point in the contract. Just before both of these life points, an outbound call is made to ask if they had any problems, needed advice on the service or to suggest moving on to a more appropriate tariff plan. Problems can then be nipped in the bud and dealt with in a more proactive basis. These actions have directly helped in reducing their overall churn rate.
Review the telephone numbers strategy used for existing and new customers.
It is important to be able to differentiate between prospective and existing customers. Existing customers are intrinsically more valuable than prospective customers. “A bird in the hand is worth two in the bush” is as relevant to a call centre operation as to the world at large.
So, where are companies going wrong? A well-known insurance company has spent a lot of money in an expensive TV campaign to recruit new customers. It needed an 0800 number to support the campaign and provide on line quotes. However, for existing customers to renew their insurance, the company provided an 0990 number. The customers were charged for a long distance call and were also given a lower priority in the queue than the TV response line. While this would have all been done for the right business reasons it can have a damaging effect on customer loyalty. In essence, this is making it easier for customers to obtain a quote from a competitor rather than extending their existing policy. The saving grace was that a TV advertising campaign also strengthened the existing customer’s view of the company, which lead to more renewals.
View the call as more than a transaction
The focus on efficiency and transactions has sometimes lead to the belief that the best call is a short call. A technique adopted by Liverpool Victoria group is to engage the customer in conversation. If a caller is looking for a “Green Card” for a foreign visit in their car, ask if they are going on holiday. It just helps to improve the overall perception to the customer.
Make the customer feel special
First Direct end every call with “…is there anything else that I can help you with today?” In his book “Excelling in the 1990’s: CEO Perspectives”, R. P. Cooley identifies that the major reason that customers leave is ‘because they have encountered an attitude of indifference as they are being served.’ This applies to 68% of customer defectors, compared to the 14% who leave because they are dissatisfied with products and services. Examine initiatives that
could make the customer feel special.
Review your Voice Prompts
One of the biggest ways to upset the caller is by poor and inappropriate use of Interactive Voice Response systems. Poor menu structure and not being able to connect to an agent are the most frustrating problems for the customer. The menu structure should be simple – not more than four options and no more than two levels. Why not adapt the IVR menu structure to the caller’s profile? For example if the caller does not have a savings account, do not give this as an option on the menu for this caller. It may be more complex to develop, but can help reduce the overall frustrations of having to talk to a computer.
Make certain that you can transfer calls
Avoid the trap of “we don’t deal with that here – please ring this number”. Transfer the call – even if it is to one of your suppliers or partners. If an agent cannot deal with a call, make sure that you can transfer the caller to the area where their query can be dealt with.
This may have cost implications, but “one call does it all” is a very sensible strategy.
Workshop sessions can be held with the call centre agents to ensure that they can understand the benefits of the customer lifetime approach. Every agent can relate a tale of bad service and can identify areas where different techniques can be used. By using workshop techniques, it is possible to pool the overall experience of the group to help develop customer relationships.
Ultimately the best way to support customer relationships in the call centre is to build a Relationship Centre. This is a combination of a new technical architecture, customer segmentation, new call handling processes and agent empowerment. The relationship will be able to support customer retention and customer relationships.
The technical architecture will be built upon relationship routing and data access. The technology allows the call centre to route calls based on lifetime value or customer lifecycle. The high value client could be routed to a “relationship manager” and the low value client will be encouraged to use self-service technologies. Alternatively the caller could be routed to an agent with a similar lifestyle who may have more empathy with their needs.
One of the most difficult elements to pull together is the customer information, which is typically buried in a number of unrelated databases. It requires data mining techniques or the adoption of a real time customer information server that holds the customer’s information. This is then fed into a relationship router that can route the call to the most appropriate engine (human or computer).
The technology involved in creating a relationship centre is not available from any one vendor and involves a combination of a number of technologies. These include Telephony Platform, Voice Response, Computer Telephony, Relationship Routing, Agent Desktop Software, Customer Service software and Data Retrieval.
Companies are increasingly looking towards specialist external consultants with skills in Customer Relationship Management, Call Centres and Systems Integration to pull it all together. To be able to deploy this at minimum risk “Rapid Application Development” techniques are often deployed to be able to roll out the product in a controlled environment with 6 to 12 week rolling release cycles.
To really be able to support customer relationship and customer retention strategies in the call centre requires investment to create a relationship centre. It requires both a lifetime view of the customer and a new technical architecture. The benefits of this investment are dramatic and can significantly increase the value to the shareholders and the organisation.
There are a number of quick wins that can be applied in the call centre, which could help to improve customer relationships in the short.
Many organisations have found using external consultants useful in helping to clarify the vision, create the business case and deploy the technology in the shortest timeframe.
The most important factor in all of this transformation is always to see it from the customer’s point of view.