What I’ve Learned From Working in a Contact Centre – Saving Money

James Lawther What I've Learned Featured Image

In this instalment of Call Centre Helper’s “What I’ve Learned” series, James Lawther outlines five lessons he’s learned from working in a contact centre.

When I worked in a contact centre, I learned about saving money. Contact centres are cost centres (or so the accountants told me), and that cost should always be minimized.

One of my teams spent all their time pulling together call forecasts, labour schedules and budgets. The formula they used to decide how much money we would spend looked a little like this:

Cost = FTE × Labour Rate = (Volume × Handle Time) ÷ (Productivity × Occupancy)

James Lawther Article Money Formula

I appreciate that some of you are rolling your eyes to the back of your head, wondering why you are getting a maths lesson.

If you are geeky like me, you will see that that is a convenient little formula. Let me explain it, at the risk of teaching you to suck eggs. No doubt your forecasting teams use something similar.

There are five variables in the maths:

  1. Volume – the number of calls that you receive.
  2. Handle Time – the time it takes to deal with a call.
  3. Productivity – the proportion of time that agents spend at their desks.
  4. Occupancy – the proportion of time agents spend answering calls at their desks. That is a mouthful; you have Mr Erlang to thank for that one.
  5. Labour Rate – how much you pay your agents.

This formula is helpful for two reasons. It will help you work out how much your call centre will cost, and it also shows that there are only five variables you can work with to save money.

This leads me to the five things I learned.

Lesson 1. You Can Save Money by Reducing Volumes

You can stop customers calling in in the first place. You do this by removing the things that confuse or irritate them. You can simplify your communications, make sure your billing is accurate, or ensure your field force turns up when they should. It all depends on the business you are in.

The other way you can reduce volume is to give your agents the tools and discretion to resolve the customer’s issues. The last thing you need is for the customer to phone back three or four times with the same problem.

Finally, automation is a good thing. Many customers are pleased to self-serve online or in the telephony system. What is good for customers is also good for costs.

There are also several underhand techniques you can use to kill volumes. Telephony dead ends and long waiting times will discourage your customers and prevent them from reaching an agent. But the short-term win is never worth the long-term pain.

Lesson 2. You Can Save Money by Reducing Handle Times

Golden coins and hourglass clock

The most common way to do this is to incentivize your agents to deal with calls quickly. This is a bad idea that refuses to die.

If you incentivize short calls, you will get short calls.

Your agents will find plenty of ruses, from the simple hang-up via the fake system crash to the transfer, to ensure they get their bonus.

These will push your costs up (more bonus payments and callbacks), not down.

The second most common way to reduce handle times is to discipline agents who take too long. This is also easy to do, but again, I’d counsel against it. Sure, maybe 1 in 50 of your agents is useless, lazy and should be taken outside and shot (we used extreme measures where I worked).

But most agents try to do a good job. If they have long calls, they probably have demanding customers and unhelpful systems.

There is a better way to reduce handle times. Give your agents simple, well-designed, reliable systems to use and reduce the number of difficult calls (see lesson 1) they get. You take the friction out of the system, and your agents will handle calls faster.

Read our article 49 Tips for Reducing Average Handling Time (AHT) for advice on reducing Average Handling Time (AHT) in the contact centre.

Lesson 3. You Can Save Money by Improving Productivity

There is a lot to be said for making sure your agents are sitting at their desks ready to take calls. If you run around shouting and waving your hands in the air, you will perform better – up to a point. But after that point, it is a losing game.

You know you have passed that point when you resort to timing how long your agents take to go to the loo. If you treat your agents like children, then don’t be too surprised when they start to act like children. Children do not make productive employees.

It is best to agree on a reasonable standard, take the time to understand why the outliers are outlying and manage them appropriately. Then move on to something more useful.

Lesson 4. You Can Save Money by Increasing Occupancy

The only way to run at 100% occupancy is to ensure that you have a nice long queue of calls waiting. Whilst that may sound appealing from a cost perspective, neither your agents nor your customers will thank you for it.

A more effective way to increase occupancy is to open up your call routing. Reduce the number of specialist teams you have and cross-train your agents so they can answer as many different call types as possible.

Occupancy levels will drop if your routing is a mass of call groups and skill types. Think of those calls like water trying to find a level; the less convoluted the path the calls have to take, the easier they will be to manage.

Like productivity, occupancy is a Goldilocks measure; it can be “too hot, too cold, or just right”. The only way to work out what “just right” is, is to simplify the routing and revert to your Erlang calculator.

For suggestions on call centre occupancy, read our article: What Is the Right Figure for Contact Centre Occupancy?

Lesson 5. You Can Save Money by Reducing Labour Rates

I used to work in factories. Factories are never in glamorous places; they are in Mansfield and Slough, not Westminster or Oxford. The reason is obvious; the land is expensive in Westminster. The same is true of call centres; it is cheaper to put your centre in Sheffield than in Cambridge, as the labour cost is lower.

Should you go further afield? Is it a good idea to offshore to South Africa? That all depends on what you are outsourcing. I outsource all my bookkeeping; I have an accountant who is better at it than I am.

Therein lies the question. Can the supplier do a better job than you at a lower price? If they can, then outsource away. But if they offer worse service at a cheaper price, you will lumber yourself with a poorly performing outsourced centre.

The bitterness of poor quality remains long after the sweetness of a low price is forgotten. Ben Franklin

Five Interesting Lessons, but What Did I Really Learn?

I was once told that if you chase the money, it runs away from you.

The way to save money in your call centre isn’t to chase it; instead, chase customer service.

  • If you stop confusing your customers, they will stop calling in, and you will save money.
  • If you streamline your systems, agents can handle your customers effectively, and you will save money.
  • If you cross-skill your agents, they can help all your customers, and you will save money.
  • If you treat your staff like adults, they will work to serve the customer, and you will save money.
  • If you put your centre where the staff are best skilled, they will serve your customers, and you will save money.
James Lawther

James Lawther

My real lesson was to stop obsessing about cost and start obsessing about service.

Nobody ever saved themselves rich.

Thanks to James Lawther, the owner, manager and general dogsbody at Squawk Point Consulting, for this great article.

Read more articles in our “What I’ve Learned” series by following the links below:

Author: Robyn Coppell

Published On: 27th Jul 2022 - Last modified: 30th Nov 2023
Read more about - Call Centre Management, , ,

Follow Us on LinkedIn

Recommended Articles

A photo of a graph with labels saying "cost" and "benefit"
22 Contact Centre Cost Saving Ideas
What I've Learned - Chris Merricks
What I’ve Learned From Working in a Contact Centre – Stats Don't Motivate Everyone
What I've Learned Featured Image
What I’ve Learned From Running a Contact Centre – Everyone in Your Team Is an Individual
What I've Learned Harshal Thorat cover
What I've Learned About Running a Call Centre - 5 Critical Factors