Proven Ways to Get More Budget for Your Contact Centre

ROI and more budget with scales

The Contact Centre Innovator, Paul Weald, explains how calculating Return On Investment (ROI) is the best way to secure more budget for your contact centre, and how ROI can be delivered through a combination of people, process and technology-enabled improvements.

The More You Can Demonstrate ROI, the Easier It Will Be to Seek Additional Funding

Some business cases in regulated industries are mandatory, i.e. conforming to new requirements, whereas many are optional and therefore require significant persuasion and buy-in from decision-makers in your organization to gain approval.

In this scenario, expect to iterate the solution and timescales to improve the attractiveness of the case for change in order to win the ‘why now’ argument.

It is also important to track the impact through the life of the project or change activity so that progress can not only be reported but also adaptations can be made to deliver the outcome required.

The more you can demonstrate that the ROI has been delivered, then the easier it will be to seek additional funding from those stakeholders in the future.

If you are looking to get stakeholder buy-in for new technology, read our article: What to Include in a Business Case for New Technology

The Ratio Between the Benefits and Costs Defines the ROI

Any contact centre business case is likely to be based on one of three key propositions:

  1. Reduced cost to serve (CTS) – either through efficiency (cost reduction) or effectiveness (higher FCR) related outcomes
  2. Improved customer retention & loyalty – based on an opportunity to grow the number of active customers
  3. Increased revenue per customer – through cross-selling or upselling to deliver higher Customer Life Time Values (CLTV)

Regardless of the outcome to be achieved, the business case will contain a quantitative analysis of the impact on business performance, i.e. revenue and cost reduction impacts, as well as the cost of achieving the change.

The ratio between the benefits and costs defines the ROI.

Your Preferred Option Should Be Compared Against the ‘Do Nothing’ Status Quo

I have known some clients that only approve a business case if the first year benefits are greater than the implementation costs, i.e. a less than 12 months ROI.

Person sat at laptop comparing two things
Compare the preferred option against doing nothing

Their logic – which I agree with – is that any business improvements that fail to meet this litmus test should be reworked to either deliver it more cheaply (no gold plating of the solution) and/or deliver it more quickly (move at a faster pace).

The business case should also contain a qualitative description of the problem you are trying to solve, and the potential options that the business can choose from.

Your preferred option should be compared against the ‘do nothing’ status quo of leaving everything as it is, as this creates the understanding of why the change is required.


Technology-Enabled Self-Service Is Easier to Quantify

Many business case improvements relate to technology-enabled self-service, as these are easier to quantify.

Essentially, by creating a new digital capability where customers can serve themselves – through a chatbot or app, for example – contact demand can be eliminated and/or contact handling time can be reduced.

This will reduce the agent contact-handling capacity required for which a cost saving can be defined.

Many technology vendors have template calculators that help to define the ROI based on standard industry assumptions. These are based on:

  • The total number of website visitors or app-based interactions
  • The proportion of users who choose the self-service or chatbot option
  • The reduction in call demand from transactions that are fully contained by the self-serve function
  • The proportional reduction in handle time from the transactions that are partially contained, i.e. still require live agent support but are quicker to resolve where the customer is more informed
  • The workforce management calculation for the capacity that is reduced as a result – which in turn can be translated into a resourcing cost benefit

The public sector, as a non-commercial vertical market, focuses many of its business cases on reducing the cost of service without lowering quality, often through these self-service options.

Measuring Operational Improvements Is Trickier to Achieve

Measuring business process or operational improvements is trickier to achieve as it is dependent on KPIs such as First Contact Resolution (FCR), Net Promoter Score (NPS) or Customer Satisfaction (CSAT), where the improvement quantum needs to be translated into a commercial value related to improved loyalty.

Taking NPS as a case in point, some experts in market research and academic fields argue that NPS is a predictor of current attitudes only (how do I feel about this company and its service?), not of future behaviour. In their eyes it is not a reliable metric of future company growth.

However, studies have also shown that there is a cohort of so-called ‘hard detractors’ (scores of 1-2 on a ten point scale) who have a strong correlation to churn at the point of service renewal.

This is one area where the distribution of NPS scores can be a reliable indicator of future behaviour, providing the ability to identify – and take proactive action – on those customers at greatest risk of leaving.

If you are looking for advice to calculate an NPS score, read our article: How to Calculate… Net Promoter Score

The Current Consumer Perception of Customer Service Is Declining

There are several 2023 research data points from the Institute of Customer Service through their UK Customer Satisfaction Index (UKCSI) and from the CCMA through their annual research into consumer perceptions of customer service which show that the current consumer perception of customer service is declining.

The latest Contact Babel Decision-Makers’ Guide reports that the typical issues leading to this service decline are:

  • Long queue times
  • Too many call transfers
  • Increasing proportion of enquiries that self-serve alone cannot resolve

Their chart on response times makes stark reading:

  • a jump in abandonment rate from an industry average historically of 5% up to 9% last year
  • a trebling in Average Speed of Answer (ASA) from an industry average historically around 40 seconds up to 120 seconds last year
Contact Babel Decision Makers Guide Report Graph - ASA to Abandon

It appears that despite all the investment in self-serve, there are still too many issues that need to be resolved by an agent, causing demand to outstrip the availability of frontline resources. Increased queue time is the inevitable result.

Management Teams Often Focus on the Wrong Things

Over the years I have seen and heard of many business cases that have failed to deliver the expected ROI. As a consultant I have been called in to try and ‘fix’ what has gone wrong.

One typical mistake I have observed is management teams focusing on the wrong things.

From the Contact Babel research, the FCR rate is quoted as the primary indicator of need by both businesses and consumers, indicating that it has the potential to make the greatest difference to the actual customer experience.

Despite the voice channel still handling 65% of interactions, too often the investment focus is on digital initiatives (and in the future this may also be true for Generative AI) that fail to take into account the consequential impacts.

Person focussing on small point

You may successfully take away simple enquiries through self-serve, but that only increases the complexity of enquiries now being handled by agents.

This increases handle time and reduces FCR, neither of which were factored into the original business case assumptions.

The financial budgets have been reduced, taking away the capacity required at the frontline to deal with the resulting demand.

A further risk is that this unintended outcome of longer queues and lower customer satisfaction results in a drop in stakeholder buy-in – failing to get the executive team’s commitment to the future improvement programme now required to address the new operational situation.

Sadly, I have known a number of senior operational leaders who have lost their jobs as a result.


Hints and Tips for Getting It Right

On a more positive note, there are a number of ideas that can be applied that can help to ensure business case success when attempting to prove and calculate your ROI:

1. Keep It Simple

Many of the most effective improvements are often the simplest to implement. I have seen several through Awards judging that have stuck in my mind.

Many of the most effective improvements are often the simplest to implement.

For example, some 15 years ago at Lego they had a really effective upsell that naturally formed part of the service conversation.

At the end of the call, the agent would check if the caller was on the newsletter distribution list.

If not, then they would promote it – brand advocates always like special offers and notifications of latest products – as the marketing team had calculated that customers receiving the newsletter had a higher CLTV than those that didn’t.

By the contact centre measuring sign-ups, the ROI for service support could calculated.

2. Measure Impact of Agent Assistance

With digital initiatives there is often the need to provide some element of live support to customers whilst online.

But how do you know if the cost of providing that support has the intended benefit?

When I was at Virgin Atlantic, we measured the impact of live chat in two ways:

  • Firstly, when a chat session occurred, a cookie was used to track the outcome. In the online sales journey we could understand the conversion rate and average sales value of supported sales (where a chat had occurred within the previous 7 days) versus unsupported sales.
  • Secondly, we pushed a survey out the consumer immediately following the chat, and as the customer was typically still online, the response rate was really high.

From these two data points, we could evidence that the customer found the chat service helpful (through the proportion of five out of five survey scores) and that they had better conversion rates and higher average order values as a result.

What we got really clever at was targeting where and when to offer chat that led to the biggest impact compared to an unsupported online customer journey.

3. Take Account of Performance Spread Across Agent Population

There is an inevitable difference between agent cohorts in terms of their ability to deliver results (sales conversions, FCR rates etc.) and also the time taken to complete the call (AHT).

Another example from Virgin Atlantic was that we had two skill types (sales and service), and whilst most agents were trained in both skills, the majority had a primary skill. They were sales agents that could take overflow service calls (or vice versa).

Ripple effect concept with drop of water falling into pool

The operational problem we were trying to solve was to reduce the abandoned call rate, and the biggest impact we achieved was increasing the amount of waiting time in the IVR before overflowing to a secondary skilled agent.

That sounds counter-intuitive until we realized that primary sales agents took longer to handle overflow service calls, and primary service agents had a lower conversion rate when handling overflow sales calls.

When we reduced the proportion of calls that overflowed then performance went up.

4. Understand Customer Segmentation Impacts

One of the key findings from the CCMA research into consumer perceptions of customer service is that there are significant differences in attitude due to age-related factors and the impact of the cost-of-living crisis.

For example, 42% of those who said that it is more difficult to manage their finances today perceived customer service was worse than a year ago, compared to 28% who are not in hardship, who perceived customer service as now being better.

The implication being that those who are struggling have higher expectations around the ability to contact service teams given the emotional impact of the issues they require help with.

Just offering that segment self-serve options, however well designed, is unlikely to produce positive results.

For the the basics of creating a customer segmentation strategy, read our article: Customer Segmentation: How to Segment Your Customer Base

5. Allow Time for Change to Become Embedded

A classic part of any technology implementation is the time it takes for agents to become familiar and competent using new desktop systems, and for customers to become comfortable using new self-serve and automated systems.

What this means is planning for increased handle times immediately after the change is introduced and uplifting resourcing capacity for a period of time.

And then tracking the path to green for AHT as these improvements become the new normal so that capacity can sustainably be reduced.

If you are looking for advice on change management in the contact centre, read our article: How to Manage Big Changes Well in the Contact Centre

6. Apply the Contact Handling Hierarchy

Thumbnail image of Paul Weald
Paul Weald

Over the years, I have come across several CFOs that believe the best way to ‘fix’ an underperforming contact centre is to outsource it.

Whilst I agree there are strategic benefits to using a BPO if the organization doesn’t see contact handling as a part of its core DNA, when it comes to seeking out contact handling improvements then there are several business case levers that should be considered before the sourcing option is chosen.

It is far more effective to eliminate failure demand – that reduces the future forecast of calls that need to be handled – rather than build unnecessary capacity into the agent roster.

Don’t outsource a problem is a simple mantra when it comes to business case options analysis.

And finally, don’t forget that executive team commitment to your contact centre improvement programme is more important than the mechanics of the business process or technology business case. Without the former being in place, then approval for the latter simply won’t happen.

Best of luck!

Thanks to Paul Weald, The Contact Centre Innovator, for writing this great article

If you liked this article and want to read more from Paul, check these out next:

Author: Paul Weald
Reviewed by: Megan Jones

Published On: 22nd Nov 2023 - Last modified: 5th Dec 2023
Read more about - Call Centre Management, , , , , , , , ,

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