Your Call Center ROI: It Pays to Care for Your Customers

United may break guitars, but cutting corners on your call center can break the bank.

Everyone knows that caring for your customers makes good sense, and generates a higher call center Return On Investment (ROI). If your call center can make your customers happy, those callers will generally say good things to their friends about you, come back more, buy more, and quite possibly even blog or tweet about how wonderful you are. Unhappy customers, on the other hand, often say terrible things about you (which may or may not be deserved), come back less often, and may never buy from you again. And they are even more likely to blog or tweet about you and your call center now that they feel you’ve done them wrong. As United Airlines found out recently, one unhappy impression can suddenly become over nine million.

This is a prime reason why so many companies have some kind of customer service department with a heartwarming mission statement, and lots of training courses for everyone who comes into even the most fleeting contact with a customer or potential new customer. That makes sense. So why do so many companies — even those that are famous for their customer service innovations — still have customer service ratings that suck?

The answer is actually pretty simple: it’s because customer service is hard. Of course, in theory, it’s actually quite simple. Just show genuine concern. Listen. Understand. Reach agreement on a solution. Follow up to make sure the solution is implemented. That’s pretty easy to grasp. But, as happens with most things simple,in reality it’s harder. A lot harder. When a customer is yelling, most people find it hard to show genuine concern, listen and understand. It’s tough to reach agreement on a resolution when a client doesn’t understand or want to understand the economics of what can be done to compensate them for their inconvenience. Pretty much all of those easy-to-understand steps are hard to implement on a consistent basis. And anything in business that is hard to implement is generally also very expensive.

That’s why, even though all companies would sincerely love to have legions of happy fans singing their praises, most struggle on an ongoing basis to keep their customers and their bankers happy at the same time. They have found out the hard way that customers whose complaints are not resolved are five times more likely to stop doing business with them. The result is that those companies often end up paying in three ways for their customer service shortcomings:

1. Their call center or customer service operations. Even though they may try to cut back as much as possible, there will always be some cost. And sadly, all too many companies try to reduce those costs by keeping everything in house rather than looking into an outsourced call center solution, not realizing that their Total Cost of Ownership (TCO) often ends up being more.
2. Marketing or public relations activities. More companies than ever before are discovering that money saved by reducing those call center operations can quickly get spent, along with a lot more, trying to resolve the media quagmires that can be generated by disgruntled bloggers, songwriters and consumer activists. Saving money has never been more expensive than it is here.
3. Lost sales. If customers are five times more likely to stop buying when their complaints are not resolved, it doesn’t take long for that cost to become significant. This loss of business is one of the costs that is most often missed when calculating the TCO of an in-house call center. Few companies have the resources or heart to build the cost of lost sales into their budgeting spreadsheets. But even though it may not be included on paper, it is certainly included in the bank balance, recognized or not.

With these costs looming large, companies will generate a higher call center ROI by focusing hard on improving their call center operations, and focusing on parameters such as their First Call Resolution (FCR) rates. Reducing the number of repeat calls will reduce overall call volume, which will of course also reduce their costs. Far from trying to save money by cutting their call center budgets as tight as possible, companies often see their best savings when they invest enough to make sure their call centers are efficient and effective in caring for their customers. A complaint resolved quickly will often lead to increased sales. A complaint allowed to simmer and boil over will often lead to more trouble and cost than most managers would ever want to imagine. Just ask United.