Twelve characteristics of the best-managed call centers

Some call centers exude energy that may take one or more different forms: a feeling of community, pride of workmanship, and results that spring from good planning and coordination. Everyone in the center knows what the mission is and is focused on attaining the objectives. They are all pulling in the same direction, just like a well-trained sports team. A number of benchmarking studies address the subject of what makes a well-managed call center. But while these surveys report on the results obtained by these centers in terms of customer satisfaction and retention, service levels, planning accuracy, organizational structure, costs and revenues, employee satisfaction and turnover, they seldom describe how positive results were obtained.

The following 12 characteristics have been compiled from the experience of industry analysts and call center managers and represent a summary of those qualities that contribute to a well-managed call center. They are the attributes of some of the world's best-managed call centers, those that consistently outperform others in their respective industries based on commonly accepted measurement criteria, including customer surveys.

Recognize people as the key to success

Call centers that recognize the direction in which the business is going are continually cultivating CSR skills. They provide training and present attractive career paths to their people. They also consider the whole person when hiring and when rewarding for good performance. They pay attention to people's inherent talents and abilities, not just the job categories and specific duties.

Leading call centers also develop formal and informal communication channels in their organizations. Keeping people well informed helps them prepare for and accept change. Change is personal, and its meaning and level of acceptance are based clearly on how change is communicated and how it is perceived.

Receive support from the corporate culture

Corporate culture, often referred to as "the value principles" of an organization, tends to guide employee behavior and can either support and enhance the best-laid plans for organizational change or ruin them. There is no magic formula for creating a supportive corporate culture; however, managers in well-run call centers agree that shaping the culture of the organization is a primary leadership responsibility. They do not believe that this process should be left to fate, and they therefore devote considerable effort to understanding their organization and the people who are part of it.

Effective communication is a primary ingredient of a high-performance culture, creating meaning and direction for people. Organizations of all types depend on the existence of shared meanings and interpretations of reality, which facilitate coordinated action among employees. Many management training programs fail to appreciate the complexity and paradoxical nature of human organizations. Unfortunately, thought processes that should be involved in management principles give way to how-to-do-it formulas and techniques and slogans and homilies as the principle management guidelines. The most effective call center managers are comfortable with the fact that it is seldom possible to completely master interpersonal relationships and that compromises are necessary. Understanding this reality of life means spending more time on "people issues" than on anything else.

Focus quality on customer expectations

The best-managed call centers have a strong focus on evolving customer needs and expectations, and they are continually redefining quality around those expectations. They appreciate the fact that what worked yesterday may not necessarily work tomorrow.

Establish a collaborative planning process

A major objective of good call center planning is to "get the right number of people in the right places at the right time." Systematic planning accomplishes other positive objectives, however, including contributing to effective communication and creating a body of information that wouldn't otherwise be available. Call load patterns support the structure of schedules. Planning is the catalyst that encourages people to think about the future and see their contributions to the overall picture. Systematic planning is also important because it requires communication on issues such as resource allocation, budgeting, and workload priorities. Constant communication about these activities is a requirement for all active call centers.

Consider the incoming call center a total process

Call centers that consistently get the best results view themselves or "the operation" as a "total process" in the organization's day-to-day business activities. This view of the call center takes several forms and results in a number of desirable characteristics:

• Assisting in the development of an effective, collaborative planning and management process

• Enabling people to understand how the call center supports the organization's direction

• Ensuring that everyone in the call center and those with key supporting roles outside the call center have a basic understanding of how call centers operate

• Assisting managers to take the initiative in coordinating and relating to other departments

• Recognizing that most quality problems occur in the process stage and continually trying to improve processes

• Integrating the call center's activities effectively with other departments within the organization

• Providing the capability to respond to changing conditions

The days of the call center as an island unto itself, separate from the rest of the organization and considered simply as "the place where they handle sales and customer service," are fast fading. The true nature of the call center has become recognized—it is the "front wall" of the organization and an important part of a much larger corporate business process.

Establish an effective mix of technology and people

In the call center environment, personal contact with callers has to be reduced because there is simply too much caller demand for CSRs to handle routine calls or tasks that technology can readily handle. However, it is an important and fundamental aspect of good customer relations that callers are not relegated to machine responses when they need a real live person or when they prefer live answers to product or service questions.

Leading call centers continue to work to find the right mix of people and technology. Although technology can take an organization where it's going, very quickly, it's a good idea to be headed in the right direction! This means recognizing both where technology fits and the importance of the human element in making technology work effectively.

As noted in Chapter 2, new technologies are not passive; they are continually changing caller expectations, causing reallocations of resources, power shifts in call centers, and changes in the responsibilities of CSRs and managers. The challenge for call center professionals is to sort through the many choices, identify the technologies that can further the mission of the organization, and then implement them with the necessary foresight and planning.

Provide the correct mix of specialization and pooling

Pooling resources is one of the key characteristics of the incoming call center industry and is a primary function of technology tools such as ACDs, networks, and other supporting devices and systems. The advanced capabilities and increasing sophistication of intelligent ACDs and network services provide call centers with the means to mix and match the incoming call load in a variety of ways. The pooling activity that takes place in call centers that have the latest technology represents a continually changing mix of specialization and pooling. The technology available to handle each call according to its individual needs and characteristics requires call center planning, operation, and management to remain focused on cross training and broadening the skills of reps. There will be overlap, however, and contingencies in the operation that must be managed with intelligence and rationality. Leading call centers have an edge over other, less-productive call center environments because they have been able to strike the right mix of specialization and pooling—one of the reasons they obtain high marks for their successful operations. To accomplish this objective, they do the following:

• Expand responsibilities for CSRs

• Avoid unnecessary complexity in CSR group structures

• Improve information systems and training so that CSRs are capable of handling a broad range of transactions

• Implement a flowchart system and network programming to identify weaknesses in routing logic

• Hire multilingual agents, where possible

• Position the call center as close to the "pooled" end of the spectrum as possible

Leverage key statistics

The indicators of high-level call center performance include

• Average call value (for revenue-producing call centers)

• Successful forecasts of call load versus actual load

• Service level

• Cost per call

• Customer satisfaction

• Adherence to schedule

• Percentage of abandoned calls

• Errors and rework required

• Average call-handling time

Related to these operating statistics are three common characteristics of call centers that get the best results:

• They ensure statistical measurements are accurate, complete, and as unbiased as possible.

• Reports are viewed in relation to each other.

• They are aware that simply tracking high-level measurements won't inherently improve results.

They know that a single report, outside the context of the others, can lead to erroneous conclusions and that statistics can often be misleading. They prefer to work on the root causes of problem areas.

Receive budgets and support as needed

Often in call center operations, the budget is presented to call center managers before objectives have been stated and before anyone has agreed that objectives could be met within the assigned budget. It is much more logical for the "budgetsetters" in an organization to ask the individuals responsible for meeting defined objectives how much money they need, what other resources, and so on. A good analogy is the airline industry: Airlines couldn't possibly operate flights without a tangible connection between the results they want to achieve and the supporting resources. They start with an objective to fly a certain number of people to a particular destination and then budget to do this. The goal is a specific, predetermined outcome supported by carefully calculated resources. This is the way senior corporate management should consider call center operations—specific objectives that require a certain level of resources. The best call center managers decide on their objectives first and then obtain the necessary resources to support those objectives through careful planning.

Hurdle distance, time, and politics effectively

The evolution of computer and telecommunications technologies has resulted in the birth of new companies and the growth of existing companies that can span both geography and time. Fiber-optic cables crisscross the globe, and satellites provide virtually worldwide telecommunications service. Trends in the call center industry reflect these developments in the global marketplace. Distributed call centers, in which two or more centers share the call load, can span a region, a country, or the globe and are becoming commonplace. Telecommuting programs continue to proliferate at a growing rate. Call center personnel have been formed into cross-functional teams, with responsibilities for everything from forecasting the workload to improving quality.

Although new technologies have provided an increasing array of new capabilities, the natural barriers that exist between people who work in distributed environments remain, resulting in the following situations:

• People who work in different places and/or at different times often have difficulty seeing themselves as an integral part of a larger, unified team.

• Informal opportunities for relating to each other in traditional settings—lunchrooms, hallways, and break room—are only rarely available.

• Significant information may be exchanged outside the formal context of memos and meetings, resulting in an uneven distribution of this information among the dispersed group.

The changing workplace means that call center managers increasingly have the responsibility for managing people who work in different locations and don't report directly to them or don't work at the same time. Managers in the best-managed call centers recognize that the success of their operations depends on how well they master the art of managing and leading in a distributed, often widely geographically separated, environment. As some authors of leadership texts have pointed out, the key to leading a dispersed team to high performance levels is building trust. Unfortunately, trust cannot be bought or mandated—and there are no foolproof, specific formulae or rules for achieving trust. Like leadership itself, trust is hard to define and has no recipe for managers to follow to create it. Despite this fact, the experience of managers in the best-managed call centers has led to a set of guidelines—management processes that have been successful in many cases—to building a desired level of trust among employees, particularly in geographically dispersed centers. Following these concrete steps is more likely to create environments in which trust will flourish than taking no action at all:

• Create a clear vision for the call center and its objectives

• Ensure that everyone in the center receives key information at the same time

• Create opportunities for people in the distributed environment to get to know each other

• Make an extra effort to develop relationships among the more "distant" members of the group, whether the separation is due to time or geography

• Minimize the impact on call center staff of unnecessary hierarchies and cumbersome bureaucracies, which can affect distributed teams adversely

Be prepared and willing to experiment

Reassessing and reviewing operating procedures to determine how well the center is doing compared to its objectives is another hallmark of the most successful call centers. These reviews attempt to answer such questions as What areas can be improved? What activities can be terminated? What assumptions no longer make sense? What can be done differently? Is there an opportunity for outsourcing some call center activities?

Be capable of vision

The call center industry has come a long way in recent years. Customer expectations are high and call centers are gradually learning how to meet them. Most of the best-managed incoming call centers have learned how to deliver value to their organizations and its customers. Collectively, these organizations have invested billions of dollars and considerable time and effort in equipment, networks, and software, as well as in human resources, including many hours spent training and equipping call center staff to meet their responsibilities. Centers are now fully versed in the nuances of forecasting, staffing, and the behavior of queues. They have identified evolving customer needs, are constantly changing and improving processes to meet those needs, and finding new and better ways of operating in an increasingly competitive business environment.

Summing up the overall characteristics of well-managed call centers demonstrates that the best-managed centers are those that have excellent resource planning and management processes that are systematic, collaborative, and accurate and that result in the productivity, service level, and quality that make them industry leaders.

The future of call center management

Some call center mangers may view the future with some trepidation and may have reservations about the impact of the next wave of technology, but the future can bring many benefits. The growth of e-commerce and the changes it will require in traditional call center operations and processes will certainly have a significant effect on how call centers operate, as will the changing business environment. Call centers will therefore be required to handle an increasingly diverse mix of transactions. Managers wonder about how to keep up in an environment that is moving at a very rapid pace, in terms of changing technology, changing customer expectations, and heightened competition. But uncertainty also brings opportunities and challenges to overcome, and experienced call center professionals will be in demand by organizations that need people who can help them meet those challenges and make the transition into the new era of business.

The incoming call center

Incoming Calls Management Institute has developed a working definition of incoming call center management that is used in this book and was first stated in Chapter 3:

Incoming call center management is the art of having the right number of skilled people and supporting resources in place at the right times to handle an accurately forecasted workload, at a specified service level and with quality.

This definition leads to two major objectives for incoming call centers:

• Locate the right resources in the right places at the right times

• Provide a service level with quality

The capability of call centers to meet these objectives has evolved through three definable major stages:

1. Service level awareness—maintaining service level as calls arrive, with some correlation to service level in planning

2. Seat-of-the pants management—little consideration of service level in planning

3. Correlating service level to the organization's mission—choosing an appropriate service level and tying resources to achieving this service level

An eight-stage process for systematic planning and management

Many individual organizations have evolved through the same general stages and most now link service level to quality and the overall mission. Systematic planning and management are required to accomplish this important linkage and can be accomplished through an eight-stage process:

1. Select a Service Level Objective Service level is defined as a certain percentage of calls answered in a specified time frame, measured in seconds. The level should be appropriate for the services being provided and the expectations of callers using those services. Service level is the critical link between resources and results.

2. Collect Data ACD and computer systems are important sources of planning data because they provide call statistics and details such as number of incoming calls, duration of calls, call patterns, and changes in the call mix. Information about what marketing and other departments are doing, changes in legislation, competitor activities, and changes in customer needs and perceptions is also required.

3. Forecast Call Load Call load includes three components: call volume, average talk time, and average after-call work. A good forecast predicts all three components accurately for future time periods, usually in half-hour segments. In the modern call center, forecasting must go beyond inbound calls to reflect other choices customers have to interact with organizations—e-mail, faxes, and video and Web-based transactions.

4. Determine the Base Staff Requirement A formula commonly used for calculating staffing requirements is Erlang C. This formula (to be described later in this chapter) is used in virtually all workforce management software systems and by many call center managers. Computer simulation programs also may provide solutions for staffing and a number of other management issues. New capabilities, such as skill-based routing and complex network environments, must also be taken into account when planning staffing.

5. Calculate Trunks and Related Systems Resources Staffing and trunking issues are inextricably associated and must be calculated together.

6. Calculate Rostered Staff Factor and Organize Schedules Rostered staff factor, also referred to as shrink factor or shrinkage, adds realism to staffing requirements by accounting for breaks, absenteeism, training, and nonphone work. Schedules are essentially forecasts of who needs to be where and when. They should lead to getting the right people in the right places at the right times.

7. Calculate Costs This step projects costs for the resources required to meet service and quality objectives.

8. Repeat Steps 1–7 for Higher and Lower Levels of Service Preparing three budgets around three different service levels provides an understanding of cost trade-offs, which is invaluable in budgeting decisions.

New opportunities and new challenges

In the marketing environment of the 21st century, there are enormous opportunities for interacting with customers. New services built around the World Wide Web, video capabilities, and other multimedia technologies are bringing new opportunities and challenges to the call center. Many inbound call center managers and CSRs are concerned about the new technologies and how they will affect their jobs and the call center industry in general.

The changing environment has caused the term incoming call center to be challenged on several fronts even as call centers are being accepted as an integral element of the business environment. The controversy is over the definition of this entity: Is it a center that handles calls? This concept hardly describes the incoming call center of today, of which there are hundreds in a variety of business sectors, from financial institutions to communications companies (see chapter 5, "Call Center Case Studies"). Calls are just one type of customer communication, and the word center does not describe the many multisite environments nor the growing number of organizations that have telecommuting programs. Call center has become an umbrella term for a variety of customer contact facilities, including reservation centers, help desks, information lines, and customer service centers, regardless of how they are organized or what types of transactions they handle.

Call center planning and management has also changed, not fundamentally, but in ways that are related to the new environment and the new technologies. With integrated Web services, customers and potential customers browsing a Website can click a button, be connected to the call center, and receive immediate live assistance. Planning and managing in this environment should involve the steps in the eight-stage planning and managing process described in the previous section. Planning for and managing video calls is another example. The process begins by choosing an appropriate service level objective, then collecting data, forecasting the video call load, calculating the base level of agents required, planning for system resources, and so on. The objectives are the same as for a more traditional call center operation: the right number of video-equipped agents and necessary technology resources in the right places at the right times, performing the right functions.

Changes to come

Changes in call center management practices related to the new types of transactions that need to be handled will be required. The new transactions will become increasingly complex as technology automates simple and routine tasks and leaves CSRs to manage interactions requiring the human touch. Customer expectations will continue to climb, and callers will not tolerate organizations that do not provide the choices and service levels they demand. The personal skills required of call center personnel, however, will not change: CSRs will still need good writing and customer service skills. Finding the right mix of technology and human capital will require an ongoing effort.

Since the early 1900s, there have been many advances in technology and the art and science of communication has been in the forefront, as described in Chapter 2. Technology has had significant impact on the call center: Operators, for example, are no longer needed to connect calls because the process has been automated. But managing the modern call center faces challenges similar to those faced by the telephone pioneers. Forecasting calls accurately, staffing appropriately, and getting the right people and other resources in the right places at the right times are continuing problems that connect today's call center to the past, as noted at the beginning of this chapter.

As telephone services matured, several solutions to resource management challenges were proposed. One of the first individuals to solve the problem of handling vast numbers of incoming calls and arriving at the optimum level of operator resources was A. K. Erlang. Erlang's queuing formula, Erlang C, still widely used today, gradually evolved into a programming language (Erlang) that has been used in a variety of mission-critical areas, especially in applications that must run continuously and across many machines such as air traffic control and, of course, call center operations.

Call centers—corporate business hubs

Recent studies indicate that in many sectors of the economy call centers have become a major factor in customer retention, competitiveness, and ability to adapt to changing markets. These operations are the "front wall" of the organization—often the first contact point for a customer. Senior executives are becoming much more aware of the significant contributions an efficient, customer-oriented call center can make to corporate business objectives and are supporting initiatives to attract the best people possible to their call centers. As call centers play an ever-increasing role in regional, national, and international economies, governments at all levels are providing tax incentives for call centers to locate in their jurisdictions.

Call center managers—professional skills

Those who aspire to call center management positions will need to develop a definable skillset to achieve success. These skills include

• Communication—writing, speaking, and interpersonal communication with all levels of management

• Project management—the ability to manage several projects at the same time

• Training—understanding the importance of training and the various training methodologies available

• Leadership and management—the ability to develop trust in employees and manage call center activities

• Performance assessments—the ability to review and assess employee performance

• Quantitative analysis—the ability to analyze statistical reports

Call center managers who successfully meet these challenges have significant opportunities for advancement. As noted previously, call center management has become a recognized management position and has cross-industry applications and thus the same job mobility opportunities as other industry management positions.

Knowledge requirements

In addition to a skillset, there are some other attributes which might be called knowledge requirements. These are personal experience and background characteristics that might round out the abilities of a call center manager. The knowledge requirements include

• Customer service

• Forecasting

• Staffing and scheduling

• Caller behavior

• Random call arrival

• Queuing theory

• Systems and software

• Organizational behavior

• Ergonomics and workplace environment

• Industry vocabulary

Staying in tune with industry developments through attendance at conferences, call center associations, and generally participating and contributing to industry events is important for call center managers. Continual personal growth and development will also be of benefit to a career. Keeping abreast of evolving technologies and developing a network of other professionals and resources available to assist in resolving job-related problems are other activities that can help the manager along a career path.

Service level—a core value

At the heart of effective incoming call center management is the principle of service level. A service level objective can be used to determine the resources required and the effectiveness of the center in its impact on the corporate business goals. Here are some of the questions that can be answered by establishing and monitoring a specified level of service:

• How accessible is the call center?

• How much staff is required?

• How does the center compare to the competition?

• Can the center handle the response to marketing campaigns?

• How busy will the CSRs be?

• What will the costs be?

Defining a service level

Service level is often referred to by various terms. In some call centers, it is the telephone service factor, or TSF. Others refer to it as grade of service (GOS), although this may be confused with the term for the degree of blocking on a group of trunks. Service level is also referred to as accessibility or service standard. Typically, the term service level is used to refer specifically to transactions that must be handled on arrival at the call center. Response time, often called speed of reply, may even be called service level as well. To avoid confusion, response time will be used in a specific sense in this book, to describe the level of service assigned to transactions that can be handled at a later time and do not need to be handled "on arrival. "

The most widely-accepted definition of service level is based on the percentage of calls answered in a given time frame, for example, 90 percent of calls answered in 20 seconds. Some managers define service level as a percentage only or as an abandonment rate. Others refer to the percentage of the time the service level objective is met, whatever that objective may be. And there are those who define service level as "average speed of answer" or longest delayed call.

The various interpretations and other definitions of service level often lead to misunderstandings and mismanagement. By its nature, service level should be defined as a specific percentage of all calls answered in a specific time frame, as previously noted. Planning should be based on achieving this target. Choosing an appropriate service level objective is one of the first steps a call center manager should take to ensure effective planning and management of the operation and to establish budgets.

Establishing a service level helps to link resources to results and measures the degree to which customers are being transferred and handled by a CSR. Service level is a tested and proven criterion in call centers worldwide for transactions that must be handled when they arrive—most commonly inbound phone calls. However, as customer contact methods change, new multimedia services—video calls and calls integrated with the World Wide Web—may also become part of the service level criterion. Because of its universal acceptance as a primary call center criterion, service level will remain an important objective to the next generation of call centers.

Other response categories

In addition to the "immediate response" category, most incoming call centers are required to handle transactions that belong in a second category, those that don't have to be handled at the time they arrive. Some examples of these transactions are

• Postal correspondence (snail mail)

• E-mail

• Faxes

• Voice mail

• Video mail

These transactions allow a larger window of time for the call center to respond. It is as important, however, to establish specific response time objectives for these interactions as it is for the first category of transactions. All categories of transactions can contribute to meeting the service objectives of the call center if appropriate priorities are established.

Other response criteria

Average speed of answer (ASA), another often-used response criterion, is related to service level because it is derived from the same set of data. However, ASA is often misinterpreted. In any set of data, it is generally assumed that the average lies somewhere in the middle or that "average" represents typical experience. This is not true for call center purposes. Although mathematically correct, the average does not represent the experience of individual callers. In a call center, most callers get connected to a CSR much quicker than the average, but some wait far beyond the average. For example, with an average speed of answer of 15 seconds, about 70 percent of callers get answered immediately, but a small percentage of callers will wait three or four minutes in the calling queue. Although ASA is useful in calculating some call center requirements—for example, in calculating trunk load—service level is a more reliable and more telling measure of a caller's experience.

Abandoned calls

Considering call abandonment rates alone as a measure of whether staffing levels are appropriate can be quite misleading. A high abandonment rate is probably a symptom of staff problems. But a low abandonment rate doesn't necessarily mean the center is optimally staffed. If abandonment rates are unacceptable, call center managers need to evaluate the situation to determine what is wrong. It is most likely that the evaluation will reveal a too low service level. When service level is being achieved, abandonment rates tend to take care of themselves.

Unanswered calls

One important consideration about service level is what happens to calls that don't get answered in the specified service-level time frame? Most Erlang C and computer simulation software programs can calculate the answers to this question and others. For example, for a service level of 80 percent answered in 20 seconds, experience indicates that about 30 percent of callers end up in the queue, that the longest wait will be around three minutes, and that the average speed of answer will range from 10 to 15 seconds. This example points up the obvious fact that different callers have different experiences with call centers, even if they are part of the same set of data measured by service level, ASA, and other measurements. The reason for this is "random call arrival," a reality of call center operation and a factor that needs to be considered when deciding how to measure quality of service. Service level is the single best measure of quality, largely because it enables the center to determine what happens to different callers.

Inbound transactions—priority levels

There are two major categories of inbound transactions, with two priority levels, that a call center needs to handle:

• Those that must be handled when they arrive (e.g., inbound calls)—Performance objective: Service Level

• Those than can be handled at a later time (e.g., correspondence)—Performance objective: Response Time

The rationale for a service level

Establishing a service level based on calls answered in a specified time as opposed to percentage of calls answered or percentage of calls abandoned or even average speed of answer provides a clear-cut indication of a caller's experience when contacting the call center. Service level is the most stable measurement of the inbound call-in queue. The importance of a defined service level can be summed up by examining the effect on customers and call center operations as it relates to the following factors:

• Agent burnout and errors

• Levels of lost calls

• Customer goodwill

• Links between resources and results

• Focus on planning activities

Applying service-level metrics

It is important that service level be interpreted in the context of call blockage, that is, calls not getting through. Any time some portion of callers is getting busy signals, no matter whether generated by the system resulting from a limited number of staff and lines during a busy period, service level reports only report on the calls that are getting through. Reports based on service level and average speed of answer can be configured to look very impressive simply by limiting the number of calls allowed to get through.

Service level is obviously a time-dependent parameter, and daily service level reports may often conceal important information. Service level may be down in the morning; however, if staff levels improve and every call in the afternoon is handled immediately, the daily report will look very good against service-level objectives. On the other hand, the level of service from a callers' perspective is a different story. It is not difficult for managers accountable for daily reports and meeting service-level objectives to "fudge" these reports or call center activity to make the situation look better than it really is. If the morning service level was low, they may keep CSRs on the phones through the afternoon when the call load drops, just to make reports look better. This is a waste of valuable time and resources and provides inconsistent service to customers.

Consider this: If daily reports are potentially misleading, the longer the time frame between reports, the more misleading they can be. Therefore, monthly averages for service level are virtually meaningless, because they don't reflect the day-by-day, half-hour-by-half-hour realities. Even so, monthly reports are a popular way to summarize activity for senior management, although there are more meaningful methods of reporting call center activity.

ACDs and service level

There are a number of alternative methods to calculate service level using ACDs. Following are some of the most common calculations used, although some ACDs allow users to specify other definitions of service level using a variety of other call center parameters:

1. Calls answered in Y seconds divided by calls answered:

   This is a very simple but incomplete measure of service level. It is not recommended for a definitive analysis because it considers only answered calls. It is an incomplete recognition of call activity and, therefore, not a good measure of service level. For example, call abandonment is entirely ignored in this calculation.

2. Calls answered + calls abandoned in Y seconds divided by (total calls answered + total calls abandoned):

   For most situations, this alternative is preferable because the calculations include all traffic received by the ACD; therefore, it provides a complete picture of call center activity. The combination of total calls answered (TCA) plus total calls abandoned (TCB) is often referred to as total calls offered.

3. Calls answered in Y seconds divided by the sum of (calls answered + calls abandoned):

   This alternative tends to be the least popular among call center managers because calls that enter the queue but then fall into the abandoned category drive service level down. It is appropriate in situations where calls enter a queue after callers receive a delay announcement. It is not recommended in situations where callers enter a queue before they receive the delay announcement.

4. Calls answered before Y seconds divided by (calls answered + calls abandoned) after Y seconds:

   With this calculation, abandoned calls only impact service level if they happen after the specified Y seconds. This measurement provides a way to avoid "penalizing" the service level due to callers who abandon quickly, without ignoring abandoned calls altogether.

Turning service level into quality of service

As many call center managers have discovered, it is important not to confuse service level with quality of service. It is possible to regularly and continuously meet service-level objectives and at the same time create extra work, have low productivity, and provide a poor quality of service to customers. A narrow focus on service level will not necessarily provide quality. CSRs can have an excellent service level but still make some or all of the following mistakes that may not be reflected in service level because they are content related and not traffic related:

• Relay the wrong information to callers

• Make callers upset

• Fail to accomplish call center objectives

• Record incorrect information

• Miss opportunities to capture valuable feedback

Service level—a limited measure

Service level is a limited measure of overall call center performance because it indicates only that "not too many callers had to wait longer than a certain number of seconds before reaching a CSR." Unfortunately, service level measurement devices such as those provided in an ACD cannot measure whether callers and the organization achieved their mutual goals. It is important not to play the "numbers" game and to keep the primary objective in mind.

Optimizing service level with quality is an ongoing consideration in every call center. If service level is the only characteristic that is being measured and managed there can be too much emphasis on it. A good service level is an enabler for other important objectives—calls are coming in and being answered so that the organization and callers can achieve their mutual goals: getting information on product or services, selling products, or providing other customer-oriented information.

On the other hand, a poor service level reduces call center productivity. As service deteriorates, more and more callers are likely to complain when calls are finally answered. CSRs will spend valuable time apologizing to callers and will not be able to answer as many calls as the service level deteriorates. Costs will increase and revenues will likely be affected negatively. Other negative situations will also develop. Calls will get longer because CSRs will eventually pace themselves differently. And they will take breaks when they are on calls if they are so busy they cannot take breaks between calls, because the "in-between" time no longer exists. In the longer term, as service level starts to slip and continues to decline, CSRs often try to clear up the queue. If they are not able to do this, they eventually adopt work habits that are detrimental to the call center. Call handling time goes up and employee moral is affected and turnover and burnout increase, along with recruitment and training costs. This is obviously a disastrous spiral for a call center environment.

The impact of a poor service level will ultimately be felt in the quality of service offered. When CSRs are overworked due to constant congestion in the queue, they often become lazy and can also become less "customer-friendly." Callers are telling them about the difficulties they had getting through to the center, and CSRs make more mistakes under these conditions. These mistakes contribute to repeat calls, unnecessary service calls, escalation of calls, and complaints to higher management, callbacks, and so on—all of which drive service level down further, again illustrating that a poor service level is the beginning of a vicious cycle.

Based on this discussion, it is apparent that quality should never be considered as an attribute that is opposite to service level—the two must go together.

Choosing a service-level objective

The number of staff needed to handle transactions and the schedules should flow from the service-level objective. (see Figure 3.6) Imagine that the call center receives 50 calls that last an average of three minutes in a half-hour period. If there are only two CSRs answering calls, the delay time for most callers will be long, and abandonment rates will be high. Adding CSRs will reduce delay times. An acceptable rule of thumb is reduce the queue to an acceptable level for both the call center and the callers. The number of CSRs required to provide this degree of service then becomes the service-level target and defines the correct level of resources to meet that target.

There are no generally accepted industry standards for service level, but there are several factors, mostly subjective, that affect service level:

• Value of the call

• Fully loaded labor costs

• Trunk costs

• Caller tolerances

• An organization's desire to differentiate products or services by level of service provided in the call center

An industry standard would have to be based on all call centers placing the same values on these factors, which would be difficult, if not impossible, to achieve. However, some regulated industries have defined service levels. For example, service levels are defined by regulation for cable TV companies in the United States and for telecom call centers in some countries. These levels of service may be regulated through a service-level agreement (SLA). In Canada, Bell Canada service levels are regulated by the CRTC (Canadian Radio and Telecommunications Commission).

It is reasonable to conclude from the discussion here that the correct service level for a call center, apart from legal regulations, is the one that meets the following conditions:

• Minimizes expenses

• Keeps abandonment to an acceptable level

• Maximizes revenue

• Meets caller needs and expectations

• Minimizes agent burnout and errors

• Is agreed upon and supported by senior management

Guidelines for determining service-level objectives

There are a number of methods for determining service-level objectives, but the following four approaches have been distilled from the collective experience of call center managers:

• Minimize abandonment

• Take the middle of the road—follow the crowd

• Relate to competition

• Conduct a customer survey

Each approach requires some subjectivity and judgment on the part of management personnel.

Minimize abandonment

No single service level would satisfy all situations affecting how long callers will wait for a CSR to respond. A number of factors influence caller tolerance, including

• How motivated callers are to reach the call center

• What substitutes for a telephone call are available

• The competition's service level

• The caller's expectations based on past experiences

• How much time the caller has

• The conditions at the locations callers are calling from

• Who is paying for the call

The first approach to choosing a service-level objective essentially involves asking the question, How low can response times go without losing callers? This assumes that a higher level of service means lower abandonment and vice versa; that is, as long as callers don't abandon, service is acceptable. But that is not always the case—abandonment is not static and will fluctuate as the seven factors of caller tolerance change. Abandonment is difficult to forecast, and choosing a service level around abandonment is one of the least desirable ways to establish a service level.

Take the middle of the road—Follow the crowd

The "middle-of-the-road" method defines service level as percentage of calls answered in so many seconds, for example, 80 percent answered in 20 seconds. The 80/20 objective has been cited in some ACD manuals as an "industry standard." However, it has never been recognized as such, even though many early call centers used it. The 80/20 objective is still fairly common because for many call centers it is a reasonable balance between callers' expectations and the practicality of having enough staff to meet the objective.

Benchmarking the competition

Another popular method for choosing a service level is to benchmark competitors or other similar organizations and then use this information as a starting point. This can be done informally by simply asking for the information or by conducting a formal benchmarking study. Whatever the approach, keep in mind that the results reported and those actually achieved may not reflect the actual situation. Human nature tends to "color" the truth on the positive side, especially when the competition may have access to the responses! Cases have been documented where companies with the same service level objectives—80 percent of calls answered in 30 seconds—achieved very different results.

A more formal way to determine the potential impact of abandonment on overall costs is incremental revenue analysis, a variation of the benchmarking approach. Traditionally, this approach has been used in revenue-generating environments, for example, airline or railway reservation centers and catalog companies, where calls have a measurable value. It is more difficult to use in customer service centers and help desk environments, where the value of calls can only be estimated. In incremental revenue analysis, a cost is attached to abandoned calls and assumptions made as to how many calls would be lost at various service levels. CSRs and trunks are added as long as they produce positive incrementals, either marginal/additional revenue or value, after paying for the initial costs. As long as the assumptions are clearly understood and communicated to management, this approach can be very useful when combined with other approaches.

Customer survey

A fourth method for choosing service level is to conduct a customer survey. This involves analyzing caller tolerance.

It is always a good idea to know what callers expect, but random call arrival means that different callers have different experiences with a call center. Even for a modest service level such as 80 percent answered in 60 seconds, over half the callers will get an immediate answer. Some may still be in the queue for three to five minutes (assuming no overflow or other contingency). This significant range of response times means that many callers in a set would claim that the service level was great, while others would describe it as totally unsatisfactory!

There are variations in customer survey methodology. Some managers take samples of individual callers and then compare the responses to the actual wait times for their calls. Others conduct general customer surveys. These samples indicate that waits of up to 60 to 90 seconds are acceptable to a fair percentage of the callers surveyed.