Revenue Model- Profit from Pain
By
The Taylor Reach Group, Inc
One of the biggest challenges facing contact centers today is supporting the management’s goal to shift the contact center from a cost center to a profit center. This can often be akin to pushing water uphill for center managers who are under-resourced and lack an understanding of the basics associated with up-sell, cross-sell and ‘save’ campaign effectiveness.
The following article sets out the parameters, drivers, sequence, and value associated with the model hierarchy and its development.
Putting things in perspective There is a progression and hierarchy associated with the implementation of a revenue generation process within any call or contact center. This progression or process must begin by identifying where the center is, what the drivers for change are, the pre-requisites, the sequence in which those activities must be accomplished, and what the impact is of those activities have on the success and profitability of the revenue generation initiative. Broadly stated the drivers would include:
Staffing:
Adequacy of current staff
Availability of current staff
People:
Skills & Competencies related to sales versus customer service
Level and type of training received
Competence or proficiency level
Process:
The complexity of the processes required
The speed of process completion
Replication and error rate of the process
Technology:
Database access, vision and robustness
Scripting and sales support tools
Virtual agent
Offer:
Relevance to customer Affinity to customer
Perceived value & relationship
These broad areas will each perform at differing levels dependent upon the combinations of the above in relation to “offer percentage” (the percentage of callers that receive an offer) and “conversion percentage” (the percentage of callers that agree to an additional transaction). The offer percentage in most contact centers is controlled by the agent or CSR: they determine if it is appropriate to extend and offer to a customer. The latter point will be influenced by the offer, the affinity to the customer, and the perceived value by the customer.
Reorganize The organizational processes in most cases have been designed to process orders and sales in a one-off fashion removed from the call/contact center. There may be no processes in place to manage add on orders or shipments within the fulfillment operation. In some cases, no policy exists for partial shipment rules (ship partials versus hold for complete). The processes are adequate and effective for the business as it has operated but are not optimized, nor necessarily aligned with supporting an up-sell cross-sell environment.
Technology in most organizations has not been designed to support up-sell and cross-sell initiatives. Often it is campaign centric and not customer centric. The systems have been designed to support mass selection of names for mailings or other campaigns and not on an individual basis. The result is the database can often not display much detail regarding the actual customer: their history likes/dislikes or affinities. Similarly most inbound customer service support applications feature access to customer records for billing and account status inquiries, not to offer or support specific scripting for offers etc.
Implement for improvement As staff selection improves: skills, competencies and sales ability the base values for staffing and people improve. The addition of specific and detailed sales skills training, role-playing, and use of the existing technology improves the values for training. As does refining and aligning the operational processes to support up-sell and cross-sell activities also improves the process values. With the skill/competency improvement, the center will see improvements in both the offer percentage and the conversion percentage.
The conversion percentage in most centers converting from a customer service environment will be in the 3-5% range and suffers from a low offer percentage as well. In these centers, the decision to offer or not to offer an up-sell/cross-sell is usually left to the discretion of the agent. It is common that their fears, concerns, lack of training, knowledge of the customer, and support negatively impacts their perception of up-sell cross-sell programs and leads them to find reasons to rarely offer the up-sell. A structured, planned and consistent approach can move the center up the effectiveness curve and begin to achieve superior results is required.
Conclusion The proof is in the results, employing this approach has already helped a number of organizations move from cost focus to revenue success. This is always a challenging journey, but can be the difference between success and failure for the center manager.
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