White Paper

What's Impacting Your Bottom Line?

By Bob Webb, Pipkins, Inc.

Five Factors that Determine Profit or Loss

The difference between profit and loss can be a delicate balancing act. One area that can have a significant impact on a company’s bottom line is the contact center, often the first point of contact for customers. When the contact center runs smoothly, there is less chance for wasted expense and more chance for increased revenue. There are many factors that can influence profit and loss in the contact center. Below are five of the most important.

Accurate Forecasting
Meeting service levels helps provide consistent customer service and instills confidence in the customer that they will have the same experience each time they call. The key to providing that consistent customer experience is having the right people, in the right place, at the right time. This is accomplished with accurate forecasting which controls under- and overstaffing and accounts for 70-80% of a company’s budget.

Accurate forecasting is determined by taking into account all the historic dynamics. While no single methodology is optimal for all circumstances, four factors should be taken into consideration:

  • Correlated Forecasting - includes forecasting for specific events that cause wide fluctuations in the volume of calls that must be processed.
  • Integrated approach to support multi-skilled issues - is necessary to have forecasting algorithms that directly calculate requirements in a multi-skilled environment, while avoiding repetitive analytical simulations.
  • Collecting enough historical data - is imperative to maintain detailed data for several years in order to produce an accurate forecast.
  • Algorithms that include curve mapping and pattern recognition - in variable environments, Historical Trend Analysis is the only way to ensure proper staffing and that can incorporate complex historical trends in its calculations.

Workforce management software needs mathematical algorithms for accurate forecasting and scheduling based on data exclusive to each center’s target service levels, fluctuating call volumes, agent skill sets, and “what if” scenario requirements. Systems that use a “simple” weighted moving average can only use thirteen weeks of historical data, which is not enough to provide a statistically valid forecast.

Algorithms should reflect real-life customer behavior and include curve mapping and pattern recognition. In environments where workloads regularly ebb and flow due to marketing activities and other variables, Historical Trend Analysis is the only way to ensure proper staffing because it is the only methodology that can incorporate complex historical trends in its calculations. Without pattern matching to predict different customer behavior for different events, the risk of over- or understaffing increases dramatically. Historical Trend Analysis not only accurately predicts the continuation of trends, but more advanced algorithms incorporate pattern recognition to fine-tune forecasts for special events like promotional mailings.

An important component of accurate forecasting is having an integrated approach to support multi-skilled issues. It is necessary to have forecasting algorithms that directly calculate requirements in a multi-skilled environment, while avoiding repetitive analytical simulations. A single forecasted set of requirements should be generated for all inter-woven skilled activities, regardless of the type of work being offered. Recognizing secondary skills and accounting for call overflow to available secondarily skilled agents will help eliminate overstaffing.

For maximum efficiency, your software should have an algorithm that incorporates abandoned calls. Systems that don’t understand abandons will always overstaff. Additionally, avoid using a simple “hours-net-to-zero” scheduling algorithm. Scheduling systems that use a simple net-to-zero algorithm cannot distinguish between schedules that deliver good and bad service. If under- or overstaffing during different intervals throughout the day nets to zero, you are not truly meeting your service level objectives during those intervals.

Agent Turnover
The most important asset in a contact center is the customer service representative (CSR). Experts posit that large contact centers spend hundreds of millions of dollars on agent replacement because of 30-100% annualized CSR attrition. The cost to recruit, hire, and train agents can range between $5K-18K per agent. This translates to exorbitant expenditures for companies with large contact centers. The advent of at-home agents has positively impacted agent turnover as well as greatly improving morale. Other strides have been made in reducing agent attrition, including the use of sophisticated software that helps enhance agent morale by giving more control over schedules through agent self-scheduling tools. Flexible scheduling contributes to agent autonomy by enhancing work/life balance. Contact centers are recognizing and utilizing technology to create a positive work experience for CSRs and are seeing a positive impact on bottom line revenue.

Agent Adherence
Agent adherence presents a significant challenge for contact centers. There are many reasons why agents fall out of adherence and it is an inherent problem. When agents arrive late or leave early, log in to the wrong queue, take unscheduled lunch and breaks, or get tied up on customer calls during scheduled breaks or lunches, the result can be abandoned calls, irate customers, lost sales, and an inability to meet service level agreements.

The best option for monitoring agent adherence is real-time adherence tools. Supervisors can view adherence status at any time in a window that is refreshed according to the timetable set by the user. When an agent is out of adherence, the system typically spotlights the discrepancy by a visual device such as color-coding. More comprehensive systems provide important additional information by indicating the nature of the violation (e.g. late start, improper activity, logged out early) as well as the agent’s current state (e.g. ACD inbound, logged off, after-call work) and the duration of the problem.

Average Handle Time
Average Handle Time (AHT) is a key metric in any contact center because it tells how long an agent spends handling a call to completion before being available to handle the next caller. It is foundational in contact center planning and essential for accurate forecasting. AHT can impact consistency in customer service. The customer may suffer when agents focus on handle time and take actions that adversely affect the customer experience, such as cutting off callers if the customer is taking too long or the caller is perceived as difficult. Or, the caller may be unnecessarily put on hold or transferred to another department.

Part of AHT includes after call wrap where agents spend time finalizing data related to the customer’s account. Call wrap is important and essential for ensuring the customer call is handled adequately; however, this extra time can decrease productivity metrics. Two suggested solutions are ensuring your workforce management system produces an accurate forecast to adequately address call volume, resulting in agents feeling less pressured to end calls in order to meet KPI’s. Create an organizational culture that focuses on quality of service rather than quantity.

The best strategy for increasing your bottom line is to provide agents with the best software tools available, including a workforce management system that produces accurate forecasting. If your forecast is inadequate, everything else will be negatively impacted. Staff your center with the most qualified agents and employ a skills-based routing system. Ensure your workforce management system adequately addresses real time agent adherence.

About Pipkins
Pipkins, Inc. is an American company and a leading supplier of workforce management software and services to the call center industry. For over thirty years, Pipkins has created and delivered superior workforce management products for contact centers of all sizes with thirteen industry-first applications. Pipkins’ premier product Vantage Point is the most accurate forecasting and scheduling tool on the market. Pipkins’ systems forecast and schedule more than 300,000 agents in over 500 locations across all industries worldwide. For more information, visit www.Pipkins.com.