Tag: operations management

By Peter Lyle DeHaan, Ph.D.

I’ve never met anyone who felt they were overpaid. Occasionally someone will admit to being adequately compensated, but most people say their pay doesn’t reflect their work or value to the organization. This is especially true of call center agents. I’ve seen this both in running call centers and as a consultant. It matters not what the pay rate is, the universal belief is that the pay is too low.

Compensation is the single greatest expense for call centers. It accounts for anywhere from 40 percent to 85 percent of total expenses, depending on call center size. Pay too little, and turnover shoots up, training costs increase, and morale decreases. Pay too much, and the outflow of money exceeds the inflow of cash. No organization can stay in business if it loses money every month.

But what is an appropriate pay rate? Fortunately, the answer is close to home. I call it the “fast-food factor.”

Quite simply, if you hire call center agents at a fast-food wage, you’ll get a fast-food mentality and a fast-food performance. Yes, you will find the occasional star employee, but how long do you expect to retain him or her? Generally, you’ll find people with little work experience. They’ll view the job as temporary, not understand customer service, and fail to comprehend the necessity of being at work on time (much less giving two weeks’ notice before quitting). With the average agent training time exceeding the average fast-food employee tenure, you can’t afford to hire agents who might quit before they finish training. Yet when you compete with fast-food restaurants for entry-level employees, this is the likely outcome.

To succeed, call centers must pay more than fast-food restaurants, but how much more? Even fifty cents an hour can make a difference. A dollar more will have a much greater effect – if you do it right. What you must avoid when raising your starting wage is merely making it easier to find the same caliber of people; you must raise your standards, too. When you pay more, you can expect more.

As a consultant, one client’s staff kept complaining, “People working in fast food make more than we do.” After hearing five such complaints, I visited the seven fast-food restaurants within walking distance of the center. The staff’s perception was wrong, but the misinformation had gone unchallenged and been repeated enough that the lie was seen as truth.

Another client’s agents enjoyed a much higher starting wage, but they, too, complained of being under-compensated. Again, I surveyed the pay at nearby fast-food restaurants and discovered the call center’s starting wage was three dollars higher than the local fast-food benchmark. Fortunately, accompanying this higher starting wage were tighter pre-employment screening and higher performance expectations. The caliber of the staff was noticeably greater. No adjustment to their compensation was needed.

To determine the appropriate hourly rate for your call center agents, you have four options:

1. Continue what you are doing (which probably isn’t working).
2. Pay someone thousands of dollars to do a wage study.
3. Refer to local wage surveys (which seldom list data for call center agents).
4. Visit local fast-food restaurants, and then distinguish your hourly rate – and agent expectations – from theirs.

Applying the “fast-food factor” has never let me down and, I suspect, it won’t let you down either.

Read more in Peter Lyle DeHaan’s Healthcare Call Center Essentials, available in hardcover, paperback, and e-book.

Peter Lyle DeHaan, Ph.D., is the publisher and editor-in-chief of AnswerStat and Medical Call Center News covering the healthcare call center industry. Get his book, Sticky Customer Service.

By Peter Lyle DeHaan, PhD

If you have technology in your call center, then you’ve likely been frustrated by false alarms and erroneous error messages. I was recently reminded of this as I searched for the source of an alarm, warning me that something was awry at home. The culprit: was a carbon monoxide detector. After an hour of futile troubleshooting, I began to consider that maybe there were actually unsafe carbon dioxide levels in my home.

What a novel thought; in all my years at call centers, I never experienced a smoke, fire, or carbon monoxide alarm that actually alerted an unsafe situation. In fact, I’d been conditioned to assume that any alarm was a malfunction. Smoke detectors were high on that list, with their low battery beeps and an occasional false alarm. When I would test them, no one ever left their station or asked if there was a fire. They merely said, “Make it stop so we can hear.”

UPSs also seemed to do more harm than good. It’s confounding for a malfunctioning UPS to take down the servers and switch when perfectly good utility power is available. Yet it happens. For a while, I kept track: UPSs were actually causing more downtime then they prevented. Generators also fit that category. Regardless if there was an automatic transfer switch or a manual bypass, inevitably something would go wrong. Despite agent training and trial runs, nothing seemed to adequately prepare staff to deal with an actual power outage.

Spare parts and backup circuits were another cause for frustration. You have them in case of an emergency, periodically testing them to make sure they work. Unfortunately, it seems that efforts to do so invariably result in unexpected problems, including system crashes.

The last category of irritations involves data backups. As if making successful backups isn’t challenging enough, retrieval is fraught with peril. Attempts to do so have crashed systems and corrupted good data.

Despite these frustrations, it would be irresponsible not to do all that can be done to keep staff safe, systems functioning, lines open, and data secure. The false alarms and problems are merely side-effects of the process.

As far as my issue at home, it was a false alarm after all.

Read more in Peter Lyle DeHaan’s Healthcare Call Center Essentials, available in hardcover, paperback, and e-book.

Peter Lyle DeHaan, Ph.D., is the publisher and editor-in-chief of AnswerStat and Medical Call Center News covering the healthcare call center industry. Get his book, Sticky Customer Service.

By Peter DeHaan, PhD

When I ask folks if they work at an in-house or an outsource call center, I am surprised at how frequently this question is fumbled. At risk of offending knowledgeable veterans, I offer the following call center basics:

Inbound Call Centers answer calls. Their agents react, waiting for the phone to ring or for the next call in queue. Inbound call centers are equipped with ACDs (Automatic Call Distributors) to efficiently send calls to the “next available agent.” Many inbound operations are staffed 24 x 7, with their agents scheduled in anticipation of projected calls based on historical data and marketing initiatives.

Outbound Call Centers make calls to customers and sales prospects; it is proactive. Even if agents’ work is not “sales” per se, they still need a sales mentality. They must engage the called party, lead them towards an objective, and deal with rejection. Outbound centers rely on predictive dialers to place calls. Agents are scheduled as needed to complete a desired number of calls within a certain time, as limited by law.

In-house Call Centers are an internal department of an organization; they provide services exclusively for their own company. An in-house call center can be a cost-center or a profit-center. Cost-centers are subsidized by corporate, whereas profit-centers charge other departments for the work they do.

Outsourcing Call Centers do work for other organizations; their business is making and receiving calls. They often enjoy an economy-of-scale that is not feasible with in-house operations. Therefore, their margins allow clients to save money, while they make money. Agents at an outsource centers work for their clients, but work with their client’ customers or prospects. Outsource call centers are increasingly desirable as more organizations consider outsourcing to increase service levels and options, return to their core competencies, save money, or all three.

Offshore Call Centers are simply any call center that is located in a different country, or”offshore.” Off shoring is often erroneously considered synonymous with outsourcing, but they are not the same.

Whatever type of call center work you do, do it well — that is the critical lesson of Call Center Basics.

Read more in Peter Lyle DeHaan’s Healthcare Call Center Essentials, available in hardcover, paperback, and e-book.

Peter Lyle DeHaan, Ph.D., is the publisher and editor-in-chief of AnswerStat and Medical Call Center News covering the healthcare call center industry. Get his book, Sticky Customer Service.

By Peter DeHaan, PhD

In retail, the term “shrinkage” euphemistically refers to stock which “disappears” before it can be sold. It is product that the retailer bought, but can’t sell because it is has been stolen or lost. In the call center, the inventory is labor and shrinkage is agents who are being paid but not working. Three metrics help track, explain, and understand agent shrinkage:

Adherence measures the time agents are scheduled compared to the time they actually work (logged in time divided by scheduled time). Since schedules are developed to match traffic projections, when the schedule is not fully followed, the result is under staffing.  Ideally,staff should adhere 100% to their schedules; in reality, this is not the case. Most call center managers are shocked to discover their adherence rates. It can represent a huge unnecessary cost,as well as contribute to lower service levels.

Several factors account for low adherence levels. The first is scheduled breaks, lunches, and training. This is the only acceptable contributor to adherence discrepancy. Depending on the length of breaks, the best resulting adherence will be around 90%. The second consideration is absences, late arrivals, and early departures. The third area is unscheduled breaks or agents leaving their positions. Typical call center adherence rates are around 75%, although well-run operations can be in the low 90s.

Availability measures how much of that time agents are ready, or “available,” to answer calls. It is calculated by dividing time available (also called “on time,” “in rotation,” or “ready”) by logged in time. Agent availability is strictly within the control of agents, determined by their willingness to be ready to answer calls. Although the ideal goal of 100% availability is achievable, 98% to 99% is more realistic.

Occupancy is the percentage of time agents spend talking to callers compared to the time they are turned on or available (talk time plus wrap-up time divided by agent “on” time). One hundred percent occupancy means agents are talking to callers the entire time they are logged in. To achieve this, calls must continuously be in queue. The resulting efficiency is great, but caller wait time can be lengthy. Therefore, 100% occupancy does not produce quality service, plus leads to agent burnout and fatigue.

Interestingly, ideal occupancy rates vary greatly with the size of the call center. Smaller centers can only achieve a low occupancy rate (perhaps around 25%) while maintaining an acceptable service level. Conversely, large call centers can realize a much higher occupancy rate (90% and higher) and reach that same service level.

Call centers with poor adherence, availability, and occupancy rates can literally spend twice as much in labor to produce the same service level as a comparably sized well-run call center. Calculate your center’s adherence, availability, and occupancy numbers– and then take steps to improve them. Don’t let agent shrinkage lead to expense explosion!

Read more in Peter Lyle DeHaan’s Healthcare Call Center Essentials, available in hardcover, paperback, and e-book.

Peter Lyle DeHaan, Ph.D., is the publisher and editor-in-chief of AnswerStat and Medical Call Center News covering the healthcare call center industry. Get his book, Sticky Customer Service.

By Peter DeHaan, PhD

How often have you called someplace and wondered if you reached the right number? All too often, calls are answered hurriedly, haphazardly, or incompletely. Or perhaps the agent seems out of breath by the time they complete a lengthy, tongue-twisting answer. It is vital that all calls be consistently answered in the same way, regardless of location or agent. Here are three parts of the ideal way to do so:

Greeting: The greeting serves to set a positive tone for the call. It is simply”Good morning,” Good afternoon,” or “Good evening.” The greeting tells the caller that the phone has been answered. These words signal that it is time for the caller to listen, but it is not critical if these words are missed.

Company Identity:This is simply the name of your organization, such as, “Acme Medical Call Center.” It lets callers know who they’ve reached, confirming that their call has gone through correctly. Say the name as it would be used by and most familiar to those outside the organization. Therefore, drop legal suffixes, such an Inc, LLC, and Ltd. Also, avoid abbreviating the company name; saying “AMCC” when everyone knows you as”Acme Medical Call Center” will only cause confusion.

Agent Identity: The final element is your first name. It adds a valuable personal touch. It is much easier for a caller to get mad at an anonymous voice, than an identifiable person.  Using your name builds rapport and establish a track record with the caller. As the last word of the answer phrase, it is also the one most easily remembered. Omitting your name implies an avoidance of personal involvement; ending with your name, signals confidence and competence, which are critical in medical call centers.

Avoid Unnecessary Addendums: It is all too common for people to tack on the inane phrase, “How may I direct your call?” A direct response to this senseless question would be “quickly and accurately.” This is a waste of time.

Putting these together, results in the perfect answer: “Good morning, Acme Medical Call Center, this is Peter.”

Read more in Peter Lyle DeHaan’s Healthcare Call Center Essentials, available in hardcover, paperback, and e-book.

Peter Lyle DeHaan, Ph.D., is the publisher and editor-in-chief of AnswerStat and Medical Call Center News covering the healthcare call center industry. Get his book, Sticky Customer Service.

By Peter Lyle DeHaan, Ph.D.

Benchmarking is the comparison of your call center with statistical results from the norm of industry peers. These numeric measurements are called metrics. Metrics can be in the form of financial figures, operational quality and efficiency, human resource efficacy, or whatever is deemed the most valuable to the participants, though typically and primarily they are operational in nature. “If it can be measured, it can be improved,” asserted Kelly Doran of Simcoe Message Centre in Barrie, Ontario. The “objective measurement of quality standards can help highlight areas of strength and weakness in both individuals and teams.”

Successful benchmarking follows a progressive path towards a desired outcome. First, there must be a desire to obtain, have, and use the information. Next, you need to determine who will be invited to participate. The basic requirement is for participants to have an interest in the results and a commitment to contribute. Beyond that, it is imperative that all participants are in sufficiently similar business niches within a common industry. In many cases, it is wise to select those using a common hardware or software platform, since operational metrics are hard to reliably compare when their source is different, employing dissimilar statistical standards. Some will assert, that from the caller’s perspective, a call center is a call center and therefore it doesn’t matter who your center is benchmarked with as long as they are of similar size. Yet everyone knows that a telephone triage call center is much different than an order-taking operation and a physician’s referral line has different objectives than a literature request function. Quite simply, it makes no sense to compare your call center to another one that is in a different industry, pursuing different goals, and with different cost-benefit standards.

The third step is to determine which numbers to measure or gather. It is recommended to start small, obtaining only a few key numbers. As participants become engaged in the process and realize the value of it, then other metrics can be added. This is followed by developing a standard determination of how the information will be gathered or the calculations will be made. For without a standard methodology each participant will make the calculation as they see fit, rendering any results unreliable. These two steps can be both time consuming and contentious. Assistance from someone with experience in benchmarking or a background in statistical analysis is most beneficial at this point, serving to greatly simplify the process and save valuable time. Also, if this person does not have a direct stake in the results, they are able to more objectively guide the process.

The fifth step is a critical one. It is to develop the survey form, which includes documenting the source or calculation of the data. Although this seems like a simple and straightforward process, it is one fraught with peril, as a less than ideal survey form will doom the process to misanalysis or failure. Again, someone with experience in benchmarking or developing survey forms will be most helpful. Then, regardless of the quality of the survey form, or its developer, it is of paramount importance to test it. What may seem perfectly clear to those who developed and reviewed the form, it could cause confusion or misinterpretation among those completing it. Therefore, a small field test should be conducted. Any problems uncovered in the test will need to be corrected before the benchmark survey is distributed to all participants.

The next two steps are the most important, as concerns in these areas can cause otherwise willing participants to decide not to complete the survey or to color their responses. Quite simply these steps are to gather the completed surveys and then to compile the results. Concerns reside in who performs these two items. It is imperative that this person or group be trusted, respected by all participants, and that there not be any perception of a conflict of interest. As such, it is recommended that someone not participating in, nor who will benefit from, the benchmarking results be assigned the task of both collecting and tabulating the responses.

The results of the benchmarking survey should only be presented in aggregate form and then only to those who responded. All individual answers must be fully protected. In some cases, such as providing cross-sectional or demographic analysis, certain sections may need to be eliminated due to a small number of responses that would effectively expose one or two members. The results, often along with analysis and a commentary are distributed to all who participated.

Although conducting a benchmarking study once is valuable, the real benefit comes from repeated studies over the course of time. Therefore, it is important to follow-up with those who participated to determine any problem areas needing correction or additional data to be collected. These changes must be made and the survey repeated. Depending on the nature of the information, the survey should be repeated at least annually, possibly semiannually, quarterly, or even monthly. The benchmarking results then become a periodic report card showing your successes, your shortcomings, your improvements, and your relapses – all with respect to your peers. This provides the basis for celebration and self-improvement.

Some Examples of Benchmarking Metrics

Operational

• Percent of calls answered
• Average time to answer
• Percent of calls placed on hold
• Average hold time
• Occupancy (percent of time spent working)
• Average call duration
• Average wrap up time
• Number of calls answered per month
• Amount of time spent on calls per month
• Schedule adherence

Human resource

• Annual turnover rate
• Average employee (CSR) tenure
• Cost to hire one new employee
• Cost to train one new employee
• Starting pay per hour
• Average hourly rate

Financial

• Percent of revenue spent on labor
• Cost per call
• Value of the call
• Profit margin

Summary of Steps for Benchmarking

• Possess a desire to obtain, have, and use the information.
• Determine who will be invited to participate.
• Determine which numbers to measure or gather.
• Develop a standard for how calculations will be made.
• Design the survey form.
• Test the form and correct problem areas.
• Distribute the form.
• Gather the completed surveys.
• Compile the results of the collected surveys.
• Present the findings.
• Analyze and correct any problems for next time.
• Determine additional data to collect the next time.
• Repeat the process periodically (at least annually).

Read more in Peter Lyle DeHaan’s Healthcare Call Center Essentials, available in hardcover, paperback, and e-book.

Peter Lyle DeHaan, Ph.D., is the publisher and editor-in-chief of AnswerStat and Medical Call Center News covering the healthcare call center industry. Get his book, Sticky Customer Service.

By Peter Lyle DeHaan, Ph.D.

What is benchmarking? At its simplest, benchmarking is objectively comparing your call center with others. Brad Cleveland of Incoming Calls Management Institute states that “Benchmarking is comparing products, services, and processes with those of other organizations, to identify new ideas and improvement opportunities.” Whereas Dr. Jon Anton of Purdue University defines benchmarking as “A structured, analytical approach to identify, deploy, and review best practices to gain and maintain competitive advantage.”

Benchmarking is a safe, anonymous, and effective way to obtain input from peers which can be used to compare and contrast your call center operation to others. This feedback provides a baseline for determining areas of deficiency, as well as success. Benchmarking produces quantifiable results, real numbers from real businesses, thereby offering real solutions. Also, once a benchmarking process has been implemented, it can be easily repeated and updated on a periodic basis. This provides a time line of successive snapshots of your business. In essence, benchmarking makes it possible to create a report card showing your successes, your shortcomings, your improvements, and your relapses – all with respect to your peers, but done so privately and confidentiality.

Therefore, call center benchmarking is the comparison of your operation with statistical results from the norm of industry peers. These numeric measurements are called metrics. Metrics can be in the form of financial data, sales numbers, operational quality and efficiency, human resource efficacy, or whatever is deemed to be the most valuable to the participants, though typically and primarily they are operational in nature.

Successful benchmarking follows a progressive path towards a desired outcome. First and foremost, there must be a desire to obtain and use the information. Next, you need to determine who will be invited to participate. It is essential for participants to have an interest in the results and a commitment to contribute. Beyond that, it is imperative that all participants have sufficiently similar businesses. In many cases, it is wise to select those using common equipment or software platforms, since operational metrics are hard to reliably compare when their sources employ dissimilar statistical paradigms.

The third step is to determine which numbers to measure. It is recommended to start small, obtaining only a few key numbers (as participants become engaged in the process and realize the value of it, then other metrics can be added). It will then be necessary to develop a standard determination of how the information will be gathered or the calculations will be made. For without a standard methodology, each participant will make the calculations as they see fit, rendering any results unreliable. These two steps can be both time-consuming and contentious. Assistance from someone with experience in benchmarking or a background in statistical analysis is most beneficial at this point. This outside assistance serves to greatly simplify the process and save valuable time. Also, if this person does not have a direct vested interest in the results, they are better able to objectively guide the process.

The fifth step is a critical one. It is to develop the survey form, which includes documenting the source or calculation of the data. Although this seems like a simple and straightforward process, it is one fraught with peril, as a less than ideal survey form will doom the process to misanalysis or failure. Again, someone with experience in benchmarking or developing survey forms will be most helpful. Then, regardless of the quality of the survey form – or its developer – it is of paramount importance to test it. What may seem perfectly clear to those who developed and reviewed the form, could cause confusion or misinterpretation to those completing it. Therefore, a small field test should be conducted. Any problems uncovered in the test will need to be corrected before the benchmark survey is distributed to all participants.

The next two steps are the most important, as concerns in these areas can cause otherwise willing participants to decide not to complete the survey or to color their responses. Quite simply these steps are to gather the completed surveys and then to compile the results. Concerns reside in who performs these two steps. It is imperative that this person or group be trusted and respected by all participants and that there not be any perception of impropriety or a conflict of interest. As such, it is recommended that someone who is not participating in, and will not benefit from, the benchmarking results be assigned the task of both collecting and tabulating the responses.

The results of the benchmarking survey are only presented in aggregate form and then only to those who responded. All individual answers must be fully protected. In some cases, such as providing cross-sectional or demographic analysis, certain sections may need to be eliminated due to a small number of responses which would effectively expose one or two participants. The results, often along with an analysis and commentary, are distributed to all who submitted data.

Although conducting a benchmarking study once is valuable, the real benefit comes from repeated studies over the course of time. Therefore, it is important to follow-up with those who participated to determine any problem areas needing correction or additional data to be collected. These changes must be made before the survey is repeated. Depending on the nature of the information, the survey should be repeated at least annually, possibly quarterly, or even monthly.

Some examples of benchmarking metrics:

Operational

• Percent of calls answered
• Average time to answer
• Percent of calls placed on hold
• Average hold time
• Occupancy (percent of time spent working)
• Average call duration
• Average wrap up time
• Number of calls answered per month
• Amount of time spent on calls per month
• Schedule adherence

Sales and Marketing

• Number of sales made
• Sales per hour
• Average revenue per sale
• Number of inquiries
• Closing ratios
• Source of leads

Human Resource

• Annual turnover rate
• Average employee (CSR) tenure
• Cost to hire one new employee
• Cost to train one new employee
• Starting pay per hour
• Average hourly rate

Financial

• Percent of revenue spent on labor
• Percent of revenue spent on marketing promotions
• Percent of revenue spent on all sales and marketing efforts
• Number of clients
• Average revenue per client
• Cost per sale
• Profit margin

Conclusion: Benchmarking is a valuable mechanism to bring outside experience, information, and knowledge into a business. With this input, business goals become more defined and realistic; direction, clearer; and focus, sharper. It is an opportunity for improvement that should be seized.

Read more in Peter Lyle DeHaan’s Healthcare Call Center Essentials, available in hardcover, paperback, and e-book.

Peter Lyle DeHaan, Ph.D., is the publisher and editor-in-chief of AnswerStat and Medical Call Center News covering the healthcare call center industry. Get his book, Sticky Customer Service.