4 Numbers to Improve Profits by 80%
Building a lasting, positive relationship with your customers is critical for business growth.
Without great service you will struggle with maintaining customers and controlling sales team churn. Slow the churn of customers and sales team members and you'll see improved financial performance and lifetime customer value. This can be the critical factor in keeping your business healthy.
A 5% reduction in customer churn can improve net profits by 20% to 80% depending upon your industry.
What are the key measurements in your customer service center?
We are going to cover those, and at the end of this article I'll let you know "The Number 1 factor blocking executive insight into service related customer churn."
Make sure you are looking at all four categories of customer service metrics in your business. These include:
Agent Success Metrics (Are the agents getting the job done? Are they available? Are they efficiently handling the service issues? Do they need more time sensitive training?)
Service Team Efficiency Metrics (Do you have the right staffing? Are you achieving your service level agreement with customers? Are you spending too much or wasting the money you are spending?)
Churn Prevention Metrics (Are you prioritizing your best customers, the growing accounts, and being attentive to top performing accounts? Tracking your issues per transaction type? Do you know your churn rate--how many customers have quit on you? Do you know why? Do you know the percentage of people happy with your service to them--how is it trending over the last week, month, quarter?)
Business Process Feedback Metrics (What reports are your service area giving to the Marketing Department, Sales Department, Operations area, Product Development, and IT? Do you know what is causing the problems? Do you know what its costing you to not fix them? Are the root causes being addressed? Is this feedback getting to the top P&L executive in a usable format or is it buried in the normal bureaucracy of business?)
Conducting a thorough review of your key service metrics and understanding what the metrics are telling you may be the most valuable exercise you can undertake in your business this year.
Any sampling of "Agent Success Metrics" should include the following as a starting point (for both call centers and email service centers):
Average Handle Time (AHT) - average amount of time it takes to resolve a situation is the starting point, but put it into context by knowing your median handle time.
Median Handle Time (MHT) - the mid-point of handle time, is good to know because then you can identify other keys to know such as time to resolution.
Time to Resolution (TTR) - the average time it takes an agent to resolve a situation is key, so you can know 1) which agents are being the most effective, 2) tune your training of agents, 3) initiate discovery work with your team leaders as to what the nature of calls are that are taking the longest to resolve. (These are your business teaching points for the executive team, as they will point to where you will discover how the business is confusing or frustrating those it is attempting to serve.)
Agent Availability Percentage (AAP) - is simply how the amount of time an agent is available (that is, logged into the phones) divided by paid staff time. (You can calculate this several ways. Do you leave in break times? Do you remove administrative work like working open cases from the calculation? Do you take out post call documentation times? You'll want to know how your team is calculating this and if they really are being consistently efficient.)
These few measurements are only a small sampling of the most valuable customer feedback you can get, but are you getting them? Are you using them to ask the next layer of questions? And, are you translating them into meaningful change for the profitability of your business?
As promised, "The Number 1 factor blocking executive insight into service related customer churn" is that
... you are paying them to keep you in the dark.
Unless the customer service leader tasked with reporting service issues to executive management is given a safe chair at the executive table and rewarded for driving down churn versus simply reducing average handle time, you are paying them to keep you in the dark.
Break this cycle by asking, then taking action:
Where do you have the department reporting into the business?
Are both the role and the capabilities of the top executive over Customer Service well defined?
Is your top Customer Service executive trusted by the c-team to identify and solve issues leading to customer churn?
Is your head of customer service "safe" if they report bad service issues related to other areas of your business that their immediate boss leads? (If they report up through operations this can lead to hiding service issues of delivery and quality. If they report up through sales or marketing, this can lead to non-reporting on ineffective communications regarding promotions, etc. to the top executive.)
Are they trained well, have the tools to do the analysis, and empowered to be the voice of the customer?
If you want to discuss a process for improving your net profit 20% or more by using your own customer support data.
#NetProfit #CustomerService #ProcessImprovement #CustomerChurn
