Events Training Consulting Newsletters Webcasts Blogs
Subscriptions
Current Issue
Past Issues
Join Our Mailing List
Contact Us
Home
 
 
 

 


TechEncyclopedia


Wednesday, February 15, 2006

The Fleischer Report – Economy of Scope

One of the best experiences of going to a conference is meeting people. At Call Center Demo and Conference in Austin, I was fortunate to chat with a number of call center managers. One chat with a call center manager from Las Vegas was particularly memorable.

The manager shared observations about the effects of the June 2005 merger of two casino companies, Harrah's and Caesars, on their respective call centers. She pointed out that agents who used to answer calls for individual hotels now assist callers on behalf of multiple hotels that are part of the combined company, now known as Harrah's.

The ongoing consolidation of operations within the Harrah's franchise is well-documented in the business press. What intrigues me most about this kind of consolidation, whether it results from a merger or from a company's decision to centralize its call centers, is that agents' job responsibilities undergo significant expansions in scope.


An agent who has to become knowledgeable about multiple hotels or casinos is likely to require more training than an agent who is accustomed to receiving calls about only one hotel or casino. In terms of hiring agents, it's more difficult to find people who have the capacity to absorb and convey information about various properties than it is to find people who can learn to answer questions about one property. Moreover, compared to a call center that supports one venue, a call center that supports multiple venues may need more resources to enable agents to gather information about these venues and about the customers who visit them.

Yet consolidation, despite the challenges it poses, can turn out to be one of the best things to happen to people who work in call centers. In most professions, including that of customer service, it is all too easy to treat a merger as an opportunity to cut headcount. The typical rationale for reducing headcount, especially after a merger, is that too many people seem to be performing the same job.

What makes call centers unique from other kinds of operations within a company is that a decision to consolidate job functions has a direct impact on customers. In return for the efficiency that a company gains from assigning a call center to represent a wider range of products, those who work in that call center acquire more responsibility.

The company, in effect, entrusts each individual agent, supervisor and manager to help a larger and more diverse population of customers. For those who have the opportunity to broaden their skills beyond assisting callers with only one product or beyond helping only one group of customers, this scenario is tantamount to a promotion.

The example I've described is one illustration of economy of scope, which refers to the ability of an organization to become more efficient by expanding the types of products or services it offers. Call centers are among the best-equipped areas of a company to capitalize on economy of scope because serving customers is a role that cuts across various industries and cultures.

Yet the most striking characteristic of call centers is that the people who work within them have the potential to provide economies of scope. Few departments within companies give employees opportunities to develop the combination and level of interpersonal, managerial, financial and technical skills that call centers can. In Austin and elsewhere, I've encountered numerous executives who began their careers in call centers; they credit call centers with providing them with the kind of comprehensive, hands-on education they needed to become effective leaders.

Economy of scope is a concept that organizations need to remember as they plan for the future of their call centers. Many companies strive for incremental changes to discrete processes, with the aim of achieving, for instance, lower hold times or higher up-sell rates.

These are worthy goals, but there is one overarching objective that call centers ought not to lose sight of: to promote customer care from a back-office function to a corporate responsibility. By focusing their energies on sustaining loyalty among the people they serve, call centers do right by all their constituents – their customers, their companies and their employees.

Posted by Joe Fleischer on Wednesday, February 15, 2006 at 12:57 PM

.

Free CallCenter Insider Newsletter

Your Email Address


Optional Areas of Interest
International News
Advice/Tips
Technology
Agent Development
IVR