Today's CEOs are expected to deliver a differentiated customer experience AND a trimmer efficiency ratio AND organic revenue growth.

They have a secret weapon in the call center—the often lightly regarded, organizationally orphaned call center—where, it just so happens, many customers have their first interaction and where they often go when they are most at risk.

But in financial services, the potential of call centers has been regularly underestimated.

For many industries, it comes as no surprise that call centers are powerful generators of new revenue.  According to McKinsey, some telecommunications companies generate as much as 60 percent of new revenues from the call center.  For some credit card companies, the number is 25 percent. (Source: "Using Call Centers to Boost Revenue," McKinsey, copyright 2006.)

That is not unheard of in banking, but it is rare.  The call center director of one medium-sized bank set and regularly met a goal that would daunt most: keeping pace daily with the bank’s entire branching system.  “We were 200 people in the call center, and there were 200 branches.  We would make 50 percent of the sales every day—with one-tenth of the people and one-quarter of the cost.”

Do that math for a very large bank.  Or do the math a different way:  How many call center agents do you have?  What if, through your leadership and coaching, each of them helped navigate one more customer a week to a new product purchase?  Keep in mind, the opportunity—the missed opportunity in many cases—is thousands of daily customer interactions.

McKinsey again:  “In retail banking…we estimate that every five inbound service agents could generate as much new retail business as a mature branch….  Efforts to cross-sell during inbound service calls could increase annual sales of new products by an amount equivalent to 10 percent of the retail sales generated by a bank’s entire branch network.” (Source: "Using Call Centers to Boost Revenue," McKinsey, copyright 2006.)

Consider the economics of the call center, where the cost of sales can be covered in the first hour of each day, and where employees are virtually never engaged in anything but talking to customers.  Typically, for the same number of sales, a bank call center takes one-tenth of the people and one-quarter of the cost of sales compared to the branch network.  In the slim margin business of banking, selling effectively through the call center should be an irresistible source of “free” profit margin.

Some Stubborn Myths

Yet despite evidence that call centers can significantly help close the revenue gap, some stubborn myths persist.

Myth #1:  Call centers are for service, and selling undermines service.

Selling undermines service only if selling means canned pitches to disinterested customers, or product suggestions that reveal indifference to the customer’s financial situation, or taking advantage of a customer’s distress with one product to urge an upgrade to a more costly product.

But if selling means helping customers manage their financial health, then selling IS service.  Patients don’t expect the doctor to stitch up a head wound but overlook the concussion, or to set a bone but ignore a weight gain.  They are paying for medical care and expect the doctor, not the patient, to be the medical expert—articulate and generous with patient-specific insights and advice.

Myth #2:  Customers don’t want to buy from call centers.

This myth did have roots in the traditional conflict between branch and call center that causes the branch system to try to retain “control” of customers.  “Our products and services are too complex to be delivered via the call center.  There’s too much turnover among the call center people.  Our customers only want to do business face-to-face.  Their service needs are just too important for the remoteness of the call center.”

But that conflict is dying a proper death in the face of the fact that customers are overwhelmingly under-served by any one bank.  It is the rare bank that can boast a high proportion of heavily cross-sold customers; average cross-sell in banking is around two.  That’s two products per customer in a business with scores of products and relationships going back years.  Competition between channels squanders opportunities and frustrates the customers caught in the middle.

Customers want all channels.  If that is an overstatement, it is still a good motto.  It is abundantly clear that when banks treat their call center employees as professionally as they treat their branch employees, they record stellar performance:  lower turnover, higher job satisfaction, higher service scores, and, best of all, higher sales to satisfied customers.

Myth #3:  Call centers automatically track the right performance metrics.

Once again, call centers are captives of their history.  Conceived to save costs—to get transactional calls out of the relationship-orientated branches—they in turn gave birth to productivity-laden measures and the systems to track them.

Walk into most sizable call centers today, and you will see something of a sports arena scenario.  Scoreboards posted high, flashing the latest productivity statistics—all where managers and agents can keep an eye on them and pace themselves accordingly.  Average answer time, agent availability, average handling time, average talk time, average calls per hour, abandonment rate, longest wait time, shortest wait time, agent-answered volume, IVR-answered volume, and so on.  Two minutes per call is a common call center limit.  (What is the standard time limit for branch personnel?  How often do they wrap up a service interaction in two minutes?)

If you can only manage what you measure, and all your measures are about speed and call volume, then the only levers you can pull are those for faster calls or fewer calls.  But if your job is to manage sales, referrals, and customer satisfaction, what metrics do you need?  That is where many call centers find themselves struggling to capture the most basic data:  how many sales, referrals, escalations, and callbacks.  Few call center agents have the systems to support these basic data-capture needs.  We often find agents tracking them with check marks on paper.  Or flipping through several screens to find the answer.  Or taking seven keystrokes to answer a call.  If metrics matter, capturing them needs to be part of the process, not a sideline.

What does it tell your agents if you preach customer experience but measure length of call?  The call center head at Bank of New Zealand, winner of a prestigious international award for customer service, rejects the whole contradiction, saying, “What do fast calls have to do with great conversations?  We don’t want to waste customers’ time, but if we were to ask them what they most wanted from our call center, they might well say quick answers, but we’d be wrong to conclude they want fast talkers or hurried conversations.  Our agents don’t even see their speed and volume stats.”

She sees those stats all the time, however, and she uses them to improve service.  “If we see an agent’s calls are going longer than normal, it’s our job to see if there is a pattern, if the agent needs more coaching on identifying the problem faster or navigating to the right solution faster.  Or maybe it’s a new campaign or a business line conflict that creates complexity.  But ‘hurry up’ doesn’t improve the customer experience, and it certainly doesn’t promote sales.”

Myth #4:  Call centers are call centers.

Call centers are call centers the way Starbucks is a coffee shop.

Well managed call centers are vibrant customer contact points, rich with potential, where customers go when they need acute care.  Even with skyrocketing use of online banking and the spread of branches, when customers have a problem, they look for a phone number, and when they call it, they look for a live person.

Fielding hundreds of interactions a minute, often at critical junctures in the relationship, call centers are contained, disciplined, high-tech environments where new tactics can be deployed rapidly in measurable ways, trends tracked, employee competence assessed, and customer reactions measured.  They are theatre—highly-charged, lively concentrations of trained performers, focused on achieving positive outcomes.  Rare is the branch, with its multiplicity of duties, that can match that contagious energy.

But call center employees are often shorted on the skills that can help them deliver a good customer experience.  The training they do receive often reveals a paradox.  Sales training that equips them with little but stock phrases.  Product training that equips them with little but jargon.  Scripting that equips them with accurate but ineffective spiels.  Perfunctory coaching that may or may not address their needs or the bank’s desired outcomes.

Our own mystery shops of bank call centers reveal that paradox:  high marks on a few measures, but stunning drop-offs on basic sales steps.

Fully 89 percent introduced themselves by name and 79 percent warmly greeted the customer.  But only 31 percent asked for the customer’s name, 22 percent consultatively handled the immediate request, 20 percent presented solutions and benefits, and 16 percent attempted to gain the business.   A dismal 6 percent obtained contact information for follow-up, and only, only 5 percent asked needs-identifying questions. 

If you truly believed that every five of your call center agents could and should deliver sales results equal to those of a mature branch, you would make sure they were crystal clear on their goals.  You would make sure they were fully capable of accomplishing them.  And you would make sure they were fully motivated to do so.  Clear, capable, and motivated:  that is the success triangle that allows ordinary call center employees to achieve extraordinary results.

If call centers are customer-employee contact centers, they need to be treated that way.  As online banking grows, the stakes are only increasing for how banks handle customers in remote situations.  Online banking’s success will depend on employees who not only have product knowledge, but who are also skilled in sales, customer engagement, writing, and typing.  Maximizing the potential of call center employees is a good place for striving to prove that highly skilled employees can remotely deliver a consistent customer experience.

How a Few Leading Financial Institutions Are Debunking Call Center Myths

• Bank of New Zealand (BNZ), the award-winning call center mentioned above, brings in 35 percent of the bank’s retail revenue.  There the call center is actually a standalone business line called Direct Sales & Service.  Their mission is “to have great conversations with customers,’ and they match metrics to mission.  In addition, BNZ also has a true pay-for-performance model.  But, cautions the director, Susan Basile, “Our remuneration system carefully balances sales and quality.  It is unlimited on the sales potential side, but it is forfeited if quality falters, and individual quality standards are set very high.”

• A mid-sized U.S. bank experienced strong growth in targeted areas after taking call center managers and agents through programs designed to embed consultative sales and service behaviors.  In the first year, product referrals from the call center increased 145 percent and continued to grow at a rate 35 percent faster than the previous year.  Importantly, quality scores began rising after the programs and has been sustained at levels above goal.

• A large insurance company in Australia deployed similar programs in a highly competitive market where call volume was also depressed.  They couldn’t achieve their growth goals on volume—they had to have better calls and improve their “strike rate.”  The director reported, “Over the first eight weeks, my targeted performance of a 5 percent improvement in our strike rate actually came in at 20 percent.  Moreover, we improved employee absenteeism and turnover by 30 percent.”  An important “side” benefit of the programs was employee morale and enthusiasm.

These organizations are believers in the power of clear, capable, motivated call center employees—a belief made easier by the proven results at several successful organizations.  Their experience provides guidance for others who wish to lead a similar change.

 

Edward G. Brown is President, Co-Chairman, and co-founder of Cohen Brown Management Group.  Johanna Lubahn is Managing Director for Cohen Brown’s Call Center Services.  Cohen Brown's offices can be reached in Los Angeles at +1-310-966-1001 or London, +44 190 839 4198, or at info@cbmg.com.