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Evaluating Evaluations

by Dick Bucci, Chief Analyst, Pelorus Associates - March 25, 2013

Evaluating Evaluations

Dick Bucci

Pelorus Associates

dbucci@pelorusassoc.com

www.pelorusassoc.com

The agent evaluation process is evolving with the changing mission of the contact center. The first thing to consider should always be how do the attributes we measure contribute to achieving the broader goals of the enterprise? The goals of the enterprise are typically spelled out in formal business plans. They will include both quantitative and qualitative objectives. In larger companies these broad goals are translated into to specific actions by each department or business unit and then filter down to operating groups like the contact center. In smaller organizations formal objectives may not be written down but they do exist. Your senior manager should know these goals and has the responsibility of sharing this information with contact center management. From, there it is your responsibility to map out departmental goals that can be converted into KPIs and identify the evaluation criteria that directly support the achievement of these goals.

Basic goals of the contact center

Understanding corporate goals will not change the basic goals of the contact center but will determine the amount of emphasis you place on each. Every contact center has four basic goals;

1. To delight customers

2. To increase revenue

3. To minimize operating costs

4. To provide valuable business insights

Customer Delight - Organizations that emphasize service quality as a competitive advantage or require high levels of customer retention and loyalty place great emphasis in customer delight. Customer delight is in the eyes of the customer and is best measured from feedback surveys. KPIs that have been empirically proven to correlate with customer satisfaction are first contact resolution and agent satisfaction. Call quality is also very important and is as much a reflection of agents’ soft skills as ACD statistics. Important soft skills include product knowledge, courtesy, professionalism, empathy, and clarity.

Increase revenue– Agents contribute to revenue growth by direct sales or by identifying sales leads which are then forwarded to the sales organization. Agents also contribute to revenue growth by helping to retain existing clients. Independent research shows that it costs far more to replace a customer than to take actions to prevent their defection. Customer lifetime value (CLV) is a concept that recognizes the aggregate contribution of a consumer over the period of time they remain customers. As the first line of defense, agents can have a significant impact on customer loyalty and consequently CLV.

Minimize operating costs – Performance metrics are the typical KPIs generated by the ACD and workforce management system and are intended to measure operating costs and productivity. In developing the agent scorecard it is very important to choose only metrics that the agent can realistically control. Metrics including service level, abandonment rate, occupancy, time to answer; queue length, calls per hour, and time-to-answer are largely a function of scheduling, traffic volume, and adequacy of equipment and services. Even cost per call is largely outside the agent’s control. Attendance and punctuality are (for the most part) controllable by the agent, as is handle time and screen efficiency.

Cost control is not just about metrics. Compliance is a very important part of the equation. In sales transactions and collections there are mandatory disclosures. Agents must refrain from making commitments (delivery dates, claims settlements, financing terms, and concessions) unless they are fully authorized to make the promise. Compliance is evaluated by scanning recorded interactions. In an July 2012 Capital One was fined $210 million as ACD statistics for misleading customers. Fortunately there are speech engines that can quickly and accurately interrogate thousands of hours of recordings by searching for the key words and phrases that confirm the agents said what they were supposed to say.


Business insights
are a special case. There are no established metrics like “average number of brilliant insights per day” or “customers saved through heroic actions by contact center agents.” But this should not be a reason for omitting agent observations from the scorecard. From senior management’s perspective a heads-up about potential quality problems, insights about the causes of customer defections, or fresh information about competitor actions could well be the most valuable “KPIs” to flow from the contact center.

Creating the Evaluation Form

The relative importance of these four basic goals depends to a large degree on the nature of the enterprise. Businesses that sell commodity products based largely on price will want the contact center to operate at the lowest possible cost, even if that means some compromises in service quality. Businesses that seek to differentiate their products and services will be more supportive of contact centers that excel at service delivery and the collection of valuable business intelligence.

For simplicity we have divided organizations into four major groups.

  1. Cost-oriented enterprises are primarily concerned with efficiency. Operating at the lowest possible cost is the primary goal so performance measures get the highest weightings.

  1. Service-oriented enterprises place the highest priority on delivering customer delight. Service quality is essential because of the reliance on customer repeat purchases and customer retention. In service businesses it is not unusual for service quality to be the primary or even the only important competitive differentiator. Metrics that gauge service quality and customer satisfaction will have the highest priority.
  2. Sales-oriented organizations see revenue growth as the number one priority Contact centers are viewed as extensions of the sales function. Their primary purpose is to close sales or at least generate leads that lead to sales. Contribution metrics will receive the highest weightings.
  3. Market-oriented enterprises recognize that understanding the consumer is paramount to growing revenues. Since the focus is more on understanding and satisfying customer needs than cost reduction or generating immediate revenues, higher weights are applied to customer delight and business insights. With the maturation of speech analytics and popularity of Voice-of-the-Customer software the business intelligence function of the contact center is becoming very important.

The following grid provides examples of measurements for each broad contact center goal. Note that the grid includes only performance measures that are controllable by the agents.

Evaluation Measures by Contact Center Goal

Customer Delight

Contribution

Performance

Business Insights

Top box customer satisfaction

Leads generated

Adherence

Model calls saved

First contact resolution

Customer saves

Average handle time

Messages to supervisors

Knowledge

Sales per agent

Attendance

Meeting contributions

Agent satisfaction

Up-sell attempts

Compliance

Coaching comments

Call handling skills

Customer lifetime value

Accuracy

Speech analytics reports

The “balanced scorecard” weights these metrics in proportion to their importance to achieving the goals of the contact center and the broader enterprise.

The model scorecard for “Agent 1” applies weights in proportion to the importance of that contact center goal to the overall goals of the enterprise.

Agent 1 - Model Weighted Scorecard

Cost- oriented

Service - oriented

Sales- oriented

Market- oriented

Customer Delight

Score

7.50

7.50

7.50

7.50

Weight

15%

50%

25%

35%

Weighted score

1.13

3.75

1.88

2.63

Contribution

Score

4.70

4.70

4.70

4.70

Weight

10%

15%

55%

20%

Weighted score

0.47

0.71

2.59

0.94

Performance

Score

8.60

8.60

8.60

8.60

Weight

65%

30%

10%

15%

Weighted score

5.59

2.58

0.86

1.29

Business Insights

Score

4.90

4.90

4.90

4.90

Weight

10%

5%

10%

30%

Weighted score

0.49

0.25

0.49

1.47

Total weighting factors

100%

100%

100%

100%

Total weighted score

7.68

7.28

5.81

6.33

The model is based on a 10-point scale. The composite ratings for each category are derived from the individual rating scales for various KPIs and subjective ratings. Examples are customer satisfaction (third-party based or supervisor-inferred), adherence, handle time, and others. The result is a balanced scorecard that accounts for all the goals of the contact center and reflects the relative importance of each goal to the broader scheme of things. If the priorities of the enterprise change, for example a weakening business environment produces more pressure on cost effectiveness, then contact center management rearranges the weights to reflect the new environment.

QM evaluations and performance appraisals

Don’t’ confuse periodic agent evaluations with formal performance appraisals

Formal appraisals typically occur only once or twice a year and consider many factors beyond call handling skills and productivity. Formal appraisals review skills and qualities like leadership, teamwork, initiative, creativity, and problem solving ability – none of which show up in call monitoring reports or key performance indicators. The main purpose of performance appraisals is to identify tomorrow’s leaders in and outside of the contact center. The purpose of periodic quality management evaluations is very narrow - to improve the performance of the individual and the contact center as a whole.

Given the dynamic nature of today’s business environment shifts in goals and strategies are a fact of life. Agent evaluations, like every other process in the contact center, needs to reflect and support the changing mix of goals and strategies.

Dick Bucci
Chief Analyst
Pelorus Associates
www.pelorusassoc.com

 
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