"Our Take" - Benchmarking

(Past Editions by: Date, Title, Topic)

 
About "Our Take" 
"Our Take" is a collection of daily vignettes covering a wide range of CRM topics. It's an attempt to add our own spin to the world of CRM. We will use the column to share our perspectives, opinions, epiphanies, web nuggets, or quite frankly anything that moves us. Get ready to expect the unexpected. And, don't be shy about sharing your thoughts.
 
 
9/30/05 - Observation: Benchmarking is Out
The attraction to compare one's operations to others can be quite strong. It may be intellectual curiosity, competitive drive or even incentive based compensation. Regardless of the motive, now is the time to look beyond benchmarking your contact center.
 
Operational metrics like average handle time, first call resolution and a host of others might tell you about efficiency but they do little to measure overall effectiveness. To be sure, what is the point of measuring how cheap you can do something if what you do is of dubious value? I'm not suggesting metrics aren't important. In fact, they are more important than ever but not because they can be used for benchmarking.
 
Benchmarking will not make you better, let alone world class. Outcome based metrics, those measures that tell you how effective you are, along with operational metrics will create the balanced scorecard for making a real difference. What about benchmarks? There is one benchmark you should keep. Read this column on Monday to find out.
 
Gary Lemke, Publisher
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10/3/05 - Benchmarking is Out - Part II
Last week, I shared one major trend I found at recent call center conferences. That is, operations are figuring out that benchmarking is not going to make them better. I suggested that benchmarking is operational in nature and often ignores the quality of the customer experience (not outcome based).
 
One of the fallacies of benchmarking is that you are comparing apples to apples. Competitors that really matter to your business work hard to protect their operational details. Even if you have access to their numbers, do you know with confidence that they measure things the same way you do? Do you understand the conditions under which those numbers were produced? The philosophy of benchmarking is good but the reality is elusive resulting in low to non-existent confidence in benchmark data.
 
The one benchmark you can confidently use to compare your operation is YOU. You can always do better and today's results should always be compared to how you did yesterday. If you make that comparison on a regular basis and continually improve, I guarantee you will become world class. Of course, that assumes you are measuring the right things. More on that tomorrow.
 
Gary Lemke, Publisher
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10/5/05 - Why We Benchmark
For those of you who have heard me speak, you may remember that I suggest there are only two reasons why organizations benchmark. Both reasons have to do with reporting to management but are quite opposite. And both reasons are not reason enough to benchmark.
 
First, people benchmark to report to management how well they are doing. They compare their operational metrics to show how much more efficient they are. It's like bringing home all As on your report card. While the comparisons make everyone feel good, the benchmarks are most often meaningless because the way you measure operational efficiency may be completely different than the way others create metrics. And if the organizations you compare yourself to are mediocre, all you have done is show that you are better than mediocre. Often better than mediocre is still mediocre.
 
The real danger of comparing metrics is the illusion that everything is great. This feeling that "everything is just fine" creates a sense of complacency and little gets better. Feeling good about mediocrity is the first step to failure. I'll share reason number two with you tomorrow.
 
Gary Lemke, Publisher
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10/6/05 - Why We Benchmark - Part II
Yesterday, I shared the first of two reasons why people benchmark. Today I will share the second reason. In review, the first reason people benchmark is to show management how well they are doing compared to other call centers. In a way, it's like saying, "I know customers might not like our service, but at least we are better than others."
 
The second reason people benchmark is to show they are operationally below benchmark comparisons in order to justify to management the need for additional investments. It is a way to say, "We could be as good as others if only we had additional resources."
 
In both cases, the primary objective of benchmarking is to sway management's view of the call center. It seems the focus is on comparisons to others rather than focusing on the expectations of their customers. And that bothers me. Obviously, it bothers many of you. The rest of this week I will begin sharing how your fellow readers feel about this subject. Stay tuned - much more to follow.
 
Gary Lemke, Publisher
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10/7/05 - Stand Up for Benchmarking
Feedback on the topic of benchmarking is running about 20 to 1 in support of my position. But I write this column to share different perspectives so today you will hear from those who don’t agree with me.
 
One reader wrote, "I strongly disagree that there are insufficient reasons to benchmark. To deploy a successful CRM solution, you need to have quantifiable objectives. Examples would be 'Reduce new sale rep ramp-up time from 6 months to 3 months as measured by ...' or 'Increase the percentage of sales to qualified prospects from X% to Y% within 6 months of project launch.' In almost every example you need a baseline measurement. Without quantifiable objectives you cannot define your ROI, you cannot tell whether or not your project succeeds, and your project will not have the focus necessary for success."
 
I wholeheartedly agree that you need baseline measurements to measure improvements and calculate ROI but I don't believe you need benchmarks to create the baseline. Isn't the baseline a measure of your operation rather than the average of other operations?
 
Gary Lemke, Publisher
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10/10/05 - Benchmarking - An Issue of Definitions?
As we continue to receive comments and feedback on the question of benchmarking, it is becoming clear that different people have different perceptions about benchmarking means. Most of the confusion seems to revolve around comparisons to internal operational metrics versus comparisons to external operational metrics. Today, I'll offer definitions for baselining versus benchmarking.
 
A baseline measurement is used as a basis for comparing your own operations (internal) over time. For instance, you might create baseline metrics that characterize your call center operations and subsequently use such baseline metrics to quantify change over time. Hopefully that change shows improvement. On the other hand, a benchmark allows you to compare your operational metrics with external measures (other call centers).
 
So baseline comparisons demonstrate change in performance while benchmark comparisons allow you to see how your metrics compare to others. Both have their place in terms of utility but the two terms are not interchangeable. Obviously, baseline comparisons are “apples to apples” because the comparisons are made directly to your operations while benchmarking comparisons can be “apples to apples” if you understand how other call centers create their metrics and if you know that the benchmarks include like operations.
 
Gary Lemke, Publisher
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10/11/05 - Benchmarking - Our Readers Speak Out - Part II
We continue today with more thoughts from our readers. One person wrote, "The reasons people benchmark today are not the reason that benchmarking became a useful tool. Benchmarking is comparing your processes/practices to another organization to understand why/how that organization is able to achieve the results it does."
 
The reader goes on to say, "Benchmarking should facilitate the adoption of best practices, not lure companies into thinking that they are performing at an acceptable level because they are as good or better than the average of whatever survey. Benchmarking, in its truest sense, without understanding the business processes/objectives is a waste of time."
 
Two things I want to point out. First, benchmarking is should never be solely about data comparisons. It must include knowledge of the business processes behind the data. Second, benchmarking to averages will simply make you average.
 
Gary Lemke, Publisher
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10/12/05 - Benchmarking to the Best
One key thought from yesterday's discussion on benchmarking is the trap of comparing yourself to averages - mediocrity. One reader wrote:
 
"Benchmarking by definition needs to be done with respect to the 'best'. If benchmarking is being done with the objective of scoring "brownie points" with the boss / management then should we call it a benchmarking exercise?"
 
In this column, we've suggested that benchmarking should be a tool to improve business processes not simply to compare metrics. Perhaps, we need a different way to describe the practice of metric comparisons so as not to cloud the good merits of true benchmarking. Any suggestions how we delineate the two?
 
Gary Lemke, Publisher
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10/14/05 - Benchmarking - Readers Speak Out - Part III
The topic of benchmarking seems to have struck a nerve with many of you. This may be the most responded to topic so far. So we continue today with more reader comments.
 
One reader wrote, "Surely we must be preaching from the same book, since your comments on the shortcomings of benchmarking exactly reflect ours. As a provider of usability and caller satisfaction testing services, I constantly hit the wall of resistance and excuses of which hiding behind benchmarks is all too common. Not once in memory can I recall a conversation with a call center manager who knew exactly how measurements were made within his/her OWN call center let alone those of others."
 
The reader goes on to share an example: "Take average call length for example. Does it include time in a front end IVR? Is it timed from trunk seizure or from time of answer? If a caller is put on hold does the clock stop? How are multiple holds and interdepartmental transfers measured? etc. etc." You see, how can you ever have confidence in published metrics when metrics are inconsistently defined from call center to call center?
 
Gary Lemke, Publisher
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10/17/05 - Benchmarking Delusions
One reader wrote, "Very closely related to benchmarking is a manager's delusion over caller satisfaction numbers. Time and again I hear a manager speak proudly of perhaps a 75% caller satisfaction score and I want to respond with: Wasn't a 75% a low "D" in school? What's so positive about annoying one caller in four? And when you add the common perception that "satisfied" is a positive (which it is not), and we see managers continuing to delude themselves about the quality of service.
 
The reader goes on to say, "Over reliance on benchmarks and trust in the companies that promote them isn't a service solution. The very "guru(s)" who have made a career out of reliance on these measurements have probably done more to foster mediocre service than they have done to improve service quality."
 
While I don't believe that the organizations that help provide industry benchmarks intended to promote mediocrity, it does make me wonder what role the benchmark firms play in helping call centers really achieve best in class business processes.
 
Gary Lemke, Publisher
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10/18/05 - Don't Pick on the Benchmark Firms
One reader wrote, "Thank you, thank you, thank you! I have long felt this way [about benchmarking] and as a consultant I feel a great deal of conflict when a customer insists benchmarking is what they want to have done to measure their performance!"
 
While some of the responsibility may fall at the feet of firms that help call centers make operational comparisons, it seems much of the blame should rest with call center managers and the people they report to. The demand for these benchmark comparisons are borne out of demand. Regardless, how misguided the demand might be, benchmarking firms are merely satisfying a perceived need.
 
We get what we ask for. Just because our kids ask for happy meals when they are hungry doesn't mean that we should take them to McDonalds for nourishment. We need to make sure that we are not just scratching an itch but rather treating the rash. In summary, be careful with those numbers!
 
Gary Lemke, Publisher
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10/20/05 - Benchmarking - A Consultant's Perspective
One reader/consultant wrote, "Benchmarking has a place - but in my presentations I warn audiences against 'benchmarking to mediocrity'. This lines up with your point that the best benchmark is YOU. If there one consistent call I get from enterprise contact center managers is the search for benchmarks (AHT, ASA, average time to abandon). So often the search is for the NUMBER that they can defend to management or finance because it drives staffing levels.
 
He goes on to say, "Benchmarks are a nice starting point, but then you really need to do the homework on getting customer sat data and start tying that to relevant performance metrics. THEN establish plans to IMPROVE on them. Funny - where one would think it would be the smaller centers that would call looking for this data because they lack staff time to analyze metrics - it's the VERY LARGE ones that always call me."
 
If you have been following this discussion thread, you most likely realize that many of our readers have some strong feelings opposed to the practice of benchmarking. I feel most of those readers actually want to wake people up to the fact that benchmarking in and of itself will not make you better. It may be a start, it may be a part, but benchmarking is not the main path to best-in-class customer satisfaction.
 
Gary Lemke, Publisher
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10/21/05 - Benchmarking - Our Readers Speak Out
I continue to work through the stack of responses to my discussions on benchmarking. Over the last two weeks, you have been hearing the opinions of your colleagues with my added perspective. Here's another point of view:
 
One reader wrote, "I would have to say that some benchmarking is needed yet keep in mind what matters most is what you do with that data."
 
I couldn't agree more. Often we see organizations using benchmark data to justify positions or calls to action. It is seen as a credible way to report to management. The reader suggests benchmarking has a place but it is not a substitute for quality initiatives that improve your processes with the goal of a better customer experience. At the end of the day, isn't a better customer experience the real objective?
 
Gary Lemke, Publisher
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10/24/05 - Benchmarking by the Dashboard Lights
A proponent of benchmarking recently wrote: "I think the key is a 'dashboard' approach...a balanced view of the key metrics. If you're paying attention to only the speedometer and don't recognize that you're red-lining the tachometer...you're going to end up in trouble!"
 
He goes on to say, "And, I agree with your point that one of the most valuable 'benchmarks' is customer satisfaction. You can argue why your handle time or FCR (operational metrics) should be different from the 'average'. However, satisfied customers are satisfied customer...in any environment. Benchmarking customer sat is a very valuable practice."
 
With regard to goals and intent, I agree with this reader. One additional point I want to make. Customer satisfaction should absolutely, positively be measured, tracked and trended. But instead of comparing customer sat to industry benchmarks, shouldn't YOUR customer expectations be the benchmark rather than the customer sat metrics of others?
 
Gary Lemke, Publisher
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10/25/05 - Take a Deep Breath
At the beginning of the month, I started to speak about the pros and cons of benchmarking. We are now approaching the end of the month and we are still on the topic. Why? Because you, our valued readers continue to chime in with your thoughts.
 
And I still have so many readers' opinions and ideas to share. I realize there are pros and cons to any position. I also realize that what may make sense for one organization might spell disaster for another. So there is no “one size fits all” answer for most topics.
 
So today, I take a break from the topic itself and pledge the following: 1) You will know where I stand on the topic; 2) If readers don't agree with my position, I promise to share alternative views; 3) I will do my best to give you all sides of a topic so you can decide for yourself. That is my commitment to you.
 
Gary Lemke, Publisher
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10/26/05 - Benchmarking - What Really Matters
One reader wrote, "Why worry about what everyone or competitors are doing in your industry? Your callers and customers are generally only concerned about YOUR performance. Is your performance improving? If your customers are happy with the service, then they are not likely to move because of service issues."
 
He goes on to say, "Therefore in order to protect your margin, volume and revenue provide good service and improve your service relative to your own past performance. In other words, use your own baseline as the measure of performance and improvement. Benchmarks are at best guides and directional, NOT definitive standards."
 
The one point I want to highlight in this response is that benchmarking may be a guideline but it is not a replacement for the diligent work of continual process improvement tied to the customer experience. Looking at your operations from the perspective of the customer is always going to be more rewarding than from the perspective of a collection of other call centers. Do you agree?
 
Gary Lemke, Publisher
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10/27/05 - Benchmarking on the Cheap
One reader commented on benchmarking saying, "Cheap and free is very dangerous for benchmarking. Some of these online companies (some been around for years) providing free and low cost benchmarking services can not invest the time and effort to cleanse and normalize the data that is being submitted."
 
He goes on to say, "From a research perspective the data must be validated and that takes human interaction with the data. In a cheap and free offering there is little to no chance this occurs so the information submitted can be total garbage. As we all know garbage in, garbage out."
 
In past editions of this column, I've been discussing some of the pitfalls of benchmarking. The reader makes a good point that not all benchmarking figures are created equal nor valued equal. If the organization supplying benchmarking figures don't have much cost, you have to wonder if they have much value. Buyer beware.
 
Gary Lemke, Publisher
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10/28/05 - Point, Counterpoint - Part I
There are organizations that exist for the sole purpose of providing benchmarking information to call centers. As you might imagine my sometimes sharp opinions about the limitations of call center benchmarking practices has caught the attention of such firms.
 
It is important to me for you to know that I am not picking on any firm. If you've been following the column, you know that.
 
So today, I want to share the column with Dr. Jon Anton of Benchmark Portal. Here is his point, counterpoint to what has been previously written about benchmarking. He promises to provide more thoughts in the future so consider this part one.
 
Gary Lemke, Publisher
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10/31/05 - Hoping to Educate
One reader wrote to us saying, "Perhaps, we need a different way to describe the practice of metric comparisons so as not to cloud the good merits of true benchmarking. Haven't we already reached a consensus that benchmarking to external "self reported" data has little validity, except perhaps as the writer suggests, to earn brownie points?"
 
He goes on to say, "While we have the ability to differentiate between "good" and "not good" benchmarks, and in general agree that good ones should relate to business goals and improving customer care versus "managing to the numbers", what may be useless information to one entity might be important to another. I think the best we can hope to do is educate. If a manager is measured and rewarded on benchmarks that have little to do with actually improving service, there is little we could do to convince that manager that a particular benchmark isn't important."
 
This reader sums up the main reason that I started talking about benchmarking a full month ago. The main message is this: Measurement of process and results is critical. Using the information to make improvements is necessary. All of it has to be done in the name of continually improving the customer experience. Enough with this “managing to the numbers” stuff!
 
Gary Lemke, Publisher
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11/1/05 - Value in Benchmarking
In my effort to provide perspectives from all sides I will continue to share what readers have to say about benchmarking. One reader felt that the merits of benchmarking are just in certain situations. She wrote:
 
"Benchmarking has value when you are starting something totally new, or when you are looking to make a radical departure from the status quo. Benchmarking can give you a target to aim for, when you are not sure which way to go."
 
I guess a case can be made that, void of any direction from within the organization, outside benchmarking metrics can help. But be careful. If you aren't sure where you are going, simply following others that may or may not know where they are going can be a shot in the dark. You may hit something, you may miss, or you may hit something you don't want to shoot - your foot.
 
Gary Lemke, Publisher
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11/2/05 - So Much Confusion
The on-going discussion about the merits of benchmarking seems to be muddled by the lack of common understanding of terms. One reader wrote:
 
"Gary, all this discussion about benchmarking and I have yet to hear anyone nail what in my mind is the obvious. A benchmark is an interim process between milestones of how things get done in an organization. 'Benchmarking' then, as a term, must be first and foremost, the exercise of defining business process, which must also be extended to include the exercises of executing and then monitoring that same process. If the metrics for measuring the success of a process are not tied directly to the business value that process is supposed to be bringing to the enterprise, why is that process being tolerated?"
 
I see no argument for the value of measuring business processes. The key phrase for me in this reader's comments is "tied directly to the business value." To me, that means using metrics to better your business, not overly focus on comparisons to external figures. Do you agree?
 
Gary Lemke, Publisher
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11/3/05 - How Good is Good Enough?
Today, I want to share another point/counterpoint with you on the subject of benchmarking. Dr. Jon Anton of BenchmarkPortal has been kind enough to offer additional perspective on what I have been writing.
 
I made the point that customer expectations rather than competitive norms should be the benchmark. While Dr. Anton agrees, he feels that is not the whole story. Click here to see what he has to say.
 
Of course, please let me know what you think!
 
Gary Lemke, Publisher
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11/4/05 - Benchmarking - An Innumeracy Crisis
I often do my best to summarize the notes I receive in response to what I write in this column. Today, I can't.
 
I can't because the email I received is so eloquent. The reader takes a step back from all the pros and cons of benchmarking and frames the issue quite nicely. But rather than trying to summarize her line of thought, allow me the share her perspective in whole.
 
Read why this reader feels the call center is facing an innumeracy crisis and why it isn't a simple matter to "draw a line between good and bad." Do you agree with her position?
 
Gary Lemke, Publisher
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11/7/05 - An Innumeracy Crisis - Part II
Many of you couldn't wait to respond in affirmation with the innumeracy crisis comments made by one of your colleagues. One person responded saying, "Eloquent indeed! Whether the issue is one of inability to sort through the plethora of numbers available, to understand the wide variety of calculations used in the industry, or plain laziness looking for someone to give them the silver bullet is unknown. I suspect there is a bit of each."
 
The reader goes on to say, "What is clear is that the contact center is a multi-faceted operation with many complimentary and conflicting goals and issues. These myriad of stats can help us to manage this complex business effectively, but trying to zero in on one or two that will get the whole job done will generally cause a lopsided management process and poor results."
 
Call center managers have a myriad of knobs and levers at their disposal to refine the business of running a call center. Given the number of ways to improve an operation, feedback and metrics on your own operations will almost always be more important than comparisons to the operational numbers of outside organizations.
 
Gary Lemke, Publisher
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11/8/05 - An Innumeracy Crisis - Part III
How much of the benchmarking game is about managing your manager? One reader wrote, "I can tell your reader has had to deal with the managers who don't understand what the metrics mean and as a result make bad decision which she probably has to help clean up. The thing that concerns me about benchmarking is that most of the time it has to do with metrics, the efficiency part of the business and not delivery of service, the effectiveness part."
 
How often do you find your management asking questions about operational efficiency and how it compares to the competition? The reader goes on to say, "In addition, benchmarking can be viewed as what the 'average' out there is for a particular metric. Well, my daddy taught me that average is defined by the best of the worst and the worst of the best. I think benchmarking has its place, but it has to be looked at in context not as an end-all."
 
I know we've said as much in past columns. While there is general consensus on this particular position, many believe behavior won’t change. While people understand what should happen, they seem trapped to do the same things over and over again. What do you think has to change for people to make the leap to outcome based metrics?
 
Gary Lemke, Publisher
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11/9/05 - Another Perspective on Benchmarking
Why do we focus so much on machine-driven numbers to measure our call centers? Is it because they are comfortable? To be sure, they are more concrete than measuring the customer experience.
 
Today, we have Mike Trotter, Executive Director for Purdue University's Center for Customer Driven Quality weighing in on the benchmarking discussion. He offers another perspective on benchmarking. He says that benchmarking data may be a good start but it can often be a blinding affect simply because numbers can often give managers a false sense of dependency and confidence.
 
Mr. Trotter goes on to say that we need valid, respected data but that information should not be the basis for ignoring the "heavy lifting" associated with providing a great customer experience. Click here to read Mr. Trotter's perspectives. Do you agree with him?
 
Gary Lemke, Publisher
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11/10/05 - Point, Counterpoint - Part III
In the on-going discussion about benchmarking, I have opened this column to the opinions of others. Since many of my comments have been critical of industry benchmarking, I feel I must allow those that disagree with me to share their views.
 
One such person that disagrees is Dr. Jon Anton of BenchmarkPortal. He runs a business that has provided thousands of calls centers with benchmark figures. My views are meant to help people perform at the peak potential and they are not meant to target any organization that provides benchmarking services.
 
Today, I share with you Dr. Anton's third point/counterpoint to the merits and limitations of call center benchmarking. Take a moment to read what he has to say and please let me know what you think.
 
Gary Lemke, Publisher
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11/11/05 - The Science of Customer Happiness
OK, time for a break from the benchmarking discussion. Well, sort of. I've been holding on to an editorial article I read last month waiting for the right time to share. Today is that day.
 
The article, The Science of Customer Happiness by Keith Dawson of Call Center Magazine, does an excellent job of discussing customer satisfaction. What does that have to do with benchmarking? Everything! I've been talking about how the customer experience is more important than comparisons of operational metrics. Mr. Dawson does an excellent job of addressing the metrics that really matter.
 
He talks about interaction happiness as well as abstract happiness and why these concepts matter. Do yourself a favor and spend a few minutes reading what he has to say. I promise that it will be worth your time.
 
Gary Lemke, Publisher
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11/15/05 - Falling Into the Trap
One reader commented on our on-going benchmarking discussion by saying, "Who convinces the executives that the call center is more than a back office cost drain? It takes an aggressive call center manager to step up and provide data that says "WE CONTRIBUTE TO REVENUES!" And this reader offers a strategy to get out of the quagmire.
 
He says, "We use a two survey strategy asking callers BEFORE a customer care contact about such things as brand loyalty and purchase plans; and then immediately after the contact, we ask again. By measuring the opinion shift based entirely on the customer service contact and applying a value to added sales or customer retention as the result and it is easy to show the impact good (or poor) service is having on company revenues. Armed with that type of data rather than "Look how much I lowered the phone bill by shaving average call length." will get management attention to a call for change.
 
This example offers up a clear and classic case how many call centers fall in the trap of reporting operational data only to have the data used against improving the customer experience. Even more important, the example shows how measuring the customer experience can make a difference to the call center, the business, and most importantly, the customer.
 
Gary Lemke, Publisher
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11/16/05 - Enough, Already
I hope the long running discussion about benchmarking has been helpful to you. From the emails we have received, I know this is the case for many of you. But one person shared a different perspective saying the discussion had gone on way too long.
 
I have felt a bit uneasy letting the discussion continue on one topic so long but was encouraged by your emails. Perhaps I let that correspondence blind me to the fact that not everyone feels as passionate about benchmarking. So I think there is a lesson learned.
 
Recognizing that different people have different interests, I promise not to stay on one topic for too long. That said, let me reach out to you and ask what the next CRM topic should be for this column. Don't hold back. Tell me what is on your mind.
 
Gary Lemke, Publisher
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12/9/05 - Net Promoter - Clarification
I'm going to take a break today from the "build versus buy" discussion but I want to let you know that it will be tops on the list for discussion next week. Especially, since so many of you have responded with great input.
 
I want to use the end of the week edition of this column to clarify my earlier thoughts about a single measure for customer loyalty because I think some people might have the wrong impression. In review, I stated that I believe the best measure for customer loyalty is the Net Promoter (NP). However, I am not suggesting that it is the only measure.
 
As I stated in my 11/30/05 entry, I think the NP metric is necessary but not sufficient. It's a great start but it won't tell you everything you need to know. It's fair to say that I am a big NP fan and I have featured it front and center because it's a great way to start measuring loyalty. Here's my promise to the 90% of companies that don't measure NP: Once you start measuring NP on a regular basis, you'll understand what additional metrics you need.
 
Gary Lemke, Publisher
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