How to Measure ROI in the Call Center

Updated: April 30, 2009

Metrics are a key component of a CRM solution because they help organizations measure their success rates and identify areas that need improvement.

When CRM first debuted, companies bought technology just because it was available, said Oscar Alban, principal global market consultant at Verint Systems Inc ., a firm that offers call-center solutions to help companies organize their metrics. Now, he says, business are asking a vital question before making purchases — what's the ROI (return on investment)?

"In the early CRM days, systems were put in with the expectation that it would solve all the problems — but that didn't happen," said Alban.

"Underlying metrics help an organization determine if they're properly forecasting, scheduling and adhering to the schedule to meet service level goals," explained David Fuller, the Director of Strategic Consulting at Interactive Intelligence , a company that provides call-center phone systems and solutions. Organizations should use unique key performance indicators to determine whether they are meeting their goals.

According to Alban, many metrics used today at the higher level of the organization are useless. It's essential to make sense of unstructured data, by linking metrics with performance, he said. "Take your metrics and write them on a whiteboard. Then write your strategies on the board. Link them," he advises.

Some companies must perform according to an industry mandate or third-party standard, Fuller said. Companies can also compare their performance against competitors and benchmarks. Purdue University in Indiana, for example, offers a service that allows companies to benchmark their metric ratings against key industry metrics, according to Fuller.

Companies can also use metrics to measure the success of employees. By measuring how efficient agents are on the phone, how often they can resolve a support issue or close a sale, and whether they follow their schedules, managers can evaluate agents individually and compare them.

The Challenges of Efficiency

Efficiency is a common concern in the call center, since companies hope to increase their returns by getting more work done in a shorter period of time.

"The call-center operation is all about efficiency and call-center-agent-use ratios, cutting down on the amount of agents' idle time," said Jim Dvorkin, chief technical officer of Five9.com Inc., a company that hosts CRM solutions for small businesses and departments within larger enterprises. Dvorkin cited the productivity improvements that companies can experience by implementing new capabilities, like inbound routing in a support center, which delivers a call to an agent with the right skill set, or predictive dialing for a telemarketing center.

Technologies are attractive because they're an easy way to get a measurable ROI. For example, a sales agent might be able to call 100 to 150 sales leads a day manually, but after installing a predictive dialer, that number can increase to 300 calls a day.

But Randy Jessee, senior product manager at FrontRange Solutions Inc ., warned that individual capabilities alone aren't enough — if an automated dialer makes a call and a customer answers the phone, the automated system will forward the call to an agent. But if the agent has no information about the caller, then he won't be prepared to handle the call. "It doesn't do you any good if you haven't done your homework on customers," said Jessee. "They're becoming more savvy."

That's why it's essential that the CRM software interacts effectively with the phone system, said Jessee. "There should be one point of view of a given customer. It's absolutely critical to think of phone and data systems together as one unit."

Dvorkin said that Five9.com Inc.'s CRM software will pop up a window for the agent with information about the caller to brief the agent about the customer.

Ensuring Customer Satisfaction and Retention

Managers should be aware that focusing too much on efficiency can have unintended consequences, coming at the expense of customer satisfaction. "Agents get real good at saying 'Go reboot and call me back,'" Jessee says. "And then — 'I solved the problem and got him off the phone.'"

"Metrics can be over-emphasized," Fuller said. "We spend so much time measuring people — if they take a 15-minute break here, if they leave work early, things like that. We feel it's a combination of productivity and quality that rolls up into true customer satisfaction."

"Now, there's a movement in the industry toward solving problems, not just how quickly you can get callers off the phone," Jessee said.

Customer satisfaction can be ensured through quality assurance monitoring or customer surveys. "You need the voice of the customer to get a true definition of service," said Alban. "It's amazing what customers will tell you about your competition, about your products and about your processes."

Customer feedback is valuable from an ROI standpoint because, Alban said, "Each customer has a dollar value."

"There's an absolute relationship between customer satisfaction and desire to do business with the company again, especially in the Internet market," Jessee said.

Collaboration

Alban recommended that companies ensure that call-center managers communicate effectively with other departments, particularly with marketing and finance. These communication channels can help a call center key in to the organization's overall goals and obtain valuable feedback about how they are performing.

A company's finance department has likely already calculated the lifetime value of a customer, Alban said. Customers may be segmented based on how much they are expected to spend with the company or how long they need to remain with a service before the company begins to start earning a return on the customer.

Identifying where the customer is in the ROI cycle can help an agent determine how much effort to put into trying to salvage a customer relationship or in whether to let a customer drop, said Alban.

"Companies often report useless information to executives, rather than key strategies," Alban said, admitting that in his career, he has also been guilty of using metrics that weren't actionable and provided minimal insight. However, he said, when the call center communicates effectively, it can be viewed as a strategic and essential asset to the organization.

Checklist: Measuring CRM ROI

Reading is just the first step. In order to measure — and improve — your company's ROI, you'll need to take a critical look into your own call-center practices. We've summarized the experts' advice into 10 actionable steps you can take to identify and meet your goals:

  1. Determine your company's objectives — collaborate with marketing, management and finance to determine the call center's goals.
  2. Make sense of your data — write down your strategies, along with the metrics you use, and link what metric data can help you measure each goal.
  3. Make sure your systems are in shape to aid your agents. CRM software should integrate effectively with your phone system and give your agents insight into the customer's information and history.
  4. Identify CRM capabilities that might help you improve efficiency and performance. Are you using common technologies like predictive dialers, inbound call routing and workforce management available with your software?
  5. Collaborate with finance to make sure you know the dollar value of your customers. How long does the company need to retain a relationship with the customer to turn a profit? What is the maximum number of sales you hope to make to the customer? How well are you maximizing the lifetime value of each customer?
  6. Use the information about customer value to train your agents and track it in your CRM software if possible.
  7. Listen to your customers — conduct a post-call survey on a random percentage of callers to find out what they think of your service. You might be surprised what you find out.
  8. Monitor about 20 percent of calls to ensure efficiency and quality of service.
  9. Determine what industry standards are benchmarks you should be meeting. Identify how your leading competitors are performing, and use that information as your benchmark.
  10. When you give presentations to management, interpret the metrics to give insight into call-center efficiency and performance.
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