Call Centers Struggle to Cope with Sales Campaigns

BY ROBERT E. GRASING

When banks run marketing campaigns, call centers need to be prepared with detailed planning and staffing models.

| SYNOPSIS | Managing a call center to realize sales and service objectives in a sales campaign environment is challenging and requires understanding the key variables of the center and a disciplined approach to integrating each line of business into the equation. Those key variables include the customer response rate, engineered times for the activities, a knowledge-based projection of the timing of the activities introduced, and understanding of the training requirements to maintain the service standards.

It's a scene played out more often than it should be: bank launches major marketing initia-tive, unprepared call center gets swamped with more calls than it can handle, customers get frustrated.

Related charts Modeling for Call Center Efficiency

Managing a call center to realize sales and service objectives in this kind of environment is challenging and requires understanding the key variables of the center and a disciplined approach to integrating each line of business into the equation. Those key variables include the customer response rate, engineered times for the activities, a knowledge-based projection of the timing of the activities introduced, and understanding of the training requirements to maintain the service standards.

Modeling the impact of planned changes using simulations that mirror the center and the new activity goes a long way toward keeping the service and sales of any bank a strength of the organization.

Call centers represent a major delivery channel for many banks today and success requires tools and management practices that are designed to provide managers with answers in advance of major shifts in new business and marketing campaigns. A thoughtful, fact-based approach, along with modeling tools, provides that required insight.

Staffing Up for Sales

There are hundreds of staffing and scheduling tools in the marketplace today. While most banks concentrate on a top dozen, the key is how they are utilized. The most appropriate models for a complex environment have the ability to easily simulate a single sales campaign or a series of campaigns in addition to the contact center's routine service work.

One of the more important factors for each campaign is determining which service or fulfillment channels will be used based on the estimated customer response rate. For example, a mail campaign may be supported by additional media like print or television and the customer may have a choice of mail, phone, email or Internet to apply.

There may also be applications in the branch system associated with a particular campaign. The issue of complexity is particularly important when the bank serves multiple time zones.

One example of how a high-response rate can affect the service model is when MBNA Corp. (now part of Bank of America Corp.), a former client, introduced its "states series" of credit cards with a mailing to millions of households. This campaign featured two or three photographs of landmarks in each state. The response rate well exceeded the company's expectations.

At the campaign's peak, which coincided with several other ongoing campaigns, MBNA was receiving 60,000 applications a day, both by telephone and mail. As these responses flooded the fulfillment centers, MBNA had the capacity to quickly reengineer their processes to assure a satisfactory response to all applicants. Most banks may not have the physical capacity to handle the unexpected additional volume of this magnitude, which could cause overload in the call center.

Additional impact is felt in the support processes that evaluate and expedite the credit, in the support units that produce and ship the approved cards and in the departments that mail notices to applicants who have been declined. A 1% difference in the expected response rate on a mailing of this magnitude could result in more than 200,000 additional calls and applications. For this reason, the response-rate calculation is a critical element in the call center model.

Every bank establishes its own response call schedule, including the days the responses are expected to start and end, the statistical stratification of the times of day they will receive calls, the volumes of calls during these times and the mix of call types handled. This enables the modeler to fully integrate the campaign and the service calls for planning purposes.

In any model, there may be hundreds of variables to consider, but virtually every model will require the normal factors that affect calculating the service levels and capacity planning, including the service times expected by type of call; the actual planned response times (customer wait time); and factors of off-line wrap-up time to complete the transaction once the representative is disengaged with the customer.

Planning for Call Spikes

One ongoing planning issue for call centers is the coordination between the multiple lines of business with regards to their planned direct marketing campaigns. These campaigns produce spikes in the call center resource requirements and need to be planned for. In addition to the capacity planning, there is often product training that has to be coordinated for campaigns with either new features or special terms. As a result, the process of planning needs to start early.

One option more frequently chosen is to handle the campaigns with outsourced capabilities. But many banks still operate internal call centers and face issues of staff size and a flexible workforce that is trained to handle increased call volumes through the peaks.

The first order of business to manage the service impact is to put a plan together with all of the competing line-of-business marketing entities to review the precise timing, size of the planned campaign, expected response rate and depth of the event. It is essential to create the proper spacing between direct marketing events in order to minimize additional resource needs to handle the incoming calls (see chart "Modeling for Call Center Efficiency"). This can typically be managed in a mature call center environment without getting every marketing manager in the same room. But the face-to-face interactive modeling helps to bring resolution to the plan.

We have observed instances in some banks where the marketing budget is allocated to the lines of business based on the amount of new business in the plan. To support the projected new business, a marketing manager might project a response rate commensurate with what is needed to realize that result. Accurate modeling depicts how much additional staff is called for based on the various projections.

The interactive model is helpful to project what the additional cost in resources might be so that line-of-business marketing managers can make a decision if they want to fund or be responsible for the new resources. This check and balance to the marketing budget tends to keep marketing managers and call center management in sync.

To demonstrate the complexity of multiple lines of business competing for call center resources, we can look to when Chase Insurance Group, part of New York-based JPMorgan & Chase Co., first started introducing the opportunity to deliver insurance products to their major banking lines of business on a direct-mail basis. Call center management quickly realized that a capacity-planning model was necessary.

Chase initially opted to build its own model because of the complexity of variables required, as well as to ensure that the bank's high service standards would be engineered into the model variables. Chase Insurance developed a simulation model that had more than 400 user-controlled variables, which were necessary to make them confident that it mirrored the call center environment and call characteristics.

While this may seem excessive, much of the variable information was modeled by the center manager in advance of the planning meetings to account for the center conditions, including turnover rates, absenteeism, learning curves, etc. The factors modeled considered alternatives that included the mix of in-bound and out-bound work, quote preparation, follow-up with carriers and every conceivable necessary action based on the experience of the current environment. The initial contact with the customer through the completed application in the center was modeled.

While the model had many variables, it was built with flexibility to easily make changes to input, which made it interactive and more useful. Once it was introduced, the model enabled call center management to work with the line-of-business management to project the resource requirements by time of day and day of week.

Marketing management from mortgage, installment loans, credit cards and other lines of business met with call center management to plan out the year and to evaluate the marketing needs matched against the impact on the call center. The objective was to provide the ability to limit the number of new hires required to meet the company's stringent service standards and to help to coordinate cross-trained staff for each event in the planned year.

Marketing managers could graphically see the impact of their own mail event on the existing staff and recognized a need to work with other lines of business to space the direct mail schedules.

This process led to full understanding of the various needs of each marketing manager and provided a level of understanding to the lines of business on what it takes to run their sales and service effectively.

Introducing Additional Lines

Another area where capacity planning is essential is when introducing a new line of business to an existing call center. This is similar to scheduling a variety of campaigns in a given year in that the impact on the existing call center must be measured and modeled. The alternatives are somewhat similar.

One difference is that the bank may consider setting up a separate call center unit to handle the new line of business rather than integrate the business line with the current staff. The options must consider providing existing representatives with integration and access to all customer information on products and services.

It is also important to estimate staff training on issues related to the new customer group and, of course, to project the capacity planning for appropriate staff. Oftentimes, the backbone of the call center system developed for one line of business is utilized by a new dedicated staff. Other times, new capabilities are developed within the existing call center and the calls are directed to line-of-business specialists by call routing. The key is detailed planning to accomplish execution.

To demonstrate this, we can look at how Columbus, Ohio-based Huntington Bankshares Inc. decided to develop a capability for their small business customers. The decision to have an integrated capability required planning and extensive project management. At the time, Huntington had only one small business banking center with a staff of five servicing one of the then-six regions they operated in and covering only a portion of the products and services that were offered. The majority of the service was handled by the sales force in the other regions.

Strategically, the bank decided to expand its small business customer base and to improve customer retention along with this initiative. A team was developed to identify what was necessary to accomplish the objectives. It was composed of voice response unit technologists, call center trainers, script writers, service agents, line representatives and a variety of subject matter experts.

This team conducted a thorough diagnostic review to examine product characteristics, related products, likely customer questions, by whom and how calls would be answered and a projection of the scalability of the service needs based on anticipated volumes. The issue of scalability was answered by examining the possible sales scenarios and modeling the likely outcomes. This required the same discipline that we have discussed earlier, including developing standards for activities and projecting the mix of transactions by time period.

This team was able to develop their plan and start implementing it within a 90-day period. After the first year of operation, Huntington opened the center activities to all six regions. It expanded the ability of handling product needs from four products to twenty. And by improving the overall service experience to this segment, it improved customer retention by over 2%. Its solution was modeled by understanding the impact of a new segment. Huntington opted for specialized service representatives for small business, but it was necessary to utilize a planning model to evaluate the impact on customers and the call center alike to accomplish this.