publication

Original Publication: Customer Management Insight - March 2009


Debates have been raging in the contact center world for years on the definition of whether there is — or should be — an industry standard for service level targets.

While some propose a “gold standard” in setting service level targets, others state that service levels must be established based on specific business needs and customer requirements.
Service Levels Rules to Live By
 
There are several prevalent themes with regard to service levels:

• What happened on the call is more important than wait time to reach an agent

• An 80/20 service level is not a “gold standard” for delivering higher satisfaction

• Over-investment in staffing to meet service levels is more common than one may think

Rule 1: Call Handling Is More Important.

Our statistical analyses consistently reveal that agent skills and call resolution have much stronger impacts on satisfaction performance than does time spent in queue. This holds true even with self-reported perceptions of wait time. Across the board, customers whose issues were resolved have higher satisfaction scores—regardless of how long they waited. So when challenged to allocate budget to satisfaction improvements, consider placing wait time lower on the list than the above factors.

Rule 2: The 80/20 Rule Is No Guarantee.

Setting service level to 80/20 does not guarantee a positive customer experience. For example, in the shipping industry we saw that queue times of up to a minute do not detrimentally affect customer satisfaction scores. In the insurance industry, Convergys analyses showed no strong effect on customer satisfaction at wait times of up to two minutes.

As a general statement, queue times of less than 30 seconds do not strongly impact the customer experience. What are the exceptions? Trends vary by customer segment and by wide variations in daily service level performance. In one group of centers where queue time varied substantially day by day, customers were highly sensitive to wait time; perhaps these daily changes resulted in widely varying customer expectations. Similarly, different call types or segments of customers have different sensitivity to speed of answer; customers calling with a technical problem are much more willing to wait in queue than are customers who need to verify their mailing address.

Rule 3: Over-Investment in Staffing Is Common.

With increased pressures to meet satisfaction metrics, many centers over-invest in staffing to achieve high service levels when the quantified return is difficult to pin down. Staffing a center to reach an 80/20 service level inevitably involves labor costs beyond what is needed at non-peak call times. But if it is not important to the customer to answer the call in 10 or 20 seconds, why spend the money to staff to a peak call volume that may only occur a few times a day? It may be perfectly feasible to drop service level to a 70/30 or a 60/40 average speed of answer, without negatively impacting satisfaction scores.Cost savings in these decisions can
be substantial.
Return on Investment
 
The first step in setting service level targets should be to conduct calibration analyses for each major call type or customer segment. This is particularly true if the goal is to implement a prioritized queuing strategy. When a company understands how different wait times affect customer satisfaction scores, objective, educated changes to service levels can
be made.

It is important to incorporate customer feedback into operational analysis to determine how sensitive customers are to queue time. In doing so, the following conclusions become apparent:

• Service level targets should be based, in part, on analysis of customer expectations.

• Queue time generally has a small relationship on the experience except at higher than ‘normal’ queue lengths.

• Satisfaction with the agent and first-contact resolution are both stronger drivers than queue time.

• Sensitivity to queue time differs by industry and customer type.

• Where queue times are less controlled, they may have stronger effects on satisfaction.

• In many cases, loosening service level targets can significantly reduce labor costs without negatively impacting satisfaction or abandonment rates.

By deploying service level sensitivity analysis, companies can strike the right balance between loyal customers and optimized costs — and find the right size fit for their customer service operation. •
Mike Cholak is Vice President of Global Consulting Services for Convergys Corporation.

TAGS: Service Level, Metrics/Performance Measurement