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Cutting Costs the Right Way

Many customer service operations have been in a cost-cutting mode – or, at the least, cost-containment mode – in response to their organizations' efforts to remain strong in an uncertain economy. Unfortunately, some are seeing these efforts backfire in the form of new and/or hidden costs, frustrated employees and dissatisfied customers.

Cost cutting needn't entail cutting back on staff across the board or forcing unwilling customers into automated systems. Rather, it should harness principles that help ensure you are optimizing wisely, while equipping your organization to maintain and improve services that build customer loyalty and brand reputation. Here are seven tried-and-true principles to harness:

1. Reassess your organization's customer access strategy. Before making any major change, it is essential that your executive team agree on the basic level of services the organization will provide. Without this foundation, cost cutting efforts are likely to head off in many unrelated directions – and may lead to unintended consequences, such as reducing service in one area only to have the workload multiply in others.

2. Work to prevent contacts at the source. The old 80/20 rule often applies – chances are, about 20 percent of the types of customer interactions you handle account for 80 percent of the workload. Start there - explore options for preventing, handling or deferring a greater percentage of these contacts.

3. Harness social channels. Customer communities, feedback sites, and the one-to-many characteristics of channels such as Twitter and Facebook can help encourage the right kinds of contacts and prevent those that should be unnecessary.

4. Pool agent groups. All things equal, if you take small, specialized agent groups, cross-train them and put them into a larger group, you'll have a more efficient environment. The objective should be to keep things as simple and pooled as possible without jeopardizing the services specific contacts and customers require.

5. Work on process and system improvements – now and forever. Errors and process inefficiencies are particularly troublesome in customer-facing operations – they multiply, consume valuable staff time, drive up network costs, and contribute to rework. The good news – even modest improvements in an environment with repeat work can yield dramatic results.

6. Optimize staffing and schedules. Being even slightly understaffed will cause big problems in terms of low service levels, high agent occupancy and heavy telecom network usage. On the other hand, those increments producing a service level of 100% may indicate that you have more agents than you need during those times of day. Getting workforce planning – forecasting, staffing and scheduling – tuned up throughout the day is a sure path to better cost performance.

7. Identify organizationwide opportunities. Explore ways to maximize cross-functional resources. For example, marketing may be willing to provide the contact center with budget to capture and analyze information on consumer trends and expectations. Research and development can get a boost through more effective after-sales support. At the end of the day, it's all one effort!