ICMI's Customer Management Insight - September 2007 - (Page 41) EXPERT’S ANGLE once they saw how long the line was. (Now there’s an exercise here in lost revenue that shouldn’t be ignored, but it doesn’t quite fit our discussion about satisfaction surveys. But for those of you who, like me, can’t help but run the numbers, read the box below for a quick analysis of the amount of money that’s going up in smoke.) So what does this scenario have to do with satisfaction surveys? In this café, the customer satisfaction surveys were located next to the register. I didn’t notice how many of the paying customers picked one up, but I can guarantee that none of the walk-aways did. This results in three fatal outcomes: 1. The café’s ratings will be higher than they should be. 2. Management may never realize that their main problem is slow service because the people who could provide that feedback never walk in the door. 3. Because of Point No. 2, management will always underestimate the importance of speedy service in overall satisfaction. HOW DOES IT APPLY TO CALL CENTERS? Of course, in a retail operation, it’s easy to see all of this unfold in front of you (if you’re looking, that is). What about in a call center operation? If you run a call center, suppose that you randomly select 100 of your callers each day to survey. Assuming that 100 is a statistically significant sample, how could this possibly be a problem? Well, similar to our café example, you would be missing out on the abandons. And you would miss out on those who get busy signals and don’t call back. And you would miss out on those callers who had a previous bad experience with your company and who now do everything they can to avoid contacting you. And you would miss out on those who aren’t able to contact you during the hours that you’re open. What’s the common trait among the calls that you would miss? They have a complaint. From “you take too long to answer” to “your service is terrible” to “you aren’t open when I have time to call, the people ” who never make it into the potential population sample are the ones who are decidedly low on the satisfaction scale. WHAT CAN YOU DO ABOUT IT? When managing dissatisfaction, we need to develop a much more extensive view of measures of dissatisfaction. Sure, a low rating on a customer satisfaction survey pretty clearly denotes a problem. And how about an abandoned call? Isn’t the M How Much Potential Revenue Are You Losing? In our café scenario, within a 10-minute span of time, six potential customers never even stepped foot inside to place an order. In a call center situation, we’d call that an abandoned call. At a retail operation, they call it… nothing. No one ever noticed it, let alone captured it in a report. Some unsuspecting assistant manager ran a sales report at the end of the shift and probably felt pretty good about the numbers, oblivious to how much better they could have been. But it’s far from nothing. Six customers every 10 minutes equates to 36 lost customers in an hour. If you figure on two strong morning hours, that’s a total of 72 lost customers that morning. Multiply that by $5 on average per customer order, and that’s $360 in extra revenue you could have seen. The margin on this kind of incremental revenue is at least 50 percent, and so you’ve lost out on a minimum of $180 in profit, probably more. What would it have taken to get to that money? Well, there were two people serving the queue. Frankly, they weren’t terribly efficient, so you probably could have resolved the issue with some good old-fashioned performance coaching and/or process reengineering. But even if you had to add a third for a four-hour shift, that wouldn’t have cost more than $50, and probably less. Take that from our $180 of profit, and you are still left with an extra $130 per morning, five mornings a week, for a total of $650 a week or over $33,000 annually — which is probably pretty darn close to what that unsuspecting assistant manager makes a year. And if, by chance, the same thing is happening in all of this chains’ 1,027 company-owned and franchised units, then the resulting $34 million is enough lost revenue to make a CFO cry (by the way, if you happen to be that CFO and you are reading this, rest assured that our consulting fee to help you fix this is considerably less than $34 million). www.icmi.com | SEPTEMBER 2007 icmi’s insight 41 http://www.icmi.com
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