North American Customer Service Management Association

Support for Contact Center Professionals

Phase 1 Strategy - Step 4 Profit/Expense Center

The Argument

According to ICMI and Zendesk research, 62% of contact centers are perceived as cost centers by the rest of their organizations. Many will argue that contact centers that provide customer service exclusively are cost centers. Contact centers hire agents, buy technology, lease facilities and pay for overhead all while not collecting any revenue.

Today customer service is not an option; it is just as much a part of the product offering as the actual product. To be competitive, you better have a customer service strategy that knocks the socks off your customers. Customer service is more than solving shipping and billing issues; it’s about strengthening the customer/company relationship thereby improving the customer satisfaction and building customer lifetime value. This customer retention activity is future revenue.
Have you ever purchased the same product or brand because you like how the company provides customer service? Apple is a perfect example; you can get free help as well as paid help on any of their products. You can stop in a store or call the help desk for support. When contact centers provide exquisite service it keeps customers coming back over and over again! Premier contact centers are measured on client retention. The contact center is building relationships with customers one call at a time, planting the seeds for future purchases. So is it a Contact “Retention” Center?
Cross Sell, Upsell and Right Sell

“Would you like fries with that?” – the most famous upsell phrase! It’s a simple question that has sold many French fries!

The ability to cross-sell and upsell is a revenue-generating strategy as well as a strategy to build creditability, build customer relationships and increase customer awareness. Recently I overheard a patient in a doctor’s office say, “how come the doctor didn’t recommend that?” when the office manager mentioned a new type of contact lens as they were checking out. The challenge is skill set. Are the agents equipped to have the cross-sell/upsell conversation? According to research firm Loudhouse Research, 86% of strategic decision makers in contact centers do not think that their agents currently have the skills required to meet their obligations in terms of upselling and cross-selling. This is an easy fix!
Invest in training and coaching!Identify and map out the opportunities where agents can “upsell and right-sell” customers, then educate agents to recognize those opportunities. Too many agents “miss” the moment. Prepare agents by educating them on the problems your products/services are designed to solve. Provide agents with questions they can ask customers to create awareness, much like the eye doctor’s office manager. Awareness of a possible solution is the first step to making a purchase.
Cross-Selling and Right Selling is a sure fire strategy to turn your cost center into a revenue machine!Organizations that invest in identifying skills that lead to revenue generation and take the time and money to coach and train agents will sell a lot of fries!
Opinions Matter

In every industry, on every product and service, customers base their opinions about the company by the way they’re treated.

No one remembers the advertising, the channel partners or even the sales person. What customers remember most is how they are treated. How easy is it to get customer service? How do they talk to you? How do they make you feel? Contact centers can align with corporate strategy when top executives see the connection between customer satisfaction and customer opinion. The contact center provides an effective vehicle; direct, two-way communication to drive customer opinion. Hug your customers and they will reciprocate with a future purchase. It’s that simple.
No Cash – No Problem!

Traditional revenue streams include maintenance contracts, upgrade programs, and fee for service.

Contact centers can drive revenue by fixed fee per support event or fee-based dependent on the length of contract or a flat fee for events regardless of length. Is it possible to structure the contact center as a cost/revenue center instead of cost only? If there is no direct revenue, then find a way to assign and quantify the value of customer satisfaction. What is the dollar value of the life of a customer? What is the dollar cost of losing one? Make the indirect revenues visible and you will quickly see the contact center is in fact a revenue center.
Cost vs. Profit Contact Centers

Using a quantitative approach to defining value in the contact center may not always be feasible.

The point is how can you quantify customer satisfaction and customer loyalty?The contact center has the greatest impact on these two metrics along with customer retention and advocacy. Contact centers are rich in customer insights and once shared across the organization drives improvements, innovations for new products and services, and long-term growth.
The contact center can break the cost center stigmaby positioning itself as a strategic asset, capable of providing deep and actionable insights. Leverage your contact center as a goldmine of information, and just maybe your customers will come up with your next great product idea. When you respect the information that comes out of the contact center, it too will rise to become a strategic asset you can’t live without.

Tips!

1. Don’t overthink the accounting structure of the contact center. The 21st century contact center provides more value than it expenses. Assign a dollar value and move on.
2. Balance upselling and cross-selling with achievable sales goals for maximum customer and agent satisfaction.

Take the Next Step!

With evolving customer expectations and service complexities, contact centers are poised to deliver strategic value and profitability to organizations in the years to come. Perceiving contact centers as a cost center is antiquated thinking and needs to be changed, if organizations wish to see the real potential of a contact center.

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The North American Customer Service Management Association (NACSMA) assists Service Center professionals with improving the delivery of Customer Care to their clients by providing a collaborative networking approach to operational issues.