The FT Word
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Welcome to the September 2002 edition of the FT Word.
In this month’s issue, a nice mix (if I dare say so myself) of a strategic topic and a hands-on operational topic:
· The quick audit: evaluating a support operation in less than an hour
· Cost per case: what this important financial metric means, and does not mean
The Quick Audit
Do you want to know how your support group is doing? If you like speed, you’ll like this approach. When I do a support group evaluation, I spend several days at the at the customer’s site (plus an equivalent amount offsite) to complete a thorough evaluation. But I often find that my first hour is the most fruitful. Even the walk from the reception desk to the VP’s office yields all kinds of interesting clues, and not just superficial stuff like people are “happy”.
Try doing the same with your group. The only trick is that you have to get into the frame of mind of an outsider. It’s difficult to be objective with a group you work with every day, so start by pretending you’ve never met them before.
Then, walk around and ponder the following 10 questions:
1) Does the physical space look inviting? Facilities say much about the way people are cared for. A dark space and tiny cubicles may be inescapable, but torn carpet and dirty walls are signs that people are not important. The state of the restrooms is another critical clue. If the support area looks worse than other areas, it’s a clear sign that the support function has low status in the company.
2) Is there anything on the walls? Support centers usually include plenty of examples of personal expression. If you are facing a sea of sterile-looking workstations, people have stopped caring, including for customers. If, on the other hand, each workstation is adorned with wondrous accessories (and it’s not Halloween), it’s time to check the productivity figures.
3) Do people say hi? Even though you are pretending you are from another planet, people should still recognize you. If they don’t, you’ve been spending too much time in your office or you have a serious attitude problem. Give yourself extra points if you actually know the names of all the people you encounter and you can greet them accordingly.
If there are lots of people walking around and you’re not having a fire drill, what are they up to? Too much time on their hands, or ineffective processes? Check it out.
4) Do you hear any noise? With the advent of electronic support, one hears many more key clicks than voices in support centers, and that’s ok. If you hear nothing, who is taking care of customers? If the noise levels are high, it must be exhausting to work in the center (and customers can hear the noise) or there’s too much staff interaction going on. See point #3 above.
5) Is there a kitchen or another area with drinks and food? Some say coffee is the secret weapon behind support centers… Check what’s going on in the kitchen: a sprinkling of customer issues and personal chitchat is a good sign that the center is humming. Count on overhearing at least one problem-solving discussion on your rounds in a properly functioning support center. If you hear none or lots and lots of them, you have process issues.
6) Any screens you don’t recognize on the support staffers’ workstations? If you don’t see the support tools, it means that they are not working well or that everyone is doing something else, both potential red flags.
7) Are there any graphs or other signs of metrics posted? A center where everyone understands and works towards the business objectives is in good shape. Are the graphs in a place where one can read them comfortably? Check the dates on the graphs. If they are not current, they are useless. I always check for opinionated graffiti: is this really an accepted means of communication?
8) Are any customer compliments posted? A “wall of fame” is a good sign that customer feedback is flowing. The display needs not be fancy, although it should look reasonably dignified. Check the dates: are any less than a month old? Then customer feedback is not that important.
9) Any customer mementoes displayed? They could have gotten there as a thank you for great service, or as a memory of an onsite visit. Any customer logo used as a dartboard is obviously a very bad sign!
10) Do you see lots of closed doors? What’s going on behind them? Lone managers escaping from their groups are not contributing as they should, and lots of escalation calls is also a concern. Groups hard at work on issue resolution or planning are a much more hopeful sign.
All done! Take a moment to note points of strengths and points to investigate further. Detailed investigation will take you more than an hour, but you should find that your quick audit yielded plenty of relevant observations.
Cost per Case
Cost per case is, very simply, the cost of resolving one customer case from start to finish. At the simplest level, it’s equal to your support cost, divided by the number of cases you resolved during that period. (To get fancy, remove, if you can, cost associated with self-service from the total cost).
Is cost per case important? Yes, of course, because it gives you a good tool to manage the support center. I often get asked what a “good” cost per case can be, which is an impossible question to answer since it depends entirely on the type of support you provide. A widely-quoted Forrester study from 2001 reported an average “industry-wide” cost per call of $35, for instance, while many of my clients, who support high-complexity software, would be happy to have a cost per call (case) of less than $200…
A better, more meaningful number would be to track the support cost per customer. Over time, cost per customer should go *down* as the quality of the product you support increases, the knowledge base and other tools within the support group improve, and the level of experience customers have also increases. If your cost per customer is going up, sound the alarm and investigate why!
In particular, installing self-service tools will likely cause your cost per case to go up, because the easy cases will be handled automatically, leaving you fewer cases, but all hard ones. But your cost per customer should go down.
I’ve been asked whether the cost per case is likely to differ by geography, as local cultures dictate a higher or lower level of service. I rather doubt this. If you find large cost differences amongst regions, it’s more likely that customers in different geographies are using different products, or different releases, or in different ways. Or it could be that you have different pay scales in different regions, which may prompt you to revisit your center location strategy.
In brief: know your cost per case and monitor it over time, but look at the cost per customer as well.
Next month, watch this space for the launch of the latest FT Works booklet: Managing Critical Situations, a practical guide to minimizing and managing support escalations to a successful conclusion.
FT Works in the News
I’m giving a webinar on Tuesday, September 17th, on the topic of Best Practices in Self-Service Support. Please join us (it’s free)! [This event was recorded and can be accessed at any time] www.kanisa.com/news/events_webcast_ft.shtml. Or click here.
SupportWeek published an article I wrote entitled “Overseas outsourcing: What’s Different?” that discusses special benefits and concerns of using overseas partners for outsourcing. You can read it at www.supportgate.com/supportweek/20020904/article1.asp
DBF, the association of French-speaking Silicon Valley entrepreneurs, invited me to talk about the state of CRM (in French, that was fun!) on September 9th.
Curious about something? Send me your suggestions for topics and your name will appear in future newsletters. I’m thinking of doing a compilation of “tips and tricks about support metrics” in the coming months so if you have favorites, horror stories, or questions about metrics, please don’t be shy.
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