200803 LOMA Conference - Creating a Call Center

Creating a Call Center:A Straightforward Approach

Presented by:

Kirsten KaczorServices Team Manager

American Family Life Insurance Company

March 2008

LOMA Customer Service Conference

Steve CallahanPractice Development DirectorThe Robert E. Nolan Company

© Robert E. Nolan Company, Inc. www.renolan.com |

LOMA Customer Service ConferenceMarch 2008 Page 2

Session Overview

§ Why Call Centers as a Focus– Critical customer touchpoint, the face of the company– Issues with service impacting competitive differentiation

§ Developing a Call Center Strategy– Basic mechanics of Call Centers– A proposed solution for addressing mixed service centers

§ American Family Insurance Case Study– Designed and implemented a call center operation using

existing skills, technologies and resources in under 12 weeks

– Real example of how companies can consolidate, organize, and develop efficient and effective call center service functions.

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Why Call Centers as a Focus


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Why Call Centers?

§ Competition creating increased pressure on margins§ Distribution channel competitiveness and instability§ Product commoditization drives service differentiation

Call centers are the “front line”the customer facing contact point

A crowded insurance marketplace means that consumers who are not satisfied with a carrier's quality of service can find viable options elsewhere. As a result, more and more insurers are making concerted efforts to improve their customer service. "At the end of the day, if youdon't satisfy your clients, they're not going to stay your clients,“

says Jeffrey Stoll, SVP and CIO of the Individual Business and Customer Response CenterMetLife.

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Of 6 industries measured by ACSI Call Center Customer Satisfaction Index, the insurance industry is on the low end

Compared to Banking (77) and Retail (80), Insurance call centers (68) need improvement!

And Satisfaction With Call Centers is Sub-par

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Yet Attention and Investment Makes a Difference

Call Resolution is the Key to Satisfaction (J.D. Powers Survey)§ 73% with issues resolved awarded satisfaction score of 80§ 22% with unresolved issues awarded satisfaction score of 29

MetLife recently invested in its call centers, and…customer satisfaction score jumped by nearly 10 percent

The technology involves agile, Web-based services that§ Allows tracking calls and keeping case history§ Accesses various systems through a single desktop.§ Reduces the time on the phone§ Improves customer experience

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Challenge: Balancing Efficiency and Effectiveness

(Customer Value)

(Costs)

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While Contact Complexity and Diversity Grows

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And Outsourcing Falls From Favor…Making Insourcing a Need

57% Opposed to Voice Offshore19% Okay with Voice Offshore24% Uncertain

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Complicated by High Multi-lingual Demand

Significant growth trends in Hispanic and Asian Markets requireattention to multi-lingual services to meet customer needs

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Making Demands for Call Center Improvement High

From 7.7 (Improving First Call Resolution) to 9.6 (Decreasing Costs), with a midpoint of

8.5 (Improving Customer Satisfaction)

Ranking of Importance of Call Center Goals

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Profiling People and Process as Priorities

48%

10%

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While Attrition Remains a Huge Issue

82% rank a prioritythe 42% attrition

Given 15% endup at competitors

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Developing A Call Center Strategy


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Call Volumes Fluctuate Throughout the Day

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0 Widely fluctuating volumes and staff needs0 Must be handled in real-time – no backlogs

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Calls Even Fluctuate Intrahour(The impact is that breaks, lunches, time away from desk critical)

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Customer and Agent Experience Also Widely Varies

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0 Expensive service delivered by bored agents

0 Believe it or not, quality is lower

Level Staffing

0 Poor service delivered by highly stressed agents

Understaffed

Overstaffed

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Typical Service Center Organization Design 1:Consolidated Calls and Transactions

Calls & Transactions0 Policy Owner Service0 New Business0 Claims

0 Policy Owners0 Agents and Brokers

0 Providers

Customer / Policyholder Service(Line of Business / Channel / Region)

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Transactions0 New Business

0Policy Owner Service0 Claims

BillingPhone Calls

0 Policy Owners0 Agents/Brokers0 Providers

Processing Center(s)Multiple Call Centers

(Line of Business / Channel / Region)

Typical Service Center Organization Design 2:Separate Call Centers from Transactions

ClaimsPhone Calls


AgencyPhone Calls


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Service Center Staffing DynamicsPhone Calls§ Widely fluctuating volumes and staff needs§ Handle peaks in real time§ Overtime not an option

§ Requires sophisticated staffing/modeling tools§ Need is immediate and unscheduled

Transaction Processing§ Mildly fluctuating volumes and staff needs§ Handle peaks with overtime§ OK to build small backlogs

§ Traditional staffing models work well§ Need can be scheduled and is not immediate

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Improvement Opportunity

§ Widely fluctuating– Volumes– Staffing needs

§ Peaks in real time§ No Backlogs§ WFM 101

§ Mildly fluctuating– Volumes– Staffing

§ Peaks in overtime§ Backlogs okay§ Staffing models

§ Blended work basket§ Shared resources§ Sophisticated

– Management practices– Modeling tools– Staffing tools

+

Requires a new strategy

Maximize Resource Utilization

100% Calls100% Transactions

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The Service Center Improvement Opportunity

Consolidated Call Center

Shared Resources

Goal:

Maximize Resource Utilization and Effectiveness

Processing Center(s)POOLED

RESOURCES –SHAREDTASKS

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The Service Center Objective

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Total Staff Call Staff Needed

Call Staffing Need

Transaction Capacity20 phone / 50 processing

50 phone / 20 processing

Short cycle transactions fill downtime for center staffStaffing at level that builds in peak time excess

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1. Forecast incoming calls§ By day § In 30 minute increments

2. Convert to staff need§ Call handle time, service levels§ Schedule adherence

3. Develop work schedule§ Start, stop times§ Breaks, lunch, PTO§ Backup coverage

4. Allocate filler work§ Short duration transactions§ Simple, once and done

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Staff Available Calls Staff Need

Match Schedules to Call Arrival Patterns

Goal is consistent customer and agent experience

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Optimizing Service Center Performance

Optimal performance from integration of non-phone tasks§ Letters, emails, faxes, other transactions, and calls requiring research§ Work is difficult to handle between calls effectively, yet must be handled

Three techniques to create balance, better utilize capacity1. Give phone staff quiet time off the phone every day§ Use slow times to reallocate staff to other work, be sure to track productivity§ Transaction productivity greatly increased by uninterrupted blocks of time

2. Treat transaction timeliness the same as call service levels§ Slow handling drives up phone calls creating spiral of lost productivity§ Use task goals similar to calls, e.g. 80% in 2 days; keep all in balance

3. Monitor percent pended phone calls (first call resolutions)§ Identify who has most callbacks and what the most common reasons are§ Training needs? Performance issue? Forms issue? Unclear policies?§ Track call back / pending return call inventories by person

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Impact of Service Center Approach

Net Productivity Increase

24%

17%

21%

18%

37%

22%

Dept 1

Dept 2

Dept 3

Dept 4

Dept 5

Overall

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American Family’s Challenge of Growth



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Outline§ American Family Insurance Company

– Staffing/ Structure– Challenges

§ “Old World” – Previous State– Metrics– Inefficiencies

§ Contact Center– Identify the Gaps– Implementation– Staffing

§ “New World” - Current State– Results/ Efficiencies– Measurement Tools

§ Future Enhancements

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American Family Overview

§ Large, multi-state, mutual insurance company

§ Top-twenty multi-line insurer based in Madison, WI § Serves personal, commercial, and specialty markets§ Products distributed through dedicated career agents§ Long history of customer focus and service quality § Concentrated on serving America’s Middle Market

§ Major property-casualty distributor § Good mix of life, health, and annuity lines

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Organizational Staffing and Structure

§ Inforce staff supported all service needs including phone calls, customer requests, and agent requests by blended teams doing the same work

§ Phone calls were answered by all staff in both teams based on a rotating schedule, and included doing the transaction work at the same time

§ Stress levels were high and quality mediocre due to the breadth of knowledge required

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American Family’s Challenge

§ Rapid growth in sales created inforce service backlogs

§ Agents striving for year end goals in time of growth

§ Service times need to improve 20% to be competitive

§ Pending inventory had to be reduced “significantly”

§ Wide swings – over 250% - in service time variances

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“Old World”

Cloudy, Not Well Defined

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Starting Transaction Service Levels2005 Loan/Surrender Tasks Production Turnaround Time

See Definition Tab for explanation of time measurement for each Task

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2005 Billing Tasks Production Turnaround Time

See Definition Tab for explanation of time measurement for each Task

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Premium Processing

Reinstatements

Wide fluctuations in service timesNo consistency in serviceBuilding backlog of transactions

Randomly arriving callsCalls impact transaction servicingTransactions impact call services

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American Family Service Center Organization:Consolidated Calls and Transactions

Calls & Transactions0 Policy Owner Service0 New Business0Policy Owners

0 Agents and Brokers

Customer / Policyholder Service(Two Teams Doing Blend of Calls and Transactions)

Calls & Transactions0 Policy Owner Service0 New Business0Policy Owners

0 Agents and Brokers

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Current Operating Inefficiencies

§ Two teams duplicating efforts– Managers– Staff

§ Phone calls causing interruptions

§ Lack of time to find efficiencies– Processing work– Handling calls

§ Lack of “Experts”

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Establishing a Service Center

§ Separated work from phone calls to improve efficiencies

§ Identified best qualified staff for each area– Took strongest processors, assigned to the work areas

§ Tasks staffed appropriately and phones got the rest – Staff were not asked for their preference

§ Needed to create a different culture– More accountability, adherence to schedules– Needed metrics to measure success and areas for improvement

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The Contact Center Improvement Opportunity

Consolidated Call CenterAgent CallsClient Calls

Problem ResearchAgent Emails

VoicemailsCallbacks

Shared Resources

Processing Center

Complex ChangesCancellations

Premium BillingConversionsSurrenders

LoansIllustrationsAgent ChgsAddress ChgsBeneficiaryDividends

Shared Tasks

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Implementation of a Contact Center§ Coverage is 7 to 7

– Team members choose their schedule – Late shifts signed up for as staffing needs are determined

§ To improve coverage we allow a 4 day work week§ Call audits are used to determine call quality

– All incoming calls are recorded and are randomly audited– Goal is 3% of the calls or 300 a month whichever is less – Our follow-up time is 60 seconds

§ Piloted for 10 months then formal restructuring– Pilot allowed fine tuning staff levels, workflows, reporting

§ Blended simple tasks with phone unit to optimize staff– Added 33% to call center staff level to allow for blended tasks– Loans, dividends, agent changes, illustrations – Fewer steps, require involvement in fewer systems, no research– Also included email boxes and voicemailboxes

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Implementation of a Contact Center

§ Created productivity measures to emphasize phones– Initially based on average timings, calculated time at work, less

project time, less time off, plus overtime to get productivity– How much time at work, less projects, less time off, of remaining

time how much logged in to take calls for adherence – Opted for monitoring what percentage of time team members

were available for phone calls to get adherence

§ For productivity, run reports to get actual talk time– Subtract talk time from productive work time, then use remaining

time to determine how much task work was done using the timings, from that calculate productivity based on non-call time

§ Service goal is 80% in 30 seconds, under 5% abandons

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“New World”

Clear, Well Defined

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Comparison of Total Transaction Inventory

Oct 4th to Dec 4th Comparison

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Total Servicing Queues Inventory Dropped 60%

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Comparison of Transaction Cycle TimesTotal Cycle Times Reduced by 25% to 72%

Cycle Time Improvements

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Common Call Center Service Goals

The three most common measures in use today are:§ ASA – Average Speed of Answer§ Abandon Rate – Percentage of callers who hang up before being served§ Service Level – x% of Calls Answered in Y seconds

ASA ignores abandons, can mislead over longer periods§ Focus on ASA alternates between poor service by overstressed agents

and great service by unproductive agents§ Measuring ASA results in wide swings of service that average out at an

acceptable level but have periods of totally unacceptable service

Abandon rate tells you nothing about vast majority of calls§ Abandon rate fairly uncontrollable, typically a symptom of other issues§ Tracking should eliminate “short abandons” – those in the first 10 seconds

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Call Volumes and Abandon RatesOver 28,850 calls received from Nov 9th through Dec 30th

§ Average talk time per call just under 3 minutes§ Average Abandon Rate 5.6%

Phone Performance

0200400600800

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Call Volume Abandon Rate

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Contact Center Performance

14,868

17,783

15,431

18,155

16,834

16,087

15,028

15,948

16,362

13,996

18,190

16,014

15,128

2.10% 1.81% 2.95% 3.40% 3.23% 2.49% 3.48% 3.13% 3.30%5.34% 3.90% 3.81%

88.45%

79.20%77.14% 78.44%

85.37%

78.67% 78.43%

74.01%71.33% 71.85%

4.35%

87.48%

79.00%

64.44%

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Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-0710,000

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Calls Answered Abandoned Rate Percent Calls Answered in 30 seconds

Call VolumePercent

Answered & Abandoned

Contact Center Performance Over Time

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Optimizing Individual PerformanceFour key metrics to identify agent development needs:1. After Call Work (ACW) – high times can mean extra breaks

or handling issues

2. Short Calls – intentional or unintentional disconnects that drive up ratios

3. Average Hold Time per Call – ties up extra staff, not good service, may be training need (excessive documentation)

4. Percent Schedule Adherence – low value means wasted resources, anything under 80% is a performance problem

Talk Time is not recommended as a metric, it may lead to the wrong result by focusing on getting off the phone

instead of handling the call

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Productivity Reporting

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Adherence Reporting

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Future Enhancements

§ Currently piloting a new business contact center – Pooled phone resources able to handle either type of call

§ Testing 2 to 3 people off the phones for two weeks– Keeping an eye on phone queue and logging in when necessary– Process work from the phones, handle queues and mailboxes – Others are logged into the phones 100% of their productive time– Improved abandon rate and service levels

GOAL: Better leverage resources, focus, increase scopeof staff’s responsibility, improve service

GOAL: Improve task efficiency, provide breaks for staff, create time for projects and longer work

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Thank you for your attention

Questions?Presented by:




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200803 LOMA Conference - Creating a Call Center

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