Capability Check Up

This is a framework I use to identify issues and opportunities within the operations that support the customer engagement, sales and retention processes. Like any diagnostic, it seeks to break a complex structure into manageable schema of core capacities. This enables a team to distinguish performance, pinpoint issues, and diagnose optimization opportunities within their own organization.

The diagnostic is a process of discovery. This approach is comprehensive and requires a significant investment of resource time and attention, but the results can be astounding and provides a sustainable model for future performance checkups.

The four Capacities are:

1. Defining the product mix strategy for Available Offers
2. Optimizing the Infrastructure, Routing, and Customer Profile
3. Ensuring Resource Capacity and Quality
4. Driving Sales Effectiveness

I will spend some time detailing each of the 16 capabilities required to support the Four Capacities for operationalizing customer engagement. Read on to see how to review each capability and identify issues and opportunities in your business.


1. Defining your Product Mix
When looking to improve sales, the first thing to consider is the mix of products being sold. Simple in sound but complex in practice, the right product mix is the articulation of how well the company strategy satisfies customer needs in a profitable way.

       The right product mix must take into account Customer:
        • Needs: How does the product satisfy real or perceived needs?
        • Behaviors: How does the Customer utilize your product, how often and for what purpose?
        • Disposition: What is the mood of the customer at the time of inquiry?

But also meet the strategic needs of the Company:

• Profitability: While the goal is to maximize profit, providing robust tiers of value/price is an effective way to reaching multiple price points.
• Market Share: A product may be more strategically important than is accounted by the profit margin alone and merit priority focus.
• Brand: How well does the product represent and reinforce the brand?

 Once the Customer and the Company elements are understood, they must be reconciled with the logistical realities of the channel on which the message is delivered:

• Online: Full range of interaction depending on site and customer sophistication. Enables limitless product variations, inexpensive and easy to track results and includes all prices.
• SMS text: Simple and short requests and messages, micro payments.
• Face to Face: Expensive but effective channel, usually for higher margin and complex products.
• Inbound Phone: Customer calls for service or inquire about a product, and is generally open to discuss offers. Messages and sales can be bundled into the servicing discussion.
• Outbound Phone: Customer receives unsolicited call (usually during dinner). Call has a high annoyance factor but is an effective way to reach potential customers depending on the quality of your call list .
• Voice Response (VR): Customer has control of navigation and generally has identified themselves. Simple messages and opt in sales tactics are possible.

By charting the product mix to support the needs of the Customer and Company and optimize for the delivery channel, a company can improve sales, profit, and customer satisfaction.

2.Defining Customer Eligibility
Contrary to public opinion, not every customer is desired. Depending on the product, some customers are just not worth the risk/return. Like a bouncer limiting who gets into an exclusive club, companies must manage the eligibility of their sales prospects to ensure they don’t let in someone who is potentially dangerous or will degrade the brand and experience of other customers.

Eligibility rules are an attempt at managing which customers should be sold to, how often, and with which products. A look at the simple chart helps to understand how this can work to define the opportunity.

The trick with eligibility is not so much defining it, but managing it. This process works best when customers identify themselves up front, so that components of their risk and behavior profile can be assessed. From this it is possible to segment the volume into opportunities that are eligible and not eligible. In most scenarios, non-eligible include highly risky customers, as well as those who’s profile makes them unlikely to buy or just not profitable. For non-eligible customers, a distinct servicing approach can be taken to focus on efficiency and customer satisfaction.

Eligible customers should then be looked at with the remaining components of Available offers: Targeting and Prioritization.

3: Customer Targeting: the right offer at the right time
Once you have the right product and the right potential customers, it is possible to apply customer targeting tools to improve the probability of a successful sale. At its essence, this requires capturing what you know about the customers and apply that to previous sales data to determine trends and correlations that will guide future targeting. Heres how it can work;

Tax-it Software is a rising player in accounting software and is on an aggressive campaign to increase sales and market share through an outbound sales campaign. They have an existing customer list with deep demographic and purchasing data. They also have a new prospect list with limited phone, name, age, and zip code.

They scan the data from their previous customers to identify trends based on existing data elements like age, location, purchase size, and date. Based on the make up and population size, Tax-it then breaks the data into smaller segments, such as less than 30 years old, 30-50, and over 50. By comparing the purchase behavior of past customers across these parameters it is possible to determine which customer types respond best to which products. Lets take our example further.

After conducting their analysis, Tax-it confirms its hunch that their low cost basic package sells well to the under 30 year old group and also the over 50. But the data is impacted by high sales in Florida. In other geographies, the older age group responds better to the expanded tax prep software. They use this to refine their outbound sales effort to focus on higher end products to the older age segment except in Florida. Now we've set up the basics, lets look at another example to show how effective good segmenting can get.

MoneyTrust Bank receives calls from their customers to service their accounts. These are handled in a call center that tries to cross sell additional products. In the past, the bank would sell everything to everybody with limited success. A new marketing manger has come in and wants to segmented their customers into the following segments:

• Loyal Low Growth: tenure with bank >3 years, deposits <$10k, holds existing financial product (mortgage, cd's,)
• Rising Stars: tenure < 3 years, assets >50k but limited product penetration
• Happy Kings: tenure >3 years, assets> $100k, extensive holdings in bank financial products

Based on this segmentation, MoneyTrust follows a different product focus for each group:

• Loyal Low Growth gets messages that maintain the relationship and minimize the cost to service for the bank. These messages include online banking, paperless statements, automatic bill pay,...
• Rising Stars are greeted with offers for additional products and services such as investing advice, extended lines, and mortgage refi's to expand the relationship with this high potential segment.
• Happy Kings are provided gracious service that acknowledges their relationship and may make token offers for premium service options in appreciation for their business.

As you can see, each segment has a different strategy: maintain and optimize for cost, expand the relationship and profitability, recognize and reward. By providing a flexible and robust offer set, the marketer can improve probability of sale and reinforce profitable behavior that is relevant to the customer.

4. Product Prioritization
So we know what products we want to sell to which customers and are ready to serve them up. Here’s where the realities of the channel come into play. No matter what channel, web, phone, face to face, there is a limited amount of information or offers you can make with a customer. So the question now becomes how to prioritize the offers made based on the actual volumes and your capacity to handle them.

There are two areas where there is often the opportunity for improvement.

1. Defined prioritization metrics aligned with the overall strategy
2. Capabilities to identify customers/transactions and prioritize the treatment according to the strategy

 1. Prioritization Metrics:

What you can’t measure, you can’t achieve. Be careful what you wish for. Both of these adages are important to understand the challenges of assigning appropriate measures to drive prioritization.

To prioritize opportunities, a lot of companies employ measures like revenue, NPV, or pre-tax income. Any one of these is a good start, but also needs to be examined more carefully to make sure it is appropriate for your business.
 1. Are your profitability models robust for all your products?
2. Is the revenue stream the same for each?
3. How do sales values differ based on the measure you choose

Let me give an example to illustrate how important this can be.

A company was facing declining call volumes and thus reduced opportunities to sell. They needed to prioritize the sales offers they made to improve profit potential and looked first at their success metric, NPV. NPV is good at defining total contribution over long periods of time and also incorporates probability and costs of a sale. The problem was, after the economic downturn, several products being sold were not behaving as their profit models suggested. As customer behavior changed and response rates declined, product values reduced with some products slipping into negative returns.

To account for these changes, the company reviewed its product profitability models and also shortened the 5year profit window to two-years. In doing this, many products that relied on longer term payback horizons looked unprofitable and were removed from the prioritization list. Left to focus on the truly profitable products the company was able to generate more short term cash with fewer opportunities.

2. Prioritization Capabilities:

Now that you know what to prioritize, the question is can you apply that to actual volumes. Advanced prioritization capabilities allow a company to differentiate channels (VR vs phone), treatment (wait time, caliber of service agent), and offer (product presented). All of this in a dynamic manner that can adjust as volumes and capacity changes.

Much of this depends on how the company defines and manages their customer segments based on their profitability and needs. For example lets say a telephone company segments its customers into corporate, consumer basic and consumer high value. 

The capabilities that telephone company requires to execute on this strategy include Intelligent Call Routing and offer presentment to:  

• ID a customer
• Define Prioritization
• Route to the correct team
• Put in to appropriate call queue
• Present the relevant product

Employing the right prioritization metrics and capabilities enable companies to extract greater value from their service and sales process. The company is able to serve up the most profitable and probable opportunities to sales agents and maximize profitability with available volumes and capacity.

Congratulations, we finished a review of Optimizing Offers with focus on

• what products
• for what customers
• in what order.

The next component in the Customer Engagement framework is Infrastructure.
Infrastructure is the nuts and bolts of customer servicing and sales effort. Often relying on complex and expensive software and hardware configurations, the infrastructure is the core engine for executing and tracking your service and sales interactions. The functional components of an effective application include:

  

1. Recognize your Customer
2. Access and execute necessary servicing requests (e.g. change address, billing inquiry, order, request status of order,…)
3. Present eligible messages or sales offers from an inventory of offers.
4. Record the servicing and sales activities that occurred during the transaction
The more sophisticated service and sales applications increase the precision of your ability to match the customer with the servicing treatment and offers that drive profitable behavior at the right margins.

5. Servicing and Sales Platform
This blog will not go into the complex nuances of choosing the right service and sales platform. Such a selection depends on long list of considerations including existing architecture, purchase and operating costs, scale, product mix, legal requirements, and more. Instead, my focus is on optimizing the infrastructure you currently have.

While each application is different, managing your platform requires regular maintenance, periodic enhancements, and a governance process to make sure the approach and set up still makes sense with the business strategy and local realities. Let’s take a look at each of these...

1. Regular Maintenance: This is basic upkeep and care to provide as-designed functionality and focuses on making sure the tool is presenting and processing the correct customer information in timely manner? Are the product and customer information feeds working, is there adequate server capacity to handle demand, what’s the support and software upgrade schedule?

2. Periodic Review: Customer service is both dynamic and demanding, and there will likely be many opportunities for upgrades and additional functionality. To ensure the application is meeting your evolving needs it is important to encourage feedback channels from multiple sources:

• Strategy: Review the system functionality vs the business need.
• User Group: Conduct focus groups or feedback surveys with the users of the system. Are there issues of system response, data accuracy, or usability? What new capabilities would improve customer treatment or efficiency?
• Industry Best Practice: while the pace of change varies by industry, there is a need to keep up to date about your competitors capabilities to identify, channel, and engage customers.

 3. Governance Process: As with any investment, there is a need to ensure the benefits of the investment are realized and prioritize new enhancements. Further, the decision principles should be clearly defined using metrics that are available. In one example, a company I’ve worked with had to prioritize the implementation of their customer treatment tool across over 20 international markets. The prioritization principles in their case included: 

• Scale: markets tiered by size (all large markets went first, then medium, and small last)
• Profitability: within each tier, the order was based on estimated improvement opportunity
• Compliance/ system risk: markets that needed the tool to overcome compliance or system failure issues were given top priority.

A lot of the above seems to be common sense and most companies get most elements right at the beginning of the lifespan of a platform. Things start to breakdown in the later stages however, and can severely limit your company’s ability to maximize the positive impacts of the customer interaction. Considering all 16 components in the framework, infrastructure is one which is relatively easy to diagnose and fix (assuming you have the funds to pay for it).

6. Offer Set Up
These approaches for also work well for Offer set up and maintenance.  Periodic review for quality usage, and impact is critical to maintaining a healthy portfolio of offers.  But for the ideation phase of an offer, one needs to understand and adapt to the realities of a multi-partner process in developing and executing on campaigns.  The goal threfore is to establish a robust and error free process that is transparent and meets the required cycle times of the specific business. 

• Map the process: identify roles & responsibilities & streamline process steps
• Establish Submision templates: define all of the information needed to load the offer. 
• Define and track Service level Agreements (SLA's) around cycle time and quality
• Establish regular governance meetings with key stakeholders to present and approve new & changes
• Review performance and errors for continuous improvement

7. Routing for dollars
Most people are blissfully ignorant to the alchemy of call routing.  After all, who wants to think they are being sized, sorted and fed to a specific service rep every time they call in to get their account balance.   But there it is, lying deep within the switches, codes and wires of a Internet or phone driven customer center, Routing exerts tremendous influence on customer engagement, sales, and retention.  

The objective of Routing is to intelligently identify, segment, prioritize and deliver opportunities to the people or channels that can best convert it into the desired outcomes: Revenue, Cost, and Customer Satisfaction. Routing decisions are driven by the following considerations:

• Comparable Value of the opportunity
• Specialty teams or channels that are more effective at converting an opportunity through special tools, offers, training, and incentives,
• Capacity and cost of the teams or channels to handle the available opportunity volume

A recent example should illustrate how these things interact to help or hurt the desired outcomes. 
A call center in Canada was concerned about the poor results of their customer retention team.  Compared with their competitors, their save rate lagged 10%  and long term customer value of retained customers was 14% lower.  This group needed help. 

This center employed a special retention team  who would receive dial transfers with customer who asked to cancel and employ special tools, offers, and training to talk the customer off the ledge and try to retain their business. When these special reps were busy, however, the general Representative population would handle the call as best they could.  This is where Routing comes in.

After reviewing the existing rules, several routing opportunities were identified:
1. During regular hours, all attriting customers were transferred and handled by the retention team on a first come, first served basis.
2. When the retention team was busy or after hours, general reps would cancel customer accounts upon request.
3. Retaining customers of the most valuable product required specialized product and customer knowledge possessed by only a few of the most tenured retention team representatives

To improve save rates and retained customer value we implemented the following routing changes:
1. Top and high value customers get first priority to reach a retention rep
2. Low or negative value customers should be cancelled immediately on request in the general teams and not transferred to the retention team.
3. A sub-group of tenured reps was created in the retention team and were prioritized to receive the top value product if available.

By prioritizing the most valuable customers and creating a special team to handle the highest value opportunities, the Canadian call center was able to improve save rate by 8% and retained customer value by 15% all without making any changes to the staff, incentives, offers or tool sets.  I hope this examples shows the power of optimizing routing opportunities and makes a believer out of you.

8. Reporting: Measure to Manage
The last component of system and infrastructure is Reporting.  Simple in concept and difficult in practice, reporting performance of a customer engagement  focused service and sales team is both essential and elusive in many businesses today.

Paramount to the design of successful performance metrics that drive desired business objectives is the understanding that you achieve what you measure, so be careful what you wish for.  For example, call handling time is an important shareholder and efficiency measure and is an important control over capacity and call wait times.  Make it the most important measure, however, and you may find customer satisfaction deteriorate and a higher incidence of call backs as representatives rush off the phone and leave customer needs unfulfilled.

Before we continue,  its worth mentioning some basic requirements.  For any reported measure to be effective in a large and geographically diverse organization, they must be:
Specific
Measurable
Achievable
Relevant
Transferable

Of course, there are a lot of specific measures one can use to drive desired behaviors and this blog should not be considered a definitive source.  I  do suggest the following measures that I believe work well. 
Key Metrics:

• Customer:  Actual customer responses to a post service questionnaire focusing on Net Promoter and Customer overall satisfaction.  One can also use actual rates of Retention for the retention team.
• Financial: Sales /Save Rate, .Sales/Save per hour, Offer and conversion rate, Revenue Generated, Sales to target,  Call Handle Time
• Compliance/:Regulatory: Pass/Fail 

Successful Reporting is made indispensable to driving business results through its utility and usability.  This is accomplished through providing accurate and relevant data from the representative and team levels all the way up to business unit.  This way the primary actors can track their scores and adjust their behavior accordingly while providing consistent and comparable data for senior leaders to make decisions.

9. Resource Capacity & Volume Forecasting
Once you’ve defined and set up your offers, built and enabled an infrastructure to receive, route, and present the opportunity, the next thing to consider is resource capacity. People, servers, and phone lines are all limited resources and need to be managed carefully to make sure you are able to maximize the opportunity. This section will talk about how to approach volume forecasting, sales planning, configuration of your productive resources, and managing the pipeline of productive assets.

Volume Forecasting: Often misunderstood and under appreciated, volume forecasting is the detailed science of defining anticipated volumes based on past experiences and future assumptions. When done effectively, few people give it much consideration. When things go wrong and volumes are significantly above or below forecast is when people wake up to the impact of this activity on costs, customer experience, and sales performance.

First let’s make the distinction between forecasting, which usually looks at a period of >30 days versus planning, which focuses on the immediate 0- 30 days period. Forecasting uses macro assumptions about organizational productivity and capacity to establish a resource plan to handle estimated future volumes. It is forward looking and attempts to provide an estimate of required capacity to manage the business within the boundaries of company defined SLA’s such as response time and abandon rate. With this longer time frame, the Forecaster takes their models to the resource managers to suggest they bulk up or down on resources based on the need and the required cycle time to make a resource change.

Planning, on the other hand, is the short term management of existing resources to handle actual volumes. It is a dynamic activity that must manage for unforeseen changes in capacity and productivity such as system outages, media/news that drive incremental volumes, and staffing challenges such as training, and absenteeism. While sometimes done by the same team, forecasting and planning are distinct and require different approaches to be successful.

One of the first things to consider within forecasting and planning is accuracy. Consistent measures of accuracy are required to ensure the forecasting/planning team is held accountable to providing the volume estimates necessary to run the business. This is important because other processes rely heavily on the accuracy of forecasts to hit their own numbers of cost efficiency, sales, and customer service measures. Without reliable forecasts, the owners of these processes are left to make difficult “win-lose”choices between customer service and sales. Depending on the process, desired forecasting accuracy is often within 95%-98%.

While the forecaster manages the pressures of making accurate assumptions of the effects of future events on capacity, the planner must be able to identify and leverage flexibility levers to effectively manage actual capacity within the confines of current schedules and available resources. In the planners tool kit are changes to breaks and vacations, scheduled non-productive activities like training and system down time, and available “stand in” resources that can be leveraged to make up immediate shortfalls in capacity.

Done well, planning and forecasting is an integral part of the healthy management of a production facility. It strives for the optimal usage of resources to maximize the volume of opportunities available while avoiding burn-out and resource churn. Done poorly, planning and forecasting will drive inefficiencies, resulting in lost opportunities or increased non-value add costs and a de-motivated workforce. So next time you see your Planner/Forecaster show some appreciation for a misunderstood but integral part of healthy production process.

10. Sales Planning: Sharing the pie
In my experience, one of the most frustrating things about operating a productive sales operation can be the sales planning process. This is because of a fundamental disconnect between the sales team’s optimistic revenue expectations, and the realities of actual volumes and sales rates that occur in production. Unless these two groups can work together, both teams will end up disappointed. This section is meant to help you avoid this disconnect.

In a recent example, three different product marketing teams contacted the production team with their next year forecasts based on optimistic revenue targets. None of the teams aligned with one another and each assumed they would get the lion’s share of the opportunities. Added together, the aggregate sales forecast would require actual volumes to increase by 190% from the previous year or sales rates to double. By the time the operations team pushes back on the forecasts, the marketing team has already approved next year’s plan. Operations and marketing must then come back to the table in February or March when it is obvious the sales plan is not going to met, and both teams end up frustrated as the bar must be set lower than what marketing wants but still higher than what operations feels they can deliver.

To avoid this scenario, all invested parties need to get together for a planning process before the end of the year and before final sales expectations are set by marketing. Heres how it can work:

Operations provides expected next year volumes, existing sales performance rates (offer, conversion and sales) and any additional items that might decrease productive capacity such as major initiatives, trainings, system changes, etc. Marketing brings to the table all relevant product teams and their initial sales expectations. Marketing also brings in any additional plans such as new product launches, major campaigns, or anticipated competitive actions that will impact volumes and sales performance measures. Locked in a room and equipped with this information, the teams work out the following:

1. How many sales are possible given the volume forecast and existing sales performance metrics
2. How would the marketing team prioritize these sales opportunities to create a proposed product mix
3. What can the two sides do to improve any of the sales performance metrics and by how much

From there the team can agree on a relevant plan based on the realities of anticipated volumes and sales productivity. In addition, this aligns the product teams within marketing around the prioritization of the channel and any efforts they might need to support to drive improved performance (such as pay for addl sales training, resources, or improve the sales tools & scripts).

The Sales planning process does not have to end in disappointment. If both the operations and marketing teams can come together with the right information and a collaborative approach, they can find ways of delivering accurate targets with stretch goals linked to specific support activities that will improve sales performance metrics.

11. Rep Configuration: getting more from your existing team
Once we have our sales plan at an aggregate level, its important to get into the granular detail of the resources available to achieve those audacious targets.  The more specialized and complex the product line, the more likely there will be some differentiation in the skill levels and expertise of certain people to service and sell/save customers.  The key here is to segment the opportunities to make sure you are getting the maximum output based on this differentiation.  Lets call this activity configuration.

Configuration is nothing new.  Think of almost any team sport where players are put into specific positions.  Using Soccer as an example, you put the players with more stamina in the middle, the strong scorers in the front, and the tough defenders in the back.  While some star players could play multiple positions, its clear that others will not have the skill set or disposition to play successfully in all positions.  Lets apply this same technique to a sales environment. 

Take a normal call center that has a spectrum of products and additional products and services that can be cross sold.  Now take a look at your team.  Some are newbies and cant be expected to perform at the more senior levels.  Others might excel at servicing but may not be interested or skilled in selling.  A third group might be competent at certain product types but lack the breadth of skills to cover everything.  Finally there's the top 20% performers who can handle all products and sales.  Your job is to match each of these groups with the right opportunity set.  The following chart will help illustrate:

The next step is right out of Sun Tsu's "The Art of War" where two General's agree to let the outcome of 5 horse races decide the outcome of  an indecisive battle.  The prescient General pits his worst horse against the opponent's strongest, then his best horse runs against the opponent's 2nd best and so on.  In our scenario, we route the lowest profit opportunities to the bottom left box while routing the highest margin opportunities (often the more complex products and upsales) to those with the best chance of success.  We may also identify customer niches where sales or product specialists excel.

Here's how this could work:  In a recent project I worked on, the insurance team wished to ramp up sales by increasing staff to handle every available opportunity.  When one looked deeper, however, only 1/3 of the opportunities were highly viable customers eligible for several relevant and profitable products.  Another 1/3 were marginal opportunities and the last 1/3 were close to impossible sales due to the customer lacking the authorization to accept the sale.  Based on this knowledge, we segmented the sales teams to:

• Provide the best 1/3 opportunities to the highest performing agents and allow the call queue to back up a little more than normal to increase the chances these calls would be handled by the experts.
• Provide the next 1/3 opportunities to the marginal team, training them on specific products they could get comfortable with.  Even though not 100% of this group's calls related to these products, it was a realistic strategy to maximise sales given the limited motivation/skill set.
• Send the bottom 1/3 opportunities to the remaining group or let them terminate in the voice response - even if a higher tier agent might be available to take these low opportunity calls.   

 In the end, we tripled sales without changing the headcount by radically changing the configuration and improving the sales conversion rates.  One caveat - this approach may seem unfair to the bottom 1/3 performers as it vastly limits their earn potential.  This is true but can be mitigated by establishing a robust process of evaluation and team migration for top and bottom performers in each team.

12. Hiring: Profile for Success
One of the biggest long term opportunities to establish a culture of performance in a service/sales operation is the hiring of the right people.  As Jim Collins brings home in Good to Great, getting the "right people on the bus" is critical to long term success.  But how do you find and recruit the right people? 

One of the common mistakes that companies can make is to hire in the past.  What I mean by this is to hire a profile and skill set that supports its historical position and strategy.  This can be referred to as hiring for skill and it often drives a "more of the same" performance model.  Companies taking this route will look for candidates that have previous call center or direct sales experience.

If that company is serious about making a transformational change in its ability to engage customers and deliver superior service that is interactive, anticipatory, and value added, they need to look beyond the candidates past skills.  Instead, forward looking companies need to change their hiring profile to look for will.

This shift is based on the fundamental realization that skills can be taught, but will is a combination of interests, attitude, and values that have formed over time.  Companies can teach Skills but not Will. 

How do you hire for will? The following are a few basic components of how to find people who will be successful in an environment that expects both outstanding customer satisfaction and strong sales/retention results. 

1. Profile Industry: Look for people with a hospitality background.  This includes travel, hotels, dining, and other types of work, but at its core, it means the people have a passion for serving others and making them happy. 
2. Pay: You are competing with all the other call centers out there for the same talent.  If you change the paradigm and look to poach the best talent away from a new industry, its necessary to benchmark and set pay against these new industry competitors.
3. Pre-screen: The total investment in the process to hire, train, and launch a new employee is incredible expensive and resource intensive.  A little bit of extra work on the front end pays for itself many times over in the savings from eliminating the wrong candidates.  A simple phone call with a potential candidate goes a long way to understanding if they will be successful,.  But instead of just asking basic questions like, walk me through your past experiences, ask more pointed questions such as "tell me about a time when you had to go above and beyond to satisfy a customer" or "How do you define success"
4. Observe Engagement Skills: when you have contact with the pre-screened candidates either on the phone or in person, interviews, spend some time observing their people skills.  Are the friendly and inquisitive?  Is the energy level and ability to engage apparent.  Can they listen?  If they cant get their interviewer excited, how will they energize your customers?
5. Hiring for success:  Bring the team leaders and managers into the process from the beginning.  As much as possible, these managers should be part of the interviewing and selection process.  Once on board., the managers should continue with the new hires through the training and on boarding process. 
6. On board for the real world: A lot of organizations bring new hires into a protected environment where they are not exposed to real calls or working conditions until many weeks or months into their tenure.  This is not helpful, and only prolongs a lack of understanding about what the role requires.  Instead, expose the new recruits early to real calls, shift schedules, and their teams/leaders to foster better understanding about the job and what it takes to be successful.
7. Recognize Failure Early:  People often criticized Jack Welch ("Neutron Jack") for being so ruthless about cutting out the bottom performers in GE.  The way Mr Welch puts it, however, is that its much more humane to recognize that the person doesn't fit in the organization and part ways quickly, rather than draw out a relationship that will never work out.  When it comes to new hires this is even more the case.  Give them a chance to learn, but set expectations early. Even before training is over, you should have a clear view if this person has what it takes.  My suggestion is to use real on the job training and set minimum standards before graduating the candidate.  If they fail to reach these standards, enter them into a performance consultation before hitting the floor. 
8. Keep the pipeline full: Depending on your scale and employee attrition rate, having a robust pipeline of new recruits is more or less important to business continuity.  That said, it is often helpful to set and raise performance standards on the existing team and continually bring in fresh talent when required.  In many cases, new talent is free from previous biases and habits that can exist with tenured teams, making a transformational change easier when the new hires are brought in under the new expectations.

 Once again, having the right talent is critical to an effective execution of an engagement servicing/sales strategy.  By changing the source and profile of a successful candidate, it is possible to create a new mold of success and drive the change required within the organization.

13. Rewards & Recognition: Simple Success
There are bodies of work on effective Rewards and Recognition programs out there so I wont begin to try to compete with their complex and deep coverage.  Instead, I'm here to help you focus on to keep focus on two core success factors: Sweet and Simple.   An incentive program must satisfy the following requirements to achieve these core characteristics:

1. Easy to understand
2. Applies to the bulk of service professionals
3. Clearly links valued incentives with basic performance KPI's
4. Rich enough to motivate the desired behavior
5. Achievable but stretches performance to higher levels

How can you apply these in a practical setting?  Lets take a customer sales organization that must balance revenue generation with customer satisfaction scores and efficiency.  First, determine the desired KPI's.  While there are many alternatives for each, in this scenario, lets use the following KPI's (Key Performance Indicators):

• Efficiency: Average Call Time
• Customer Satisfaction: Recommend to a Friend
• Revenue: First year revenue generated (value of products * # of products sold )

Notice there are only three measures.  This is simple to understand, clear to follow, and applies to most of the representatives with only minor changes to the targets themselves.  These are also clearly linked to the objectives of the company but may need to be further prioritized through creating a total rating that is an algorithm of all three KPI's in some combination of %'s (e.g. Customer satisfaction may make up more than average handling time if it is of higher significance).

The last 2 requirements rich enough and achievable are possible through careful valuation, target setting, and applying minimums and multipliers.  This part is a bit more tricky and deserves a little more explanation.

First on the valuation.  There are many groups who have reviewed incentives as a % of total take home pay.  In my experience, this ration needs to be greater than 15% but less than 50% if one is to maintain your careful balance between a service culture and a hard sales driven culture.  Too little and representatives are not motivated to perform, too much and they will ignore basic service and treatment strategies in order to make the sale.
Next on target setting.  One great way of setting targets are to determine what the top 10%-20% of your best performers are achieving and set the targets to their scores.  This means it is both achievable but also aspirational for the entire organization to reach what the highest performers are already doing. 

But be careful, you also want to make sure you are motivating those same best performers who already perform at that level.  This is where minimums and multipliers come in.  Structure the incentives to include both a minimum performance expectation (below which no incentive is given) and a performance kicker that accelerates earn above a certain score.  Of course non-negotiable items like quality and compliance must be maintained for any incentives to be considered. 

So next time you are looking at your organizational incentives and wondering if they are effective at driving the results you seek, ask the question:  "Are the Sweet and Simple enough?

14. Training & Coaching: People Enabling Success
One of the things I hear a lot from my colleagues in the online space is "How do you deal with bricks and mortar.  All those calls require armies of service representatives - online is so much easier and less messy" 

Maybe.  It is absolutely true that changing strategies and treatments delivered by real people takes a lot of time and focus. But this is missing the point.  Human interface is an intensely rich and valuable point of connection.  The beauty of the phone channel is that you have the chance for dialogue.  A real person, asking a real customer what they think with immediate feedback and input.  Together they can share, solve and sweeten the customer relationship with the brand.

Whats hard about this is that managing large teams of diverse employees to service an even more diverse set of customers requires effective training and coaching.  That is because while servicing a customer can be considered a science, engaging with them is an art.  When a customer is truly engaged in a positive and value added way, you can create a bond that will defy the gravity of price and competitive tactics.

We already talked about the importance of hiring the right type of person for engagement.  Now lets discuss approaches to training and coaching them.  There are several important elements to effective training and coaching.  Consistency, Iteration, Practice, and Feedback.   

1. Consistency: all of your training and coaching tactics need to have a common substance and format.  Like a great CEO who maintains a simple message over and over again, the consistency of the message is a big part of its power.  Why?  Because service reps are very sensitive to flavor of the month activities.  Like all humans, they are resistant to change, and the more consistent and pervasive the message, the more likely they will believe and buy into it. 
2. Iteration: Complex skills and treatment strategies take time to learn and put into practice.  Especially for an existing workforce that will have to change existing habits, there is a need to start small and build through successive gains.  For this to work, its necessary to choose only 1 thing to focus on at a time.  Once this is well understood and applied in practice, you can build on this with more complex approaches.  Only with a strong foundation can we expect to reach great heights.
3. Practice: No matter how much "sense" a new approach can make to a person on a logical level, it is only with  practice that we can master a new approach. 
4. Feedback:  This is a critical step in the learning process and at the core of coaching.  To be effective, feedback needs to be relevant, timely, and constructive. 

 Lets go deeper on the concept of Feedback.  The old school of customer service would train and coach to the process or call type.  To coach to engagement, you must train and coach to the customer's needs.  Specifically:

• Make a personal connection: Greet warmly and give confidence that you know and are committed to the customer
• Solve their problem: have the knowledge and empowerment to actually solve the problem
• Add value: give more value than they expected by making it easier or richer to do business with you

 After listening to >15 calls from the same person, its possible to understand the trend and coach to it.  15 sounds like a lot of calls, but its critical to find the trends behind the one off bad calls or difficult customers.  The coach will find the trend and focus in on of the above elements to coach to and create a plan to address.  Good coaches also provide alternative language, tools and approaches that have worked for other people. In fact, coaching can include their peers to get involved in a group feedback session where peers share their own tactics. 

Then give some time to practice for a week or so.  In the next coaching session bring back last sessions topic and celebrate any progress.  Listen to more calls and find the next opportunity.

While the call types my be predictable, the customers are not. Using consistent and iterative training and coaching that allows for practice and constructive feedback can see a huge improvement in customer satisfaction, loyalty and revenue.

15. Sales Scripting: Listen, Learn, Lead
A key point of contention between marketers and sales operations is the role and content of sales scripts.  Marketers are interested in making sure their products are represented properly and that all their shiny happy verbiage is conveyed to every customer.  Operations, on the other hand, often sees sales scripts as restrictive language that "ties up" the creative element of the sales dialogue and increases the risk of the representative sounding "canned" or robotic.  Both arguments are correct. 

The key with effective sales scripting is strategically managing the content based on the following variables:
1. Complexity and regulation/compliance of the offer
2. Experience/tenure of the representative
3. Universality of the offer benefits with the customer profile

1.  Complexity/Regulation.  Lets face it. Some offers are more complex than others.  Product options, long lists of features, and specific details require more detailed scripting to ensure the offer is accurately represented.  Add to this any legal/compliance related verbiage such as disclosures and its clear why this element is a key component of how much scripting is necessary.

2. Experience/Tenure.  Obviously a more tenured and experienced sales representative has a better handle on how to make an offer than someone new to role.  Those new to the role will need all the help they can get to best position an offer.  This includes the opening or transition statement, a list of key features and benefits, as well as any closing or linkage statements that round out the offer and helps it fit into the conversation.  On the other hand, an experienced representative will often require a simple list of the key product features and benefits, especially on known product offers.  This allows them more room to apply their own tactics and dialogue in a natural way.

3. Universality of the offer. A running theme in my blog is the concept of relevance.  More than any other tactic, relevance ensures your offers will be well received and value add.  Offer Universality basically means how universal or relevant the product and its features are tot he general customer population.  If we were talking about car insurance and we knew all our callers drive, then universality of the product would be high and the scripting could be generic.  If a substantial portion of our callers lived in NYC and did not drive, however, then universality would be lower and the need for specialized scripting increases. 

Crafting the right Script: putting it all together
Based on the above three variables, its possible to craft the right set of scripts based on the complexity of your products, how universally relevant they are to your customers, and the level of experience of your representatives.  Unfortunately, these three elements are rarely static, and there can be large variations in a given product portfolio.  As such, here are some tips to scripting to help manage through these variations:

• Establish a standard script format for all offers.  I like to use one that includes an opening statement, a bulleted list of key features and benefits, and a closing statement that brings the discussion back to the reason for the call.  More experienced representatives will get familiar with the format and use the portions they need without getting lost in all of the verbiage. 
• Try to tailor offer benefits to specific customer profiles.  This can be as simple as defining customer profiles  (e.g. "Timmy the Traveller", "Sarah the Shopper", " Paul the Points Junkie") and providing a grid of the product features that are most relevant to each profile. 
• Listen to the best sellers and copy their scripts.  As much as we think we know about our customers, the representatives who speak with them all day are the closest to what resonates.  Its very effective to find the high performance sellers, speak with them and listen to their calls to learn what works and build into the scripts for everyone else. 

The key with effective scripting is providing robust material to best represent the product without stifling the creative selling process that is based on listening to the customer, learning what is relevant for them, and then positioning the offer in their terms.  Scripts should equip your representatives to better leverage their unique and interactive relationship with the customers to ascertain and present the most relevant and value add offers in the right way to make an effective sale.

16. Fullfillment: Making the sale stick
Depending on your product mix, local legal requirements, and fulfillment process, there is a very real possibility that a portion of the sales you make are not completed.  I call this sales leakage.  Something breaks down somewhere in between the customer accepting the sale and the sale being completed and paid.  If this section is not relevant to your process, then feel free to skip this entry. 

Those of you who are left know how utterly frustrating sales leakage can be.  I work with a group in Australia who, because of legal regulations require that a customer send written confirmation of the sale, lose between 60% and 75% of sales agreed to with a customer on the phone.  Same thing in the UK with similar leakage rates.  Leakage is not just bad for business but also for the customer experience, since it disrupts customer expectations, demoralizes representatives, and wastes valuable opportunities.  What can be done to reduce sales leakage and maximize value?

There are three main causes of sales leakage:

1. Overselling & Buyers Remorse: Representative sales approach was too "hard" and the customer agreed to the purchase just to get off the phone.  Afterwards, the customer simply cancels within the trial period or doesn't send in the paperwork needed for completion.
2. Low Recall: like it or not, we all have short attention spans and memories.  Even if a customer agreed to something on the phone, the likelihood that they will remember and act on the offer diminishes as soon as they get off the phone.  Wait more than a few days, and the probability they will complete the sale plummets further.
3. Broken Fulfillment Process:  Some companies have not invested in making the sales fulfillment process as simple, convenient, and error free as possible.  Every point of friction along this process is a chance for leakage.

1. Overselling & Buyers Remorse.  There are several tactics to combat overselling.  First: only pay representatives for fulfilled sales.  Second, link sales incentives to customer satisfaction (see Rewards & Recognition section two entries ago).  Third, use offer and conversion rate metrics to identify "hard" sellers.  Actively listen to their calls and develop coaching plans to help these representatives adjust their techniques.

2. Low Recall.  The key with low recall is to identify where it exists and develop strategies to address it.  In the Australia example, the company enabled an SMS text message technology that could be sent right after the customer accepted the offer.  All the customer had to do was respond to the text with a "Yes".  This tactic increased sales fulfillment from 25% to 85%.  Other approaches include the timing of communication.  In the UK example, the representatives communicated the fulfilment process to customers to inform them they were expected to send a signed form back and how long to expect that piece of mail.  In the case of the UK, sales went from 35% fulfilled to 75%, delivering $1MM in incremental NPV annually. 

3. Broken Fulfillment Process.  Put on your reengineering hats and analyze the process from end to end.  Are customers informed of how the process will work?  Is the timing appropriate and can it be shortened?  Can you automate this by using email or other esignature methods such as texting?  What happens if a customer receives the mail and calls back in - will they reach someone who can adequately speak to the specifics of the offer?  Digging deep into the process will uncover opportunities to drive simple, convenient, and error free.

Hope you can apply these to your own customers and realize the benefits of carefully cultivated customer loyalty.