When businesses first started outsourcing, it only made sense to come up with metrics to track the success of the outsourced workers, as well as how to pay for them. But one could argue that the metrics chosen were arbitrary.
For example, an agent finishing a call in 20 seconds doesn’t tell you whether the customer on the other side of that call got what they wanted. Some work has been done in an attempt to try and understand whether the customer was indeed happy and whether they felt the purpose of their call was handled correctly. Mostly this is done through NPS. A process for understanding whether a customer would recommend the particular service or company answering the call. This is a great step forward but it still doesn’t help us truly understand if the company outsourcing has achieved the outcome they were expecting.
To complicate matters pricing methods were created that set the cost of the outsourced service as a multiplier of the number of people working for an organization by the cost of that resource. Essentially a headcount-based cost.
This “headcount” based pricing mentality doesn’t necessarily focus on how whether the agents are working to their true productivity potential. Are they indeed driving better outcomes?
But with better technology and an improved understanding of customer processes and journeys, we can take a step back to really evaluate the metrics and KPIs that we track for outsourced teams.
The challenges with cost-per-head metrics
A cost-per-head methodology to outsourcing puts the priority on the price rather than the results. And while cost-per-head may suit smaller businesses that simply need more people on board to help them grow, this isn’t the case for most mature or larger businesses that need to outsource.
This is further complicated as many organizations operate in siloed environments with teams of agents specializing only in a specific process, The connection of how these disparate teams perform together to achieve the organization’s outcome becomes blurred. This leads to limited information between different teams and customers get passed around without much context.
And when the only priority is a low price, call centers and businesses will find that:
- Customers remain frustrated – when agents are focused only on passing the customer onto the next agent so their call times remain low, those already-frustrated customers aren’t going to get the outcome they’re looking for.
- They can’t scale – increasing outsourcing capabilities can be costly, especially if those extra agents aren’t getting customers the outcomes they’re looking for. All businesses do is end up with higher costs without a noticeable benefit – and this badly impacts the call center’s reputation for achieving good results.
- There’s a hidden cost to poor outcomes – if customers aren’t getting their desired outcomes, they’re staying on the phone until they do. And if this takes too long, this ends up costing the business as time is wasted trying to resolve a problem for a single customer rather than tackling the problems of the ones next in line.
- Their reputation is at risk – in the past two years, customer demand skyrocketed for channels such as phone, live chat, and email support. This meant that more customers were interacting with brand representatives. And if they weren’t happy with the way the agent handled their problem, the business’s reputation was put at risk.
And as businesses step out of survival mode into regular operations, they’re realizing that their internal teams may be costing them more than they expected. This is likely to lead them back to outsourcing and headcount-based pricing in an ever-increasing spiral to achieve lower costs. But what kind of approach should they be taking instead?
Why cost per outcome should be the focus of outsourcing
Cost-per-outcome isn’t a new concept, it’s been floating around for decades. The trouble was that before today, we didn’t have the right technology to measure this effectively.
But now these tools are becoming more available within increased data focus and a better understanding of the customer journey driven by journey mapping over the last few years. And businesses will find that adopting a cost-per-outcome methodology might just be the answer that they’re looking for when it comes to decreasing the high costs associated with expanding their call center capabilities.
A cost-per-outcome approach works like this:
A business will approach an outsourcer and discuss their needs – but the focus will be on what actually happens throughout the customer journey. This then leads to a conversation about how much it costs to deliver that outcome in their own business. This will focus on not a single person but a number of people each with differing skills. Another way to look at this is we now have a cost of delivering an outcome with a “Team”. The underlying metric then becomes how many outcomes can each team deliver. The more experienced the team naturally the more outcomes that can be delivered.
This drives a very different conversation between an outsourcer and the organization. How do you create multi-functional teams? What skills do they need? How experienced do they need to be? How many outcomes (support tickets resolved, for example) are the organization looking to achieve? This is a far better conversation than how many agents they want to pay for. One key point here though, Outcomes are rarely ever lagging measures.
This flips the script around to focus on an organization’s productivity levels. And the amount of outcomes achieved is much more scalable than the traditional focus on agent numbers.
Simply put the more experienced the outsourcer gets (through better training or improving their internal processes) and the more efficiently they work to achieve the outcome the more productivity they will be able to drive without needing to increase the number of agents, this benefits both the organization and the outsourcer as profit margins grow for both.
One approach to increasing your productivity:
Take a look at your team structures. As we mentioned before, many call centers operate in a siloed environment – but this isn’t necessarily the best way to work.
Combining different skills into a team will mean that customers stay within that team, no information or context is lost, and your agents can see customers right through to the end of their journey. Focusing on a single goal and working as a cohesive team makes it much easier to achieve better outcomes.
We can take a look at the ultimate developers of team-based work, the military. If you consider the scenario, as I did in my previous career in the Royal Navy, where a disaster or humanitarian event is occurring in a faraway place where a nearby ship is asked to intervene.
In this scenario, the ship doesn’t simply create a team of doctors and medics and send them on their way. It will create a team that can address the entire picture (the customer outcome if you will). This emergency response team will be made from a team of doctors, nurses, engineers, logistics managers, security, and perhaps administrators. A team with the relevant skills needed to achieve the desired outcome. Because without this team of disparate but complementary skills, they simply couldn’t achieve what they wanted.
So why shouldn’t this work the same way for contact centers and outsourcers?
Outcome-based methodologies create better businesses
Applying an outcome-based methodology to contact centers is essentially a win-win for both stakeholders.
Contact centers and businesses will find that this methodology and a new way of working will improve their:
- Profits – happier customers make for better businesses. And this is really what the focus of a cost-per-outcome approach is – actually solving customer problems. On the other side of this, outsourcers will be able to increase their own profit margins without needing to hire more agents as long as they’re able to increase the productivity levels of their existing teams. They’ll be able to do more with what they already have.
- Better processes – adopting a methodology that drives teams to deliver a collective outcome empowers them to focus on efficiency and subsequently productivity with the obvious flow-on effects for all. Teams work smoothly, agents are happier with the outcomes achieved, fewer mistakes are made, and productivity is lifted at a more manageable cost to the organization.
- Flourishing business relationships – Outsourcers often become close partners for the business that outsources to them. And when they can achieve great results, the relationship between the outsourcer and business grows and creates further opportunities to gain new customers.
Discover how to apply an outcome-based approach to your business
At Omada One, we’re strong believers in focusing on outcomes rather than costs when it comes to outsourcing. History has shown us that multifaceted teams can focus more easily on achieving a strategic outcome for your business.
Omada One is helping businesses through training in-house teams to refocus on the customer journey, as well as providing alternative outsourced teams that have an outcome-based approach.
If your business is looking for better ways to work, you can contact us to discuss how we can help you start on this path.
[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]