CASE STUDY


EQM and the Impact on First Contact Resolution



A White Paper by Dr. Jodie Monger
Customer Relationship MetricsTable of Contents

Introduction 3

Measurement Methods 5

Survey Calibration is a Critical Component of Every Program 7

Overview of EQM Relative to This Research 9

Introduction to the Research Project 10

Research Methodology 10

Research Results 11

Conclusion 12

Biographies 13

Customer Relationship Metrics 15











Copyright © 2007 Customer Relationship Metrics
2Introduction

Contact center leaders are deluged with different Customer Relationship Management
(CRM) solutions that promise to reduce costs, heighten customer satisfaction and loyalty,
improve productivity and do more with less. But no matter which CRM solution or
program you choose to implement, you must remember the most critical factor to your
contact center and for your company's existence -- people.

Many of these initiatives come from top-level executives, who are usually far removed
from customer interactions, and many of the solutions presented appear to be the perfect
answer to enhance customer satisfaction and loyalty by increasing First Contact
Resolution (FCR). What to focus on with respect to the center's performance is often
based on benchmark data attempting to show that the contact center is in line (or not in
line) with others. The most important thing to keep in mind is that while there are several
ways to benchmark the performance of your contact center, when all is said and done, it's
the customer that has the final say if you have best practices. Although companies may
have initiated several solutions that are supposed to improve customer satisfaction and
loyalty, many are flawed because of their neglect in bringing the customer into the mix.
One way to insure that these relationship management strategies are effective for the
bottom line is to have a good voice of the customer experience measurement program in
place.

The goal of our centers today and a main driver of cost via repeat calls and the
implication on customer satisfaction (actually dissatisfaction) is to provide First Contact
Resolution. This is one of the most important metrics to us, and yet is also the most
illusive and miscalculated metric in a contact center. Contact centers have employed
various types of technology and manual solutions to help calculate their FCR rate. While
some of the data that is collected internally are useful, the reality is that none should or
could answer the question on behalf of the customer. The customer is the one
experiencing the possible pain from your service strategy and is your single best source to
determine this metric.

Beyond knowing the metric by going directly to the source (your customer), being able to
link caller evaluations to the agent has a profound impact on First Contact Resolution
(FCR) rates and allows you to focus your training and coaching to the agents that need it
most. In addition it helps to identify root causes that are strategic or systemic in nature
and allow for corrective action. At the individual level, having this information at hand
allows the contact center to provide the right training and coaching at the right time, to
the right agents, adding up to not only a higher ROI for the Voice of the Customer
program, but also a higher ROI on your training and coaching efforts. Increased FCR
percentages yield higher contact satisfaction and contribute directly to customer loyalty.

To prove this point, Customer Relationship Metrics (Metrics) conducted a research
project that provides evidence that real-time agent-level customer feedback has a
significant positive impact on First Contact Resolution rates and creates a significantly
higher ROI for your Voice of the Customer measurement program, the results of which
Copyright © 2007 Customer Relationship Metrics
3are described in this paper. Leading the research was Dr. Jodie Monger in conducting the
study. She is founding Associate Director of the Purdue University Center for Customer-
Driven Quality and a pioneer in customer experience research, as well as the President of
Metrics.

Metrics selected two new clients for this research. "Call Center A" began a real-time
External Quality Monitoring Program (EQM) to collect feedback via an immediate post-
call customer survey and for Metrics to conduct a Survey Calibration process to correct
response errors. Complete details on EQM can be found at www.ExternalQM.com.
"Call Center A" collected their customer feedback using the service of Metrics'
Completely Automated Telephone survey system (CATs®). CATs® is an advanced-IVR
platform that is specifically designed to conduct research. CAT surveys include both
quantitative numeric scores and qualitative (customer comments) data. "Call Center B",
thinking it was more cost effective, implemented the survey script designed by Metrics
with their own IVR system so Call Center B could only collect center level data and
numeric ratings. "Call Center B" sent Metrics the data each month and Metrics returned
the analysis and reporting. Metrics assisted both call centers through the development of
the customer feedback measurement program.

In summary, "Call Center A" collected results that were directly linked to the agent that
handled the customer's call and could gather actual verbal comments directly from their
customers. "Call Center B" collected results that were not directly linked to a specific
agent that handled the call and did not have the ability to collect or report verbal
comments from their customers.

The objectives of the research study were to assess the impact of real-time agent-level
(specific) feedback on First Contact Resolution, measure the ROI of such a customer
feedback program, and manage to the results to improve training and coaching of agents.
The research focused on how First Contact Resolution would be impacted, and by how
much, after the implementation of a robust EQM program versus an internal "survey"
program.

The highlights of our research with the two call centers are summarized below. We
found the following over a six-month period:

Call Center A
" First Contact Resolution rate was increased by 10.4%
" Will have 3,120 less repeat calls a month to handle
" Have an annual savings of $187,200*
(Note: simple direct cost analysis proves ROI for EQM to be 390%)

Call Center B
" First Contact Resolution rate was decreased by 2.9%
" Will have to handle an additional 870 repeat calls per month
" Increased their annual expenses by $52,300*

Copyright © 2007 Customer Relationship Metrics
4* Normalized using $5 cost per call.



Measurement Methods

Effectiveness of service delivery can be measured in many ways in a contact center. The
ultimate objective of any quality program is to answer the question, "Are our customers
being served well by our contact center?" The measurement methods utilized are critical
to having a valid answer to the question. Quality is important to you because in today's
"commoditized" economy, the only differentiating and competitive advantage a company
has is the service it provides. All too often companies that have the best product become
extinct due to poor service.

Most contact center managers who focus on maintaining a high level of quality service in
their center have implemented a call monitoring program. These programs include five
to twenty live and remote monitoring occurrences a month of an agent's contacts with
different customers. Through this process, the agent is held accountable to a
predetermined set of criteria. The criteria often include courtesy, verbal skills, listening
skills, product or service knowledge, willingness to help, sales, and more depending on
the industry and product/service.

The standard monitoring form may have been created by different people in the contact
center, by a manager, or sometimes by a senior level executive that has a personal
expectation of how a contact "should" be conducted. The theory is that if an agent
follows the criteria set forth in the monitoring form, the customer will receive a high level
of service and the company will retain them as a customer since satisfaction contributes
to loyalty.

In reality, this theory leaves a lot of contact center managers scratching their heads in
disbelief when any type of customer feedback is captured and the gap between the
internal quality scores and the customers' measured level of service is a negative double
digit variance. How is that possible? What is the problem?

The problem is that all customers want to be taken care of efficiently and effectively, but
elements to accomplish this vary from one person to the next. Therefore, creating a
monitoring form with set criteria that must be adhered to for every contact may be
inappropriate, contribute to the above mentioned gap, and even cause some caller
dissatisfaction as the agent forces required criteria into the call. A monitoring form
should be a dynamic instrument that can handle different types of interactions with the
ultimate goal being, "The customer was satisfied and a repeat contact on this issue should
not occur". An internally estimated FCR value is possible; however the customer
ultimately provides the input values for the metric.

The methods used most often to capture immediate or near-immediate customer
evaluation of service delivery for telephone interactions include: CATs® (Completely
Copyright © 2007 Customer Relationship Metrics
5Automated Telephone surveys), Email, and IVR (Interactive Voice Response). So then,
what is the best way for companies to quantify the customer's experience? Some
companies have realized that traditional survey methods to gather customer intelligence
via the contact center are not acceptable and have sought better alternatives. While
traditional methods are still common place, they do not allow the voice of the customer to
be heard quickly. Customer feedback that is gathered by a delayed or flawed strategy can
easily mislead and ultimately misdirect your service strategy.

The customer experience measurement methodology that you use must reflect your
mission to be customer-focused and to be easy to do business with and that means
congruence with the customer-selected channel of communication. If this is not done,
"survey channel slamming" occurs. Survey channel slamming happens when a customer
sends you an email and you send them a survey through the post office, or when a
customer contacts you by phone and you send them an email survey. This is dangerous
to your measurement program and must be avoided. Ignoring customer preferences can
generate a service weakness and may create a source of dissatisfaction; this undermines
the validity of the voice of the customer measurement program. To best measure the
effectiveness of service delivery, an immediate evaluation is needed via your customers'
preferred channel. This will ensure the success of your Voice of the Customer program
as well as increase your customers' satisfaction and loyalty. It creates the ideal situation
that contact center managers are searching for.

Surveys on IVRs are gaining in popularity although not as quickly as Internet/email
surveys. Each of these methodologies has their own drawbacks. A standard IVR is not
designed to capture all of the elements necessary to do proper customer experience
research. Many companies have tried to upgrade their IVR system to include capturing
customer data, often times having to compromise program necessities due to the
limitations, therefore restricting their ability to produce actionable intelligence. Some
have also resorted to hosted IVRs to conduct research. Using an internal IVR as a
collection tool, one must combat the internal resource limitations that are always great,
design and analysis issues, trunk capacity limitations, reporting production, and the
inability to capture and transcribe customer comments or to provide service recovery
alerts. Using a hosted IVR presents some of the same design and research-related
limitations.

CATs®, while using IVR-type technology is more of a complete research solution and
the added value secures faster ROIs for the research investment. The system is more
flexible, scalable, and provides greater depth in research related function and reporting
than an IVR. The CATs® system contains rules-based programming which allows users
to control the volume and types of data collected to balance the cost and quality
components of data collection. The CATs® platform is flexible and can be deployed in
numerous ways.

EQM programs, for many contact centers, are part of their incentive pay program because
it provides the most accurate results from customer experience evaluations. The CATs®
system also provides real-time service recovery opportunities by providing service
Copyright © 2007 Customer Relationship Metrics
6recovery alerts to key personnel in the event a customer rates an interaction poorly or has
an ongoing repeat call problem (FCR failure). The reporting of performance from an
EQM program is also extremely flexible and contains in-depth analysis that can be posted
electronically, hard copy, on an intranet or the Internet (client defined).


Survey Calibration is a Critical Component of Every Program

The greatest weakness of a Voice of the Customer program that is designed to hold
people accountable for their job performance, is the failure to have a back-end survey
calibration process that leverages customer comments. Every EQM program includes
such a back-end survey calibration process. Without a survey calibration process in
place, the potential for error is amplified - meaning the credibility of the research
program is decreased and your liability is increased. Most customer feedback programs
merely present the Voice of the Customer results in raw format. If you are using raw
customer feedback results to hold people accountable, you are conducting survey
malpractice. Survey malpractice is an organizational liability.

Surveying is a science. For VoC program results to be scientifically sound and credible
to the agent level, the survey calibration process must take place and each survey must be
consistently held up against a list of criteria. In the survey calibration process, all of the
customer verbal comments must be reviewed to ensure the scoring portion and agent
accountability are defendable. All scientifically sound research programs contain a data
cleansing process. You must not forgo this step in your eagerness to quantify FCR and
service delivery.

An effective survey calibration process on agent-level feedback holds surveys up to the
"is this fair?" test. These examples are taken from the thousands of comments Customer
Relationship Metrics collects each day for our many clients.

"The Specialist that helped me with my problem was wonderful, however,
the generalist, Bonnie Harris, that helped me in the very beginning was
not. She got very aggravated with me when I had to be transferred to a
specialist."

Without the verbal explanation of the score and without a survey calibration process, this
survey would be assigned to the Specialist (as the last one to handle the interaction). By
reviewing the comment and the survey scores in the survey calibration process, it is
apparent that the negative scores were actually meant as an evaluation of the generalist,
Bonnie Harris. Based on the customer's explanation, this survey and score must be
removed from the Specialist and attached to the rightful owner - Bonnie Harris.
Anything less than this type of "is it fair" test creates "noise" and hence liability,
associated with the program and its results.

Terminating an employee based on performance, providing or withholding incentive pay,
or giving a raise or promotion from unclean (non-calibrated) data is a problem waiting to
Copyright © 2007 Customer Relationship Metrics
7happen. Team members need to be focused on the service ratings of THEIR customers
and not presented with an opening to spend time discounting the survey results or
building a case that the measurement program is not fair.


Another example:
"The rep who assisted me was not very helpful. She had a very bad
attitude and she disconnected me, which meant that I had to call back and
have someone to connect me to this survey line. Someone needs to correct
her on her bad attitude."

This survey would be assigned incorrectly to the representative who followed the
procedure to connect the customer to the survey. Without the survey calibration process,
the wrong employee would be held responsible for the scores. Survey calibration is
paramount to the believability of the results and to providing sound information to the
management team.

Another example:
"I don't know why you are asking me to make a suggestion for the rep.
She was wonderful. I pressed ONE to be the best."

Despite very clear survey instructions, this customer did not realize that ONE was the
lowest score and would certainly be confused when the survey asked them to explain how
the representative could improve. A clear explanation of what the customer intended to
rate allows the data to be corrected.

One final example:
"As far as I'm concerned, y'all handled my problem by getting XYZ
company on the phone with us. Lets hope they take care of it like they said
they would. It wasn't your fault and you helped me. Thanks so much."

The caller responded that the problem was not resolved on the CAT survey and
technically that is true. However, the center assisted the customer with an issue that was
beyond the company's control. The gray area of this situation should not affect the
resolution classification of this call. The customer's survey comment, when asked to
describe the unresolved problem, indicates that the score should be changed for the center
from unresolved to resolved. If the customer finds that the problem was not corrected as
promised by the other company, she will contact that company.

How often does Metrics see (and correct) such errors? Less than 5% of the time sounds
low, doesn't it? The average contact center collects 600 surveys per month so this error
of 5% affects the payout or performance review for 30 agents every month. Think about
how many times something has to happen in your center that creates a problem for the
management team. How long would it take you to fix that many problems? How many
of your agents would take advantage of this liability issue and lead to more questions of
your management techniques and performance metrics?
Copyright © 2007 Customer Relationship Metrics
8The back-end survey calibration process for your agent-level feedback program will
provide increased customer and employee satisfaction. In any case, surveys that do not
pass the "is it fair" test affect every employee in your company - and rightfully so.
Success or failure of your agent-level Voice of the Customer program is contingent on
quality and should never create dissatisfaction for customers or employees.

So when selecting a Voice of the Customer solution, be aware the vast majority of
options do not have the survey calibration process available. So as you can see, this must
be added to the solution and the investment.

Evaluating quality is not as simple as one, two, three. It is a thought provoking and
passionate conversation for any contact center professional. In order to ensure you
acquire a competitive advantage, a Balanced Performance Scorecard, and have effective
input values for ROI models, the key is to be consistent and properly analyze the
feedback, turning it into actionable results in a continual improvement process.

Overview of EQM Relative to This Research

The ideal situation for a contact center manager is to have the customers' perception of
service quantitatively linked to the internal metrics currently used to manage the contact
center. By having all of this data in one place, the manager is able to make better
decisions based on both the Voice of the Customer and internal processes. The EQM
program data can be linked to specific internal metrics, enabling a manager to understand
how a change in one of the metrics will ultimately affect First Contact Resolution and
customer satisfaction with the contact.

An EQM program works by greeting callers at the beginning of the call with a request to
provide feedback at the end of the call to evaluate the interaction. This can be done
without the agent knowing of the impending evaluation by the caller. When they are
done speaking with the agent, they are connected to a CAT survey. Because the request
for feedback is immediate and non-intrusive, response rates are very high and confidence
levels of 95 percent and higher are easily achievable.

The CATs® system allows you to collect both quantitative and qualitative data in the
customers' own words, allows for branching of questions, alerts for less-than-acceptable
service, and connects the results to a specific agent. By implementing such a system, the
true voice of the customer can be captured. The flexibility of the ongoing measurement
approach provides the platform to gather any additional customer intelligence. The
contact center is leveraged to the entire organization by implementing a real-time survey
program that can be fully-hosted, requiring no hardware or software.

A strong emphasis can be placed on the Voice of the Customer program because EQM
delivers a valid measure of the customer experience. CATs focuses on the real-time
capture of caller perceptions on the level of service they received from the contact center.
With a stringent survey calibration process in place, EQM can assure agent-level results
Copyright © 2007 Customer Relationship Metrics
9are reliable and valid. For this paper, we focused on the results of caller satisfaction from
an EQM program and a survey program using an IVR to identify the impact of agent-
level feedback (or lack of) on First Contact Resolution and the ROI of both programs.


Introduction to the Research Project

For both contact centers, Metrics performed a thorough and comprehensive study to
design the survey scripts to effectively quantify callers' perception of the service. While
the two centers had different methods to capture the feedback, there were several
common questions for comparative analysis purposes.

The two centers were selected because they were easily comparable to one another. Each
center averaged about 30,000 calls per month. Each center had roughly the same amount
of agents answering calls. Since "Call Center B" chose to implement the survey via an
IVR system and "Call Center A" implemented CATs®, "Call Center B" could not (and
did not want to) drill down to the agent level with the results. In short, this situation
created an excellent opportunity to conduct a scientifically sound research project.


Research Methodology

The survey instrument was approved by the users of the information in each center
consisting of representatives from the monitoring team and contact center supervisors.
The survey was not changed at any point during the research process in order to provide
consistent and valid data throughout the study.

Following the first measurement period, each center outlined the changes in the work
process of the agents before and after implementing the customer feedback programs.
Metrics then reviewed and revised the data elements required to quantify the performance
and financial impact that the centers realized. Our primary concern was to be certain that
we understood the process that was in place and that we were accurately portraying the
contact center operation before and after implementation of the customer feedback
program.

While Metrics clearly expected to find positive performance improvement, there were no
guarantees. Whatever conclusions were made would be driven and supported by the
customer evaluations gathered from the centers during the study. At a high level for
"Call Center B", their caller satisfaction reports from the IVR survey allowed center
managers to see the impact of collecting real-time customer feedback for the center as a
whole. But for "Call Center A", the availability of CATs® reports has focused the
attention of every agent on the importance of each call. Any call may have been selected
for a CATs® evaluation. The culture has now absorbed the fact that each contact is a
customer relationship that needs to be managed effectively. The introduction of EQM, if
nothing else, has focused the agents on the need for call quality on each and every call.
Since "Call Center B" did not collect agent-level data, it is not known if the results would
Copyright © 2007 Customer Relationship Metrics
10have been as striking. The anonymity of the agents in "Call Center B" creates a "not my
problem, it was only a few calls today that I didn't handle well" attitude with respect to
overall center performance and caller satisfaction.


Research Results

We examined the caller evaluations and measured First Contact Resolution rates over a
continuous six-month period. "Call Center A" began the study with a First Contact
Resolution rate of 36.4%. "Call Center B" began with a First Contact Resolution rate of
49.3%. This baseline of performance was established as part of the reporting process
after the first month's data. As the study progressed and agent-level feedback was
collected by "Call Center A", the results for this metric were dramatic.

"Call Center A" increased its First Contact Resolution rate by 10.4% while "Call Center
B" actually experienced a decline in its First Contact Resolution rate of 2.9%. Further
analysis by Metrics highlighted for each center the financial impact of the numbers and
quantified the subsequent affect on caller satisfaction and customer loyalty.

Quantification of what these increases and declines in First Contact Resolution rates
mean in terms of dollars can help contact center managers better justify the ROI
encountered by implementing an agent-level Voice of the Customer program. Based on
the 30,000 calls per month average, and a conservative $5.00 cost per call, if "Call Center
A" continues to maintain this improvement they will have to take 3,120 less repeat calls
per month at an annual savings of $187,200. On the other hand, "Call Center B" will
have to handle an additional 870 calls per month for an additional expense of $52,200 per
year.


Copyright © 2007 Customer Relationship Metrics
11As presented in the graph above, you will see there was a substantial net improvement in
First Contact Resolution rates for "Call Center A", while "Call Center B" showed a net
decline. The main factor was because "Call Center A" was able to identify the key
drivers of customer satisfaction for the CSRs that comprised a team from the real-time
agent-level customer feedback that it received through CATs. With the key driver
analysis, they were provided actionable results to the agent level that was utilized in
implementing targeted training and coaching to the individuals that needed it most, when
they needed it most. Additionally, "Call Center A" was able to make changes in their call
routing that resulted in callers being handled by the most suited agent. Without the
agent-level feedback, "Call Center B" was not able to provide focused training and
coaching and therefore did not receive the benefits experienced by "Call Center A".

So, as you can see, "Call Center A" not only experienced reduced operating expenses
from the decline in repeat calls but they also proved a higher ROI for training and
coaching. "Call Center B" is unable to realize the type of return on training as "Call
Center A". "Call Center B" also struggled with extracting the data and delivering it to
Metrics to enable timely processing of their customer feedback. Thus, by connecting
real-time caller feedback directly to the agent providing the service has far reaching
benefits. Here we focused only on direct costs…the impact on loyalty and increased
revenues are significantly higher. It is all about having the right information at the right
time and knowing the right thing to do with it.




Copyright © 2007 Customer Relationship Metrics
12Conclusion

From our research into the use of EQM, the agent-level customer feedback was able to:
" increase First Contact Resolution
" reduce operating expenses
" reduce headcount
" increase productivity
" increase caller satisfaction
" lower cost per call
" increase the ROI on training and coaching efforts
" generate a high program ROI, realizing a 1-month payback.
Copyright © 2007 Customer Relationship Metrics
13Biographies

Dr. Jodie Monger is the President of Customer Relationship
Metrics and a pioneer in customer experience measurement.
Prior to creating Metrics, Dr. Jodie was the founding Associate
Director of Purdue University's Center for Customer-Driven
Quality.
Since 1993, Dr. Jodie has worked with numerous organizations,
using her expertise to help them quantify the Voice of their
Customer. These companies in turn utilize her research and
knowledge to enhance customer satisfaction and relationship
management. She allows them to turn data into effective
information. She has worked with clients in numerous industry sectors with their
Business-to-Business and Business-to-Consumer business units.
Dr. Jodie and her team at Metrics provide the critical tools necessary to measure and
manage your most important corporate asset - your customers. Since 1993, Metrics has
been providing mission-critical expertise in all parts of the development, implementation
and reporting of customer feedback solutions. Metrics has industry-leading expertise and
solutions, which enable companies to quantify and thereby improve their customer
relationships. For over 20 years she has been involved with numerous contact center
improvement and measurement projects.
In addition to design and implementation of Customer Relationship Management, Dr.
Jodie has published several books and numerous articles relating to customer service
excellence. Of note are two books co-authored by her and other industry experts:
Customer Relationship Management published by Prentice Hall and Call Center
Management by the Numbers published by the Purdue University Press.

For several years Dr. Jodie has been a respected and requested faculty member at IBM's
Advanced Business Institute and at AT&T's College of Call Center Excellence,
Advanstar Events, CMP Media Events, ICMI Knowledge Exchanges, and more. Her
formal education is in the disciplines of Consumer Behavior, Statistics and Research
Methodologies. She earned her PhD and MS from Purdue University and a BS from
Juniata College.









Copyright © 2007 Customer Relationship Metrics
14Customer Relationship Metrics, L.C.

Metrics was created in 1993 by Dr. Jodie Monger to help organizations capture and
quantify the Voice of their Customer and is a certified woman-owned business. Metrics
combines the world of academe with the business world to produce revolutionary
customer relationship management research.

Our extensive data gathering processes provide critical customized information about
businesses, allowing us to assess needs and take businesses to the next service delivery
level. Distilling complex data to provide practical, cost-effective solutions that increase a
company's bottom line.

Customer Relationship Metrics delivers beyond the contractual scope of assignments
through its diverse experience in customer relationship management. Our extensive
research skills, knowledge of customer satisfaction drivers and reliability to deliver, is
why clients choose Metrics. More information can be found on our website
www.metrics.net or call 1-877-550-0223.

Copyright © 2007 Customer Relationship Metrics
15