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Amae Software


The Amae CI Suite™: Quantifying Benefits and Business Modeling Using The Primary Matters Guide® Business Impact Analysis Tool


March 2005

Executive Summary

Customer Experience Management (CEM) is the process of intelligently collecting, reporting, and incorporating customer experiences (perspectives, interaction feedback, and opinions) across an organization in a manner that specifies actions necessary to influence customer behavior and drive profitability.

This case study quantifies three primary operational benefits of the Amae CI Suite,the most advanced CEM Technology available. The information presented in this paper is derived from four separate organizations and their experience using the Amae CI Suite.   These organizations include a large credit card operation, a ticket reseller, a large utility company, and a company that sells consumer electronic devices. To quantify business impact and returns, ThePrimary Matters Guide (The Guide™), a powerful activity based and comprehensive analysis tool, was used.

To illustrate the impact of the Amae CI Suite, operational benefits at four different sites over a six month period were averaged and applied to a single theoretical and typical contact center.   Modeling an average contact center, this study reflects national averages and consists of 170 agents with a $12 Million operating budget and an annual growth rate of 15%.   All results and ROI calculations include Amae CI Suite licensing and support costs.

Benefits realized in Sales, Marketing and the positive impact on customers that the Amae CI Suite generates are not detailed in this paper.1

This document has two primary purposes. The first is to calculate and share the Amae CI Suite ROI derived from the operational benefits realized in four separate organizations. The second is to demonstrate the power of The Guide with a defined system to include customer experience implications.   The Guide comprehensively models the financial impact of the Amae CI Suite, covering all related resource implications including staffing levels, telecoms costs, total cost of ownership, etc. all derived from simple operational metrics.


Operational Benefits Studied

In the four sites studied, the Amae CI Suite had a direct impact on three primary and distinct operational areas:

  1. Contact Center Productivity – direct impact on first call resolution rates, call volumes
  2. Employee Satisfaction – increases in agent tenure
  3. Quality Monitoring – 80 times greater coverage with more accuracy for less money2

CEM Technology gives customers the ability to provide feedback on their specific interactions with the company immediately following, and in the context of, the interaction. The process is engaging and customers are positively affected by the experience. In fact, the process of giving feedback itself improves the relationship with customers and positively affects customer satisfaction. Companies in this studyare transferring 70% of their calls to the Amae CI Suite and realizing customer response rates in excess of 85%! — a strong testament to the positive impact on customers.

The information collected is incredibly powerful. Transcending traditional “survey processes”, CEM Technology introduces transactional information which can be used to manage individual service agents, specific organizational processes and particular products/services.

Methodology

The first step in determining the ROI associated with the Amae CI Suite was to use The Guide to build a baseline of a typical contact center. The activity based nature of The Guide enables the creation and projection of personnel requirements, system costs, and operating budget based on the number of calls and the handle times over a three year planning horizon.

The Baseline assumptions for the contact center example uses in this study are as follows:

Metric

Baseline

Calls handled per month

200,000

Annual growth in call volume

15%

Average Handle Time

360 seconds

Escalated Call Handle Time

240 Seconds

% of calls escalated

5%

First Tier Agent Salaries

$15.00 per hour

Second Tier Agent Salaries

$17.00 per hour

Benefits

30% of salary

Supervisor Span of Control

15 Agents

Management Headcount

8 Management

Operational costs for office infrastructure, telecommunications and typical contact center systems such as an ACD and CRM system are included by simply ‘turning on’ the appropriate System Template in The Guide. These templates are populated with industry standard cost and benefit information. The demand for each System is driven by the activity volume and the number of agents required.

The result is a call center budget with the following top level metrics:

($‘000s)

Year 1

Year 2

Year 3

Annual Budget

$12,459

$14,266

$16,208

Variable Employees (year end)

191

222

258

Fixed Employees

8

8

8

To determine the ROI from using the Amae CI Suite, all relevant costs were included in The Guide. Actual changes in performance variables from sites using the Amae CI Suite were entered in the “CEM Technology Scenario”.   Contrasting the baseline budget with the CEM Technology Scenario Budget,a Total Cost of Ownership for the Amae CI Suite was automatically generated.

1. Contact Center Productivity

First Call Resolution Rates plotted against Agents A direct, tangible benefit of the Amae CI Suite is the ability to understand how well each individual agent is serving customers. This is brought to light in the following example:

Many installations of the Amae CI Suite ask customers whether the agent resolved their issue on the first call. The Amae CI Suite processes these responses in real-time and automatically identifies agents who are not effectively addressing customer issues. Figure 1 shows a typical distribution of agents and their “First Call Resolution Rates.”

The power of CEM Technology is demonstrated by the ability to identify why certain agents are failing to resolve customer issues – allowing supervisors to focus their training efforts on improving the performance of the weakest agents, and in extreme cases, to make personnel-related decisions. Implementing the Amae CI Suite empowers agents and supervisors to understand opportunities for training and development based on feedback received directly from their customers.

In the studies conducted at four Amae CI Suite installations noted in this paper, First Call Resolution Rates improved by 5% and call escalations decreased by 50%.   The result was a 7% decrease in call volume.3   The Guide leverages this information and automatically calculates the impact on headcount, system costs and overall budget.


2. Employee Satisfaction

The culture in the contact center is dictated by the way management deals with agents (and vice versa). In many situations agent and management objectives are not aligned. Management is constantly striving to reduce operating costs, and hence have agents handle more calls in less time. Agents, on the other hand, are serving customers while being pressured to handle more calls in less time. Striking the right balance between cost and customer service becomes difficult without a way to consistently measure the most important perspective – the customer’s. The natural result is an “adversarial” relationship (whether explicit or not) between agents and management.

One of the unique benefits of implementing the Amae CI Suite is the customer-centric culture that develops. The Amae CI Suite measures an agent’s “Customer Influence”, or the rapport that is created between the customer and the agent that served them. To do this, the system measures feedback response rate and total number of questions completed ¾ or the Customer Influence Rate. Measuring an agent’s influence on customers (relative to customer feedback) creates a customer-centric culture — where the natural emphasis is on serving the customer in a manner that creates positive rapport and positive customer feedback. It is a win-win cycle that reinforces itself.

The Amae CI Suite automatically reports detailed and aggregate customer perspectives to agents and management. The quantitative focus on customer perceptions aligns management and agent incentives, changing the culture within the contact center dramatically (and rapidly). Overall agent productivity and job satisfaction dramatically improves. This leads to improved agent morale and reduced agent turnover. Agent turnover (and associated recruiting and initial training) and lost productivity are two of the primary cost drivers in contact centers today.

The four sites in this study have realized agent tenure improvement of more than 75% following Amae CI Suite deployment. Understanding the economic impact of this change in operating environment is easily quantified using The Guide. Changing the average agent tenure driver automatically affects the training budget, recruiting budget, agent availability and required staffing levels.


3. Quality Monitoring

The traditional objective of quality monitoring is two fold:

  1. to ensure that agents are adhering to policies set for the contact center.
  2. to identify which agents are doing a good job at providing service.

The quality monitoring function is performed by dedicated quality monitoring resources (equipment and staff), and by supervisors who listen to agent calls in order to understand agent skills and training requirements. Both approaches are time consuming and expensive. In a significant majority of call centers worldwide, the number of calls monitored and reviewed is significantly less than one percent (1%!) of total calls.

The Amae CI Suite overwhelmingly improves the quality of monitoring and reduces time spent and associated costs dramatically. Customers will gladly provide objective feedback (over 85% of the time) when asked. A monitored call can be selected, instantaneously, based on actual customer feedback, providing a pro-active process to focus monitoring resources on any selected objective. Time and money spent listening to inconsequential calls is eliminated, saving both quality monitoring resources and supervisor time.

At the four sites studied, the amount of time supervisors spent observing agent calls was reduced from 25% of their time to less than 7%. The resulting savings were immediately realized and supervisor time was freed for other critical activities like agent training.  

Furthermore, within a 6 month timeframe, all four sites studied reduced their QM staff to focus on only adherence aspects. Judgment of the quality of service provided was universally provided by customers.

Quantifying these benefits was achieved by increasing the span of control for supervisors (from 15 to 17) and reducing the quality monitoring staff in The Guide.

Operational Impact Summary: ROI and Payback Analysis

The benefits of the Amae CI Suite are quantified in The Guide by measuring the operational impact of:

  1. Contact Center Productivity – a 50% reduction in escalations (from 5% to 2.5%), a 7% decrease in call volume and a 3.5% increase in Agent efficiency.
  2. Employee Satisfaction – agent job tenure increase of 75%.
  3. Quality Monitoring – a reduction of 2 QA personnel, an increase in Agent/Supervisor ratio from 15 to 17 and a 50% reduction in on-going training days (from 5 to 2.5 days).

In addition to the software costs associated with implementing the Amae CI Suite, the following cost components were entered into The Guide to reflect thorough impact:

  1. Customer and Agent Interaction – 5 seconds were added to each call starting at the time of the Amae CI Suite implementation to reflect the invitation to be surveyed and transferred.
  2. Survey Time - Telecommunication costs associated with a 75 second survey on 70% of the calls were added.

The result is the “Amae CI Suite Scenario”, which is compared with the baseline scenario in the tables below:

Baseline Scenario

($‘000s)

Year 1

Year 2

Year 3

Annual Budget

$12,439

$14,168

$16,244

Variable Employees (year end)

191

222

258

Fixed Employees

8

8

8

Amae CI Suite Scenario

($‘000s)

Year 1

Year 2

Year 3

Annual Budget

$11,798

$12,296

$14,179

Variable Employees (year end)

165

191

221

Fixed Employees

7

6

6

It is clear from comparing these scenarios that the Amae CI Suite dramatically impacts the operations in the contact center.

Amae CI Suite Return on Investment

($‘000s)

Year 1

Year 2

Year 3

Cash flow Savings

$641

$1,872

$2,065

Cumulative ROI

385%

1,204%

1,705%

Over the three year period, using a weighted average cost of capital of 15%, the resulting ROI of the Amae CI Suite is automatically calculated by The Guide as 1,517%.


Understanding this ROI calculation is made simple using the analytical powers of The Guide. The Guide analyzes different scenarios simply by changing individual operational metrics. Using this approach, the quantitative benefits of Contact Center Productivity, Employee Satisfaction and Quality Monitoring are easily isolated and are summarized in the pie chart below.

Amae CI Suite ROI

It should be noted that analysis of specific benefits is theoretical – in practice the three areas of operational benefit in this study are all interrelated.   Even so, it is interesting to note that the return from quality monitoring alone justifies the investment in the Amae CI Suite. This is especially poignant considering that over 80x as many calls are monitored using the Amae CI Suite when compared with traditional quality monitoring processes.

The areas studied in this ROI, calculated using The Guidedonot include other benefits realized by the four sites studied, for example, the ability to conduct “real-time” customer research; lead and revenue generation; and improved Customer Satisfaction and Loyalty.   These benefits are described in separate studies.4


Summary

Implementing the Amae CI Suite has enterprise-wide implications with a powerful and measurable ROI.   It will increase company profits and help create a customer-centric culture that encourages customer and employee satisfaction and loyalty.

The Guide gives management a comprehensive activity based tool that enables thorough analysis, business planning, and forecasting.

Using actual results from four implementations and applying them to the contact center model used in this study, the Amae CI Suite return is significant. The Guide notes operational benefits in the three areas studied delivering an ROI of 1,517%.

Amae Software has captured all the benefits of CEM Technology and processes within the Amae CI Suite. Data throughout this article is supported from actual implementations and experience with the Amae CI Suite. For further information or a demonstration of the Amae CI Suite please contact Amae Software at www.AmaeSoftware.com or telephone (650) 965-0820

Primary Matters, Inc., using the capabilities of The Primary Matters Guide®, analyzed the business impact of CEM Technology as presented by Amae Software. While this impact was measured against a 'typical' contact center, the methodology is easily and quickly applied to actual operations. Users of The Guide™ benefit from understanding their cost drivers, targeting cost reductions, and making informed decisions. For further information or a demonstration of The Primary Matters Guide®, please contact Primary Matters at www.primarymatters.com or telephone (902) 794-7095

 


 

1. Amae Software White Paper: Power of the Amae CI Suite

2. Amae Software White Paper: Improve QM by more than 80x

3. Amae Software White Paper: The Power of the Amae CI Suite

4. Amae Software White Paper: The Power of the Amae CI Suite




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Last modified: May 31, 2006 .