Optimizing Customer Service Channels Using a 2x2 Quadrant Approach
If I had to construct a new routing protocol for a customer service department, I wouldn't follow the traditional path of offering the same communication channel to all clients. This approach is common in legacy businesses like banking and insurance, where they established phone channels decades ago, and their clients are accustomed to calling the contact center to speak to a representative. However, we all know that synchronous channels like phone calls have some of the highest labor costs per transaction due to clients' expectations of low wait times. Additionally, in this day and age, I would argue that it is one of the worst customer experience channels because clients have to navigate outdated IVRs or use speech recognition systems that are hit or miss in terms of routing them to the correct representative. Not mincing any words, it's a colossal waste of time for the client.
So, if I had to establish another channel without knowing the customer base's communication preferences, I would use a 2x2 quadrant approach to determine how to segment service based on the client's Lifetime Value (LTV) and the importance of the transaction.
Here are some principal guidelines I would use:
- High LTV, High Importance:
This quadrant is reserved for transactions that impact business results. At the same time, it is the most expensive channel to staff. Therefore, transactions considered in this corner should be examined thoroughly before placing them here. In addition, there should be zero friction for the client to reach this channel; they shouldn't have to navigate through any routing systems and should have straight access to an experienced, top-tier associate who can resolve their issue without bouncing them to another department.
- Low LTV, Low Importance:
This quadrant will inevitably be the area with the largest percentage of transactions. Initially, it's acceptable to staff this with associates to handle these transactions, and it would be advisable to staff the channel at the threshold of acceptable turnaround time. My take on minimally staffing this channel includes:
A) These transactions do not drive business results.
B) Naturally, the business will continually automate procedures in this quadrant, so the demand for labor hours will reduce over time. Having a surplus of associates here will lead to a higher labor expense ratio.
High LTV, Low Importance
The main philosophy for the bottom right quadrant should be to build out self-service options for these high LTV clients. I personally believe these clients value their time and want a channel that resolves their inquiries the quickest, rather than having to speak to someone, which takes longer, or having to re-explain their issue. At the start, though, I would take the opposite approach to staffing this channel compared to the Low LTV, Low Importance quadrant because the clients are high LTV. Also, if most of the transactions are automated away, you can always move these higher-skilled associates to High LTV, High Importance quadrant.
Low LTV, High Importance:
Finally, this quadrant will require the art of workforce planning. It's difficult at the beginning to set the threshold because if you set it too low, it will lead to higher staffing requirements since the turnaround time can't be as high due to the importance of these transactions. Set the threshold too high, and you risk missing important transactions for a large number of clients, which could lead to lower customer satisfaction. If I can afford it, I would staff slightly on the side of overstaffing and gradually reduce staff as the correct thresholds are determined.
Rethinking the traditional one-size-fits-all approach to customer service can lead to more efficient operations and better client experiences. By segmenting clients and transactions using a 2x2 quadrant based on Lifetime Value and transaction importance, businesses can allocate resources more effectively, reduce costs, and improve customer satisfaction. Implementing this strategy requires careful planning, robust data analysis, and a willingness to adapt, but the benefits to both the company and its clients can be substantial.