Call Center Math

It's so easy to track success at a customer service call center. All you have to measure are the number of calls, how quickly they're handled, and whether queries are resolved without input from a manager, right?

Wrong. Metrics like average handle time are not the most important ones, and they might even result in callers receiving shoddy service, said Jodie Monger, president of Customer Relationship Metrics, a research consultancy in Sterling, VA.

So just how do you measure call center ROI?

Monger offered the following equation.

This formula is based on the assumption that call centers survey customers about their satisfaction with telemarketing calls. On a 10-point scale, callers who rate their experiences with a 9 or 10 are categorized as “delighted.” Anyone who gives a rating of 3 or below is considered “dissatisfied.”

In a hypothetical case, a company polled 100,000 callers and discovered that 60% were “delighted” and about 5% were “dissatisfied.”

What did Monger do next? To follow her, take out your pocket calculator.

First, she used transactional data to determine the average value of all customers. She found it was $50. She then multiplied the total number of customers surveyed (100,000) by the percentage of satisfied customers (60%, or .6) and multiplied that by the average value of each customer.

Next she multiplied the number of dissatisfied customers (5%, or .05) by the number of customers surveyed, which also had been multiplied by each customer's average value.

To wrap it up, Monger subtracted the revenue generated by dissatisfied customers from that of satisfied customers (in this case, $3 million minus $250,000). She then divided the result ($2.75 million) by the amount of dollars it cost to operate the call center for the period in question — however long it took to service 100,000 customers.

In this example, Monger assumed a call center's total costs were $2,083,333. When $2.75 million was divided by $2,083,333, the result was 1.32. When that figure was multiplied by 100, it resulted in a contact center ROI of 132%.

The beauty of this is that a spike in dissatisfied customers will have a clear, and rather drastic, impact on the metric. (Call center managers whose ROI is below 100% should probably either retrain current employees or recruit new staff, or update their own resumes.)

Meanwhile, that ROI figure provides DMers with a number of insights. First, it gives a clear sense of the call center's value, which can in turn be used to justify additional investment, or (in tight times) maintenance. Furthermore, it establishes a dollars-and-cents performance metric vs. one based on the more arbitrary performance metrics assigned to each seat in a center.

Finally, it gives call center reps justification for treating customers like customers. And that will result in both measurable and immeasurable benefits to any organization.