Challenging Demand in the Contact Centre:
The Good, the Bad and the Unnecessary
Sponsored by Sabio
February 2012
Contents
Executive Summary
2
Foreword from Sabio
4
Introduction
6
Part 1: Waste in the Contact Centre: What Does it Cost?
7
What causes unnecessary, avoidable or wasted contacts?
7
Part 2: Challenging Demand: First Steps
9
Why challenge demand?
10
Getting started – what are organisations doing?
11
What does the contact analysis show us?
11
Budgeting for challenging demand
13
The benefits so far
14
Part 3: Barriers to Future Success
15
Challenges for demand management
15
Part 4: HMRC Case Study, August 2011
19
1
Executive Summary
Demand management strategies have been implemented widely across the UK customer contact industry over
the past three years. In our survey of CCA members, 68% said they have a demand management strategy in place,
and a further 18% will implement one in the coming year.
The need for these strategies is clear: on average, CCA members say that 27% of inbound contacts are
unnecessary, avoidable or wastage. The main categories of waste are:

chasing calls from customers (eg ‘have you got the application’)

poor outbound communication from organisations which generates inbound contact (eg confusing pricing)

failure in the call centre (eg name and address not updated on the database despite customer notification)

information available online (so the customer did not have to call).
CCA members have made great strides in reducing demand. Much has been achieved through better online
service, improved IVR and customer education. Nearly half (48%) of organisations with a demand management
strategy say they have saved between 5% and 10% of their total operating costs. In the future, these
organisations expect to save a further 14%, with some anticipating more than 30% cost reduction. Encouragingly,
only 3% of CCA members say demand management service strategies will end up damaging customer service or
effort.
What are the barriers to implementing demand management strategies across an organisation? Experience
shows that there are a number of difficulties that must be overcome if demand management is to go from
strength to strength in the future.

Co-operation needs to be improved with other areas of the organisation to eke out the remainder of
potential savings.

IT legacy systems need to be replaced to reduce process complexity and transparency.

Change management needs to be ongoing to involve people and continually improve operations.

Better MI data is required so that organisations are clearer about the reasons for failure and process
shortcomings.
2
So, demand management has made great progress, but there is more to do. And doing it will be difficult, as one
executive said:
“*The+ scope of the work. *The+ majority of solutions deliver relatively small benefits, so to achieve significant
success; [you] have to generate numerous projects, working across the whole business.”
One organisation which is successfully overcoming these challenges is HM Revenue & Customs – one of the
largest contact centre operations in the UK. Reducing call volumes by 400,000 plus in one case, it is the subject of
a case study in Part 4 of the paper.
3
Foreword from Sabio
This study shows CCA members are making important strides towards addressing their challenging demand goals.
It focuses attention on the key challenge of delivering a quality service, while still identifying and securing process
and cost improvements.
CCA members are clearly on the right track, and it was impressive that the lead driver cited in the research for
embarking on challenging demand programmes was the desire to improve customer service, and also not
surprising that cutting costs followed closely behind. The research also shows the importance of maintaining a
rigorous focus on identifying and challenging demand – rather than blindly pursuing contact avoidance – a tactic
that rarely returns the benefits that organisations are looking for.
Instead the focus needs to be on categorising contacts in the first place. At Sabio we see challenging demand as
part of an ongoing, integrated series of processes that organisations need to apply to pro-actively manage their
contact volumes. These actions need to centre on actively identifying and encouraging the right kind of
interactions, while executing strategies to remove the need for other interaction types.
First it’s important to assess your existing flow of interactions and divide them based upon their value to the
caller, and their value to the servicing organisation. Programmes can then be identified to help eliminate the need
for those low value contacts and to support automation where the caller appreciates the value of the service.
This process results in lower contact volumes, leaving agents with more time to spend on addressing the needs of
higher value contacts. Core to the success of this approach, however, is making sure that you don’t just remove
live service from lower value contacts, but instead systematically address the root causes and processes that
create those contacts in the first place.
You can’t really undertake this analysis without first measuring just why people are contacting your organisation.
For this you need precise contact codes – maybe around 20-30 – and true departmental ownership. If a customer
is calling about a failed payment, then it’s really up to your accounts department to fix. As the HMRC case study
later on in this research paper shows, if you fix the process then the lower value interactions tend to get fixed as
well.
Once you’ve identified your types of contact, the focus needs to be on managing and fixing them. Ownership is
key: if you start cross-charging departments for the unnecessary interactions their broken processes are causing,
4
then you can quickly make progress. Setting up a hitlist of contact codes to address, work through them, add in
the next five and keep on going.
Identifying processes for web, text, IVR support or proactive outreach is a smart move. Perhaps more important,
however, is freeing up agent resources so they can really focus on the higher value interactions that deliver a
positive return for your business.
The research shows that almost half of CCA Members surveyed have seen savings of between 5 and 10 percent
from their initial programmes. At Sabio we think the real returns will come as these activities become embedded
in an organisation’s day-to-day processes and becomes an ongoing activity.
Peter Galloway, Head, Voice Self-Service Practice, Sabio
Sabio is a specialist contact centre and unified communications systems integrator focused on delivering
exceptional customer contact strategies and solutions based on best-of-breed technologies from leading
organisations such as Avaya, Nuance and Verint. With operations in the UK, Singapore and Germany, Sabio offers
business consulting, systems integration and managed services and has worked with many major organisations
including Brewin Dolphin, BT Business, DAS, Eurostar, HomeServe, Leeds City Council, Office Depot, Pitney Bowes,
Scottish Widows and Thames Water. For more information, visit www.sabio.co.uk or follow us on Twitter at
Sabiosense.
5
Introduction
It is two years since CCA Industry Council focused attention on demand management, asking “Is it good for the
customer and good for the organisation?” Some took the view that demand management and lean service were a
return to the ‘factory’ and cost-cutting mentality of call centre leadership. Others said it presented great
opportunities to reduce unwanted contacts and deliver ‘the best service is no service’ customer experiences
which are when there is no need for the customer to interact with the organisation.
Demand management strategies have been widely implemented across UK contact centres. CCA, with the
support of Sabio, has decided to carry out an assessment of these new strategies to find out what is working and
what is not. There were three stages of insight generation:

A case study from HMRC, one of the largest contact centre operators in the UK, which has had a demand
management strategy in place for three years.

A working meeting to discuss demand management with: Joe Anderson, Hitachi Capital; Spencer Brooks,
Ventura; Bernie Burrow, Sony; Pauline Cochrane, CCA; Anne Marie Forsyth, CCA; Peter Galloway, Sabio;
Sam Halford, Equiniti; Mark Haynes, Lincolnshire County Council; Kenneth Hitchen, Sabio; Louise Lee,
Converso Contact Centres Ltd; Mark Osman, Arvato Loyalty Services Ltd; Bernard Quinn, The Cabinet
Office; Carol Roberts, ING Direct; Martin Sellar, HMRC; Stuart Walland, Converso Contact Centres Ltd.

A survey of 86 organisations who are members of CCA.
6
Part 1 – Waste in the Contact Centre: What Does it Cost?
The scale of contact handling by CCA’s 800 members cannot be underestimated. Some organisations take up to
70 million calls a year with workforces of close to 10,000, while few handle less than 1 million a year. As webchat
and email contact rises, so too do costs.
So the finding from our survey of CCA members that, on average, 27% of contacts received are unnecessary,
avoidable or wastage, is startling. For a modest contact centre, handling 5 million calls a year, this represents
unnecessary expenditure of around £6.75m (using an average call cost of £5).
For some organisations, the situation is much worse, with as many as 40% of contacts being unnecessary.
What causes unnecessary, avoidable or wasted contacts?
Each contact centre has its own demand profile, and this uniqueness means that the causes of avoidable contacts
are varied. Some will be more hampered by complex products that create repeated questions, while others will
have weaker online self-service, which drives simple transactions to the call centre.
Across all the organisations we surveyed, the most common categories of unnecessary or wasted contacts are:
1.
Chasing calls from customers
Many of these are from customers who are unsure of deliveries, application processes or actions from
organisations. The reassurance or sequence of events has not been communicated adequately to customers.
Generally, the business process has not failed.
2.
Poor outbound communication from organisations
Closely related to the above, unclear communication and marketing from organisations generates inbound
calls from customers looking for clarification. This might include complicated pricing, complex legislative
information or overly detailed forms.
3.
Call centre failure
These problems tend to be where the agent has neglected to take an action, not followed up or incorrectly
undertaken a task. These failures cause customers to repeat their original contact.
7
4.
Information available online
Some will view this category as relating to customer education: encouraging people to use online self-service
to get information or even resolve problems. Others will see this not as failure, but rather, customers taking
action and making their own channel choice.
5.
Wider organisational failure
This category of contact relates to broken processes, products or delivery promises made by other
departments. It includes a product design weakness, a late parcel drop-off, or action by an employee outside
the call centre which causes inbound contact.
6.
Billing queries
Poor or unclear billing creates ‘pinch points’ for customers and generates calls to resolve or clarify charges.
7.
Log-in problems
Many customers experience problems trying to log in to online and phone self-service and call to get help
resolving those problems.
These are averages across CCA members, but the uniqueness of each organisation’s contact profile means that for
companies, log-in problems are the top category of failure, while for others it is billing.
Demand management experts recognise that these seven categories of unnecessary calls include some overlap.
For instance, poor outbound communication may be at the root of low usage of information available online,
while chasing calls from customers may be due to a poorly designed customer experience process. Clearly,
detailed analysis of contact reasons is essential.
8
Part 2 – Challenging Demand: First Steps
Since CCA Industry Council first focused on demand management and lean service strategies in 2009, a wave of
implementation has occurred across the industry. Initially, much of the work was completed by consultants. But
now, in-house teams are continually trying to manage demand through reducing the causes of unnecessary
contact and increasing customers’ use of self-service technologies.
Of CCA members we surveyed, 68% said they had implemented a demand management strategy, with similar
propositions in the private and public sectors. Of these, 42% had been implemented within the past three years,
while 21% were in place more than three years ago. Another 16% of CCA members surveyed plan to implement a
demand management strategy in the near future, revealing the ongoing interest in this area.
How long ago was demand management first
implemented?
50%
40%
30%
20%
10%
0%
0 to 6 months
6 months to a
year
1 to 3 years
3 to 5 years
More than 5
years
For some organisations, demand management is an extension of an existing first contact resolution (FCR)
strategy. However, CCA members see important differences between these two approaches, particularly in terms
of reducing calls rather than just resolving existing contact levels better.
9
How is a challenging demand strategy different from a 'first contact resolution' initiative that your organisation
has implemented?
One executive commented:
“*First contact resolution+ was mostly ‘low hanging fruit’ and simpler processes – this [demand management] is
the more complex and full end to end.”
Why challenge demand?
The cost benefits are uppermost in the minds of contact centre directors, but an equally strong motivator is the
desire to improve the customer effort scores and experience. Wasting consumers’ time through repeat calls or
energy-sapping products and services does not drive repeat business or high levels of trust in public services.
Are these two objectives – customer satisfaction and cost reduction – mutually exclusive? Most of the
organisations we surveyed feel it is possible to achieve both at the same time. Only 3% of CCA members say
demand management service strategies will end up damaging customer service.
What is your challenging demand strategy primarily
motivated by?
Demands of CEO / Board
Response to recession
Agree slightly
Agree strongly
Government policy
Industry publicity
Staff feedback
Competitor activity
A desire to cut costs
A desire to improve customer service
0%
20%
10
40%
60%
80%
100%
Getting started – what are organisations doing?
Understanding the opportunity to challenge demand requires an almost forensic analysis of failure, once the
obvious weaknesses are identified. Most organisations start with a new process of identifying the reasons for
calls, followed by assessing customer feedback and listening in to calls.
Which techniques have you used to implement your
Challenging Demand strategy?
Collecting new data on reasons for contacts
Listening to calls
Analysing existing data on reasons for contacts
Analysing customer feedback
Process mapping to identify failure
Building business cases which identify cost of failure
Creating new ways for agents to identify issues
Team Huddles/meetings to identify improvements
Identifying the cost of failure in other parts of the
organisation
Using consultants to help improve processes
Presenting 'bills' to other parts of the organisation for
their failure
0%
20%
40%
60%
80%
100%
What does the contact analysis show us?
The experience of CCA members in implementing demand management strategies has been positive, with many
opportunities to reduce contacts. The main route has been to reduce calls by driving contact to self-serve through
better online and IVR applications. This ties in with the need to reassure customers, and education has played a
vital role too, along with improved outbound communications. Similarly, text alerts can help customers to
understand processes more clearly. As these CCA members commented:
“… customers have the ability to complete transactions via the IVR, increasingly via web-chat and also via their
device with apps”
“Expanding web-based self-service options. Identifying resource-intensive customers to consider how best to
handle their contact.”
11
With IVR self-service, the most successful adoptions appeared to have the following criteria:
IVR Success
Importance
- Call has more value to the customer than the service
√√√
organisation
- Customer makes the call repeatedly (eg more than once a
√√√
year)
- Call can be resolved from a defined set of solutions (eg
√√√
account balance, opening times)
- Call requires a level of authentication which can be achieved
√√√
through self-service
How have you been able to reduce these unnecessary or unavoidable contacts as a result of your challenging
demand strategy?
Overall, there appear to be three broad types of contacts to organisations according to CCA members:
The Good – Contact which organisations want to receive and that add value (eg sales, customer service which
can’t be dealt with in other ways, responding to what organisations perceive to be a genuine need)
The Bad – Contacts which are the consequence of customer or organisational failure. Repeat calls to chase up a
delivery failure, a billing error or complaint about rude staff. Enquiries about unclear product specification or
pricing. Or contacts from customers who are unreasonably demanding or have already had a query answered.
The Unnecessary – Contacts from customers, which they could easily make using self-service channels given
encouragement and education (or incentives).
12
Budgeting for challenging demand
The costs of driving the challenging demand strategy through the organisation appear to have been met through
the normal budgeting process and resultant savings from driving self-service, improving processes and customer
education. These comments from CCA members characterise the policy:
“Investment costs are funded by reductions to future budgets and are rigorously applied to ensure accountability
and enforce delivery.”
Some of the savings have been re-invested for better service:
“Reduction in no value contacts are budgeted to be almost counter-balanced by new work coming to the Contact
Centre (c1% reduction in total contacts projected for 2011/12)”
“Gradual headcount reduction through natural attrition and reinvestment of resource into value-add roles, eg
dedicated department trainer, additional coaches.”
13
The benefits so far
Implementing a challenging demand strategy has created significant benefits. Nearly half (48%) of CCA members
have delivered savings of between 5% and 10% of absolute cost base – a very strong result. A further 21% of
organisations have saved between 11% and 15% and 1 in 10 have reduced their absolute cost base by between
16% and 20%.
How much have you saved as a proportion of your absolute
cost base as a result of implementing a challenging demand
strategy?
10%
21%
21%
Less than 5%
5% to 10%
11% to 15%
16% to 20%
48%
Again, there is significant variation in the performance of individual organisations and their expectations for the
future. The chart below shows that the benefits of demand management strategies are not correlated with time
invested in implementing actions. There can be ‘big wins’ in the short term as well as smaller gains, which are the
result of ‘hard graft’. Overall, however, across all CCA members completing the survey they expect to save 14% of
their annual operating costs through demand management.
14
Average savings as a result of demand management strategies
Length of time since organisation implemented a demand management strategy…
0 - 1 years
1 - years
3 years or more
Average saving already achieved as a
proportion of your absolute cost base
10.0%
8.0%
9.0%
Average expected saving in the future
15.0%
17.0%
12.5%
Part 3 – Barriers to future success
Will the high expectations of CCA members for future savings be realised? Initiatives tend to come and go in the
contact centre industry, so what will be needed to ensure that organisations achieve continued success with
demand management?
The broader task of challenging demand should not be underestimated, as this CCA member commented:
“*The+ scope of the work. *The+ majority of solutions deliver relatively small benefits, so to achieve significant
success, *you+ have to generate numerous projects, working across the whole business.”
Further, achieving success is not easy with around 35% of CCA members saying that demand management
thinking overstates the potential to reduce contacts.
Challenges for demand management
1.
Co-operation from other areas of the business
Demand management strategies need to extend beyond the call centre to influence and improve processes
and actions that are controlled by other parts of the organisation. But securing co-operation from colleagues
is the biggest barrier to progress, with 42% of CCA members saying that other departments and divisions are
unwilling to co-operate with their demand management service strategy. There are many examples of the
problem:
 “Resistance to change within certain areas of the business.”
 “Poor customer service practices elsewhere in the organisation.”
 “Engaging other parts of the business whose activities drive a lot of our non-value/failure demand calls.”
15
 “As an outsourcer, we cannot always take immediate action… as this has to go to the client.”
 “They feel it’s simply to help the contact centre! *rather than the organisation+.”
 “The scale of the operation and ensuring all stakeholders are involved.”
Some 78% of CCA members say that the contact centre has become the “eyes and ears” of the organisation.
But data from our survey show that less than 30% of demand management strategies are organisation-wide,
and that involvement by other departments is generally well below 50%.
Which departments are involved in the strategy?
100%
80%
60%
40%
20%
2.
Sa
le
s
Co
mp
la
int
Int
s
er
na
M
ar
ls
ke
er
ti n
vic
g
e
de
pa
Lo
rtm
gi
en
sti
t
cs
/d
eli
ve
rie
Cl
ai
s
ms
/B
en
ef
its
Pr
od
O
uc
rg
t io
an
n
isa
ti o
n
wi
de
Cu
sto
me
r
Se
rv
ice
0%
IT problems
The limitations of legacy IT systems are a barrier to demand management strategies for many organisations.
In fact, 40% say improved systems are needed to drive through further changes. Some of the improvements
needed include:
 “Working around IT and integrating data from various systems.”
 “IT availability” and “IT development resource”.
 “Limitations in… proactive comms.”
 “Tech changes are costly and take time.”
16
3.
Change management
The difficulties of encouraging colleagues to change, and change their mindsets, continue to act as a barrier
for those responsible for demand management strategies. A resounding majority of CCA members say that
demand management must be supported by an ongoing change management structure in order to be truly
successful.
 “Doing so while focusing on day-to-day operational performance, generating revenues and the change
that our area goes through.”
 “Overcoming a BAU mentality.”
 “Ongoing project work, some of which has been brought forward due to government initiatives… reduced
available resource to reduce demand.”
4.
Accurate data
The more time spent reducing demand, the more CCA members report the difficulty in securing accurate
data about failure, customer purpose and organisational process. This places real emphasis on analysis.
 “Understanding the real root cause of issues. Current technology doesn't provide good MI, so manual
collation of customer motivators has been introduced.”
 “Obtaining robust and credible data to prove the concept and to measure improvements has been
challenging at times.”
Overall there is much to do, but CCA members have made good progress in implementing a challenging demand
management strategy. The key actions from the research appear to be:
1.
Demand management is a long term initiative – Organisations are still getting cost benefits having spent 3
or more years looking for ways to reduce inbound contact. As new products or policies are launched more
unnecessary contact will be generated.
2.
The Good, Bad and Unnecessary – Don’t attempt to cut ‘good’ contact, while focus on eliminating the bad
and encouraging customers to avoid the unnecessary.
3.
Big wins are rare – Although some organisations report some successes in reducing discreet and large
volumes of contact, most point to many instances of smaller gains.
17
4.
Recognise IT and systems weaknesses – Although it is great to achieve demand reduction with existing
infrastructure, to make larger leaps in resolving process failures systems will need to be upgraded.
5.
Remember David and Goliath – Contact centres often feel like the David in relation to the wider organisation
Goliath. To truly create low customer effort and expense call centres need to engage and influence the rest
of the organisation to improve their ‘failure’ in contact generating behaviours.
6.
We’re all unique – Lastly, challenging demand management strategies will be very different in one
organisation from another.
18
Part 4 – HMRC Case Study, August 2011
This paper builds on a previous HMRC demand management case study, published in March 2010 in CCA Industry
Council paper ‘Lean Service and Demand Management: Good for the customer, good for the organisation?’
In the spring of 2010, HMRC was just beginning to develop a demand management team in order to: control new
demand emerging from the business; reduce existing demand which does not add value to the customer; better
match supply to demand, particularly in peak periods; and make the best use of IVRs. Since then, HMRC has gone
on to establish demand management processes and governance across the telephony channel, with further
expansion being explored through post, in-person (face-to-face enquiry centres) and online channels. A Demand
Management Programme is now a key part of HMRC’s four-year Change Programme, with significant benefits
forecast, requiring both investment to support new self-serve tools and a rigorous governance process to ensure
demand accountability across the department.
To put the work into context, the Customer Contact Directorate of HMRC runs 17 contact centres, with around
6,800 staff handling approximately 60 million telephone calls a year (including around 10 million handled by
automated telephony messaging). The contact centres deal with over 20 different helplines, supporting individual
income tax (PAYE and Self-Assessment), Tax Credits, Child Benefit, and a number of complex low-volume lines like
VAT and Excise Duties. HMRC has to deal with challenges such as mandatory annual or more frequent
transactions for nearly every individual and business in the UK, with strong peaks in demand, primarily driven by
statutory deadlines.
Demand management’s early work was on a small scale, but was able to deliver nil- or low-cost call reductions
right from the beginning. It is now demonstrating significant call reduction benefits, alongside increases in
employee engagement and empowerment. As the results are becoming visible, the interventions are being
adapted on a wider scale in order to reduce unnecessary pressure to the business without negatively impacting
on HMRC’s customers. Over the past two years, demand management benefits have amounted to:

In 2009/10, 6.5 million calls were handled by automated telephony messaging (4.5 million after callbacks –
a percentage of customers call back immediately, despite initially hanging up after hearing a telephony
message) from virtually 0 in 2008/09, with a further 4.2 million calls eliminated.

In 2010/11, 11.4 million calls were handled by automated telephony messaging (8.4 million after callbacks),
with 7 million calls eliminated.
19
To achieve these results, HMRC has developed a number of demand management processes and methodologies,
including:

Call Classification (through the collation of detailed call data, allowing HMRC to identify root causes for
demand and prioritise solutions with policy and process owners).

A suite of professionally developed IVR messages covering all lines of business, which are kept under
constant review and are regularly refined for responsiveness to customer needs.

Deep Dives (focused research into particular call types to create detailed solutions to low demand).

Voice of the Customer postcards (a postcard tool available for use by every advisor as a real-time staff
suggestion mechanism to flag more detail around specific problems and to support the headline data – all
generating frontline improvement ideas focused on removing or migrating low-value contact).

Contact Gateway (year-round collaboration with policy and process owners to refine processes, reduce
demand and manage output despatch schedules to spread demand – all to ensure that any new products,
processes or campaigns do not create additional low-value or unnecessary contact).
Utilising these tools has led to many successful call reduction projects, including the following examples:

Improving the content of the Annual Coding Notice and introducing an explanatory flyer – both aimed at
increasing customer understanding. This reduced the number of ‘reassurance calls’ from 84% to 40%.

Improving customer advice guides for advisors, streamlining processes and establishing processing
timescales for the Tax Credits New Claims process, saving 3.5k calls per month.

Clarifying the customer’s Unique Taxpayer Reference (UTR) number on the Self-Assessment form, saving
over 100k calls per year.

Using Call Classification data to support a business decision to stop sending out a National Insurance
Deficiency Notice, saving approximately 170k calls per year.

Improving the layout of the Child Benefits Entitlement form to increase customer understanding, saving
15k calls per year.
And, as the benefits indicate, HMRC has also had significant success with the introduction of self-serve automated
telephony messaging (IVRs), including:

Informing customers of changes to payment dates over bank holidays, handling up to 80% of queries over
the Christmas period.
20

IVRs telling customers what information they need to have to hand to successfully complete a Tax Credit
Renewals call with an advisor saved 100k of otherwise failed calls.

Signposting alternative channels (such as online information) to meet customer needs.

Introducing a telephony-based Correspondence Turnaround tool to reduce progress chasing calls, saving
around 405k calls per year on PAYE Repayments alone.
The success of demand management has meant that it is now a key part of HMRC’s four-year Change Plan, and
they are now in the process of embedding demand management processes and methodologies into the business.
Governance frameworks are being built to allow for regular sharing of data, discussions on the latest demand
position, and decisions on new reduction projects. Detailed four-year delivery plans are being built within each
business area, including possible investment projects to deliver new services such as improved telephony
automation and intelligent online forms.
Overall, demand management is proving a huge success at HMRC, with the department keen to expand its remit
into other areas of customer interaction. The programme is delivering significant call reductions, contributing to
channel and customer strategies, reducing costs for customers and, of course, ensuring much-improved service
delivery.
21