The coronavirus crisis has put even more pressure on businesses to reduce costs, nothing new for contact centers who have long suffered from the “cost center” label. What if you could both reduce costs and upgrade your contact center technology at the same time?
Knowledge management can be a surprising and effective tool for decreasing operating costs while improving KPIs. Here’s how.
Identify Cost Drivers
Contact centers offer a long list of costs to consider from staffing and technology to classic overhead. Knowledge management, while often seen as a support system, impacts a wide range of cost-related factors including:
- Average Handling Time and Cost per Call
- First Contact Resolution Rate
- Average Speed of Answer
- Training and onboarding times
- Hold times
All of these metrics are affected by how quickly your agents can find answers, how accurate the information is and whether customers have to call back or channel hop because their issue hasn’t been solved.
How does Knowledge Management Impact Business Outcomes?
Knowledge powers all customer service processes, in the same way that electricity powers a building. We take both for granted until we don’t have it and see how many things fail. Imagine working in customer service for a bank or e-commerce company. You pick up the phone and get a question about a complex financial product or one of your e-commerce store’s thousands of items. Yikes! Your knowledge base is down. It will quickly lead to a domino effect of failures from longer hold times, lower FCR and frustrated customers to agents all giving different answers.
Fig.1: Four major areas where and how KM concretely impacts key business outcomes
Learn more in our Webinar: Old vs. New Knowledge Management & Building the Business Case for KM
Before we dive into numbers, let’s look at one example in detail, specifically increased FCR. Studies have consistently shown that every percentage point increase in FCR leads to both a reduction in operating costs and an increase in customer satisfaction.
Fig. 2: The role KM plays in impacting FCR and the metrics to measure
Why is FCR important and how does it drive costs? FCR not only helps gauge customer satisfaction but a higher FCR leads to happier customers and thus your customer loyalty and lifetime value. In addition, it is an indirect measure of your agents' efficiency and plays a key role in contact center profitability. More first contact resolutions reduce repeat calls which lowers call volume, costs, workload and staffing requirements.
What A 20% Increase in FCR Means in Dollars
Let’s begin with one of our government customers, a large European city who implemented our knowledge management platform to streamline their service processes, increase automation and provide consistent answers across all channels. They achieved:
- 20% increase in FCR
- 50% reduction in AHT
Looking at a mid-sized contact center with 1.1 million calls per year, or about 4,600 per day, the savings from only these two factors is significant. Based on average operating costs of 3,000,000€ per year, of which 80% are personnel costs, that corresponds to a 20% cost reduction, or around 600,000€ annually.
Reducing handling time by half from an initial four minutes over 1.1 million calls per year results in a total reduction of 36,000 hours or about 20 agent’s worth of resources. With an average yearly cost per agent of 30,000€ , that results in an additional savings of 600,000€.
In total, from these two improvements alone, we see around 1.2 million Euros ($1.4 million USD) in savings in one year. Moreover, this does not take into consideration additional impacts such as shorter training times.
Several additional examples from other industries include:
- A telecommunications provider who was able to reduce the number of support documents from 8,000 to 1,400
- A provider of IT solutions for retail banks who increased their FCR by 25% using decision trees
- A multinational automotive company halved the number of calls in its IT service solely by offering self-service.
Fig.3: The cascading impact of knowledge management on KPIs and costs
KM is Mission Critical for Contact Centers
Customer service is a knowledge-intensive process from creating, editing and publishing documents to regularly reviewing them and gathering feedback. Finally, modern knowledge management’s focus does not end at organization as in the past but includes the ability to deliver it into multiple service channels as well as integrate with key internal systems like your CRM and CCaaS platform.
CCW’s 2020 Special Report on KM makes it clear:
“The fact that many organizations recognize the underlying need for knowledge management as a must-have tool sheds light on the shift from quality KM as an ideal competitive advantage, to the primary infrastructure for profitability in the contact center.”
The ability to automate workflows, offer self-service in more channels and deliver faster service, all due to better knowledge management, is a game-changer for your customer experience, agent experience and costs.
Agents expect the same technology and speed from their business tools as they get on their iPhone or from Google. Making their jobs easier means increasing employee satisfaction and trust, which in turn helps them deliver better service. A grumpy agent who can’t find something in SharePoint and do their job properly won’t be as chipper as one who can quickly get their customers’ issues solved.
Your customers benefit from additional self-service options including the company’s website, chatbots or even voicebots. Critically, they receive the same information in every single channel, which increases customer confidence and reduces channel hopping. How many times have we all gotten one answer on the web and another on the phone?
Modern knowledge management is an important yet overlooked tool that can significantly improve contact center KPIs and reduce costs. It enables organizations to better cope with budget cuts from the ongoing coronavirus pandemic while improving both customer and agent experience and equipping your company for omnichannel service.