Imagine if 70% of the work you did every day was unnecessary, the result of something that had gone wrong, and your job was to fix it.
What an incredible waste that would be.
This number is real, up to 70% of all calls are due failing to do something or do something right for the customer.
Let’s talk about why this happens every day in contact centres.
Improving what we call the triple bottom line in contact centres (customer experience, employee engagement and operating costs) often starts with ways to reduce AHT and improving first contact resolution.
The logic is that shorter calls are better than longer ones, this saves money, creates capacity and customers can get on with their lives, but they still had to make the call.
Better FCR means more customers are getting what they need in one call, but it still means they had to call.
Neither AHT or FCR fixes the root cause of the issue, and surely the goal should be to prevent the call in the first place.
Up until now, we haven’t had the language and mindsets to get to the heart of the issue, so we have dealt with the symptoms and not the cause.
By removing these calls we are not suggesting the end of the contact centre, we’ll never remove all the failure demand, this is about repositioning the role of the contact centre from cost centre to value centre.
What does Failure Demand look like?
Incorrect bills and statements
New features or plans not applied to an account
Password resets
Staff shortages, causing processing times to blow out, driving customer calls
Call backs not made, prompting the customer to call back in
Follow ups on the status of an application
Statements not sent / sent to the wrong address
Bonuses or benefits earned, not applied to the account
Incorrect information given leading to the wrong expectations being set
By now, you are probably thinking about the types of Failure demand in your contact centre. Start making a list.
If you imagine yourself being a customer in these situations, you will have felt frustrated at being forced to put in effort because of something out of your control.
If you imagined yourself being at the front line in customer service, you will also feel frustrated, and you are also feeling burnt out, due to high call volumes and dealing with unhappy customers, call after call.
This is the reality in every contact centre, day in and day out.
These issues put enormous pressure on the people providing service, leading to unplanned absences, rise in mental health issues and in the worst case attrition.
When the root cause of failure demand is not treated, employees begin to lose trust in the organisation to live up to their vision and see it as a failure of leadership to prioritise what is most important.
Pressure on collaboration
Most failures are complicated, something has not gone to plan and this requires some diagnosis and problem solving. Contact centre teams, IT, Product and Sales need to work together to find out where it went wrong and fix it.
Ownership of the problem is often hand balled around and these failures are often repetitive, so they are dealing with the same issues day in and day out, and tensions can escalate quickly between teams.
How does failure demand happen?
Sometimes, failure demand is inadvertently designed into the system, is hidden, and only becomes exposed due to high customer demand. Rather than wait for this to happen, a proactive and intentional approach to the service design must be taken from a customer’s perspective.
Sometimes, when we become aware of failure, we are unable to make fixing it a priority, and we have no choice but to accept failure as part how we work.
When this happens our service, support and sales teams become the band-aid, the work around, and the experience they have at work suffers, just like customers, this erodes the confidence and trust they have in the organisation to support them. They feel a dissonance between the reality and the vision.
We’ll never remove all failure demand, the fact is we need growing companies to get to market and learn about what their customers need, failing is necessary part of this process.
What we need to do is to understand how to design failure ‘out’ of the system when we find it and take measures to eradicate it.
Let’s break it down
The impacts on the employee experience
Employee’s say that the growing complexity of the work and spikes in demand account for 50% of the reasons they consider leaving an organisation. They also say that the challenging nature of the work, particularly during busy times, is the key driver of unplanned absences. Anything over 85% occupancy is the burnt-out zone and people can’t stay here for long.
20% of contact centres Team Leaders are on the phones, 22% of the time. This is a staggering number. And it’s the number 1 reason they consider leaving the organisation, it also takes them away from coaching and development activities which they rate as their number 1 priority and the area they wish they had more time to invest in.
It is well understood that high occupancy leads to higher AHT, as employees who are under the pressure of back-to-back calls look for ways to get a break, by using hold or wrap time. This makes achieving service levels a nightmare.
In some cases, employees will find other non-productive ways to get a break during the day, gaming the system to get some respite.
Do you know the true cost of Failure Demand on your employee experience?
The impacts on operating costs
The average contact centre salaries have risen 10-15% since the pandemic and this rising month on month with the competitiveness in the labour market. Then add in the cost to super, leave provisions, recruitment, and training.
If we take a conservative estimate of failure demand being 35%, this means you are carrying 35% more cost in staffing costs than you need to. Do the sums, it’s a big number.
Fixed costs like this are a big part of the budget and the more failure demand you have the more people you need to answer those calls which is more square metres of office space. This is the least flexible part of the cost stack (the cost stack is the breakdown of expenses required to run your contact centre)
Headsets, dual-screens, computers, ergonomic workstations at home and in the office. This has doubled since the pandemic as we set our teams up to work in office and at home.
Most technology used in contact centres is now charged based on the number of seats you need. This could include a KMS, WFM, Telephony solution, LMS and perhaps you have a payroll solution as well. The more failure demand you have, the more of all these you need, and your cost stack skyrockets.
Do you know how much failure demand is contributing to your operating costs?
Impacts on the customer experience
According to Qualtrics, high effort interactions are the main driver for customer attrition. In some cases, customers may not leave due to high switching costs, but they certainly won’t buy more from you, and they definitely won’t recommend you. In fact, they are more likely to go to social media and tell others about their poor experiences.
Further research by Bain and Co. Shows that by increasing customer retention rates by just 5%, can increases profits by between 25% to 95%.
The most well-known CX metrics like FCR and NPS hide Failure Demand, in fact I’ll go as far as to say FCR is ineffective, in many cases the problem can be fixed on the call, but the root cause remains, meaning many other customers will have the same experience. This is another example of building failure demand into the system, these calls become part of the forecast and front-line staff are tasked with trying to get irate customers off the phone faster.
Only one third of Australian contact centres are achieving their service level
standards to customers.
Do you know the true cost of failure demand on customer experience?
Scalable Growth
AI has come a long way in the last few years, but for now it is more effective with simple transactions. Take chatbots as an example, throw failure demand at a bot and it will struggle to resolve the problem, most of us have experienced how frustrating this is and we then look for a person to talk to.
Choosing the right application for AI automation is important for the customer experience but also the successful adoption of AI more broadly, right now we aren’t that confident it can do what it says on the label but that can change with the right service design. There is a rising trend in companies looking to use these low-cost channels to manage failure demand, this may be a lower cost option for the budget, but it’s still high effort for the customer when they switch channels.
Do you have the mindsets and skills to design scalable customer experiences?
Do you know which technologies and more importantly, the right use cases to help
you scale quickly and deliver world-class experiences?
Reputation and Brand Risk
In 2021, AFCA the complaints ombudsman for the financial services industry in Australia managed 70,000 complaints resulting in over $240 million dollars in compensation, and a further $32 million from issues relating to systemic failures.
Failure demand can go wrong in a big way and when it does it can cost more than money, reputations are hard to build but can be damaged very quickly.
Do you know the true cost of dispute resolution?
What about Value Demand?
The other side of the demand coin is Value demand.
These are interactions your customers want to make, like buying new products or services.
Imagine if your servicing teams had more capacity to invest in Value demand interactions. Have you ever wished you could offer more value by making outbound calls to support the customers onboarding journey or to cross sell other products?
Or being able to redirect budget to invest in AI and automated solutions to provide self-serve options to customers?
The dramatic rise in the implementation of Customer Success teams shows that the early part of the customers journey with organisations is critical to focus on if you want to support long term relationships, solving for failure demand creates capacity to invest here.
Sadly, this is not even on the radar for most contact centres, but value creation could be part of the strategy.
There has never been a better time to fix Failure Demand.
How can we help?
We can coach and educate leaders on customer demand.
Show you how to identify and visualise failure and value demand in your contact centre.
Help you understand your unique cost stack to reveal the true cost of failure demand so you can build a business case to fix it.
Develop ways of working so you can identify the root causes and then prioritise the solutions to realise the benefits.
We find the best place to start is to get a conversation going.
Book us in for a chat with your leadership team, with no obligation, we can run a knowledge building session to educate the team on customer demand and tell you how you can get started quickly and easily to uncover failure demand in your contact centre.
We have over 20 years’ experience in contact centres and have led successful failure demand programs at organisations like ME Bank, Real Estate.com, QSuper and MLC Insurance.
Credit must go to John Seddon for Customer Demand, and for his work in the field with his company, Vanguard. Without him we would not have the language and means by which to understand and deal with Failure Demand. Much thanks.
All data referenced in text is taken from the SMAART Recruitment Best Practice Report, 2022
