How much is that call worth?
New model shows companies how to tailor service levels to different types of customers
- Date:
- October 2, 2017
- Source:
- University of Toronto, Rotman School of Management
- Summary:
- Call centres can be expensive as well as the source of lots of consumer angst. But companies can get more bang for their buck by doing a better job of coordinating marketing decisions that drive customers to call centers with operational ones about handling them once they get there.
- Share:
Call centers can be expensive as well as the source of lots of consumer angst. But companies can get more bang for their buck by doing a better job of coordinating marketing decisions that drive customers to call centers with operational ones about handling them once they get there, says a new study from the University of Toronto's Rotman School of Management.
The study, co-authored by Professors Philipp Afèche and Opher Baron in the Rotman School's Operations Management and Statistics Area, and Mojtaba Araghi, an assistant professor at Wilfrid Laurier University, provides an integrated marketing-operations framework to help companies design more effective service policies for their call centers and other service channels.
The framework builds on a theoretical model that maps the flow of new and existing customers through the call center and their consumer decisions afterwards, based on their experience.
Unlike previous research, the model links call center capacity, service quality and how that quality influences future consumer behaviour.
"Our model highlights that it is important for companies to be able to answer questions like: How does a particular customer behave if they don't get served? What's the chance that they will leave the company -- or spend more, depending on the service quality they've received?" says Prof. Afèche. This can give companies insight into designing different service levels for different types of customers, depending on their value to the company.
Too often, says Prof. Afèche, call centers react in response to marketing decisions, rather than the two functions working together to determine which customers to target in a marketing campaign and what capacity needs to be there to serve them. Traditional ways of measuring customer value, meanwhile, can ignore how that value is affected by service quality, leading to poorer decisions about attracting and keeping them.
"Our model gives companies a more complete picture of the value of a customer," says Prof. Afèche.
Getting things right at the call center has been shown to be vital to businesses. Previous research has shown that companies use call centers for 80% of their customer interactions and 92% of customers base their opinion of the company on what happens during their call. Four out of ten customers who end their business with a company place the blame squarely on a customer service call that went badly.
Story Source:
Materials provided by University of Toronto, Rotman School of Management. Note: Content may be edited for style and length.
Journal Reference:
- Philipp Afèche, Mojtaba Araghi, Opher Baron. Customer Acquisition, Retention, and Service Access Quality: Optimal Advertising, Capacity Level, and Capacity Allocation. Manufacturing & Service Operations Management, 2017; DOI: 10.1287/msom.2017.0635
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