Adding two important metrics will increase your profits.
The following represents typical, standard metrics to analyze the success of a direct response product teleservices campaign:
- Sales conversion rate
- Cost per call
- Cost per order
- Management Expense Ratio (MER)
While these reports seem logical; history has shown us, that within the multi call center environments, two of the most important metrics are missing! Who is answering each of my calls, and secondly, what percentage of my calls are being answered by top agents? The flip side of the measure is what percentage of my calls are being answered by low performing agents?
To understand the importance of these metrics, you must dig deeper into the typical sales breakdown of agent performance and the impact on sales conversion rates.
Intelemedia Research Data
The Sales Bell Curve
[pullquote class=”span3 pull-right”]How often do you hear that 80% of sales can be attributed to 20% of the sales organization?[/pullquote]
Across all sales environments, agents segment into three buckets: top performers, medium-range performers, and low performers. Normal bell curve dictates that 20% of agents fall in the top performers category, 60% fall within the medium, and 20% are low performers. It doesn’t matter whether it’s real estate, life insurance, or any other call center agent environment; all sales organizations are comprised of this ranking.
How often do you hear that 80% of sales can be attributed to 20% of the sales organization? They are referring to the bell curve described above. 20% of a company’s sales representatives actually drive close to 80% of their revenue. These are the top performers group.
90-Day Research Study
With this in mind, Intelemedia conducted a 90-day research project within a group of our clients to validate the ratio and understand the impact. We selected five programs across a variety of product categories and price points. We analyzed the agents taking calls, their sales conversion rates, and number of calls they took.
|Top Performers (20%)||Medium Performers (60%)||Low Performers (20%)|
Percentage of Calls
|Top Performers (20%)||Medium Performers (60%)||Low Performers (20%)|
We find that each of these programs falls within the expected sales bell curve.
Please note, however, that the top 20% performance group’s average conversion rate was 25 to 50 percentage points higher than the lower 20%. We consider that a very dramatic difference in performance. In addition, we identified a 9 to 12 percentage point variance between medium group performance and the lower performance.
In every case, the medium and low performance groups were handling more calls than the high performing group. And please note that they are handling more calls than a statically random routing plan would provide.
In summary, while the top 20% performers have dramatically higher conversion rates, they receive less than 20% of the calls! Certainly, this has an impact on a campaign’s performance.
Key Measure is Missing
Most clients and call centers focus on the center’s overall conversion rate— per day, per week, or per program. This is not enough.
Without understanding the disbursement of calls to your agent environment, based on the bell curve of high performers, medium and low, the overall conversion rate doesn’t give you a total picture. Without it, you may make decisions based on inadequate information.
Each day you make decisions regarding the quality of media purchases, what price points work best, does creative need refreshing, etc. Yet little attention is given to a metric that has an overarching impact to each these elements— and that is what agents are taking the calls? Our studies have shown that the group of agents taking your calls will dramatically change the performance of your price point analysis, media buys, and more. The reason is the distribution of your calls among the agent performance groups dramatically changes your conversion rate and ultimate performance.
Shift in Disbursement of Calls Gives Dramatic Results
A shift in the disbursement of calls from low performers to high performers can result in a dramatic improvement of results. If you do not measure the call distribution among agents, the data you analyze and use for making decisions, could be wrong.
The following are call distribution patterns uncovered during our research analysis that will affect your performance.
- We saw agents with conversion rates 10 points below the medium conversion rate receiving more calls than the top performers.
- We saw significant agent turnover, resulting in new agent training, ramp-up time, and consequently, low sales conversions.
- We saw top agents become underutilized or drop off the reports completely.
To illustrate the impact distribution patterns can have on sales conversion rates, the following table illustrates how improving the call distribution pattern, within each performance group, by just single digits can affect total sales. In the one example below, we distributed calls to the top performers seven percentage points higher than the current rate; we moved the number of calls to the medium performance group by six percentage points, and the lower performance group received two percentage points of fewer calls.
Look at the significant impact on a campaign when calls are shifted up the agent performance chain.
Impact of Distribution Patterns
|Existing Data Breakdown||# of calls||% of total calls||Average conversion rate||# of total sales||% of total sales|
|Top Performer (20%)||20,570||15%||37%||7,611|
|Medium-range Performers (60%)||73,810||70%||21%||15,500|
|Low Performers (20%)||26,620||15%||9%||2,396|
|Projected Impact of Call Shifting from Low Performing and Medium Performing Agents|
|Top Performer (20%)||27,830||23%||37%||10,297|
|Medium-range Performers (60%)||77,440||64%||21%||16,262|
|Low Performers (20%)||15,730||13%||9%||1,416|
|Variance – added sales resulting from Call Shifting||2,468|
A product with an average sales price of $100 would generate $246,800 additional revenue each month.
Treat your Agents Like Your Sales Force
If you had your own sales force, would you allow more of your calls to go to the lower performers instead of to your top performers? Most assuredly not. Why not then treat your call center agents as your external sales force, and ensure that your top and mid-performance agents are getting an appropriate amount of opportunities to sell your product.
Once you understand the impact of this additional variable, we recommend you add two critical reports to your daily teleservices analytics.
- Ratio of calls to top, medium and low performers: establish a benchmark and review the results with your call centers as part of your management reviews
- Agent ranking report: listing of agent sales conversion rate for the week by sales conversion rate and percentage of calls taken
Compare these reports from week to week. Are the same medium and underperforming agents taking the same percentage of calls?
Cull out the lower performers at your call center; ask for the plan for immediate training and / or; take them off your program. Certainly reduce the number of calls they take.
Don’t Overlook Other Factors
Keep in mind that time of day and media buys also can have an impact on close ratio. Don’t assume the quality of the rep is the only factor at play. To prevent overlooking other factors, prepare the segmentation of your reports by day-part and media buys. This research – and client feedback in general – has shown that media buy and time of day have a dramatic impact on sales conversion, so be sure to understand this as you are evaluating performance. If a short form direct response spot performs significantly lower on conversion rate than a long form or print ad, and particular agents are taking the majority of short form leads, do not compare their total results with those of agents taking print leads. A simple cross check by running a report of result by agent by media buys will highlight this factor.
Don’t Overlook Outliers
Another important step is to run “outlier” or “exception” reports. These reports are geared to list under performers receiving too many calls or top agents who are not receiving an appropriate number of calls. For example, upon discovering a group of underperformers receiving twice as many calls as the top performers, take action and utilizing an intelligent routing strategy to correct the call distribution ASAP.
This adds another dimension to your call center management. Work with your vendor/partner and set a benchmark. Work together to move a greater percentage of your calls to the medium and top performers. Provide input on training and scripting to improve the performance of each group.
Be sure to review your call agent performance ratio and call distribution performance ratio on a regular basis to make sure you have the right sales agents taking your calls each day.
Adding these important agent performance metrics can provide significant insight and value to your campaigns. These metrics are equally as important as abandonment and sales conversion, two metrics you use today. As you have seen, this represents a key area to improve profits in your campaigns.
David Schreck, CEO of Intelemedia Communications
David is President and CEO of Intelemedia. Intelemedia offers a new breed of call center services by combining industry-leading technology with a platform uniting top performing agents from multiple call center companies. Since 1993, Intelemedia has developed elegant telephony and database solutions for the call center industry that transform how organizations more effectively manage call handling and caller experience within their customer service and sales acquisition environments. His wealth of experience integrating technology, sound business processes, and strategic sourcing is the driving force to the success of Intelemedia’s call center applications. David’s approach to “client-centric” teams focused on understanding and meeting customer needs has created a track record of developing high demand products. Prior to joining Intelemedia in 2001, David spent 16 years with Moore Corporation where he established Moore’s industry-leading national strategic print management outsourcing unit. In addition, he led the company’s initial thrust into e-business, successfully introducing electronic forms as a high growth and viable business within the printed form industry.