CCOs: Tackling Systematic Resistance to Accepting Subpar Performance

Transcript

[00:00:00] Steve MacDonald: Welcome to the Contact Center Perspectives podcast. I’m Steve MacDonald, your host. Today, we have a very special guest, Pat Ferdig. Pat is an expert builder. You have worked primarily in the SaaS space and electronics. What we’re going to talk about today applies across the entire industry. 

We’re going to discuss tackling systematic resistance to accepting subpar performance. This plays into the ongoing perceptions of senior-level management and the board across the contact centers industry, mostly as cost centers to be controlled and maintained.

But we’re going to flip that around. One of the things that you’ll help us with is understanding why there is this acceptance of subpar performance, how that’s holding us back, and how we can flip that and actually show how a contact center is one of the most vital parts of a company’s growth engine.

With that, I will ask you to expand on your background as a builder and a fixer because you also have expertise in coming in and fixing broken organizations’ contact centers. I’ll let you talk a little bit more about that. 

[00:01:18] Pat Ferdig: Fantastic. First, before I get started, thank you for having me participate today.

It’s an honor to speak with everybody, and hopefully, everybody can get a little glimmer of something that could make their lives easier. When you look at my background, it has been around that building component.

But what we’re talking about today isn’t building a process that software drives or supporting a specific product. It’s really about the concept of satisfactory underperformance. When I look back at my background, I see that many organizations I’ve joined have always had this mentality.

This means that they have SLAs in place, but they’re so focused on one or two metrics, and the board metric there is cost, that they don’t see the value that is actually being delivered, or they are missing the point.

I’ll explain what I mean by that a bit, but my background in utilizing that mindset and a humanistic approach has led to companies that have contributed significantly to their valuation numbers. It’s really by utilizing that mindset, that thought, and really understanding how to address this issue of what I call satisfactory underperformance.

[00:02:48] Steve MacDonald: Here’s what I love that you’ve already done. You reframed the conversation. The biggest perception in the industry is that contact centers are cost centers. You’re talking about affecting the very valuation of the business, which means you’re talking about revenue. 

You’re talking about competitive advantage—everything that helps a company work, grow, and scale. So, this satisfaction with underperformance is an acceptance of it as a necessary evil. This is a cost that we have to contain. We have to be able to have somebody answer questions from our customers.

But beyond that, I need to see a direct connection to the company’s valuation. You mentioned the humanistic approach as a foundational pillar to that. Could you explain what that means? 

[00:03:35] Pat Ferdig: Absolutely. When I talk about a humanistic approach, I mean the emotional side of the business.

By definition of human nature, every individual has an emotional response to one thing or another. You start seeing these trends in your CSAT, and they start tracking. How did it make you feel speaking to this individual, or how did the solution make you feel?

Those are really to try to capture the emotional or human response because what that customer perceives is that customer’s reality. What that agent perceives is that agents are what they believe. So, it’s about getting in, understanding, and talking with individuals.

It’s about ensuring you’re not asking them to do something they wouldn’t do. It’s about understanding what that individual is and having empathy behind it. When I say empathy, I mean completely different than sympathy. 

Empathy is understanding, putting yourself in that individual’s shoes, and telling your conversations to their emotions. With that, you can build that humanistic connection, and being able to do that, you get buy-in from many different people. 

You get buy-in from your agency. When you take a humanistic approach, you get more customer buy-in. You get more acceptance, agreement, and participation because everybody’s human. Everybody wants to have a voice. My expectation for my team is that they use that voice and communicate what’s wrong, what’s broken, what’s hard, how we can make it easier, and what different ideas we have that are out there.

[00:05:23] Steve MacDonald:  What’s interesting is that you called out two segments of individuals when you were talking about the humanistic approach here: customers and agents. Why did you call out agents? You could have called out the board or the company’s leadership, the sales organization, or marketing product development. Why did you call out agents and customers? 

[00:05:46] Pat Ferdig: I did because customers are obvious. Basically, we’re in business to make money, and those customers pay our paychecks.

That’s really why customers. On the other hand, agents are that if you look at it after an item is sold, it doesn’t matter if it’s a pen, a service, or a computer; after that initial sale, the only interaction that customers typically have, at least voice interaction, is with an agent.

Those agents are setting the tone for that company, whether it’s support, technical, or customer service. To give you an example, when I first started my career, I won’t tell you how far back it was, but with gateway computers, I was a customer service representative. That was right before Christmas, and it was back when multimedia was a huge phenomenon. I can hook my speakers up to my computer and hear things. There was a major shortage of sound cards. So we couldn’t ship computers.

Back then, a P.C. was $25,000 to $35,000, and all these individuals were trying to purchase these for Christmas gifts. So, I had mothers and fathers calling on the phone crying because they wouldn’t get anything. That is critical because an agent can make or break that scenario for that customer. You must use that humanistic approach with agents because if the agents are engaged and happy, they will provide more confidence and provide a higher level of service and support to the customers.

You cannot have a customer experience strategy without focusing on the agent experience. It’s just impossible in my mind. 

[00:07:41] Steve MacDonald: That probably leads us to our next question. You talk about how important it is to assess and rebuild when you’re in that rebuilding mode.

That would be great if you could tell us a little about what you do in assessing and rebuilding. One of the things you pointed out was that your number one priority in rebuilding is with the agent. First, back us up and tell us what you are assessing and then what you are trying to rebuild. 

[00:08:09] Pat Ferdig: Yeah, it really depends. I look at things in terms of continuing to reinvent how we do things. Customer behaviors change, and customers’ expectations change. We have to stay on top of that.

I’m looking at things, and I’ll come into an organization. Typically, things are broken. We know we’re transitioning to a consumption model, so we need to build all the playbooks, this type of thing, and all the agent training to enable the business to do that, or it will be one where, ‘Hey, we’re starting from scratch.’

There have been scenarios where our net revenue retention is at 78%. So things are physically broken, but we don’t know why. The key to really understanding that is to listen to the conversations.

Talk to the agents because the agents themselves know what’s broken. They know what works and what doesn’t work. They know if there is a script you’re using every time I try to utilize it. A customer gets upset, and this is where it comes back to sitting down with the agents and finding out what’s going well and what’s not going well. Are there things that we should start doing or not? Are there things we should stop that we’re currently doing and really focus on how to make it easier?

Because I think that as individuals get up there in the ranks, it’s very easy to say, ‘You know what? I’m in the position I’m in because I have all the experience and all the knowledge.’ The reality is that as you build yourself up in the ranks.

You become more distanced from what’s happening on the front lines. So, we can consider ourselves an empty can up at the top, and to make the right decisions, I need to get engagement from the agents. I need customer confirmation that it is exactly what they’re looking for or want, and then we can look at the overall impact. When I say overall impact, it’s a pilot refined launch. It’s never flipping the switch and making sure what happens because, at the end of the day, every business is there to make money.

So, we cannot afford to put something in place. It’s going to have a negative impact, and there’s always going to be something that doesn’t go perfectly. But you can understand what that is, not accept that that’s just the way that it is, and continue to improve that utilizing your six-sigma methodology and some of your other components that are out there. It’s not really accepting the way things are. 

[00:10:52] Steve MacDonald: I love the way you keep helping us think differently about that.

If you were to have a net revenue retention problem and the executive leadership said, ‘We got to figure this out,’ and somebody said, ‘We got to do in-depth research with our customers. We’ve got to talk to our customers. We have to figure this out,’ Nobody would bat an eye.

If somebody said, ‘We got a net revenue retention problem. I want to go talk to our agents,’ There might be dead silence in the room. They’re the ones having daily conversations; that’s what I’m taking away from this. So, it is the absolute next best thing. They’re having conversations widespread.

Any research with customers is going to be a slice. Still, if you can capture that knowledge or have continual conversations when you say refinement, your agents are the refinement megaphone from the customers.

[00:11:46] Pat Ferdig: They are. They are the voice of your customers.

You have all of these customer-listening posts, the CSAT surveys, your MPS survey, and your view sites. You have all of these areas, customer segments, or sentiment, where we spend a lot of time as leaders trying to understand the reality.

You know what? If I have an agent who talks to 50 to 75 customers per day, they’re going to have a pretty good understanding of what happens in those phone calls, what’s reoccurring, and what’s not reoccurring. I think that when you look at change, you try to put a gauge in place to figure out, ‘Hey, what risks do we have? What are the challenges?’

[00:12:25] Pat Ferdig: It has to start with the agents. In order to do that, you have to make sure that your agents are enabled. By enabled, I don’t mean I’ll give you a discount for this or that, but that’s also a good thing. I meant that are they trained properly?

Are you recruiting for the right level of agent? Do they have the right mindset to do that? I think spending time with the agents is critical to any type of contact center’s success. Once you get to that point, you can start monetizing the operation.

But if your level of support is just, ‘Hey, you know what? We’re just here to answer phones,’ that type of thing. It’s a necessary evil. It’s a necessary cost. It doesn’t work that way anymore. There has to be value, and there has to be a driver there to make sure that everybody, up and down, understands the value the contact center is providing to the business. It’s not just providing support because you can correlate the experience level to renewals. 

If it’s a renewal company or has a software renewal component, you can factor in those experiences with your contact center with repeat purchases. You have the data that you can utilize, but it all comes back to their experience. I’ve had customers, and I’ll give you one example of this: when I was with Avalara very early on, we had a complete system outage. All of our servers went down.

None of our customers could calculate tax, so I first jumped on the phone and started calling our big customers. I had everybody else. We tried to be as proactive as possible. We had an NPS survey that went out about a week after that.

[00:14:15] Steve MacDonald: Oh, geez. 

[00:14:15] Pat Ferdig: We all know that NPS is based on a single experience, but guess what happened? Our approach was that we actually saw our NPS increase even though we had a complete system outage a week prior. I think the reason for that is the approach, the ability to enable them, and the way that we engage with the agents to let them know what is going on.

We were very transparent, giving them the authority to be transparent to the customers. That’s a big piece of it as well. Transparency and communication are all a part of the humanistic approach I discussed.

[00:14:55] Steve MacDonald: It shows you right there because of the NPS score. That measures everything about long-term viability. You could take a negative situation and help bolster your NPS score. We think about it sometimes as insights. I can do product development and new launches, and that’s another way that there’s a big connection between the contact center’s value.

But that was actually a negative in terms of accessing the product and service, and you turned it into a positive. That’s one of the most powerful stories that I’ve ever heard about the power of the customer experience and its impact on the business, so I’m dying to ask you this question.

Since the priority is rebuilding agents, we’ve discussed their importance at length. I will first ask for your perception of this and then the perception of executive management. On a scale of 1 to 10, how important are agents to the overall growth and vitality of the business?

[00:15:54] Pat Ferdig: For me, it’s absolutely a 10. As I said before, the agents are the company after that point of sale. Whether the executives want to believe that or not, that’s the reality. If I’m an agent, and I just don’t care about my job, and I’m having a crappy day, if I project that, that customer is going to understand that. They will think that’s company behavior, not agent behavior. 

The agents are absolutely the most critical. I think they are right in line with the product because if you have a crappy and buggy product, you can still save that customer that experience by having great agents who own the customer, who take action, who follow up on this type of thing.

But if you have a fantastic product but no agents on the back end, you’ll lose customers quickly. 

So, I think that the agents are absolutely a 10. Now, to flip that, if we look at the executive team, I would probably guess that a lot of them will rate it a 4 or a 5.

Because they see it as a necessary evil, they don’t understand the importance of having those agents retain that revenue or increase the return purchase for that repeat purchase. It’s our job as leaders to make sure that they understand that connection because once they do, it is well beyond just what the SLA and the CSAT scores are.

Once they understand that correlation, it becomes easier for leaders to ask for more resources because we can directly correlate that to the growth of the business. 

[00:17:48] Steve MacDonald: So, I think what you just went through there is one of the reasons why subpar performance is accepted: people do not see the contact center in its true light and its true value.

They’re looking at it as a cost center. Its strategic importance is valuable to the organization, but they’re not making that connection. It’s just a cost center, and they’re accepting whatever it takes to maintain costs, including incredible agent turnover rates in the industry.

The entire industry has said, ‘Eh, it’s a necessary evil. It’s just a part of the game. We got to do that.’ Good organizations know how to create the right company culture, the right agent environment, and the agent’s growth opportunities. That’s the humanistic approach that you used throughout the whole conversation. Now I see how we’re tying it back in. 

[00:18:41] Pat Ferdig: Yeah, and it all blends together easily. I worked for an organization—I won’t say who—that had a term issue with over 200+ employees. We were hiring left and right.

We have employees who went through training on day one, but then they were gone when they were supposed to be on the floor. So, it’s really important to understand that. I think that as leaders, especially contact center leaders, a lot of us are servants by nature.

So, they can get awkward promoting these things to the organization, saying, ‘Hey, you know what? My agents and my contact center are the face of the business. We are the reason that customers are going to repurchase or renew.’ 

I think it takes stepping out of people’s comfort zones because you always have to sell to the executive team. You always have to present the organization as a value-added service to the company’s customers. What happens is that there are executives out there who just don’t want to hear it and aren’t going to hear it. They grew up with an old-school mentality where the contact center is a cost center.

We know it’s a necessary evil and that it will cost us 3% of revenue annually. So, as the contact center leader, I’m holding you responsible for three things: keeping your costs under 3%, SLAs, and CSAT. You know what? That’s fine. I can do that.

But what about self-service rates? What about other things, such as customer effort? What about some of these other things that we actually tie that experience into repeat business? Then we can monetize it. Are our customers telling us new ideas for products within the contact centers? It would be great if we could do this. Are other leaders within the organization taking that information and acting on it, or is it just saying whatever we’ll get to it? Again, This is where I’ll pull the humanistic approach in because the humanistic approach builds relationships.

When you build those relationships, you build trust. Now, all of a sudden, when you go into a meeting and have a customer corner where you can give an example of a great experience and comments from customers and a bad experience, people walk away with that bad experience top of mind and say, ‘You know what? I know I’m in the product, but what could we have done to improve that?’

[00:21:02] Steve MacDonald: What you’re talking about is intelligence, and it’s all coming from the agents. They’re all front-line. I had another C-Suite individual, just like you, say they’re one of our best early warning signals.

[00:21:15] Pat Ferdig: Absolutely. 

[00:21:16] Steve MacDonald: So, how much value is it to the organization that we identify a problem before it sat there for six, seven, eight months, creating issues again and again for the organization because we didn’t clearly recognize it or how to fix it? As you’re saying, it’s not just renewals, cross-sells, upsells, creating loyalty, and increasing net promoter scores. Still, also, like you’re saying, renewals, cross-sells, upsells, creating loyalty, and net promoter score increases.

On the other hand, it also avoids disasters that always happen. 

[00:21:42] Pat Ferdig: Absolutely. In fact, it is important enough for me to spend an average of one to two hours per day talking with agents, team leads, and managers because they are my early warning. When I have these conversations with them, it’s not ‘Hey, you missed your metric. What are you going to do today to fix it?’

It’s, ‘Hey, I noticed that we slept a little bit. What are you saying? Let’s work through this together.’ It’s not the finger-pointing. It’s, ‘Hey, we know we had this challenge, but what can we do?’ But even beyond that, what can we do today?

If you look at what can happen over the course of the next week or month, what are you hearing from the customers? What are you hearing as far as an agent? What’s hard? Do we need to look at the systems we’re utilizing? You could use 4 or 5 different systems that can be consolidated into 1 to make it more streamlined.

So, I think that talking with those agents and understanding their experiences is just as important as understanding the customer experience; you can’t have one without the other. 

[00:22:47] Steve MacDonald: I’ve always believed that the customer is the highest voice of authority in the business.

Agents talk to customers every single day and gain the kind of insights that make them the highest voice of authority. Actions speak louder than words. You spend one to two hours a day talking to agents.

It shows us where your priorities are in terms of learning, but you actually have a process for not only talking to agents one-on-one but also getting their voice into the company. Tell us a little bit about that. 

[00:23:19] Pat Ferdig: Absolutely. Even though I spend a lot of time with the agents, I typically embed them with other departments.

We will have agents attend the R&D team huddles. They are there specifically to talk about their experiences with the customer. Now, this isn’t something that you could probably flip a switch and say, ‘Hey, I’m doing this tomorrow.’

It’s about culture and making sure that you have that culture, but getting the buy-in and trying to embed that agent experience with other departments is absolutely critical. It’s important because it allows them to talk directly to the people who are talking with the customer.

What’s happening? What’s the feedback? It also empowers your agent to go in and say, ‘You know what? They do care.’ 

I think many agents get into trouble thinking, ‘You know what? I’m just one person. What am I going to do?’ 

The reality is that they’re not using their voice. There’s nothing we can do. As leaders, we need to hear and listen. It doesn’t mean everything you hear will be a good idea, but if you start hearing the same thing, then you know for a fact that it’s an issue.

It’s a lot of communication. It’s about getting the experience into different things. Whether it’s a monthly alley rally where I pull my entire teams together from the contact center by my sales teams or accounts receivable teams, I pull them all together and be completely transparent.

How did we perform? What did we do? We gave them the customer stories. Then, we have a monthly global meeting where we pull other departments into our conversations so that they understand the priorities from an engineering perspective.

They understand the priorities from a sales perspective and try to engage and have those direct relationships so that there’s open communication. We have a platform that we could utilize across the business to ensure that we can vocalize and evangelize exactly what our customers are saying, what our agents see, and what we need to do as a company in an organization to change.

[00:25:34] Steve MacDonald: You know what? I’m taking away from this because I’ve been waiting to ask this question. 

You said I must be selling—constantly selling to management, and you’re in the C-suite. You’re in the middle of the management and selling to other individuals: CFOs, CEOs, boards, and CROs. 

What you just laid out is that you let the agents and the involvement with other departments be one of your biggest sales strategies because if engineering, product development, marketing, and all these other different departments are saying what they learned through the agents, automatically is listed in the role of the agents.

[00:26:09] Pat Ferdig: Absolutely, and vice versa as well. It invites them to come listen for a couple of hours here and there. ‘Hey, you know what? Come tap into one of the agents. Here’s that experience firsthand.’ So, I think that is another way that you can really build that customer culture.

What that does is that it puts an additional spotlight on your contact centers for what it is that your contact centers do. So, now it’s not just me, the chief customer officer, going to the CEO and saying, ‘This is what we’re saying.’ Now, suddenly, you have your development team going to their leaders and their leaders going to the CEO to say the same thing.

You take a couple of those turns, and all of a sudden, you’re going to start seeing more attention. You’ll start seeing the wallet open a little bit more. Maybe you’ll start seeing your training department; if it doesn’t reside within your organization, say, ‘Hey, we want to do some extra courses. Is there a specific curriculum that you want?’ 

My experience has been that. It’s not something one person can do. I can’t look back at my successes and say that this is what I did because it’s about what everybody else is doing. It’s about the agents feeling empowered. It’s about the humanistic approach. It’s about being agile. It’s about asking for advice on how to fix this. It’s about working cross-functionally and then building the team with the contact center at the center of that team.

At that point, you’re able to disseminate and sell the services and experience you’re providing much better and get recognized for it. 

[00:27:45] Steve MacDonald: I know we could go on forever because it’s so fascinating, but with everything we’ve discussed, what would be the takeaway you would want others to have from listening to or watching this podcast? If there was one thing that you wanted them to take away, what would it be? 

[00:28:01] Pat Ferdig: The one thing that I want people to take away is to make sure that you are taking the opportunity to step out of your comfort zone and sell the value of your contact center. You always have to be silent.

So, it doesn’t matter if you’re conversing with your boss; if you’re a director reporting to a VP or a VP reporting to a C-level, you constantly have to sell that value, right? And how you sell that value isn’t, ‘Hey, I met the SLA, or we exceeded the SLA.’

It’s about the experiences that you’re building that will relate to an increase in renewals or repeat customers because that’s what the sea level wants. That’s their concern. That’s what they have to go to the shareholders for—or the VCs or the peas or whoever.

They are held responsible for the revenue growth of that business. So, you have to find a way to identify the contact center’s involvement or participation in that growth. You do that, start reporting on it, start showing the value of your actions, and then, suddenly, everything gets elevated.

[00:29:18] Steve MacDonald: Thank you. That was two minutes of a condensation of the entire conversation we had here. Part of what we want to be able to do is empower others to be successful. So, that’s your recipe for success. I know people will have additional questions. Would it be appropriate for us to send you your link on LinkedIn?

[00:29:39] Pat Ferdig: Absolutely, I would love that. If anybody has any questions, I’m more than happy. I completely believe and pay it forward. I had a lot of great mentors in my career. Mentoring is one of the most rewarding things for me, so I’m happy to help whenever and however we can. 

[00:29:55] Steve MacDonald: Fantastic. Thank you very much for sharing all of your C-suite insights on this subject.

[00:30:00] Pat Ferdig: Fantastic. Thank you. It’s been a pleasure!