Transforming Contact Centers: From Cost to Value Centers

Transcript

[00:00:00] Steve MacDonald: Welcome everyone to the Contact Center Perspectives podcast. I’m Steve McDonald, your host. Today, we have a very special guest: Florian Schroeder of StepStone. And Florian, you are the head of customer success. Today, we will talk about how we transform the way contact centers are perceived in the industry from not a cost center.

[00:00:26] Steve MacDonald: But to be a value center and how that value directly correlates to so much of the company’s success, right down to the bottom line revenue. I’m excited to start on this, but I suggest expanding on your background and what you’re doing at StepStone.

[00:00:48] Florian Schröder: Yeah. Thank you, Steve. Thanks for having me on the podcast. I’m very happy to talk to you. To tell you what I’m briefly doing, I have some expertise in custom experience. I’ve been working for a wholesaler for more than three years in custom experience and putting that onto the level of one of the most important KPIs.

[00:01:03] Florian Schröder: Uh, the company. I’ve worked for Stepstone, an online recruiting company like Indeed, for almost three years. You might know that one. It’s the biggest one in Europe. I’m doing customer success here. I’m working with small and strategically important customers with several teams.

[00:01:20] Florian Schröder: And we try to bring customer success to even more importance than it already is and what it should be. 

[00:01:27] Steve MacDonald: Fantastic. And what’s nice about that is that you span both B2B and B2C in your position, right? One of the things that we want to talk about here is the contact center’s role in the organization’s success.

[00:01:43] Steve MacDonald: And what I wanted to do is start with managing the customer journey. And how much does that impact, obviously, not only the whole business but also how you run customer success? How do you run the contact centers? So explain your thinking behind that. 

[00:02:00] Florian Schröder: Yeah. Managing the customer journey is a young task for me.

[00:02:05] Florian Schröder: We would have talked about it 20 years ago. It would have been very new to everyone. But now, it is a field that needs to be tackled and managed proactively. So when we talk about customer journeys, for example, take B2B customers. It makes a difference if B2B customers see and feel that you manage the customer journey proactively.

[00:02:27] Florian Schröder: And let’s say you’re in a market like StepStone is, in a market where prices are comparable, where services are comparable, it makes a difference if you have a team that is dedicated to managing the customer journey proactively. What you need for that is an end-to-end perspective on what the customer journey has inside.

[00:02:48] Florian Schröder: And if you do have to build bridges across all the departments and you have to break silos maybe when it comes to success, sales, the leadership, experience, reporting, product, and you name it. And this is something we try at StepStore. Can always do better, but I’m trying. And what we try to understand now is.

[00:03:08] Florian Schröder: If you manage the customer’s loyalty today, you influence tomorrow’s success as in what you earn tomorrow. First, we need to map the journeys of our most important customers. Then, we must understand what we do, where there are gaps, and where we could improve. This is where we are right now.

[00:03:25] Florian Schröder: We are in a very interesting situation where we take that to the next level and provide surprising services. 

[00:03:37] Steve MacDonald: You mentioned this idea of collaboration, right? Between customer success sales and the company’s overall leadership. You coined a phrase in our previous conversation that you called the hygiene factor.

[00:03:51] Steve MacDonald: Can you explain that? I liked what you said there. 

[00:03:55] Florian Schröder: Yeah, I can try. Regarding customer loyalty or experience, you usually discuss hygiene or motivational factors. Hygiene factors are something that you cannot proactively manage as a company because they are something that Customers expect when they pay your price, they buy your product, and they expect you. For example, if something with a product does not work, they can address someone to help you, a hygiene factor.

[00:04:22] Florian Schröder: So if they address an issue and you don’t help them, customers are immediately dissatisfied, and you cannot change that. And you don’t make them happier if you help them. So you can just say it’s a zero one. the situation, a motivational factor, and you can read tons of studies about that. Still, you do something that suddenly creates happiness where there was nothing before, no unhappiness, no dissatisfaction, just nothing as you created happiness.

[00:04:46] Florian Schröder: For example, let’s say a company bought a job ad with us and says, look, I want to hire someone. stepstone in promoting that position to find someone. And maybe the logo changed. And now they are asking my team to change the logo. So if we do that, it’s all fine. If we don’t do it, nothing’s fine. The customer is unhappy, right?

[00:05:13] Florian Schröder: There will be a hygiene factor. The motivational factor would be, for example, now and then, we call the very same customer and say, look, apart from all the topics we tackled so far, everything that matters to you, how would you rate our partnership? This open question leads to a talk that you suddenly have on eye level.

[00:05:32] Florian Schröder: That is disconnected from operational use cases, one, two, three, four, five, but that is like a talk about your partnership. This suddenly creates happiness, as if there had been nothing before. So, this is how we tackle these two fields. This is also how we differentiate in the teams we have. Well, you’re talking about. I love the idea of creating happiness 

[00:05:53] Steve MacDonald: where there wasn’t before.

[00:05:54] Steve MacDonald: You said you can’t proactively plan for that, but isn’t that what the contact center is trying to do with every interaction? So I 

[00:06:05] Florian Schröder: I think we have to, like, in the last years, start to understand that there are differences in managing customers’ happiness. So, picking up the phone when a customer calls you or responding to a written email does not influence customer happiness because that is just the expectation you fulfill, right?

[00:06:23] Florian Schröder: So someone buys a product for some or some thousand dollars. There is an expectation that comes with it, and it doesn’t help if you just fulfill that expectation because maybe your competitor does the same. Still, what if you find ways of increasing happiness with some impulses that you can meet on a sales that the sales account or account manager or sales manager says, look, I just want to make sure, like after 10, 20 days, whatever, that you’re still happy with what you bought or that for example, the service department, the contact centers.

[00:06:57] Florian Schröder: Understand this is my customer. I am responsible for managing the customer journey, and I proactively write or call or set up a meeting just to make sure, for example, onboarding went well or just to make sure the product usage goes well and everything’s fine as expected. Or maybe you can find something that customers haven’t seen, something they were unaware of, some missing products, or some features they didn’t find yet.

[00:07:27] Florian Schröder: You can ensure the customer knows about this and how to use the product. The last part is part of the contact centers where they can make a real difference. Also, when it comes to the level of people you have on the road to their skills, we will talk about that later.

[00:07:45] Steve MacDonald: Okay. Well, my takeaway from that, which is great, is that a contact center can handle the requests and try to meet that expectation, or you can go above and beyond that proactively. So you have to pick up the phone, you have to respond to emails, you have 

[00:08:06] Florian Schröder: to be fast. And then you have to do the reactive things or the cases brought to you, right?

[00:08:16] Florian Schröder: You have to pick up the phone, respond to emails, and be fast. Service level is one thing, average response time is one thing, and average handling time for first response solution. Like all these things, they matter and influence the hygiene factor, dissatisfaction, or zero. And then you can build on that.

[00:08:35] Florian Schröder: If you only do proactive impulses, you find things that customers might not have seen before. You try out new services. It only works if you have a great foundation. It’s like. You cannot build a rule without the rest of the house underneath. This is how I would paint the picture here. 

[00:08:54] Steve MacDonald: I think this fits very nicely into the conversation about how to proactively change people’s perceptions of contact centers as necessary costs.

[00:09:10] Steve MacDonald: We have to transition from a value center to one where we add value in many different ways. What are your recommendations for making that transition? 

[00:09:26] Florian Schröder: Yeah. I see a shift or a change from cost to value centers in the industry. If we had talked 10 to 15 years ago, I think many companies would say, look, if we’re sold a product that needs to be a contact center that can be addressed, someone to pick up the phone, someone to respond to emails, that’s it.

[00:09:48] Florian Schröder: Now we’re at a time where markets, they tighten products, gets more, you can change them product A to B, and you don’t see that much of difference. And that is when service makes a difference. I strongly believe I have to underline that cost centers. Something of the past and contact centers have to become value centers.

[00:10:12] Florian Schröder: How do you get there? First of all, you need to have the right people on board. This is difficult enough. We talked before, right? You’re in Denver, Colorado. I’m living in Western Germany, but we face the same issue. There is a lack of people. There is a lack of labor on our markets. You have to find the right people who want to work with customers, the right individuals.

[00:10:34] Florian Schröder: You have to develop the skill set. You have to pay them accordingly. And you have to cultivate a cultivation or a service-oriented mentality among them. To do so, you need to have a company environment that understands the value of contact centers and knows that selling a product is one thing.

[00:10:56] Florian Schröder: Everything on the customer journey matters. Suppose you will sell again to this very customer or a new customer because. You can’t be sure. Customers talk, non-customers talk, and customers talk. You never know the network of any customer. Maybe they’re not. Maybe they have tons of friends and tons of colleagues. Tell them, look, don’t buy with them.

[00:11:14] Florian Schröder: That’s not a good company. Or you know what? If I had issues, they helped me. They also called me to understand if I’m happy, and that matters. And if you promote that internally, you can say, look, this is what we do here. This is how we use KPIs to measure if what we do creates value and if it creates money for the future.

[00:11:35] Florian Schröder: And if you understand, you have to integrate your performance of the complex center into overall company success, then you promote your value internally. So hire the right people, and make sure everyone knows what you’re doing and what kind of work it gives to the company. And then, not only do what you’ve always done but try new things. Try to find out what your customer is and what matters to your every customer, which can be different.

[00:12:03] Florian Schröder: You may be in B2C, you may be in B2B, your product might be very simple or very difficult. So try out what works, and if it works, scale it, then make it happen for all business lines and try to take your team on the journey to develop the skills necessary to deliver a certain service that you aligned on—a certain sales pitch that you aligned on and so forth.

[00:12:30] Steve MacDonald: So I want to unpack a little bit of that because it was amazing when you started. You talked about the right people and that the right people have the right quality, the right mindset, and that service orientation and service matters. They’re influencing the customer and the perceptions of the entire company, right?

[00:12:49] Steve MacDonald: And that they do that over time. And then all those people have their network. So there is quite an impact on the business overall. That’s brilliant. My question is when you are training these people, and you’ve brought them in, do you also train them on the fact that yes, we want to have average call times reduced and first-time response and everything, all the key KPIs, but do you train them on the fact that what you’re doing here?

[00:13:20] Steve MacDonald: Has this had a greater impact on the business? And how important is that in your training with these new people? 

[00:13:29] Florian Schröder: Yeah, first of all, you can only train people ready to be trained. Therefore, I would go with the credo or the motto. I don’t know how you say it.

[00:13:39] Florian Schröder: You hire a character, you train skills. I believe in contact centers of the future. It’s more important that you hire people with a service-oriented mentality and don’t need to know how to use. a contact center, dashboard, or your ticket system, you name it, right? Or your CRM system. This is how you can train them, and they can learn how to like which KPIs matter when it comes to your daily operative work.

[00:14:04] Florian Schröder: But if they bring a certain mentality like I want to help people, I want to make them happy and ensure they know my customers know how to use that. This is something they. ring to the table, then you can train them on how to get better there and also on how to fulfill their KPIs. Does it make sense?

[00:14:26] Steve MacDonald: Yeah, absolutely. If people see the bigger picture and understand the importance of what they do, because one of the things that you mentioned in our previous conversation that we’re going to get to here is that nobody wants just to do the mundane things, the small things that don’t matter, they want to know that what they’re doing has a purpose.

[00:14:44] Steve MacDonald: It has an impact. So that’s why I asked that question. I agree. You’re going to have the right character. You’re going to hire the right people because you can train the tasks that they do. But if they understand that what they do is of critical importance to the company and the success of the company overall, they’re likely to be happier in what they do because they see themselves as a vital part of that success.

[00:15:08] Florian Schröder: Absolutely. I would like to give two more examples of why that matters so much. It will be the most significant thing for any customer service consultant or any contact center consultant if a customer comes back, so stays a customer, a retention customer, and if they say, look, I do that because of, for example, Mr.

[00:15:29] Florian Schröder: McDonald, I stay here because Mr. MacDonald was great. She was always there for me, and he understood what I needed before I knew what I needed. That’s the first thing. And second of all, if you proactively work on your customers and you try to make. I’m happy. This is very unlikely to be subsidized by AI.

[00:15:52] Florian Schröder: It’s very unlikely. They might be unlike your daily work routines, but this personal interaction is very unlikely. 

[00:16:03] Steve MacDonald: So now how do you then, and you talked about, you need to promote this value internally within the organization? Some of these perceptions are long held as a cost versus a value center, right?

[00:16:17] Steve MacDonald: What are the things in your mind? These are the most important things to be internally championed, right? You want to promote internally things that show we have a much greater impact than just handling some questions, and there’s a cost involved with handling some questions. What do you want to do that promote and do it well?

[00:16:39] Florian Schröder: Yeah, first of all, as a context center responsible, you must know your KPIs and ensure that your team knows the KPIs that matter. For example, only what you can measure counts; it’s not there if you cannot measure it. And that is, for example, when it comes to contact centers. I talked about average handling time, resolution time, etc.

[00:17:04] Florian Schröder: The most important KPIs, if you want to put it, are the key KPIs. The key is the customer satisfaction score, the CSAT. This measures your service, how good it is, and how your customers perceive it. As a next step, the net promoter score is the lead KPI for customer loyalty. And if you can measure these two KPIs and that they influence one another, then you’re able to promote that to your company to say, look, this is the value we bring, and if you then also have suitable controllers or even customer experience people in your company, that makes sure.

[00:17:43] Florian Schröder: And that is, take the CSET, the customer satisfaction score. They take the NPS, the net promoter score. And they say, if you influence this, you influence that. And if you influence that, this will influence your future revenue. And if you made that sure, if you built that line, and you promoted that into your.

[00:18:07] Florian Schröder: company, what does it bring to you over the company’s success? Then, you have created the value of your contact center. No one will even think about reducing labor there because reducing labor will impact the company’s revenue. 

[00:18:23] Steve MacDonald: Revenue is what we are all in business for.

[00:18:27] Steve MacDonald: That is business. We all know the net promoter score impacts revenue, and customer satisfaction impacts the net promoter score. And so, if we’re working our way backward here, what impacts customer satisfaction? And that’s where you’re talking about, get the right people, the right character with the right service mentality, right?

[00:18:50] Steve MacDonald: And we, you, can train them to use the dashboards and different things like that. If the right people are the key to satisfaction, promoter score, and revenue, I have a question for you. All right. The issue with the right people is the agent turnover issue in the industry, right?

[00:19:15] Steve MacDonald: Where we’ve been around up a little bit down a little bit around 40 percent agent turnover, right, for decades, but for the longest time. Is that something that we should accept, or is that something that we could impact to impact the customer satisfaction net promoter 

[00:19:31] Florian Schröder: Score ultimately being revenue?

[00:19:33] Florian Schröder: Yeah. I got your point. Agent turnover is natural. I cannot give you the numbers for StepStella out of confidentiality, but we also face turnover in our sales contact center and our service contact center. They differ, but we have them. There is a natural turnover, but let’s put it this way.

[00:19:54] Florian Schröder: On a scale from one to 10, I would give that topic an eight of importance. You should tackle that as a company very proactively. First of all, recruiting costs are high. So, if you constantly have a higher turnover, then it is natural for your business. Then you constantly have to recruit new people. And in the beginning, I talked about the labor shortage, so this will not get easier.

[00:20:19] Florian Schröder: Recruiting externally is always more expensive than developing internally, so you would have to face this. If you develop your people, you first help people grow in their roles. You develop people with a great customer collection, which also helps. Your customers should know there is someone that I can always lean on.

[00:20:42] Florian Schröder: There’s someone I can go to. If you lose these people and you constantly have to tell your customers, look, there is someone new now and next year, actually, there is now someone new for you. This doesn’t help you very much when it comes to, okay, we want to build on the potential of this customer to bubble this customer price-wise or product-wise whatever, if you have constant turnover there This relationship is so crucial between, for example, a sales accountant, an account manager, contact center, consultant, and the customer.

[00:21:12] Florian Schröder: This relationship is so crucial. It has to be withheld as long as possible. Of course, people develop internally. Externally, this you cannot stop. This is also important, but you need to make sure that there is a connection that stays not only for months but best case, for years. And if you hire the right people and start to develop them in the right way, you have a customer service mindset. You pay these people on a level that is something they can live with, and that is also when it comes to benchmarks of the market, a salary they can live with, then you will reduce churn.

[00:21:51] Florian Schröder: There are some other factors, such as a company’s image, leadership, or unusual culture. Or how is your company developing in general when it comes to revenues? There are other factors, but I’m just pointing out this one factor: hire the right people, develop them properly, ensure a solid connection between sales and your customers, and pay them right.

[00:22:12] Steve MacDonald: So, is your point of view that we shouldn’t accept a 40 percent turnover rate, that there are things we can do? And then how high of a priority is that if you’re running a contact center? How big of a priority do you put it as a? On a scale of one to 10, you put it as an eight in terms of the overall impact that agent turnover can have on the business.

[00:22:38] Steve MacDonald: As the business grows, you conclude that agents are successful through bottom-line revenue. So, how important is it for a leader like you running a contact center to address this agent turnover? Should we accept it, or should we work on it every day?

[00:22:58] Florian Schröder: This is a no brainer. We should work on it every day. And I can tell you why. A 40 percent turnover rate is severe. And if you have that in your branch, market, and company, this is an underlying virus. There is something incredibly wrong. As I said, you always have some turnover, and that’s also a good thing because if you have new people joining the company, they bring some in German, we’ll call this some fresh wind into the team, into the company, something new, something interesting, new perspectives, but still.

[00:23:27] Florian Schröder: That’s a natural turnover rate you have. Maybe some people go to pension, then you replace them with others. That’s fine. But if it gets over a certain line, which has to be very individual on a company, branch, or market level, I can say this is okay. But 40 percent sounds a lot to me.

[00:23:43] Florian Schröder: Then you have an issue, and this is where I can try to, like, make one connection where this gets the worst. Several studies show how important it is to keep your agents happy, like your employee happiness or employee engagement, and that there is a direct correlation to your customer happiness. To put it in easy words, the happier your employees are, the happier your customers are. The happier your customers are, the happier your employees are, which is the opposite of a vicious circle.

[00:24:16] Florian Schröder: It’s a happiness circle that influences each other. And you cannot do this if you constantly have to recruit new people, onboard them, upskill them, then use them, and then do the same thing again. This circle of happiness will never develop. So if this 

[00:24:33] Steve MacDonald: We need to work on this daily, and 40%, if that’s where you’re at, even close to it, there’s something very wrong.

[00:24:40] Steve MacDonald: So that’s unacceptable. You’ve thought a lot about how to address the patient turnover rate. What are some of your recommendations for sharing with your peers here? What are some of your recommendations to put that proactive plan together and say, okay, if I’m going to do this and something important I need to be working on every day, what are the top points? What are the things that you need to be working on?

[00:25:03] Florian Schröder: So, how can we address it? That’s one thing, and this is, I think, crucial because if it comes to contact center agents or customer service consultants, you need first to address the salary. You have to make sure that you have a competitive salary span in your company, compare yourself to other departments, and compare yourself to your competitors.

[00:25:28] Florian Schröder: What are they willing to pay? If you pay 5,000, 10,000, or 10,000 less than your main competitor, you will always lose your best people to them. That’s the first thing. So make sure that there are your possibilities. What can you pay? What are you also willing to pay? And don’t try to underpay your best people.

[00:25:46] Florian Schröder: Second, remove boring and repetitive tasks. You can do that if you analyze your processes. Where are the gaps? What can you do? Which systems do you need to make agent’s lives easier? And you can also use the benefits of artificial intelligence, and AI might help us in various ways regarding customer service.

[00:26:10] Florian Schröder: It can help you automatically address the right messages to your customer. When it comes to use cases, you have, let’s say, build a top 10 use cases, and you say, look, do this. We have this answer, we have that, and you free your agents up from all these repetitive tasks and everything that is. I typed the identical mail for the third time today. In doing so, you free up space and resources, and what you shouldn’t do, like in the cost center, thinking you would not reduce people but shouldn’t do that, you should use these free resources to become proactive and understand your customer.

[00:26:43] Florian Schröder: What are the needs? Where can you find things or situations that a customer will face in, say, ten days or two weeks? And you can do something now so the customer doesn’t see or face that in two weeks. It can be anything. It can be like you need more budget to continue with your product, or your lifespan will end in two weeks.

[00:27:04] Florian Schröder: And what can we do now already? Or maybe you cannot be as happy with your product as you should be. If we would do this and that you would adjust something, you could be even happier. So you? Is there anything that helps you be more proactive? AI is a big helping factor here. Although sometimes it is perceived as a danger or a threat to jobs when it comes to contact centers, it can be a real help because it frees up resources that are so desperately needed.

[00:27:31] Steve MacDonald: Let me ask you a question. It can be seen as a threat to contact centers. But part of what you said is that you shouldn’t reduce staff, right? Just use AI to make them more proactive and remove some of those mundane, boring tasks nobody wants to do. Right. That will lead to their job satisfaction, right?

[00:27:53] Steve MacDonald: This is to address the turnover rate. What is your view? Is AI going to replace agents, or is AI just going to empower agents, but you would always still need that live agent? Where do you land on that? 

[00:28:08] Florian Schröder: When it comes to Cephsal, I can tell you we will take the second. AI will empower our agents to provide better proactive customer service or even customer success work.

[00:28:20] Florian Schröder: Some companies might think I can make AI 40, 50 percent of my use cases here. So 40 or 50 percent of my staff is not needed anymore. And I think that would be the wrong decision because just to go back to the beginning, what we talked about if I can get boring and mundane use cases out of my agent’s hands, and I.

[00:28:39] Florian Schröder: I will make space for proactive services, for proactive impulses to my customers, to try to influence the motivational factor, something that is not expected, something that is surprising and cool. If I may, if I do this, I will influence the net promoter score because it will not be influenced by whether I had an issue and see if it would help me.

[00:29:01] Florian Schröder: This is not where this KPI suddenly skyrockets. It goes skyrocketing, and if you do something your competitors don’t do, you need time, space, and skills. You need to have the right mindset, and you need time for that. And if you have time for that, you can think of something that makes your customer happy.

[00:29:17] Florian Schröder: This is where it all gets together. This is where it all makes sense: the right people with the right skills, time, and no stupid and boring tasks to do, like one, two, or three hours per day, that you can invest in your customer. 

[00:29:30] Steve MacDonald: We all want more time in our day, right? And we all know what we would be doing.

[00:29:34] Steve MacDonald: We would be doing proactive things. As business people, we think about that all the time. Why are we not thinking about how we empower our agents? To do the same thing and be more proactive, you know, it’s like the net promoter score is what you’re doing that is different from your competitors, which isn’t just the standard on answering questions quickly.

[00:29:54] Steve MacDonald: That makes perfect sense. We’ve talked about it a lot. I would love to ask everybody, your peers, and other contact center leaders here if there was one takeaway you wanted them to have after watching or listening to this podcast. What would that be? 

[00:30:14] Florian Schröder: That’s a great one, Steve.

[00:30:16] Florian Schröder: That’s a great one. The main takeaway is to ensure that you stand for what you stand for as a company, hire the right people to make your company’s purpose a reality, keep them, and make them happy. And watch happy customers unfold. 

[00:30:31] Steve MacDonald: It seems simple, but I know that’s why we all have careers: to make that happen.

[00:30:38] Steve MacDonald: Thank you so much for coming on and sharing all these insights. If people have additional questions, please provide a link to your LinkedIn profile so they can reach out to you. 

[00:30:52] Florian Schröder: I would be happy to do so. At StepStone, we don’t always do everything perfectly.

[00:30:55] Florian Schröder: We do not, but we are in a process and on the way and have already traveled quite a bit. We want to travel even more, and I’m happy to share that with everyone facing similar issues. Fantastic. Again, thank you very much for coming on.