POV: Contact Centers as an Investable Value Engine

Transcript

[00:00:01] Steve MacDonald: Welcome, everyone, to the Contact Center Perspectives Podcast. I’m Steve MacDonald, your host. We have an incredible guest on today, Dean Czuma.

Now, Dean, for a long time—a decade, most recently—you were at McKinsey & Company, and you were in charge of the Global Business Services Unit. I’m going to let you talk a little bit more about that. That puts you in a position as an expert right away, and you’ve worked across B2C and B2B companies in almost all regards. So we’re going to tap into a bit of that knowledge today.

We’re going to talk specifically about our customers and our contact centers and why they are not a cost center, as many companies still see them, but rather an investable engine for the company that produces so much more when you actually feed that engine with fuel.

Before we get into that conversation, though, I’d love to have you spend just a minute here and tell us a little bit more about your background.

[00:00:59] Dean Czuma: Sure, Steve. First of all, thank you for having me. I really appreciate it—and for that prolific introduction. It’s humbling to hear that, but I try not to take myself too seriously.

Anyway, I did spend 10 years building McKinsey & Company’s global services mid-to-back office operations.

The McKinsey world revolves around delivering client service, so every facet of the business focuses on that spearhead of delivering great client value. When we examined our global back office, we applied the same mindset: How do we position ourselves with great services, a great experience, and capabilities that deliver value all the way into the client team rooms on a daily basis?

Additionally, how can we treat each other internally—within a fairly large, complex, global organization—as customers and suppliers? How do we collaborate to drive and continually increase value? It was an amazing experience to be part of stewarding this, developing a vision, and growing it over the years.

Before that, I was much more involved in a B2C environment at a med device company, where I built a very complicated, rule-based reimbursement customer service system. We handled a lot of contact center-based selling, upselling, customer service, product replacements, product fitting, training, and education.

There were a lot of interesting aspects to that role. I also turned that into a back-office order-to-cash operation as well. So I have quite a bit of experience in different environments doing what you might call “contact center work” but also driving value through talent concentrations.

[00:02:31] Steve MacDonald: Just out of curiosity, why is this subject—contact centers as an investable engine—something that’s near and dear to your heart?

[00:02:40] Dean Czuma: A contact center, or any talent concentration interacting with customers, is probably the most important—and often the only—source of interaction between a company and its products and customers.

When you think about it, unless you’re a monopolist, you’re competing for mindshare and experience share with your customers, regardless of what product you’re selling. To fall short in that—to not make it a meaningful part of your value stream and invest in it heavily—means you’re missing out on significant investment potential.

[00:03:16] Steve MacDonald: That ties right back to the title of our podcast today: Contact Centers as an Investable Engine.

I’d love to hear your opinion on this because there’s actually a McKinsey study that I quote all the time, which I think is phenomenal in terms of reorienting our thinking.

It was from 2023, and I believe over 400 different B2C and B2B companies were evaluated—highly profitable companies with the greatest return on shareholder value. One of the number one conclusions from the study was that, across the board, the biggest differentiator was CX—customer experience.

What you just articulated—sometimes being the only real interaction between customers and the company—how does that study’s focus on CX connect to the idea of contact centers as an investable engine?

[00:04:14] Dean Czuma: First of all, the experience of the end customer has to be crucial in teaching a company how to do business. It offers you—or should offer you—the capability to pivot, whether that means modifying a product, increasing product diversity, or rethinking how products are delivered, serviced, and paid for. It can even help develop annuity streams.

For me, this has become increasingly important. If you think about the birth of e-commerce 25 years ago, we’ve moved from a brick-and-mortar environment to a digital one, and now to a mixed model. The question is: How can you use your customer interactions—your contact center and the front end of your engine—to map this out? How do you increase profitability while also expanding capability and revenue opportunities?

The study doesn’t surprise me at all. Being inside McKinsey for a long time, we focused on internal transformations. Our colleagues work with clients constantly, gathering insights and delivering findings like this, so I find it to be a completely believable metric.

[00:05:21] Steve MacDonald: The term “investable engine” implies a large ROI—why else would you invest in creating an engine that’s going to produce something incredible?

If you had to articulate the potential outcome, the promise of investing in a contact center, what would you say?

[00:05:45] Dean Czuma: I think it comes down to two or three key areas.

First, customer retention. Everyone is competing for customer mindshare and share of wallet. If you’re in an environment where other people sell your products—possibly even in the same channel—outperforming them with great service and capability will help you win.

You could have product failures, quality issues, or mistakes, but at the end of the day, what customers will remember is probably not the cable they bought from you. They’ll remember the experience they had when they received the wrong one—or ordered the wrong one—and how you resolved it.

We’ve seen this in multiple e-commerce environments where customer service agents are empowered to retain customers at all costs. When you have a million customers, the cost of keeping one is relatively small.

Second, new revenue opportunities and customer stickiness. Is it a one-time transaction, like buying a battery from an auto parts store? Or is it a long-term relationship where you regularly buy products and want to work with a company that understands you?

For example, pet owners appreciate companies that know their pet’s name, size, and preferences. They value empathy when their pet is sick or even when their pet passes away. These details create customer loyalty and repeat business, which are key to long-term success.

[00:07:10] Dean Czuma: And I think those are the kinds of experiences that move you from the generic environment to one where there is specialization. And then I think the third thing is around what the breadth of product and, let’s call it, upsell cross-opportunities.

[00:07:24] Dean Czuma: What more can your customers experience from you? And how are you going to profit from that? That customer relationship, once it’s acquired, is an incredible potential opportunity. How do you take advantage of that? And I think this is a very big channel for you to do that in a world where you have a lot of competition.

[00:07:41] Steve MacDonald: Just last month, Forrester was cited in one of the reports saying that, on average, 77 percent of revenue comes from your client base. Yet, we chase new logo development as organizations all the time. We have to, obviously—there’s no argument about that. When you sit back and you think about, okay, this year’s revenue—77 percent is going to be coming from the people we already have—it changes the beacon of where you’re headed and where you’re focusing your time and energy. And one of the things—of all the things you said there, which was amazing—is you used two incredible words when you talked about the agent.

[00:08:22] Steve MacDonald: The front line with the customer—you said “empower” and “embolden.” But in a world where I’m looking at this as a cost center, I’m dialing back, I’m checking out KPIs like average handle time, and I’m trying to squeeze it down—that’s a metric from the board down. So it drives our thinking. But what you’re saying is exactly the opposite of that. That’s what it feels like.

[00:08:47] Dean Czuma: Let’s dig into average handle time for a second. That, to me, is a metric to dispatch your customer—to get the customer that loves you and has called you for attention off the phone as soon as possible so you can move on to the next one. And I think a better metric—a much better metric—would be single-call resolution.

[00:09:07] Dean Czuma: Can I satisfy the customer? Who cares how long it takes? If it takes four hours and three different interactions with supervisors or product managers to resolve my issue—calling FedEx on the phone or whatever the case is to make sure the product gets there—why wouldn’t I incentivize and reward people for saying, “No, I’m not going to take my break. There’s no red light blinking on my phone to take the next call. I’m going to press green when this customer is satisfied.” They’re going to fill out a survey at the end that says they’re satisfied, which is going to increase our NPS and all these other things. But it’s a satisfied customer rather than one that the operational people have dispatched just so they can say, “I handled 17 calls this hour.”

[00:09:52] Steve MacDonald: It’s not a quota-based system. You’re not judged on how many calls you were able to take and how quickly you were able to—I love the word “dispatch” them. It almost feels like a throwaway—the opposite of customer experience. And there’s not a company out there that doesn’t say, “I want to be customer-centric. I want to be customer-focused or customer-obsessed.” Everybody says that, but you’ve got to actually operationalize it. You’ve got to say, “Okay, now, tactically, how are we going to execute that goal? How is that a part of our go-to-market strategy?”

[00:10:33] Steve MacDonald: You’ve discussed operationalizing contact center excellence. What do you mean by that?

[00:10:35] Dean Czuma: Steve, you brought up a couple of good points about the mission. Everything we do as a company should cascade from our vision and mission to what our capital structure is. It should be communicated so that people at all levels can understand.

[00:10:55] Dean Czuma: If you’re saying to a frontline customer service agent or a quality engineer that our goals are to make a 25 percent gross margin, they don’t quite understand that. But if they hear, “I want to have excellent customer satisfaction. I want to have a 90 percent quality rate. I want to have high-quality products,” then they can understand that, and it must connect to the mission.

[00:11:17] Dean Czuma: If you’re the type of company that doesn’t really feel the need for or doesn’t need to have a strong customer service backbone, then focus your energy somewhere else—whether it be your supply chain turns, your product efficacy, or whatever it is you’re thinking about. But when you’re thinking about the value stream that includes the customer, I think operationalizing it is not extraordinarily difficult if you think about the right metrics. What are the things we’re trying to accomplish? If we’re trying to accomplish great service, single-call resolution, or using this channel as a revenue-generating engine—where the customer called wanting to buy a $100 product and ended up buying a $150 or $200 product—those things don’t happen for free. They require training. They require the inputs to the emboldenment that drive that value.

[00:12:13] Dean Czuma: So I think the right metrics are one. The second one is, how are you training your people? Are you putting them through a five-day training system on how to use the call center system and AI bots on the screen? Or are you training them on the customer demographics they are actually talking to? What kind of products are they interested in? What are they going through besides buying your product today? How are they feeling? What is going on within that environment? Giving them more insights and letting them play with that as they talk to their customers.

[00:12:39] Dean Czuma: Treating these frontline agents like adults who know how to have a conversation and understand that the person on the other end is human. Thinking about how to use tools to get you there. The emboldenment and enablement part is quite complex at the end of the day because you have to have great systems in place. You have to have fast systems where the databases are well-constructed, and you need good training and capabilities. But then the people have to be able to use them. They have to be able to escape the script when needed.

[00:13:12] Dean Czuma: And do it naturally. You and I have both been on the phone with someone where you really needed help, but you could just feel that it was not going anywhere. The person was caged and didn’t have the capability to move up and out to solve your problem on the first call.

[00:13:27] Steve MacDonald: I think those are the winners—the ones focused on the value stream of delivering service, not just on what happens when the call comes in and how to route it to the right place. It’s about solving the problem for the customer.

[00:13:41] Steve MacDonald: A very vivid picture that you’re painting here in terms of the value that can be created. There are two other major areas of value I want to ask you about. You mentioned that somebody might call in looking to purchase a $100 item or collection of items, but they come off the call having bought $150 or $200 worth of products.

[00:14:01] Steve MacDonald: There’s actually a capability of the contact center—the agents as salespeople. They’re cross-selling, they’re upselling. When there are new product launches, customers are calling in, asking questions, and considering making a purchase. There is a direct correlation between sales and revenue for the organization and how the contact center handles all of those situations.

[00:14:27] Steve MacDonald: How do you characterize the size of that opportunity—contact centers as actual sales agents in many capacities?

[00:14:36] Dean Czuma: It certainly depends if your product portfolio is set up in position. For example, I had a fairly large route of cash organization that did claims handling and sold some products. What we did was fortify their product lines. We bought a company and acquired a bunch of products that they could actually sell to those clients, those customers. They would episodically talk through where they’re at and say,

[00:14:58] Dean Czuma: “I’m also thinking about needing a pair of compression garments, or I need this, or I need that.” And we said, “Here, go to this website. We can help you with that if you really wish. If not, it’s fine.” Setting the value stream up for success is a big part of it.

[00:15:10] Dean Czuma: It’s also about core context. We sold a very high-priced product to the client, but what products would go along with it that might make their life better, make it easier for them to use, make them a little happier, or ensure that they didn’t have to go to the store and buy something else?

[00:15:28] Dean Czuma: Especially in cases where you have a contextual sale, you can really drive that into your contact center. It’s funny—when I talk to my leadership team about some of the most important things, there are two: always be recruiting and always be selling.

[00:15:41] Dean Czuma: And if you always sell without the dogmatic sound of sales, it sounds like help. It sounds like understanding. It sounds like empathy—how I might be able to help you a little bit. I think those are the things that really work. What we do in the world where we work is start at the beginning.

[00:15:57] Dean Czuma: When we hire contact center reps or mid-to-back office colleagues, we’re thinking about their collaborative skills. We’re thinking about their empathy—how they handled things when they were in college, high school, their family, or their church, whatever the case may be.

[00:16:13] Dean Czuma: We put those things together, and those are the ones that end up floating to the top in terms of capability. You’re crafting your employment, your workforce, for these things. I think that’s a critical part of it. If you’re looking to find people who can pick up a phone, press a button, and are good with computers, that’s great.

[00:16:30] Dean Czuma: But you should also consider the softer skills that align with your proposed value stream. Again, it comes down to the cascading metrics of what’s essential for your company.

[00:16:39] Steve MacDonald: So that’s one major area of value and value creation—this soft sell, this human approach to helping. We talked about the customer experience bucket. Then, there’s another one: the contact centers talk to customers all day long.

[00:16:56] Steve MacDonald: There’s another set of customers—the internal departments inside their organization. They are customers of the knowledge we glean from thousands of interactions with external customers. What can a product learn? What can marketing learn?

[00:17:12] Steve MacDonald: What can sales learn? Operations? Pricing? It goes on and on. Regarding this value engine, how do you think about the relationship between the contact center and all the other departments?

[00:17:27] Dean Czuma: First, the contact center depends on the product and offering. In the world where I worked, the people on the front line sat an aisle away from the marketing department. They sat in an aisle away from the quality and testing department. They sat close to the HR group as well.

[00:17:45] Dean Czuma: So they always considered the end-to-end game. A lot of times, you don’t get that opportunity. I’ll give you an example—McKinsey Global Services and many companies concentrated talent in locations that were not necessarily in the offices where the consulting was done.

[00:18:01] Dean Czuma: But what we did was think structurally about the support system that backs client service. We started moving departments into those areas and recruiting people across various functions. This allowed for, number one, a cultural connection; number two, a connection to the product and service; and number three, the ability to problem-solve and engage in real-time.

[00:18:36] Dean Czuma: I was going to save this for the end, but I think it’s relevant now—continuous improvement. If your frontline is a dead end for making your product or service better, you need to change that. There should be a loop where the front line provides feedback as an equal in the process.

[00:18:52] Dean Czuma: They’re the ones on the front lines, digging the ditches. They may not know the intended use model, but they see how it’s really being used. They can provide invaluable feedback.

[00:19:00] Dean Czuma: Another critical factor is how the company treats its own departments. Is there an “us vs. them” mentality? Is there a hierarchy where salespeople are most important, then engineers, and customer service is at the bottom?

[00:19:12] Dean Czuma: When you have a team focused on the mission—where different professions, different pay grades, all contribute to the value stream—everyone benefits. Treating each function as a collaborative thought partner in value delivery lifts all boats. It makes everybody feel better about their work and creates a healthier environment.

[00:19:35] Steve MacDonald: You just touched on a really important area there. You mentioned the word “culture” about 10 minutes ago. The environment—is it top-down? Is it “us vs. them”? Is customer support at the bottom of the totem pole? How does culture play into the value engine across the board, specifically in the contact center?

[00:19:57] Dean Czuma: Culture is huge. I know the difference as a consumer, and I also know the difference as a B2B or B2C executive leader. I’ll give you examples of both.

[00:20:25] Dean Czuma: As a consumer, I can tell when the person I’m speaking to is juggling multiple companies and reading off scripts. They’re just trying to get me through the problem, not truly understanding it.

[00:20:38] Dean Czuma: On the other hand, there’s the agent who says, “Hey, this is a recorded call because I get trained from these interactions, but how can I help you today?” There’s genuine interaction. They know the product. They’ve worked there for years or have been trained properly.

[00:21:00] Dean Czuma: Internally, it’s critical that everyone rows in the same direction. Sales reps should sell a product they believe in, and the entire organization should be solving for the same set of issues.

[00:21:17] Dean Czuma: I’ve had friends who have left our offices in a couple of my different companies in senior leadership roles. I’ve had conversations with them when they’ve actually come back to our firm. And I said, “Wow, you were here for a couple of years, and you went to that bank. You stayed there for a year, and then you came back. You interviewed for a new role back here at our firm.”

[00:21:36] Dean Czuma: “Why did you come back?” I’ve had dozens of these conversations. Their number one answer is, “I came back because of the culture. When I’m here in this office, I know the product, and I know the service that we deliver. Everybody around us talks about it. We get to talk to our clients, or we get to talk to people that are very close to our clients.”

[00:21:55] Dean Czuma: “The people in the main offices that are working with me treat me like I’m one of them. Where I went to this place, they treated us like a vendor. They mistreated us like a vendor. They did not really consider us to be part of the family. They blamed us when something went wrong.”

[00:22:08] Dean Czuma: “The systems were poor, and there was a problem. They said it was us. We tried to problem-solve, tried to ask them, tried to show them what was wrong, and they just ignored us. Those are the types of organizations where there’s some healing needed across the value stream in order to figure out how to deliver value a little bit better.”

[00:22:24] Dean Czuma: And a lot of companies go through this, by the way. It’s not something that hardly ever happens. It happens a lot.

[00:22:29] Steve MacDonald: One of the things that I think you and I talked about right before we hit the record button is, in this day and age, when you’re thinking about moving companies or interviewing, you’re interviewing that company as much as they’re interviewing you. And I talked to chief technology officers and CROs. Let’s say one of the most important criteria, if I’m making a move, is the culture of the business that I’m going to. In fact, I’ve had those same CROs—I had CRO-CMO combinations come on the podcast—and they attributed over 50 percent of the success of the company to their company culture because it attracted the right high-performance individuals who contributed to high-performance teams. Their engagement turned into phenomenal engagement with the clients and, ultimately, better client retention, acquisition, and revenue.

[00:23:21] Steve MacDonald: So it was refreshing to hear people like a chief sales officer or a chief revenue officer—who are under quotas to drive short-term revenue—talk about something like company culture in such a way that it’s an incredibly important part of the revenue generation engine.

[00:23:38] Steve MacDonald: So I think it has, like you’re saying, massive implications for the value engine that we’re talking about today because agent turnover has always been one of the biggest issues in the industry. If you can train and retain your good agents and people, everything you’ve been discussing gets easier.

[00:23:57] Dean Czuma: I’ve had quite a few conversations recently regarding where capital investments are going and the idea of stacking enterprise systems. Number one, you have a workflow engine, an ERP system, an HR system, and customer relationship management software.

[00:24:16] Dean Czuma: All of those have some very big overlapping capabilities but also some niche capabilities. Many corporations are buying pieces of, or all of, those things and then not implementing them to their full potential. They’re creating annuity streams for the software companies.

[00:24:31] Dean Czuma: They’re solving some problems but not necessarily getting at the core. Instead, they’re disinvesting in places like service to be able to pay for that. Otherwise, their gross margins go down, and they must find ways to replace that.

[00:24:48] Dean Czuma: Where will you replace it when you’re creating all these shiny new penny systems? Are those adding value? Are you actually creating systems that are enabling your frontline and enabling your company to be successful? There needs to be a practical view of where to put investments and not treat the front lines like a buzz phrase I once heard—”mission-critical minimum wage.” That phrase drove me crazy because it reflects an apparent disinvestment in the only people and systems that actually interact with your customer directly.

[00:25:20] Dean Czuma: When you put it that way, I think people finally come around, but it takes a little bit of thought and looking across the entire landscape of the capital and value structure of a company to figure that out.

[00:25:32] Steve MacDonald: I want to go on another hour. This is fascinating. I think you already mentioned it, but I asked you at the beginning—at the end of the podcast, our poor human brains can’t retain too much in one sitting. If there’s one key takeaway you want people to remember, what would that be?

[00:26:12] Dean Czuma: Yeah, I think a couple of things. The winners will lead in experience, and it starts with the way that customers are approached. A corollary to that is that it’s critical to earn the right to deepen a customer relationship. Who is best equipped to do that? And how do you do that?

[00:26:28] Dean Czuma: Sometimes it’s through great product, sometimes through great service, but you’ve got to figure that out as a company. Another thing—we covered the human experience, and even though we talked about it a lot, I still think it is a key takeaway. The human factor is critical in creating a competitive distance, especially when product offerings catch up with each other.

[00:26:59] Dean Czuma: One thing we didn’t really get to is that processes and standards are important for consistency and quality in this part of the value stream, but they shouldn’t depersonalize the function. If they have, it’s time to think about repersonalization, especially as AI introduces more automated answers. Are they the right answers? Are they too generic? Are they just plain hallucinations? We have to be careful about reconnecting and repersonalizing the function to be successful.

[00:27:41] Steve MacDonald: I love that. What a vivid idea—repersonalizing instead of just sticking to KPIs, scripts, and call quotas.

[00:27:49] Dean Czuma: Everybody is probably doing that stuff. It’s where the magic is that you want to be skating towards.

[00:27:53] Steve MacDonald: I’m pretty sure questions will come out of this. Would it be appropriate for me to share a link to your LinkedIn profile so people can reach out?

[00:28:02] Dean Czuma: Yeah, absolutely. That’s no problem. I’d love to engage and chat with folks.

[00:28:06] Steve MacDonald: Dean, thank you so much for coming on and sharing insight after insight. Very inspiring, and I know it will be inspiring to the audience. I truly appreciate you sharing with us today.

[00:28:17] Dean Czuma: I appreciate it. I also recognize that there are many views on this, and in different situations, any one of these treatments may be the most or least important. Contextualizing within the boundaries of your corporation and mission is super important.

[00:28:34] Dean Czuma: This has been a lot of fun, Steve. Thanks a lot for the time.