By Peter Lyle DeHaan, Ph.D.
What is benchmarking? At its simplest, benchmarking is objectively comparing your call center with others. Brad Cleveland of Incoming Calls Management Institute states that “Benchmarking is comparing products, services, and processes with those of other organizations, to identify new ideas and improvement opportunities.” Whereas Dr. Jon Anton of Purdue University defines benchmarking as “A structured, analytical approach to identify, deploy, and review best practices to gain and maintain competitive advantage.”
Benchmarking is a safe, anonymous, and effective way to obtain input from peers which can be used to compare and contrast your call center operation to others. This feedback provides a baseline for determining areas of deficiency, as well as success. Benchmarking produces quantifiable results, real numbers from real businesses, thereby offering real solutions. Also, once a benchmarking process has been implemented, it can be easily repeated and updated on a periodic basis. This provides a time line of successive snapshots of your business. In essence, benchmarking makes it possible to create a report card showing your successes, your shortcomings, your improvements, and your relapses – all with respect to your peers, but done so privately and confidentiality.
Therefore, call center benchmarking is the comparison of your operation with statistical results from the norm of industry peers. These numeric measurements are called metrics. Metrics can be in the form of financial data, sales numbers, operational quality and efficiency, human resource efficacy, or whatever is deemed to be the most valuable to the participants, though typically and primarily they are operational in nature.
Successful benchmarking follows a progressive path towards a desired outcome. First and foremost, there must be a desire to obtain and use the information. Next, you need to determine who will be invited to participate. It is essential for participants to have an interest in the results and a commitment to contribute. Beyond that, it is imperative that all participants have sufficiently similar businesses. In many cases, it is wise to select those using common equipment or software platforms, since operational metrics are hard to reliably compare when their sources employ dissimilar statistical paradigms.
The third step is to determine which numbers to measure. It is recommended to start small, obtaining only a few key numbers (as participants become engaged in the process and realize the value of it, then other metrics can be added). It will then be necessary to develop a standard determination of how the information will be gathered or the calculations will be made. For without a standard methodology, each participant will make the calculations as they see fit, rendering any results unreliable. These two steps can be both time-consuming and contentious. Assistance from someone with experience in benchmarking or a background in statistical analysis is most beneficial at this point. This outside assistance serves to greatly simplify the process and save valuable time. Also, if this person does not have a direct vested interest in the results, they are better able to objectively guide the process.
The fifth step is a critical one. It is to develop the survey form, which includes documenting the source or calculation of the data. Although this seems like a simple and straightforward process, it is one fraught with peril, as a less than ideal survey form will doom the process to misanalysis or failure. Again, someone with experience in benchmarking or developing survey forms will be most helpful. Then, regardless of the quality of the survey form – or its developer – it is of paramount importance to test it. What may seem perfectly clear to those who developed and reviewed the form, could cause confusion or misinterpretation to those completing it. Therefore, a small field test should be conducted. Any problems uncovered in the test will need to be corrected before the benchmark survey is distributed to all participants.
The next two steps are the most important, as concerns in these areas can cause otherwise willing participants to decide not to complete the survey or to color their responses. Quite simply these steps are to gather the completed surveys and then to compile the results. Concerns reside in who performs these two steps. It is imperative that this person or group be trusted and respected by all participants and that there not be any perception of impropriety or a conflict of interest. As such, it is recommended that someone who is not participating in, and will not benefit from, the benchmarking results be assigned the task of both collecting and tabulating the responses.
The results of the benchmarking survey are only presented in aggregate form and then only to those who responded. All individual answers must be fully protected. In some cases, such as providing cross-sectional or demographic analysis, certain sections may need to be eliminated due to a small number of responses which would effectively expose one or two participants. The results, often along with an analysis and commentary, are distributed to all who submitted data.
Although conducting a benchmarking study once is valuable, the real benefit comes from repeated studies over the course of time. Therefore, it is important to follow-up with those who participated to determine any problem areas needing correction or additional data to be collected. These changes must be made before the survey is repeated. Depending on the nature of the information, the survey should be repeated at least annually, possibly quarterly, or even monthly.
Some examples of benchmarking metrics:
- Percent of calls answered
- Average time to answer
- Percent of calls placed on hold
- Average hold time
- Occupancy (percent of time spent working)
- Average call duration
- Average wrap up time
- Number of calls answered per month
- Amount of time spent on calls per month
- Schedule adherence
Sales and Marketing
- Number of sales made
- Sales per hour
- Average revenue per sale
- Number of inquiries
- Closing ratios
- Source of leads
- Annual turnover rate
- Average employee (CSR) tenure
- Cost to hire one new employee
- Cost to train one new employee
- Starting pay per hour
- Average hourly rate
- Percent of revenue spent on labor
- Percent of revenue spent on marketing promotions
- Percent of revenue spent on all sales and marketing efforts
- Number of clients
- Average revenue per client
- Cost per sale
- Profit margin
Conclusion: Benchmarking is a valuable mechanism to bring outside experience, information, and knowledge into a business. With this input, business goals become more defined and realistic; direction, clearer; and focus, sharper. It is an opportunity for improvement that should be seized.
Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of AnswerStat. He’s a passionate wordsmith whose goal is to change the world one word at a time. Read more of his articles or his book, Healthcare Call Center Essentials.
[From the Summer 2003 issue of AnswerStat magazine]