How Silicon Beach’s $20B Customer Service Budget is spent
If Silicon Beach is worth $155 billion and approximately 13% of that budget is spent on Customer Service, then we’re looking at over $20 billion dollars flowing into the Customer Service sector in the LA area alone. If these stats are true, Silicon Beach itself makes up nearly 6% of the $350 billion dollars that is spent on Customer Service year over year.
Where does this money go?
More than 60% of the cost of CS is people. Even with evolving technologies, AI and robust FAQs, most of the money is spent on people. What’s more is in Silicon Beach specifically, most entry level CS people are still not paid a livable wage, though this evolving. I’ve seen more roles paying much better than ever before. But hiring for CS is more than finding someone to engage with Customers. Building a CX team requires so much more. You’ll need leadership and supporting roles if you’re looking to deliver best in class customer experiences.
These roles are not cheap, and if you want them done properly will require a good amount of been there, done that energy.
For example, if you didn’t grow up in Customer Service, you may think the six figures you’ll drop on a Workforce Management (WFM)Expert is insane. But what you don’t realize is that role pays for itself by saving you from making too many hires, not enough hires or placing people into the wrong schedules causing severe gaps in your coverage. Every Workforce Management role I’ve filled has paid for itself. If this role isn’t saving you headcount, you’ve hired the wrong person.
You may also find it silly to hire a true Learning & Development professional whose job is to create and facilitate (can sometimes be two roles) training for your team. This duty is often afforded to the person who has been part of the team the longest. The tribal knowledge this person has is important, but are they great at passing that knowledge on? Do they understand how people learn and are they able to organize their thoughts and experiences into learning materials? If you answer to either of these questions is no, you’ve got the wrong person in place.
Customer Experiences need to be mostly consistent. If not, you’ll be surprised at how quickly the news travels on what you did for one person, that wasn’t done for the other. To ensure consistency and uncover training opportunities, you’ll need Quality. Quality Assurance is sometimes given to high performers that has a skill set, or strategy you want to spread across the team. What about their friends? Some can totally keep things separate, but it can be challenging to hold friends accountable when you understand their personalities. When you’re creating a brand, it’s not so much about the individual personalities so much as it is about the persona of the business as a whole. If you’re finding that your experience isn’t uniform, or your QA person is making excuses for less than stellar performance, they’re not the right fit for the role.
For every 25 employees, you can count on having at least 2 leaders, 1–2 trainers/facilitators, 2 quality persons and 1 WFM person.
Systems promise to save you money, but are they really deflecting contacts?
The short answer is yes (but only if they’re setup properly). Sometimes you can’t see it immediately, but one way to measure the success of your Help Desk or auto-responders is to review the number of views, or messages that were automatically resolved. This may feel incremental, and it is, but every little bit counts.
Consider this: if you have 10% more Customers this month than last month, but you’re receiving the same ticket volume as last month, there’s a win there. You can monetize this by calculating your cost per contact for each month to to see just how much you’ve saved.
The average cost per contact is $1 per minute. If you’re receiving 3,000 tickets per month at 5 minutes each, that’s $15,000 per month you’re spending or $5 per contact. Introducing new channels will help to reduce this cost. Channels like chat allows a one to many servicing relationship (one customer service person to many customers), thought it can be confusing for CSR people who have trouble multitasking.
Chances are, over 50% of your inquiries can be handled by self-service.
Your systems should be configured in a way to save you time, effort and energy. I believe in Deflecting, not Deterring. This means you should provide the Customer with enough information to service themselves, but you should be available to them if they choose not to. Customers are more than willing to be pay for better service. If your service is good, you can charge more. It’s about value more than anything.
Other ways to save:
Build a scalable foundation early on. This means you may need to hire an experienced leader or consultant who has seen at least double the size you’re at today.
Setup your systems and make them work for you. Let the machines handle anything that’s black and white. Let people handle the rest.
Establish processes that won’t need to be changed as you grow. This includes workflows. Your processes should work for 1 employee or 100, 10 Customers or 10,000.
Improve your training. If your team is effectively trained to service your Customers with clear decision making abilities, you can essentially hire less while empowering them to do more.
Get an effective Workforce Planning strategy set. Hire when you need, scale down when necessary and define the right KPIs to ensure performance is where it needs to be.
Remember, happy customers tell their friends they’re happy. Angry Customers tell everyone. Your goal should be to reduce Customer effort and make their lives easier. Happy Customers are loyal. Loyal Customers drive down your acquisition costs.