Press Release Author: Monch Bravante / US Contact Point
Industry: Advertising
Press Release Summary: In most companies, the task of customer segmentation involves determining whom, out of your target market, you will offer your products and/or services to. This very important task is usually done by the marketing group. However, in some organizations, this job is outsourced to call center management and is handled through call routing.
Press Release Body: August 13, 2008 -- In most companies, the task of customer segmentation involves determining whom, out of your target market, you will offer your products and/or services to. This very important task is usually done by the marketing group. However, in some organizations, this job is outsourced to call center management and is handled through call routing.
The business of providing data and services geared to helping you segment your customer base is engaged in by a lot of companies. And while segmentation is a complex subject, the following simple rules that often get overlooked can help you manage the workforce. According to Rick Kosiba, PhD, a charter member of SWPP (Society of Workforce Planning Professionals), the first rule is to tie the segmentation of your customer file to your company goals. Straightforward as it may seem, it is interesting to know that even sophisticated and analytically driven organizations usually miss the mark. In Kosiba's experience with a large credit card collections shop, the company utilized segmentation to prioritize who to contact and when to try and call their delinquent customers. They used "how late" as their primary segmentation and used a commercially available risk score as a secondary segmentation. There was nothing wrong with it.
However, they overlaid on top of this segmentation a sophisticated and commercially available contact optimization system that reordered the daily calling list each morning. Still, all of this seemed logical.
Kosiba said that in his experience, most collections shops are a tad overstaffed, and this shop was no different, until one week when part of their contact center network went down. This was when the segmentation scheme's faults became obvious. Kosiba received a phone call from the remaining on-line contact center manager: "Something is wrong with our system! We're only calling people who are barely delinquent! How do I get it to stop?" The mistake they made is that they let their contact optimization software, in the guise of maximizing contacts, determine who were called and how often the company tried to contact them. In simplest terms, once they became resource constrained (when the network went down) the system began calling the delinquent card members who were easiest to get on the phone. In their portfolio (and most portfolios), those folks who will answer the phone the most readily are those customers who are only barely delinquent (and will pay anyway).
The hard lesson learned was that they were using risk score thresholds and lateness to determine who was most important to call, and then, overriding them all, contact probabilities as a proxy for the real goal, which was to reduce dollars lost through bad debt.
Even on normal days, the contact optimization tool threw everything out the window and focused the entire collections effort, not on the true company goal, but instead, on filling the agent's time with chatting to our easy to contact customers.
Focusing your organization toward the supreme goal of minimizing charge-off dollars is crucial in collections. Customer segmentation should be focused directly on this goal as well. For more information about the contact center industry, call answering services, marketing and advertising solutions, and web development, log on to www.uscontactpoint..com. US ContactPoint's call center solutions are designed to create unparalleled customer satisfaction to guarantee the success of your business.
2022
