Call Centers are not Always a Commoditized Service
"If you look in the dictionary under what 'outsourcing' is, it should say ICT Group," says John Derham, senior vice president of Direct Marketing and Decision Support at Chase Manhattan Mortgage. Chase offers direct consumer mortgages through direct marketing solicitations (primarily direct mail), and it has outsourced the process of handling its inbound calls responding to those solicitations.
Derham's division was formerly owned by Advanta Mortgage Company, and he managed the unit there, as he has since Chase acquired it. Originally Advanta chose to outsource the inbound calls, he explains, because the internal staff was not best utilized as telemarketers and, consequently, were not handling the work effectively. There were IT systems challenges, and there were cost and time constraints to scale the process up to meet Advanta's massive growth. "It was an obvious problem staring everyone in the face," recalls Derham. "We had to scramble."
Footdraggers vs. Scramblers
The search for a customer relationship management (CRM) supplier was simplified, for Derham says the only company in which they had confidence in its ability to help them scramble was the ICT Group. They had some prior experience with ICT for their inbound calls from cable television campaigns, and he liked the outsourcer's "no-nonsense, get-it-done approach," as well as its flexible technology.
Most CRM vendors, he comments, are only interested in quoting a price per minute and service level agreements. But Advanta and Chase both wanted to use carefully scripted questions that would elicit certain results and data. "Our core requirements included transferring voice and data streams to our loan officers after a series of questions were offered," explains Derham. "However, when we would talk about the importance of transferring that same data to us in a nightly batch file, the other vendors' eyes glazed over. But ICT got it. They understood that we are a direct marketing company and that data is our life blood." As opposed to other vendors that need specific details as to what to do and why, he says ICT needs very little handholding. Chase was also comforted by the outsourcer's understanding of the level of complexity in the process, as well as its speed in implementing changes.
The contract was signed in May 1998. Almost immediately, ICT's flexibility was especially important to their success. There were several major challenges, but Derham says it took only two months after cutover to ICT to work out all the bugs. First, Chase had a double whammy of management issues and sales training issues because it consolidated all of its mortgage products into one call center at the same time as the ICT transition.
Then they had some problems with scripting and call logic. "We found we were asking far too many questions, which created longer talk times than we wanted," Derham explains. ICT helped solve that problem.
The biggest challenges occurred because Chase had underestimated the volume of calls. Indeed, the 230,000 monthly calls were double what had been initially forecasted. "It was a pleasant surprise when ICT scaled up very, very quickly and had us running near the service levels they had agreed to in just a few weeks," says Derham. Several months later, the outsourcer scaled up again to match Chase's growth, opening up another site.
At maximum capacity, ICT supports Chase's mortgage operation sales and customer care programs with 300 representatives at four contact centers throughout the U.S.
In addition to ICT's innovative way of transferring the inbound call data to populate Chase's management information system databases, the outsourcer has implemented a new system to handle the calls. "It gives us functionality that I didn't think we were going to be able to get," states Derham. The system can utilize dual paths of call logic so that Chase can make changes on a small percentage of the calls but leave the control system logic untouched until they see results from the changes in the test call path. As the vast majority of those experimental changes end up not being adopted, the ICT system gives the added value of not putting at risk the entire Chase marketing base.
The outsourcer also helped Chase test its newly developed Spanish-speaking queues. Derham says his group can work with more than 100 million pieces of direct mail each year; yet there are only 10 people in the Chase direct marketing area because of the global strategy of outsourcing within his area. He's a big believer in outsourcing; even so, he believes not all outsourcers are the same. "Call centers really are very commoditized - with most vendors, you get the same technology, service levels and pricing," Derham states. "It's the little things and the level of comfort I have with the management of ICT that makes them stand out."
Those "little things" have resulted in additional value to Chase. ICT introduced the concept of first qualifying calls before routing them to an internal loan officer, which allows Chase to better focus on streamlining its internal loan officer operations. Most importantly, ICT's services have played an instrumental role in increasing Chase's mortgage "closing" rates, cross-selling/up-selling additional products and services, as well as fostering improved customer retention and loyalty.
"They truly have become an extension of what we do," says Derham.
Lessons from the Outsourcing Journal
- Scripting is an important function in streamlining and maximizing the value in an inbound call center operation. Not only does it affect the length of talk times, but it also can collect data that is useful in screening leads and in "closing" transactions.
- A CRM outsourcer must be versatile and able to respond quickly to changes in call volumes, call routing, scripting and implementing new programs.
- In a call center or CRM function, accuracy of estimated call volume at the time the outsourced process is transitioned to the outsourcer is of utmost importance in the supplier being prepared with the appropriate level of resources to handle the work.