Benefits and challenges of contact center benchmarking
Contact center benchmarking can help organizations allocate spending and improve CX. Yet, common pitfalls, such as a lack of qualitative data, can negatively affect efforts.
As contact center leaders evaluate performance, benchmarking offers data-driven insights to guide strategic planning.
Many organizations use benchmarking -- the process of comparing tools and processes against competitors' -- to optimize contact center effectiveness. This process can improve decision-making, but a flawed approach can waste time and resources. In the webinar, "Why Contact Center Benchmarking Matters: Benefits and Pitfalls of Comparisons," Robin Gareiss, CEO and principal analyst at Metrigy, and Justin Robbins, chief evangelist at 8x8, discussed the benefits and challenges of benchmarking in customer service.
"What I love about benchmarking … is it helps us temper how much we look back and how much we think about and focus on what's ahead," Robbins said.
However, organizations often focus on the wrong metrics and fail to measure their baselines, which can squander their benchmarking efforts. Contact center leaders should know the pros and cons of benchmarking so they can implement effective strategies and avoid common challenges.
What is contact center benchmarking?
Contact center benchmarking compares a contact center's performance metrics, processes and tech deployments against competitors, industry standards and internal baselines. This technique highlights contact centers' strengths and weaknesses so organizations can make data-driven improvements.
KPIs that organizations commonly compare in contact center benchmarking include the following:
First call resolution (FCR). The percentage of inquiries agents resolve on the first call or contact.
Average handle time (AHT). The average length of customer interactions in a contact center.
Service level. How quickly agents answer inquiries within a specific time frame.
Abandonment rate. The percentage of customers who hang up before they reach an agent.
Net promoter score. The likelihood that customers will recommend the organization to someone else.
Customer satisfaction (CSAT). How satisfied customers feel with an organization.
Employee satisfaction score. How satisfied agents feel with their jobs.
In addition to these KPIs, contact center leaders can compare their software tools, such as interactive voice response (IVR) systems and chatbots, to those of competitors. These comparisons help leaders implement the right mix of processes and tools to improve efficiency and CX.
Contact center benchmarking lets customer service leaders evaluate how their performance compares to external standards, such as competitors in their markets. For instance, an organization with an 80% FCR rate might learn that key competitors exceed 85%. In this case, the organization might invest more resources into agent training or knowledge base software to boost FCR.
"You want to make sure you're not only keeping up with competitors, but exceeding them," Gareiss said.
2. Optimizes tech deployment
Benchmarking helps contact center leaders track the effectiveness of tech deployments, such as chatbots, IVR systems and agent assist tools. For instance, if an organization implements a generative AI chatbot to reduce hold times and improve CX, it can track metrics like AHT and CSAT before and after the tool's implementation to gauge its effectiveness. This process can help contact center leaders understand different tools' benefits and their challenges.
Additionally, benchmarking can help contact center leaders secure funding for future investments, Gareiss said. For example, if a contact center has a track record of linking emerging technologies to improved support metrics, C-level executives might be more likely to approve more funding in the future.
3. Enhances strategic planning
Contact center leaders can use benchmarking to guide their strategic planning efforts, because it helps identify areas for improvement. For instance, if a contact center has lower employee satisfaction scores than the industry average, the organization might decide to invest more in tools and processes, such as voice of the employee technology, to improve the employee experience.
Additionally, the ability to apply benchmarks and form hypotheses about long-term strategy can help contact center leaders stand out in their planning meetings. It demonstrates executive-level thinking and can attract the attention of business leaders, such as CEOs.
"If you come armed to that meeting with all kinds of numbers and benchmarks … you're going to be the star of that meeting," Gareiss said.
4. Improves spending
As contact centers evolve, benchmarking can help organizations allocate spending to areas most likely to offer measurable improvements, Gareiss said. For instance, if an organization sees that most competitors use generative AI chatbots for self-service, the organization might invest in its own.
Contact center leaders can also compare their spending to that of competitor organizations. For example, research might show that leading competitors spend $2,500 per employee on CX technology each year, which might influence the organization to spend more or less in that area.
5. Boosts customer satisfaction
Contact centers interact with customers more closely than other departments and can strongly influence how customers feel about brands. As benchmarking improves contact center performance and operations, it therefore can also boost CSAT.
"You're hoping that … customer satisfaction is going to improve because you're … focusing on items that matter to them," Gareiss said.
5 challenges of contact center benchmarking
Contact center leaders can struggle with benchmarking, especially if they skip key steps, like measuring a baseline and collecting qualitative data.
If you don't know your starting point, how do you measure whether you've improved?
Robin GareissCEO and principal analyst at Metrigy
1. Failing to measure a baseline
All benchmarking efforts should involve gathering baseline data to compare future and external data against, but organizations often overlook this step. For example, a contact center might deploy a new IVR system to reduce call volumes. To evaluate the new system's effectiveness, contact centers need historical call volume data to compare it against.
"I can't tell you how many people we've talked to over the years who are doing some benchmarking, and they don't know their starting point. If you don't know your starting point, how do you measure whether you've improved?" Gareiss said.
2. Comparison inconsistencies
When contact center leaders benchmark, they often compare their performance to competitors in the same industry and of a similar size. This approach brings more accurate results, as similar industries often have similar standards and metrics for customer support.
Yet, organizations often decide, in the middle of benchmarking programs, to compare themselves against different industries, which can negatively affect the accuracy of their results, Gareiss said. For instance, a contact center for a financial company might compare its AHT against other financial companies, then compare it to e-commerce organizations later in the quarter. The e-commerce industry has fewer regulations than finance, so retailers can sacrifice quality for efficiency more so than financial institutions. Therefore, it might not make sense to compare the AHT at a financial institution to that of an e-commerce contact center.
Although cross-industry benchmarking can lead to innovation in many cases, organizations should take it on as its own benchmarking project, Gareiss said. Switching back and forth between industries in the same benchmarking effort can lead to confusion and inaccuracies in data.
3. Ignoring internal changes over time
Contact center leaders sometimes overlook internal changes that affect their benchmarking results, Gareiss said. For instance, if a contact center benchmarks its performance before and after a change in management, it should consider the management team's role in performance changes.
Changes in leadership, staffing, technology and processes can all affect benchmarking. Organizations that don't account for these factors might get misleading results.
4. Lack of qualitative data
Benchmarking relies on a lot of quantitative metrics, such as FCR and AHT. Yet, organizations often underestimate the benefits of qualitative data, Gareiss said.
For example, if organizations notice a dip in efficiency metrics like AHT, they can correlate that dip with qualitative, voice of the customer feedback. While performance metrics highlight problems, qualitative feedback can illustrate the root cause of them.
"It gives you an understanding of the whys behind the whats," Gareiss said.
5. Not acting on the results
The whole point of benchmarking is to improve decision-making, but many organizations fail to act.
"We see almost 30% of companies actually not doing anything with results," Gareiss said.
This problem typically occurs due to a lack of ownership of the benchmarking processes. Ideally, chief customer officers and their staff would lead an initiative to analyze the benchmarking data and devise a subsequent action plan.
Key takeaways
Contact center benchmarking offers many benefits, such as improved spending, tech deployment and CSAT. Yet, organizations must avoid common pitfalls, such as comparison inconsistencies and a lack of qualitative data.
To create an effective benchmarking program, contact center leaders can first identify what they want to measure and evaluate their baseline. After the benchmarking is complete, they can analyze and share that data with all stakeholders.
"Don't keep this information hidden. Let people know what's going on, especially … frontline people," Gareiss said.
Tim Murphy is associate site editor for TechTarget's Customer Experience and Content Management sites.
