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Research Backs Hanover's Service Strategy

31 October 2005

Research Backs Hanover's Service Strategy

Companies outsourcing their contact centre work should think again if they care about customer service, according to international research.

Hanover Group runs an in-house Customer Contact Centre serving its four debenture companies, Hanover Finance (formerly Elders Finance), FAI Finance, Nationwide Finance and United Finance.

Perry Cornish, General Manager of Marketing and Operations says the Group is re-confirming its commitment to its in-house centre, backed by evidence showing that companies outsourcing their call centre work to cut costs are facing deepening customer dissatisfaction with their service.

Gartner, a leading international information technology research and analysis house, says that by 2008 "60% of organisations that outsource parts of the customer-facing process will encounter customer defections and hidden costs that outweigh any potential savings they derive from outsourcing".

Mr Cornish says having an in-house contact centre with staff held responsible for key business objectives goes against the industry flow, but is essential to customer service.

"Increasingly we hear of companies looking to reduce costs by outsourcing contact centres either off shore or in a provincial town. Ironically, international evidence suggests that in attempting to cut costs, they incur far greater costs," Mr Cornish says.

Dimension Data's Merchants Global Contact Center Benchmarking Report 2005, states: "Companies are fixated by their perceived need to reduce cost through headcount reduction and automations, when in reality they are the very things most likely to make customers annoyed, frustrated and even move to a competitor."

The report highlights that in 2005, call abandonment has risen for the third year in a row, and is now at an average 13.3 percent across all industries. The report argues that abandons are rising because almost half the companies surveyed cited cost reduction and increased efficiency as their main commercial driver. By contrast, only 17 percent of companies measured their contact centre's success on first-call resolution rates.

By industry standards, the cost of losing a customer is equal to multiplying the value of the customer's business by five.

Mr Cornish says this research mirrors Hanover's experience.

"For us the future is in embracing the Contact Centre as a core business unit," Mr Cornish says. "Hanover Customer Contact Centre is there for one reason - to provide truly excellent customer service, principally for our investment companies. The effect of being in the same office as the businesses they serve and integrated with marketing strategies is that Centre staff understand the business, and buy into what we are trying to achieve.

"Consequently, they are a vital part of our business, including being responsible for business objectives that are as central to our success as any other part of the business. Along with that responsibility and an understanding of how the businesses operate, our Contact Centre staff have some discretion when dealing with customers. They are able to provide investment solutions for callers, make decisions and essentially use their initiative within the bounds of good practice. Being responsible and valued is a great motivator," Mr Cornish says.

Hanover Contact Centre is also an important conduit for accurate and timely customer feedback on potential issues or products and services that are well received. Mr Cornish says this is a vital service that could not be offered without that close, regular contact.

Contact Centre Manager Frances Maddren says Hanover's approach includes having an overlap of staff on the phones. She says all callers are free to talk as long as they please, which could not be maintained if they adopted industry standards of running the centre at 80% or higher capacity. This approach also allows a critical breathing space for staff.

"We've all had the experience of calling a company or service provider where, once you finally get to speak to a person, you can hear the fatigue in their voice and their desire to move you on. They've probably had 100 calls before you, and have another 100 to fill their quota, are tired and as they talk to you they are watching the phone queue building up.

"Customers have the opposite experience when dealing with our Contact Centre. Our staff are encouraged to take an interest in the callers and to talk as long as the caller pleases. Our callers appreciate this level of engagement and naturally feel free to ask any questions they like and can expect an answer. They leave with the general impression that we have time for them and are interested in meeting their needs."

Ms Maddren says use of technology is also another issue that the Contact Centre has addressed.

"People want to talk to people, not recorded messages. We have a call management system like all contact centres, but we manage it in such a way that the customer doesn't realise the system is there. They speak to a person - a New Zealander - and have their needs met by that person. No one waits in a queue."

Mr Cornish says Hanover Contact Centre has a 6-point commitment that assures investors they can call when it suits them (between 7am and 7pm), their call will be answered by a person in a timely fashion, and that their needs will be met.

"It's not rocket-science, but it does require diligence and the will to invest in your team to deliver the service you want. There are no short cuts really, but the awards success - and the success of the finance companies - underscores the value of making this investment," Mr Cornish says.

Hanover Contact Centre offers service to Hanover Finance (previously Elders Finance), FAI Finance, Nationwide Finance and United Finance.

Recent Awards: * Contact Centre of the Year (Under 50 Seats Category) 2005 - Telecommunications Users Association of New Zealand * Best in Industry (Financial Services) 2005 - CRM Contact Centre Awards * Best Contact Centre Less Than 50 Seats (Gold) 2005 - CRM Contact Centre Awards * Best in Industry (Financial Services) 2004 - CRM Contact Centre Awards * Best Contact Centre Less Than 50 Seats (Gold) 2004 - CRM Contact Centre Awards * Best in Industry (Financial Services) 2003 - CRM Contact Centre Awards * Best Contact Centre Less Than 50 Seats (Silver) 2003 - CRM Contact Centre Awards


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