Is your customer management outsourcing model stuck in “whack-a-metric” mode?

Every aspect of customer management is interdependent. If you optimize one transaction without considering how other transactions are affected, you are subject to what we call the “whack-a-metric” principle, where you improve one aspect of your business only to see a new challenge spring up elsewhere.

Whack-a-metric mode feels like hard work because it is. Staying on top of every supplier problem that pops up can be exhausting – and exasperating. Clearly, it’s not a strategic use of your company’s time or money. Any gains you may be making in transaction efficiency are being undermined by lack of integration.

To get out of whack-a-metric mode, you need to have a strong hub and spoke model. The spokes are external vendors or internal call centers. The hub is the centralized support structure – the people, processes and technology that drive your customer management efforts.

Benefits of a strong hub
The hub is the foundation of a company’s customer management operations. Unfortunately, many companies outsource the spokes and simply overlook the critical functions of the hub. As a result, they cripple their efforts to optimize customer management. Because every process and every transaction happens in a vacuum, these companies end up chasing metrics, improving in one area at the expense of another. Whack, whack, whack.

In contrast, a strong hub allows for fully integrated end-to-end customer management. A cohesive, well-run hub can:

• Reduce costs and capital expenditures,
• Generate increased revenue per customer,
• Increase overall customer satisfaction,
• Optimize the customer experience,
• Improve customer management efficiency and effectiveness, and
• Grow your business.

Components of a strong hub
Many core customer management functions require centralization within the hub, including: intraday performance management center, root cause analysis, reporting, statistical modeling, workforce management, training, and project management. As the core of the hub, these shared services ensure that the spokes are operating consistently, while identifying best practices and key lessons that can be embedded back into your company’s operations.

This graphic gives you an idea of the range of core functions a strong hub provides for a business relying on multiple suppliers.

A cohesive, well-run hub significantly reduces variation in quality, improves staff utilization, increases speed to market, drives revenue extension, and reduces expense.

A strong hub will empower your business to achieve greater effectiveness, but accountability must be driven on an interval-by-interval, day-by-day basis. That’s why you also need a strong vendor management / operations team.

Managing your hub
If you simply sign supplier contracts and manage a few metrics, you will soon find yourself back in whack-a-metric mode. The reality is that the economics of customer management outsourcing – especially call centers – are not typically aligned with your business objectives. You need an experienced vendor management team to drive performance.

One option is to invest in your internal management team. This route requires some honest assessment of internal capabilities and commitment. Can you build the expertise in house? Can you do it quickly enough? Are you prepared to deploy the capital investment needed to do it right?

Alternately, you can find a partner – like CXO Global Solutions – that specializes in customer management integration, oversight, and vendor management. A company with the expertise and client-side experience to fix your broken or underperforming hub-and-spoke system – or replace it altogether by connecting you to customer management experts and best-in-class resources.

Bottom line: If you invest in a strong hub-and-spoke model supported by end-to-end vendor / operational management, you can get beyond whack-a-metric mode and create a total customer management system that optimizes your company’s strategic objectives.

Check out the complete whitepaper on this topic at: http://www.cxogs.com/insights.html

–Bryan DiGiorgio