What metrics should you use to ensure BPO providers are aligned with your business goals?

Metrics need to be tracked at multiple levels: 1. CXO metrics: Typically these are most important business level metrics that CXOs are accountable for. Example: free cash flow generated, reduced time to market, reduced compliance risk, Days sales outstanding, Customer satisfaction index, etc. 2. The next level of metrics are meaningful outcome metrics at a process level. Examples are discount rate captured, invoices processed on time, end customer voice of customer score, etc, 3. The next level of metrics ae purely process efficiency metrics like, first call resolution, turnaround time, response time, etc. This way, the metrics relate to the different level of stakeholder and covers process, outcome, business.

#1 golden rule - adhere to agreed upon SLAs. They are the benchmark of your performance and non delivery will lead to your competitors getting your market share. Show case those SLA numbers- good or bad in every forum and be truthful and transparent

A BPO company’s business goal(s) will differ as per its vision I am listing down few metrics which commonly applies – as per me! 1. Billed - Billable = > 0 ( the difference needs to be 0 or positive numbers measured on monthly basis) 2. No revenue leakage & penalty 3. Cost per seat 4. Cost per transaction 5. SG&A (Selling, General & Administrative (SG&A) Expense) 6. Attrition rate 7. Customer retention, referral and new business 8. Organic and inorganic business growth 9. Industry recognition / awards & certification 10. Technology & domain capabilities 11. Delivery center expansion to leverage time zone and labor cost advantage 12. New customers across globe / continent Welcomes feedback to add or modify.

In my experience, it has always been considered a premise to select KPIs in line with the company's strategic goals, making it possible to assess the BPO's operational performance and drive excellence and sustainable growth. However, in addition to conventional metrics, KPIs centered on innovation, such as the average implementation time of new solutions or the adoption rate of emerging technologies, offer a holistic view of the value added by the BPO in terms of differentiation and adaptation to market changes.

I think it is important to have the outcome metrics as part of the SLA, for instance transactional CSAT, process level quality, etc. What one should be careful though about is that the contractual SLAs are not too detailed because then you do not have the ability to pivot to the needs of the business and you may be relying too much on targets for those SLAs that are not accurately set, or as improvements are made do not have the ability to change.

Every contact center should measure the below KPI for smooth contact center operations... This should be done end to end, starting from Recruitment > Training > Nesting > Production Efficiency Metric ( Typically deals with Occupancy/Utilization/AHT) Service Metric ( Asa/Abandonment/ on-time recruitment/schedule adherence) Satisfaction Metric ( Csat/Nps/ and staff Satisfaction) Quality ( transaction monitoring score with critical accuracy and training/recruitment Quality)

To ensure BPO providers align with business goals: Key metrics used as the client working with Transcom, HP and Sitel- First Call Resolution Target FCR at 80% to ensure efficient issue resolution, minimising callbacks and customer effort. Average Handling Time Set AHT benchmarks to ensure swift query resolution without compromising quality. Quality Assurance Scores: Example: Regularly assess the quality of interactions through monitoring and scoring calls, chats, or emails.

KPIs are the compass in gauging BPO success, but the "watermelon effect" is a reality check. It's like having a perfectly green exterior while inside there might be some issues fermenting. Often, this happens when KPIs aren't customer-centric or if accountabilities aren't crystal clear and universally understood. It's crucial to foster a system thinking approach to ensure all teams align towards the common goal, preventing scenarios where individual successes don't translate into an improved overall customer experience. Let's aim for KPIs that not only look good on paper but genuinely enhance the customer journey!

KPI – internal measures of processes effectiveness and / or indicators used for bonus systems. SLA – measures for agreements with internal / external clients for ensuring transparency and effectiveness of the processes / performance of the contracts.

There are 2 indicators for any activity 1) KPI (Key performance indicators) 2) CPI (Critical performance indicators) Both are important if we perform the activity and missed to consider anyone it would be problem. Critical performance indicators would be few and Key performance indicators are many while performing any activity BPO would take care of both but if they missed KPI it would impact to reprocess but if they missed CPI it would impact to financial losses as a form of penalties

Absolutely spot on! Customer Satisfaction Scores (CSAT) are the compass, but the real journey begins with selecting the right respondents. It's crucial to seek feedback from various organizational levels, ensuring a holistic perspective. Addressing difficult feedback head-on and crafting action plans collaboratively is the secret sauce. Timely updates and the direct involvement of top management, especially in dealing with silent customers, add that extra oomph. After all, silence might be louder than negative feedback. Engaging with customers and navigating the journey together is where true satisfaction blooms.

The real measure of CSAT score is if your contract gets renewed without much of back and forth!! 😀 Any organisation would love to have continued contract...and for that if you are able to exceed on what is needed on CSAT scores, you job is done. Must use innovative ways to delight customers. Sometimes, even discussing about latest weather, may help.

Customer Satisfaction Scores (CSAT): Implement CSAT Surveys: Regularly collect feedback from customers regarding their satisfaction levels after interactions with the BPO provider. Net Promoter Score (NPS): Measure customers' likelihood to recommend your services after engaging with the BPO provider. Customer Effort Score (CES): Evaluate the ease of customers' interactions with the BPO, ensuring minimal effort for issue resolution.

CSAT is something which assists the business owners to judge or analyse whether their customers are happy with the products and services. In today's century, since we are more customer oriented, it is highly recommended

CSAT are more than important, even if a BPO accomplishes SLA's and KPI's, CSAT can be disastrous - a low CSAT can have significant implications, regardless of meeting internal operational metrics - why? While SLAs and KPIs focus on operational efficiency, CSAT measures the overall customer experience. It encompasses not just speed and accuracy but also empathy, communication, and problem resolution. A high CSAT means Retention/Loyalty: A low CSAT means can damage a companie brand's reputation and in today's interconnected world, dissatisfied customers can, and will, quickly share their experiences online!

A Typical Contact Centre Operation can have multiple KPIs aligned as part of the desired performance outcomes. It can have SLAs, Repeat, Quality Management Framework and each one of them can be outcome driven but the End Goal Should be An Alignment To NET PROMOTER SCORES whereby you can have a barometer to gauge whether your end customer is actually promoting your business/product or not.

Customer loyalty is of prime consideration when outsourcing activity is undertaken. Other business metrics such as ROI or KPI drives the contract construct. However NPS a reflection of how the customer is experiencing the delivery.

NPS is not only a VOC metric, it is seeing beyond the front-end of the business. Do not underestimate the back-end process, because NPS means the overall experience of the customer journey. Taking care of the back-end is one key determinant of a high NPS return.

Many years ago my previous company Microstrategy has introduced NPS as one of the first in IT industry and it helped a lot with achieving the highest results in customer support.

Net promoters score is something which helps us to define the loyalty of the customer towards the company or the product or the service It even help us to judge whether the customer will promote our product to another probable customer or not As always said, one satisfied customer shall bring 5 more customers

Ein Beispiel, wie man die Rentabilität als ein BPO-Unternehmen für seine Kunden steigern kann ist auch durch einführen von Cross- und Upsell-Strategien im Endkundenkontakt. Viele Kunden scheuen sich heute noch Vertrieb im Kundenservice zu integrieren. Wenn aber richtig eingeführt, dann lässt man kein Geld mehr auf dem Tisch liegen und kriegt direktes Feedback über seine Produkte/Dienstleistungen.

Return on investment is a crucial metric for evaluating the financial performance and it totally depends upon the strategic planning as well as the Operational Metrics being followed on the floor. If all the metrics are being followed correctly and being run properly, we can observe a profit and business cost cutting, revenue increase that would be considered as return of investments

One often overlooked aspect of calculating ROI of your BPO footprint has to do with the Vendor Management organization. High maintenance BPOs that require Vendor Managers to operate as their Operational Managers in order to drive results, will drive the overall footprint cost up. That added time and effort from a VMO needs to be built in the ROI calculation (and will likely drive that ROI down). Conversely, a footprint with autonomous BPOs that don’t require frequent oversight for achieving performance improvement will help you keep a lean and streamlined VMO organization that will likely drive the footprint ROI up. In other words, look at those sunk costs when attempting to track and monitor your BPOs ROI!

It's helpful to break down the ROI metrics into 3 categories: Strategic Metrics, Operational Metrics, and Financial Metrics. In small businesses, clients go straight for the financial (revenue metrics). But some services don't directly impact revenue. Here are ways to measure those services. 1) Cost savings - Reduced ad costs, reduced overhead 2) Customer satisfaction - feedback on new web design, ad recall surveys 3) Turnaround time and error rates 4) Market share - increased brand awareness, traffic, etc

In my BPO implementations, I have adopted a customized approach to defining ROI metrics, aligning indicators with specific business objectives: 1. The cost savings percentage reveals cost savings compared to in-house operations, highlighting financial efficiencies. 2. At the same time, using Time-to-Resolution (TTR) makes it possible to focus on operational efficiency, measuring the speed of response in resolving customer problems. 3. To drive growth, Customer Revenue Improvement supports other initiatives, especially in critical areas such as sales and customer support. This customized approach offers a complete view of ROI and demonstrates the strategic adaptation of metrics to drive specific growth and efficiency objectives.