Call Center optimization

Case Study : Call Center Optimization

What is the biggest turn-off when you call the customer service center for seeking support on any
issue?
For me, it is the waiting time. The line : Your call is important to us really does not do any
consolation to the customer who is waiting on line.
Lets say, I am looking at comparable Internet Service provider : A, B and C. What will be my
main considerations to choose one of them? First, will be the internet speed and second will be
the customer support. Customer support is supremely important for any company whether it is a
Telecom company, Internet Service Provider, Bank, Insurance company or an E-Commerce
Firm. It is the assurance from the company that anything going bad will be resolved as soon as
possible.
So, we all understand that Customer Service Center is probably the second most important
consideration just after the actual product. Also, customer service is one of the biggest

contributors to the cost component for any firm. So, within the same budget can we make the
customer service better by using analytics. Lets try looking at it with a case study. Note that all
the numbers are simulated and are used to bring out a concept and does not come from a real
case.

Type of channels used in customer service

All companies provide multiple channels through which customers can reach out / connect with
them. Here are a few of these channels :
1. Call Center: This is the most expensive channel which customers use to reach out to
companies. Every company wants to minimize this channels cost to reduce operational
expense, but its a necessary evil. Every customer wants a human respondent to
truly assure that everything will be resolved. This preference might change over time, but
as of now we have to accept the truth that machines are not as good as humans to
understand
customers
problem
and
provide
customized

assurance.
2. IVR: This is a cheaper channel and is used by almost every company. In general, you get
to IVR and if customers query is not resolved on IVR, he/she finally reaches the call
center.

3. Social Media: This might seem like the cheapest channel to receive complaints from a
customer, however is the most deadly channel today. The reason being, everyone who
comes on the social media page can see these complaints. You are no longer on a 1-to-1
conversation with the customer.

4. E-Mail: This is probably the easiest to handle and cheapest to resolve medium for any
company. However, this is one of the least preferred channels for the customer to reach
out to the company.

Other channels might include brick and mortar branches / outlets, 1-on-1 customer relationship
managers etc. The most important of all is the call center (calling process) which every
company needs to maintain but at minimum cost possible.
So, how can we optimize the expense for a call center. To optimize this problem, you first need
to understand that here we are dealing with two entities : Customers and the caller. And to
optimize combination of customer-caller pair, you need to understand how are customer different
from each other and how are callers different from each other.

Customers : What might influence the time a customer takes

on Call?
Because customers might not call the call centers frequently, more important attributes will be
his /her demographic and relationship with the company. Lets consider a bank. So, for a bank,
these attributes can be :
1. Relationship balance of the customer : How valuable is the customer for the bank
2. Type of product which a customer holds : Is the product more prone to disputes or are
plain vanilla deposit products?
3. Region of customer : Customers from rural areas might take longer time to understand
the solution provided by the caller.
4. Tenure of customer: A new customer might have more number of questions than a
tenured customer
Beyond these, there can be past call data which might be useful :
1.
2.
3.
4.

Last Call duration

Time difference from the last call
Reason of last call
Whether the reason was resolved after the last call or the ticket is still open

Callers : What might take a caller higher time than others?

Even though the time taken by callers might not be very different from each other, some level of
segmentation can definitely be found. Here are a few variables which can influence the amount
of time caller takes :
1. Vintage of the caller : A new caller might take longer time to resolve the same query
2. Training done by the caller : Caller training might help them to understand and resolve
the customer queries faster than the others.
3. Location of call center : Onshore vs. Off-shore call center might have different resolution
time because the callers can easily understand the accent of the customers from the same
country and might understand customer issues better.
4. Utilization rate of the caller : A caller who is highly utilized might have a lower
efficiency compared to others.

How do start modeling ?

What is the objective function when we are trying to optimize the call center efficiency? Here are
a bunch of objective function I can think of:
1. Call duration : This directly hits the total cost.
2. Customer satisfaction : It might not directly hit the cost or revenue but definitely hits the
bottom line in a longer term.
So, how do we solve for two objective function? In general, to make it simpler, we take one of
the objective function as a constraint and other as the main objective function. We will try to
create a formulation which can be solved using an assignment problem. For simplicity we will
not take customer satisfaction in this analysis.

Sample Problem Statement

You have 7 types of callers and 7 types of customers. Assume that all seven customers call at the
same time, how do you assign callers to each of these customers so that the total time of the call
center is least.

All numbers shown here represent time in minutes. Imagine this problem getting to an extent
where 1000s of callers respond and 100000s of customers call. So, we probably need a more
scientific way to do this problem.
Lets first see, what is the time if 1st caller gets assigned to 1st customer and 2nd to 2nd and so
on. The total time becomes 23 + 84 + 91 + 82 + 67 + 63 + 6 = 416 which is 59.4
minutes/customer. Now, lets try to optimize this problem using something called assignment
problem solution using Hungarian method. The steps are :
1. Reduce every row with the minimum of the same
row.

2. Reduce every column with the minimum of the same column

3. Find a row which has only one zero and make the assignment. Also cancel all the zeros in
the same column. In case two rows comes out to have zero in than same column, leave it
to
be
assigned
at
the
end.

4. Now select the same cells in the main grid and do the total time calculation.

Doing the calculation, the total time now comes out as 165 which is just 23 minutes/ customer.
This is a far better assignment than the random allotment.

End Notes
A real life call center optimization is far more complex than this scenario. For a real case we will
need to consider packing algorithms which can incorporate the fact that different calls come at
different time and what is the best packaging. Other level of complexity can be brought in by
considering customer satisfaction rate. We will try taking up these pieces in coming articles.