Trying to reach a live person to answer the phone in most large organisations has been accepted to be an exceptional event. Be it a bank, a hospital, a telephone company, a retailer, whatever... all have installed the automated systems with which we are familiar. Thank you for calling but please go to our website. While the automated systems were mostly reserved to large organisations, the automation is expanding to SME’s (small and medium size businesses) – whom I assume – are thinking if the big companies do it, we should do it too. Making the transfer to an automated system is easy today with “cloud based” software services that are readily available and priced at a budget monthly cost. The technology and the monthly budget pricing is tempting but is it the right thing to do?

Peter Drucker once said, “There's a difference between doing things right and doing the right thing.” Doing the right thing is wisdom, and effectiveness. Doing things right is efficiency. I ask... When did avoiding talking with customers and prospects on the phone become a good business practise?

My long business experience taught me that customers and prospects call for one of three main reasons:

1. The caller is a customer or a prospect interested in buying.
2. The caller is a customer who wants to complain or ask a question about the company or a product/service.
3. The caller needs help and think we can help him/her.

Re-directing the caller to the website may indeed work in many cases but in number 1 a trained and motivated live person can do a much better job. What an opportunity to learn more of the caller profile and needs and upsell ! In number 2, a trained and motivated live person can turn the complaint or the question into a renewed goodwill and a profitable opportunity. Dual benefits: Avoiding losing the customer and uncovering an opportunity to make a sale. A website visit cannot do that. In number 3, a trained and motivated live person may be able to find a need that can be satisfied or refer the caller to a trusted partner who may reward us financially or reciprocate by referring customers and prospects to us. We score big on all three scenarios!

If so, why do companies want to avoid answering the phone with a live person? They must be motivated by the saving of using an automated system. How much of a saving is then a valid question? My first source of information reports that a Telephone Customer Service earns about $150 per day and my second source reported about $160 per day. Very modest compensation if compared to the benefit of generating sales from prospects and customers, retaining customers rather than losing them to the competition and building goodwill.

The incremental sales results will depend of course on my business product and/or service. I rounded the daily employee cost upward to $200 to account for the cost of adding an incentive, benefits, recruitment, training, supervision, and other costs. I used an average modest Gross Margin of 30%, (GM = Sales – Direct costs x 100). Result: I would need just a $670 of daily sales per employee to break even.

Modest sales of $1K a day per employee would generate a yearly profit of $26K per employee. Sales of $2K a day gives me an attractive yearly profit of $100K per employee. I used for my calculation a steady $200 cost per employee per day. I used a Gross Margin of 30% on sales and deducted my $200 employee cost from my GM. I will leave you to do the math with whatever adjustments you want to make to my assumptions.

My conclusion is that the immediate cost saving of an automated system are real but appear to be a short-term booster. On the medium and long term, the avoidance of a Customer Service Representative forfeits the attractive opportunities of growing sales, recuperating lost customers, and generating incremental profits. Making robots sound like people and people sound like robots is not the right answer. The right answer is in making robots help people serve customers better and generate higher profits.

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