In telephony, the acronym POTS stands for Plain Old Telephone Service and the importance of having dial tone and human interaction may have been lost in the technology shuffle, if only temporarily. But the challenge to properly serve Credit Union members when, where and how they need or want that service seems to bring POTS back to its rightful place, as evidenced from presenters at a recent Callahan and Associates Webinar titled, "Best Practices in Lending/Call Center Management."
Reports of POTS' death have been greatly exaggerated, it seems, because the telephone is still a vital link to member service delivery. But it has evolved; today it combines advanced technology (integration of branch and Web operations) and highly trained Credit Union sales and service representatives to deliver products to members on demand, in real time.
Credit unions have traditionally used call centers to respond to members' needs in house, but as the Credit Union product mix grew in complexity the cost of specialized training, turnover and scheduling presented real problems. Today, one half of all Credit Unions of $25m in assets and up outsources its call center operations. But what is the right mix of in house and outsourced operations? And where can outsource call centers be most effective?
For Michael Poulos, president/CEO of Michigan First Credit Union, Detroit ($380m assets; 65,000 members), the progression in 2000 from having no call centers to two in 2001 with a member service center that did everything but loans and a lending center just for loans helped to avoid a negative ROA. It also erased member perception that the Credit Union didn't make loans. "We weren't viewed as a lending institution," Poulos said.
In 2002 the Credit Union contracted with lending Solutions, Inc (LSI) for 24/7 and overflow services. The integrated operation has greatly improved service and the bottom line. (ROA was 1,19 and the loan to share ratio was 48% in 2000 and in November 2003 it was 1.07 and 67.32% respectively.)
LSI's Dan Matthews advises Credit Unions to recognize the difference between member service transactions and loan sales. "Transactions are like working at McDonald's, and closing loans is a specialty," he said. The idea is to build the total system the Credit Union needs, adding on-line banking and other channels into the delivery. But loan centers must be 24/7 because they are the best revenue generator Credit Unions have, said Matthews.
Measuring for staff coverage at call centers is a mix of science and art, implied Matthews. Natural disasters and announcements from the Fed's Alan Greenspan can throw everything off, so it's best to be flexible with employee shift planning. Call centers are high burnout jobs. Hire part-timers and college students to help alleviate the fluctuations on higher volume days or in emergencies. Use skill based routing to get the best reps to answer the most demanding calls. And record all calls for revue and training.
A 'cybercentric' member operation is in place at PSECU ($2.2b; 290,000 members), said CEO Greg Smith, which has always done it in house. "We prefer letting members do it for themselves," he said, acknowledging the Credit Union's self-service telephone (SST) approach. And PSECU always felt their employees would do a good job and wasn't comfortable turning members over to someone else.
In the mid-90s PSECU switched the bulk of calls (balance inquiries, checks cleared, etc.) from the call center to an audio response, or SST system. The Interactive Voice Response (IVR) system installed in 1997 frees agents for other work, said Smith. (PSECU employs 300 call center agents and has three primary centers: direct access, loan by phone and card services; and three secondary centers: member services, IT help desk and a CUSO.)
So called 'good abandons' are those when the member gets the information and hangs up satisfied. Transfers to an agent come with the appended records on screen, which saves time and cuts frustration. Smith demonstrated the use of call center management tools and said they simplified planning.
The on line banking portion now nets 50% of consumer loan applications and 75% of real estate loans (first mortgages and home equity loans).
And while PSECU had its labor problems a while back, it now has a low turnover rate due to good salary and benefits and a casual dress code. Future plans may include a duplicate system as back up for emergencies and consolidating several centers into one.
Don't forget it all started with dial tone.