Why an 80/20 Service Level is Wrong for Your Call Center

Call Center

In the world of contact center metrics, “service level” has always held a special place. It gives the industry a universally understood way to talk about how quickly customer calls are answered by support agents. Its origins go back over 5 decades, to the earliest days of call centers.

Call center service levels are, broadly speaking, a commitment to a particular average speed of answer, or ASA. And for many call center managers, maintaining these service levels is a top priority. For some outsourced call centers (BPOs), missing a service level could result in financial penalties — or even the loss of their contract!

With so much riding on this metric, it’s shocking to see how many call centers choose their service level arbitrarily, or with minimal consultation. Because using the 80/20 rule for call centers is doing exactly that…

What is a call center service level of 80/20?

Service level is always given as a pair of numbers: A percentage value and a time value in seconds; it has nothing to do with the Pareto Principle.

An 80-20 service level in a call center simply means that 80 percent of the calls will be answered within 20 seconds.

Definition of 80-20 Service Level in a call center

Where Did the 80/20 Service Level Rule
Come From?

The longevity of service level is astonishing when one considers the enormous changes that have occurred in customer service technology over the last few decades. Even more astonishing is that most call centers would name the same target value for that metric: the magical “80/20”.

One would hope that this standard is based on careful analysis, but in reality, it’s not an 80/20 rule or principle at all. It was arbitrarily chosen in the early days of call center technology.

In speaking to numerous experts in this field, two things are clear. First, the most popular service level is 80/20. And, second, no one knows where this standard came from!

With so much riding on this metric, it's shocking to see how many call centers choose their service level arbitrarily, or with minimal consultation. Because using the 80/20 rule for call centers is doing exactly that. #bpos #contactcenters… Click To Tweet

One analyst told me that 80/20 principle was “hard-wired” into the original call center platforms made by Rockwell in the 1970s. Rockwell, which got out of the call center business in 2004, was one of the pioneers of the technology. There’s debate over whether Ericsson or Rockwell was actually first to market with a true ACD.

In other places, I’ve read that it came from an AT&T study conducted some 30 years ago, that had found that callers tended to hang up after 20 seconds in the queue.

Whatever the story is, clearly we need to approach this “standard” with skepticism.

The ’80/20 Rule’ is Just an Arbitrary Industry Standard

Lawrence Whitaker, a 25-year call center veteran, now with Bell Canada, told me that he suspects — and I agree — that the 80/20 “standard” gets a false validity boost simply because it sounds like the Pareto Principle. You know, that old saying about “20% of the work will take 80% of the time”. But clearly that’s a completely spurious connection.

Putting aside this quirk with “80/20”, Lawrence still feels strongly about the value of the metric:

It’s still the best one for measuring interval and overall performance… it ties the resources you need to the results you want to achieve.

Another long-time veteran, Kevin Brown, said that he had done some research into the origins of 80/20 and similarly came up empty-handed. He added, “In the end, I think it was picked arbitrarily and now everyone is used to it.”

The Problem With the 80/20 Service Level for Contact Centers

The case against worshipping service level has been made by many contact center analysts and industry veterans. Most of the complaints boil down to the idea that, if too much attention is focused on optimizing for this metric, other facets of the call center can suffer.

Traditional Metrics Are ‘Lagging Indicators’

Harvard Business Review put it succinctly: “Instead of worrying about typical customer satisfaction measures, such as share of wallet and net promoter scores, organizations should look at the number of new value-adding service ideas put into practice. It’s not that conventional metrics are unimportant, the researchers say, but because they are ‘lagging indicators’ they can bog down efforts to achieve rapid, dramatic change.”

So that’s a broad strategic reason to de-emphasize service level. If we get more tactical, there two other problems worth mentioning:

Service Level Metrics Don’t Correlate With Customer Satisfaction

Gemma Caddick, a Forecast Analyst at Severn Trent Water, brings up the first, “80/20 tells us that there is an aim to answer 80% of customers within 20 seconds. But what it doesn’t tell us is what happens to the 20% of customers that are not answered in 20 seconds.”

The very nature of the service level metric means that variability can get swept “under the rug.” Let’s say your call center successfully met your 80/20 target all day. You know that 80% of the calls were answered in less than 20 seconds — really that tells you very little about what went on that day: You don’t really know anything about how those calls went.

We have to be careful not to get wedded to any particular metric. Otherwise, we run the risk of causing horror stories like those of customers being put to the back of the call queue so that customers who are still within the service level limits can be answered and targets met.

Let’s say your call center successfully met your 80/20 target all day, so you know that 80% of the calls were answered in less than 20 seconds — really that tells you very little about what went on that day: You still don’t know anything… Click To Tweet

What percentage of those calls resulted in a second call because the agent wanted them off the phone quickly? Or how many opportunities to upsell a customer were missed because the customer support agent didn’t have the time to build a relationship with the customer?

If we take the time to understand why our customers are calling, we may find that they may stand to wait a little longer to speak to someone. And if we know what customers are willing to tolerate, we can set service levels that allow us to deliver exceptional customer service. Even if that means they have to wait on the phone for, 40 seconds, or even an entire minute.

As Joe Barkai points out, “Diagnostic Strategies research shows that once they are placed in the queue, callers do not abandon at a constant rate…As long as the service level target is longer than the abandonment threshold, callers will wait.” It’s worth testing that limit to see if you can raise other important metrics like CSat or FCR.

If you have multiple skill groups in your call center, another issue arises. Averaging across the groups to get a single service level can obscure problems in specific groups. Measuring each group separately is smarter, but that leaves you with too many numbers to interpret. This is actually an argument against dividing your workforce into skill groups.

Contact Centers Are Focusing Less on 80/20 Service Level

It seems call center managers are taking this advice to heart. In one recent report by Call Centre Helper, the researchers asked participants to rank the importance of different metrics in their operation. Service level is in 4th place, behind Customer Satisfaction, FCR, and Advisor Satisfaction!

What are the most important contact center metrics - call center helper 80 20 service level bar graph

And although an 80/20 service level is still the most common for contact centers, that doesn’t tell the whole story.

A recent report by Natterbox, NICE InContact, Jabra, and Serenova that surveyed 250 contact centers found that there are, in fact, a wide range of service levels in use today, ranging from 50/40 to 100/180. You can also see that companies are experimenting both with “relaxed” (i.e. longer) target answer times and stricter percentages.

In a post on CallCentreHelper.com, the authors reflect on why companies might be willing to relax the target answer times (i.e. leave callers on hold longer):

“Well, firstly, there are the obvious cost benefits, in that you’ll likely need fewer [agents at] … a lower SLA. The company might have also investigated how varying their SLA impacts their customer satisfaction. If they found a low correlation between the two metrics, there is a business case for lowering SLAs … [but] If you were to do this … look at the impact service level has on your abandon rate, to ensure that you won’t lose too many calls. ”

is the voice service level in your contact center 80 20 graph

Source: CallCenterHelper, “Are You Delivering Exceptional Customer Service?” – 2019

Ways to meet your agreed service level — 80/20 or not — is for another blog. But regarding the abandon rate issue mentioned in that last sentence: A great way to reduce — or even eliminate — abandoned calls is to replace hold times with a call-back. Here’s a great case study on a company that reduced abandonment rate: First Service Credit Union.

How Do You Set the Right Service Level for Your Contact Center?

Kevin, Lawrence and the others I consulted, all agree that a call center’s service level should be based on what that call center can reasonably achieve given its resources and given the expected call volume.

Coming up with this figure requires deep analysis and hard work. And it’s work that most call center managers don’t have the time or tools to do. So if your average speed of answer service level is currently operating under 80/20… the odds are good those numbers are not the right ones for your call center, and the proper analysis was never done!

if your average speed of answer service level is currently operating under 80/20… the odds are good those numbers are not the right ones for your call center, and the proper analysis was never done! #bpos #contactcenters #slas #80/20 Click To Tweet

To do the analysis, you have to balance your company’s desire to deliver customer satisfaction — or customer engagement or Net Promoter Score — versus the cost you’re willing to bear to achieve it. Industry consultant Stuart Crutchfield from Genesys suggests starting by asking these three questions:

  1. How do I want to prioritize my customers’ wait time? This often can reflect Customer Lifetime Value or Propensity To Buy, where customers of greater actual, or potential, value are prioritized for a prompt answer.
  2. Having segmented my customers by some measure of importance, after how many seconds in the queue does their Abandonment Rate start to materially increase?
  3. What is the impact of increased Abandonment Rate on our customers’ satisfaction? Compare higher abandonment groups to a control group for this one.

Another approach to take is to look at the standards guides published by COPC which some in the industry use as benchmarks. They have separate guides for internal operations, outsourced operations, healthcare and vendor management.

Don’t Get Stuck to an 80/20 Service Level

With the knowledge that the 80/20 service level is a mere arbitrary goal for call centers, we a freed to tailor it to our own uses. Your customers may well be willing to wait longer than 20 seconds to talk to someone, as long as they don’t have to wait indefinitely. They may even prefer to find the answer themselves through a better self-service option, or dare I say it, receive a call back from a customer support agent at a later time.

Meeting high service levels in your contact center is expensive, and may even be a waste of time if they’re not aligned with corporate strategy or moving the needle on customer satisfaction scores. Explore what your customers really want, and how you can align that with your corporate goals before you set a service level for your call center. And be willing to adjust them when you get new data coming through.

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