This is the second of three blogs looking at the issue of missed business calls. The first blog looked at how many calls are missed by UK businesses. The third blog reviews the strategies adopted by businesses to reduce missed call numbers, including the important role call answering services can play.
The growth in digital communication channels
The channels through which a business can communicate with its customers has increased considerably over the past decade: email, live chat, WhatsApp and other messaging platforms, e-commerce and e-booking solutions, AI chatbots and more.
Reasons given for implementing these digital solutions include responding to customer preferences, improved customer service, lowering cost-to-serve, and reducing head count. Each of these communications channel have their own specific benefits and drawbacks. For example, live chat is good for those scenarios where phoning may be problematic, for example public transport or in a noisy work environment, or where the question asked has a short and simple answer. Paperclip delivers live chat support for many of our clients.
Consumer behaviours and phone calls
We only have to think about our own behaviours as consumers, however, to recognise the importance of phone calls to businesses:
- If the question to which we need an answer is not straightforward, i.e. it is like a decision tree where the answer to one question determines a second and a third question, then a phone call is the best option.
- The same is true for questions where our knowledge of the subject in hand is unclear and we need, therefore, to discuss the problem to determine which questions to ask.
- When our question is nuanced with ifs/buts/maybes, it is better dealt with by phone; for example where we have researched a subject online, made an outline decision on which solution to opt for and which supplier to use, but need to know the price to confirm our order.
- Where we are considering using a supplier for the first time and need reassurance that the words used on the website regarding customer service are matched by real world interactions.
- Where our questions are urgent and we need to be sure they have been received and, ideally, answered e.g. following up a house transaction with a conveyancing solicitor, booking an urgent appointment with a healthcare practitioner; logging an IT issue with our IT support provider, getting a plumber to fix a leak.
- Where we want to place an order and want to explain exactly what it is we want.
The key driver for B2B marketing
From the perspective of a business owner, director or manager, we would want to encourage customers and prospects to call us in all of the above scenarios. Furthermore, the key driver of the majority of B2B marketing is designed to encourage customers and prospects to phone in so we can start to build a relationship with them. At Paperclip, for example, our social media content, our blog articles (including this one!), our e-marketing and our PPC advertising all seek to establish trust and credibility so that a potential customer feels comfortable making that initial enquiry over the phone.
In short, for many businesses, outside face-to-face meetings, the phone remains the most important communications channel for customer acquisition (sales) and customer retention (ongoing sales).
Yet, as we saw from the statistics in the first blog article of this series, businesses, on average, miss between 25%-40% of calls.
Why do businesses leave phone calls unanswered?
Given the commercial importance of phone calls to most businesses as outlined above, this is a challenging and perplexing question to answer. I suspect it is often a combination of two or more of the factors outlined below.
Phone calls aren't important
There are a number of businesses that actively avoid receiving phone calls by not including a contact number on their website and restricting questions to online forms or similar. Personally I find such websites irritating and they immediately raise concerns for me about placing orders with a supplier with whom I can’t build a relationship. However, if the product supplied is widely perceived as a commodity and the key driver is price, it is understandable that some businesses adopt this approach.
Insufficient staff numbers and multitasking
This is a problem that affects all businesses, but SMEs find it particularly challenging to ensure the phone is answered. For example, a healthcare practitioner such as a physiotherapist will be focussing on the patient rather than answering a call; a tradesperson will be dealing with the problem at hand; a solicitor may have an important deadline to meet…and so on.
Even when businesses do have admin support staff, the emphasis is on achieving optimal productivity through, for example, multi-tasking.
Peak call volumes and long hold times
This is really a variation on ‘insufficient staff numbers’. Many businesses will have times of the day, or days of the week, when call volumes are higher than average. At Paperclip, for example, we experience higher call volumes in the morning than the afternoon, Monday mornings are particularly busy; the day after a Bank Holiday is a hotspot; Saturday is quiet, but the calls can be urgent. As answering calls is our raison d’être we closely track call volumes and schedule our call answering team resources accordingly.
Where businesses have limited personnel available to answer calls, this leads to long hold times which further compound the problem.
It is important to note that the negative impact of peak call volumes on missed calls is true even for those businesses with dedicated reception staff. Furthermore, it is not unknown for the reception team to need comfort breaks, go for lunch, take holidays or be ill. All factors that can lead to missed calls.
Lack of clear processes, procedures and metrics
In some businesses it is part of everyone’s responsibility to answer incoming calls. The sad truth is that, without clear process, procedures and metrics, ‘everyone’s responsibility’ often becomes ‘nobody’s responsibility’.
Answering phone calls is disruptive and impacts on core productivity; this can be particularly frustrating when the call is a sales call or automated spam call. Consequently, it is not surprising that there should be a reluctance to answer calls particularly when it is perceived that certain team members are not taking their fair share of the load.
Lack of phone and customer service training
Whilst it may appear to be commonsense that incoming calls are important, this truth should be made explicit; the customer or prospect making that call pays our wages.
For new starters, answering the phone without any training can be daunting. Furthermore, lack of training may lead, from the customer’s perspective, with an unsatisfactory service experience which can damage relationships.
Phone technology that isn't up to the job
In the recent past, analogue phone systems and phone lines were expensive and often lacked facilities such as call waiting, call queueing and call routing. Modern VOIP technology, however, typically provides such flexibility as standard and at low cost.
Today, phone technology should not be used as a reason for missing calls.
What is the commercial impact of missed calls?
IntroducerTODAY calculated that £30bn was ‘lost’ by businesses in the UK due to missed calls; that’s around £5,500 per business.
Whilst some of this business may have truly been ‘lost’, in most cases a missed call effectively creates a potential customer for a competitor. Missing a call, therefore, has not only an immediate financial cost to a business, it also has a marketing or reputational cost as it bolsters the competition.
Calculating the cost of a missed call at the level of an individual business is extremely challenging and will be impacted by a huge range of variables such as market structure, dominant position, product or service provided, availability of substitute products or services, and so on.
However, whilst it may be challenging, it is well worth taking the time to arrive at an educated estimate.
Here are just some of the data points worth collecting to help you in this task. We have focussed on the month as the time period:
Phone calls
- On average, how many calls a month does your business receive?
- On average, how many calls a month do you miss?
- Be honest. For example, losing a caller when they are placed on hold is a missed call.
- Be honest. Count all calls to voicemail as missed calls.
- On average, of the calls you receive, how many are opportunities to win new business or opportunities to retain existing customers?
From this dataset you will be able to estimate how many sales opportunities you miss in a month.
Sales success ratio
- What percentage of sales opportunities do you succeed in turning into an order? (Closing the sale)
Multiply the ‘sales opportunity’ figure calculated from your phone call data, by your sales success ratio, and you will arrive at the number of ‘lost’ new customers each month.
Client lifetime value
- What is the average value of an order in your business?
- On average, how many orders does a loyal customer place with your business each year.
- On average, how long do you retain customers for?
Taking the number of ‘lost’ new customers and multiplying it by the average client lifetime value gives you the monthly cost of missed calls to your business.
Other costs
It is important to recognise that the figure you arrive at by doing the calculations as outlined above is likely to be an underestimate.
For example, missing calls has a reputational cost impact on your business. How many businesses do you never call because you have heard their customer service is poor?
You can find out more about the commercial impact of a missed call in the Paperclip blog article ‘The true cost of a missed call’. There is also a Paperclip workbook which can guide you through the ‘commercial impact of a missed call’ process.
Summary
In the first article of this series on missed calls, it was found that UK businesses miss around 25% to 40% of incoming calls. In this article we have discussed the importance of phone calls to the vast majority of UK businesses, and looked at why, despite this importance, calls are missed. Finally, we looked at the commercial impact of missed calls and outlined a way in which you can calculate this impact for your business.
In the next article I look at the approaches adopted by businesses to reduced missed calls including voicemail, IVR systems, AI chatbots and, my passion, third party call answering services.
Hi, I’m Louise Bellwood, Director at Paperclip. I am responsible for delivering Paperclip’s customer service and growth strategies for 2024 and beyond, I am a crusader for the benefits call answering can deliver for organisations of all kinds; customer service, sales generation, customer retention and more. If you have a question about call answering – pricing, set-up, benefits – I would love to hear from you at louise@paperclip.co.uk or 01246 418 181.