ORLANDO, Fla. - Mutual fund call centers are critical to retaining customers but are not managed as efficiently as they could be, said consultants who spoke here last week at the Investment Company Institute's operations conference. Operations centers also need additional technological and training resources but will only obtain such resources if they can demonstrate their importance by supplying figures on their impact on revenue, the consultants said.
Call center, operations, sales and marketing representatives could also learn a great deal from one another and improve one another's performance, consultants said. The barriers that keep them apart must be broken down, they said.
Until now, operations has been looked upon as a boring, unimaginative cost center, the speakers said. However, the quality of the service that call and operations centers provide investors can be quantified, said John Goodman, president of Technical Assistance Research Programs of Arlington, Va. Goodman's firm consults on customer service in a variety of industries, including government.
"The revenue implications of service are ten times cost," Goodman said.
To quantify the value of customer service, one should multiply the number of customers affected by a problem by the estimated damage to a company's customer loyalty, Goodman said. That figure should then be multiplied by the profit the affected shareholders bring a fund company each year to arrive at the revenue implications of a mistake or service flaw, Goodman said.
The revenue implications of a mistake can be significant because only 45 percent of shareholders who experience a problem with a fund company - be it inaccurate information or poor service - purchase additional shares, Goodman said.
"One serious problem can create a 20 percent drop in customer loyalty," he said.
Operations and information technology executives need to point out the revenue implications to upper management in order to get them to understand the value of the operations budget, Goodman said.
"This is a linkage that even chief financial officers understand," said Goodman. "You have to create economic imperatives for [upper management to support customer service and operations centers] and that imperative is greed."
With this data in hand, operations executives can then appeal to management for permission to work with sales and marketing executives, said Suzanne Jones, president and senior partner with Competitive Business Strategy Group of Williamstown, N.J., a consultant in integrated sales. All too often, sales and operations not only fail to communicate with one another but even view one another as adversaries, Jones said.
In fact, it would benefit the sales and marketing departments if they learned about the customer service centers, Jones said. Salespeople could promote the professionalism and knowledge of the operations department when pitching a fund to a prospect, she said. Further, it is in the interest of the sales and marketing department to assist the customer service department by informing them of advertising campaigns or possible surges in business, she said.
"All too often, promises made at the point of sale cannot be made good on," Jones said. "It's not enough for operations people to be told to make the customer happy.' They need to know what's being promised, because if you can't do that, the customers will leave."
Mutual fund companies could also attract more revenues and more shareholders if their call centers not only responded to incoming calls but initiated outgoing calls to suggest investment strategies to investors, Jones said.