Chart of Cost and Volume by Contact Code

Contact Management: 8 Tips for Developing a Contact Coding System

Contact coding is a system of numerical, alphabetical or alphanumerical codes that are used to classify customer contacts into a contact reason category.  The purpose of a contact coding system is to systematically organize the way that a company categorizes all types of customer contacts regardless of the medium, so that there can be a uniform approach for dealing with each contact reason.

As a company becomes more advanced in its customer service practices, these codes also become the main routing codes in interactive voice response (IVR) system or a self-help center routing system that determine whether or not a customer’s issue can be resolved through a contact elimination program or whether or not the contact needs to be redirected to a customer service agent.

Additionally, contact coding systems are also used to categorize and assign contact costs to different divisions of the company for both accounting purposes and more importantly as an information source to analyze a company’s customer’s support needs, identify product and service problems and identify structural operational problems that can be removed to streamline costs.

8 Tips for developing a contact coding system for your company’s customer support operations

1. Contact codes must cover 100% of potential contact reasons, not overlap and be assigned to a single department owner

Organizing the coding system in this manner will enable the team to easily assign customer service operating costs to each division of the company and demonstrate that customer experience management is a multi-team responsibility that requires company-wide goal alignment.

2. Contact codes should be focused on why a customer contacted the company for assistance

Use the reason for outreach as opposed to what the customer was trying to learn. Nailing down a reason for contact is much more insightful to the company as it can be assigned to a department and adds more color about the type of problem as many different types of problems could be resolved with the same piece of information.

Below is a list of example contact codes to help get you and the customer experience management team leaders determine the most logical contact codes for your company:

  • Activate service
  • Cancellation
  • Change Address
  • Do you have?
  • How to?
  • Lost Password
  • Need new service
  • Payment Arrangement
  • Refund
  • Set-up account
  • Place Order
  • Policy Frustration
  • Why’s my bill so high?

3. Catch-all contact codes should be avoided at all cost

“General,” “Other” and “Miscellaneous” – these codes are uninformative about why a customer contacted the company and provide no direction ion how to resolve the issue and are self-defeating, as contact coding programs are intended to make the customer support program more systematic. By forcing agents to pick the best fit category for a customer contact, the company is forcing an agent to best characterize a contact into a category, even if they are not 100% certain that it belongs in a given category. This partially accurate information will be much more informative than a catch all code because the contact category will at least be close to the actual reason. As long as the contact codes are well–thought out and tested and there are not too many options, the agents will generally be able to properly categorize contacts, which will improve the company’s overall information about the average customer.

4.Contact codes do not have to be set in stone

However, it is important to realize that every time that these codes are changed, the entire customer service team will need to be retrained on the new coding system, so it is important to limit the times the system. Try to make any changes in a cyclical manner, and limit the changes to major ones. This will limit the costs associated with retraining the team and also limit the time the management team spends ensuring that the list of codes are collectively exhaustive.

5. Contact code descriptions should be written plainly

Use descriptive language as if the customer himself were speaking. This makes it is easier for agents to classify customer issues into each contact code category and also simplifies the customer contact reason self-selection process in an automated system like an interactive voice response (IVR) or a self-help center routing system.

6. Limit the total number of contact codes to 40

Regardless of the size of your company and the number of products you have, contact codes should be limited to no more than 40. Startups and expansion stage companies should target 21-30 contact codes and add new ones into the mix as the company introduces new products and services that create new contact reasons.

Having more than 40 contact codes makes it difficult for agents to effectively qualify and rout complaints and also negatively affects the user experience in a self-help environment and generally leads to a direct contact because of frustration and confusion. These unneeded contacts can be resolved through a clearer and more limited set of contact codes and reasons. Limiting contact codes does come at the expense of losing some of the contact reason details, but this slight drop in accuracy will be more than made up by increases in categorization accuracy and productivity.

7. Require contact codes in all forms of customer contact

Contact codes must be assigned to all forms of customer contact regardless of whether or not an individual ever talks to an agent, so that you can evaluate the effectiveness of the company’s contact elimination programs and systematically analyze the company’s contact handling process for structural problems via a contact coding cost and volume analysis.

Adopt a universal operating cost measurement

To setup a contact coding cost and volume analysis, a company needs to adopt a universal operating cost measurement like handle time to estimate the cost of dealing with every customer contact and must apply this measurement to every customer contact.  To execute a contact coding cost and volume analysis, simply aggregate the number of contacts for each code and chart those against the average handle time for each contact code.  This will uncover which contact reasons are costing the company the most, so that the team can focus on developing more efficient support programs for dealing with these types of contacts. Below is an example of a hypothetical contact coding cost and volume analysis to illustrate how to conduct this type of analysis:

If you are interested in learning more about contact coding systems and contact elimination programs, I highly recommend reading Bill Price’s book entitled The Best Service is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs. Similarly, if you are in learning more about how to develop a first class customer service model, I also recommend reading my previous blog posts on how to design an effective customer communication strategy and how to implement Net Promoter Score (NPS) as a company key performance indicator (KPI).

Marketing Manager, Pricing Strategy

Brandon Hickie is Marketing Manager, Pricing Strategy at LinkedIn. He previously worked at OpenView as Marketing Insights Manager. Prior to OpenView Brandon was an Associate in the competition practice at Charles River Associates where he focused on merger strategy, merger regulatory review, and antitrust litigation.
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