Efficient budgetary decision making is a major aspect of running any successful business. You have a limited amount of money to channel into improving your company, whether through hiring new staff, upgrading your equipment or investing in the latest software.
Knowing how to spend in the most efficient way is difficult, but you can make it easier on yourself by basing your budgetary decision making on your team’s performance results.
There’s a clear link between performance and budget: if your call center or customer service department is failing to achieve the results you aim for, you have to understand why — and take action to correct flaws.
What are the benefits of considering performance results before budgetary decision making, and what happens if you don’t?
Performance and Budget: The Importance of Basing Decisions on Data
An effective quality assurance program is vital for companies of all sizes and sectors. With this initiative in place, your quality analysts will conduct ongoing evaluations of your employees’ performance and gather data to measure their work.
This data should give you all the information you need for good budgetary decision making. You’ll see where each employee’s strengths and weaknesses lie, allowing managers and team leaders to create strategies to build on the former and overcome the latter.
This can be a complex process at first, especially if your business is relatively new and you have little to no experience organizing training for your workforce. Let’s try to make it easier for you.
Spending wisely on the right training
Let’s imagine performance results show one of your customer service agents is struggling with one of the most important metrics — Customer Satisfaction Scores. Any business obviously wants to leave consumers happy and willing to come back, but it’s not always possible. Earning bad Customer Satisfaction Scores indicates the worker in question has to make changes, though it might not be clear right away what these should be.
That’s where matching negative scores with their respective interactions is so helpful, and simple to do with the best QA software. Managers, team leaders and the agents themselves should review said interactions to determine where major mistakes are being made.
Further coaching and training will build on the conclusions you reach from these sessions. This reduces the risk of wasting money on ineffective training: there’s no need to hire a professional to come in and educate your workforce with generic tips.
Actually, a survey shows businesses throw huge chunks of their budgets on corporate training anyway, with only 10 percent of it proving to be effective. Basing all training on performance results is much more cost-effective, providing your workforce with relevant guidance on the issues affecting them most.
If an agent finds engaging customers harder than others and seems to miss opportunities to build bonds, you could consider training focused on interpersonal skills.
As a result, you’d know you were spending your money on training with a practical, tangible purpose: if the employee’s engagement capabilities developed over time, their improvement would be evident in their performance results.
Measuring the value of your investment is easy in a case like this, giving you real insights into the link between performance and budget.
Overlooking Performance Results with Budgetary Decision Making
As we’ve already discussed, performance results can have a significant impact on your budgetary decision making. If you spend time analyzing employee achievements along with your quality analysts, team leaders and management team, you can develop a comprehensive strategy to improve performance in the most cost-effective way.
But what if you have no quality assurance program in place and have never established which KPIs matter most to your business?
You’re not alone. It’s easy to overlook these factors when you start a company. You have so much to do, tasks which seem non-essential can just fall by the wayside. Yet neglecting the connection between performance and budget puts you at risk of making bad decisions with your money.
Picture the scenario: you only operate a small team of customer service agents during the early months of your business. You don’t appoint a team leader and there are no admins to keep their work organized. As a result, you lose track of your employees’ schedules, productivity, time-management and more.
That makes actually understanding how effective they are far harder than it has to be. Perhaps you’re focused on running the company and growing without considering your customers’ experience — and that’s a major mistake. Their satisfaction has to be a priority at every step.
How Bad Budgetary Decision Making Affects Performance Results
Failing to base your budgetary decision making on performance results can have a nasty effect on (funnily enough) your performance results.
How so? Think about it. Without analyzing your employees’ work and impact on customers, you have no real knowledge of how well they’re working. They could all be going off-script and telling consumers different things. They might be making mistakes and covering them up. They may even be rude to people and treat their work as a game.
One way bad budgetary decision making can affect performance results is if you were to downsize your customer support team. Losing, say, four employees would make the remaining staff’s work much harder: they would still be dealing with the same number of customers, but would either have to rush through interactions or let the backlog of support requests build up to compensate for the shortfall.
This will frustrate your audience and pile more pressure onto your employees. Customer Satisfaction Scores and Net Promoter Scores would drop. Average Handling Time of interactions would shorten, making customers feel less valued. Response rates would change too, not to mention your employee engagement taking a nosedive as well.
The money saved by downsizing would likely need to be channeled into fixing the problems this decision caused, making the initial financial benefits irrelevant. This is just one example of the link between performance and budget, but it shows why good budgetary decision making has to be based on data.
Every business has a budget. Every business has decisions to make. Managing both successfully is rarely easy, but it can become a lot simpler when you rely on insightful performance results from across your workforce.
Launching performance campaigns is quick and straightforward with Playvox. We provide all the information and guidance you need to get set up, helping your business start its journey towards better budgetary decision making.
How has analyzing your team’s performance results helped you make stronger spending decisions? What advice would you share with other managers looking for a positive change? Share your thoughts below!