We need to "Talk": an inbound call center at a New Zealand bank has been cited for having the world's best customer service.

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The secret?

The emphasis is on "great conversations' and not on sales quotas.

Bank call centers have a mixed history. Unlike their counterparts in telecommunications or credit cards. where call centers emerged as a primary interface with customers, bank call centers were largely established as "disintermediators." They were a way to get routine service interactions out of the branches and save the branches for presumably more high-value interactions.

As a result, many bank call centers acquired a second-class reputation. It may even be exacerbated today now that some banks see the call center as a crutch for customers who are reluctant or unable to bank online.

Bank of New Zealand (BNZ) was typical in that respect just a few short years ago. It was a good operation, but handicapped in ordinary ways, according to Susan Basile. now managing director of direct sales and service for the bank. With $50 billion (Australian dollars) in assets. BNZ is comparable in size to Mellon or First Horizon in the United States., serving more than 1 million customers with about 6,000 New Zealand employees.

Basile explained the situation when she joined the bank:

* Management's expectations were low when it came to the call center's impact on the customer experience: Just keep costs down, try to solve customers' problems quickly, and don't make things worse.

Basile recalls, "It was apparent we were performing to expectations; but expectations were not high enough, and that was reflected throughout the operation."

* A sometimes awkward relationship with the retail line of business prevailed. For a while, retail curtailed proactive call center outreach to new customers without prior approval from the branch where the customer relationship was owned. "If customers want to use the IVR (interactive voice response), they will tell us, and we will tell you."

* The call center often had little or no notice of new marketing campaigns, leaving agents unprepared for customer calls, resulting in unsatisfactory interactions and fulfilling already low expectations. "That was hard on our customer service results," Basile says, "and it was hard on morale."

* Call center technology changes were chancy, with decisions usually made by the information technology (IT) department based on then costs, not on broader benefits. IT was adept at estimating their own cost to make a change, but less skilled at estimating the cost for hundreds of agents to continue coping with, say, inconvenient screens or scattered information.

And the call centers' customer service numbers were far from stellar. Low expectations had been reinforced by hiring practices and shift changes that underemphasized service and led to high turnover and all the negative impact that entails. Basile recalls, "Agents didn't have regular hours or their own workspaces. Our centers were not attractive places to work. Turnover was high which meant we were not 'growing our own tomatoes'--creating managers from within. So that was another morale issue."

Nevertheless, Basile was optimistic. "We were taking 10,000 calls a day for the bank, 10,000 proactive contacts from customers who needed our help, so we knew we had a great opportunity to impact the bank's brand."

Today, in a striking turnaround, BNZ's call centers account for 35 percent of the bank's retail sales. "We maintain a customer quality rating of 107 percent (the scoring model uses weighted points)," says Basile. "We answer 82 percent of incoming calls in less than 20 seconds. Our abandonments are held down to 4 percent. Our agents' pay is 20 percent incentive-based and they have unchecked sales potential."

There is another compelling indicator of call center turnaround: Basile has been elevated to full-fledged membership on the CEO's retail executive committee. She is routinely consulted by business line and marketing heads who eagerly seek the call centers' support for their initiatives.

Those accomplishments came about over the course of long journey with more than a few detours and occasional setbacks. "There was no silver bullet," Basile maintains, but instead five main changes that accounted for most of the improvements--five modifications that most banks and bank call centers can replicate of customize for their own unique environments.

1. Entertain the possibilities; set your goals high enough that some are bound to call them dreams.

When BNZ decided to change the call center's performance, the managers didn't say, let's cut our average length of call by X percent, or boost our sales by Y percent, or even win awards for this or that. Basile recalls saying, "We just want to be the best call center in the world."

She knew that companies in other industries were using call centers for sales with impressive results. And she knew this: What call centers do is to make conversation; what great call centers do is have great conversations. So BNZ managers settled on that as their mission: Let's do what it takes for our agents to have great conversations.

2. Form "the success triangle": clear, capable and motivated employees

Why were the agents not having great conversations? The same reason any group of employees suffers performance lapses. They haven't formed what Cohen Brown calls "the success triangle." Either they are not clear on expectations, or they are not capable of meeting them, or they are not motivated to do so.

It didn't take Basile long to determine that by and large, all three gaps existed at BNZ's call centers. Clarity was lacking not only at the call center employees, but frankly, at the management level. Capable? Well, if the bank was not viewing the call center as a critical channel in the overall customer experience channel, how likely was it that they were hiring people with an aptitude for sales and service and then investing in the right kind of training and coaching?

As for motivation, when people are uncertain and lack preparation and tools, motivation is about the last thing they feel.

Every call center agent, every team leader, every supervisor, and every member of management went through a rich, intense "call center lab," facilitated not by consultants or trainers but by members of the bank's call center leadership team.

Included in the lab were the full scope of skills the bank thought the call center people would need in order to have great conversations with customers. They went well beyond the basics of "what to say to customers" in this or that situation. The bank absolutely did not want scripted conversations.

After the call center lab, additional leader-led training included: How to assess client financial needs. How to be an extraordinary sales leader. How to be a proactive teleconsultant.

Clear, capable and motivated didn't happen overnight and it doesn't sustain itself on air, but the call center lab launched the breakthrough. And, Basile acknowledges frankly, "It didn't work for every agent. But if clarity, capability and motivation were not enough, it was good for them as well as us to know that and guide them to better situations."

3. Measure the science, not the art, of call center interactions.

There's a fundamental catch to most performance metrics, even the right ones; they can get people focused more on the metric and less on the behavior the metric was intended to inculcate. And if they are the wrong metrics, all the worse.

Walk into most call centers, and you'll me massive whiteboards showing up-to-the-minute metrics: how many calls each agent has taken, the number of calls waiting, the average wait length, the longest wait, and so on. Agents know how long their calls are running, how they are doing on speed and efficiency, and how they are doing compared to everybody else.

Basile admits, "We used to do that, too, at BNZ. But after we all went through the call center lab, we asked ourselves, 'What do fast calls have to do with great conversations?' Sure, we don't want to waste the customer's time, but if we were to ask them what they most wanted from our call center, they might well say they want fast answers, but we'd be wrong to conclude they want fast talkers or hurried conversations."

She added, "Even if we had asked management, who at that time still perceived our reason for being as taking costs out of the branch, 'What is really the best way for you to measure our contribution?', they were wise enough to draw a distinction between fast calls and efficient handling of customer problems. But still, length of call is a common proxy for efficiency, length of wait a common proxy for quality of the customer experience, and that's what was in place."

No more. BNZ didn't make this change overnight, but they did make it. Today, BNZ agents are not on the phone worrying about time. "And they don't worry about selling five of this or three of this by tea-time," Basile insists. "If they are having great conversations, the right results will happen."

Basile herself definitely cares about time. She considers her highly trained, highly skilled agents a scarce resource, and her job is to deploy scarce resources wisely. So if she or her team leaders see an agent's calls going longer than normal, they look into it. They listen in on a few calls to see if there's a pattern. Maybe the agent needs more coaching on active listening to identify the problem more readily, of coaching on how to use the system to navigate to the right solution more quickly.

Or if they see average length of calls rising, they check to see a new campaign might have more complexity than expected, or if customers might have received conflicting information from another line of business. If wait times rise, Basile declares, that's a resource issue, not a reason to impinge on the quality of conversation other agents might be having.

4. Keep improving: reinforce and coach to get better all the time.

The tennis player wins Wimbledon and rises early the next day to hit hundreds of forehands and backhands with her coach. The tenor, the morning after a triumph at La Scala, sings scales for an hour for his teacher. The day of the All-Star game, the home run king spends serious time in the batting cage under the watchful eye of the batting coach.

They all know the most important thing about "executional excellence": It takes practice, and it takes coaching. Even for the best in the world, if they want to improve, they not only need to learn new things, they must continually reinforce what they already know. The difference between the #1 player in the world and #25 usually isn't pure skill, but executional excellence--the ability to play at the top of their game every day no matter the pressure of circumstances.

Basile acknowledges that basic truth of performance over and over in many ways, but in mainly two categories of activity: skills reinforcement and coaching. First, she points out, "We haven't shrunk our training period--we've expanded it! Now it's eight weeks, and worth every minute.

"For every single agent, my team leaders and I listen to six of their calls every month and provide feedback. We look for what they do right and talk about that. We look for what they did wrong, and we talk about that. We give a tremendous amount of feedback."

After all, the underperforming culture didn't happen overnight. It couldn't be changed overnight. It couldn't be changed by a new program every month. It required a steadfast focus, drilling on the basics, and perseverance to constantly find new little ways to improve.

5. Reward--lf it's worth doing well, reward it early, often and in many ways.

Everybody knows that you get the behavior you reward, but Basile tends to think of rewards the way she think of metrics: They are as much art as science.

On the science side, BNZ absolutely revamped the call center compensation. Basile increased the incentive portion of agents' pay to 20 percent. They have unlimited potential income from sales. But she carefully balances quality of interactions with sales outcomes. After all, it is still about great conversations. She doesn't want them concentrating on sales, but on adding value for the customer.

So they set a minimum threshold for quality. If agents fall short of the quality threshold during the month, the sales incentive compensation is forfeited.

On the art side, there are many ways that BNZ agents are recognized and rewarded. In one particularly telling event, last year the call center was made its own business line, called Direct Sales and Service--again very explicitly recognizing that call center agents deliver both.

And not many banks value their call centers enough to have them report to the bank's chief executive officer, as BNZ now does. If important discussions about customers are taking place, Basile is part of them. The call center is no longer the place calls go to save time for more important people. Call center agents are important, professional bankers.

When the chief executive of National Australia Group (BNZ's holding company) comes to New Zealand, he pays the call center a personal visit and takes time to talk to the agents. Likewise the bank chief executive is a regular visitor, readily acknowledging the call center's importance in supporting a great customer experience as part of the BNZ brand. He tells the agents: "I may be the CEO of the bank, but when customers talk to the bank, they talk to you, not me. You're the voice of the bank."

Edward G. Brown is president and CEO of Cohen Brown Management Group, Los Angeles. Johanna Lubahn is managing director of the company's Call Center Services. The company works with banks and bank call centers around the world. E-mail: [e-mail] or [e-mail].