Last come first serve – the counterintuitive way to succeed in managing virtual queues

The cost of a large marketing funnel

I just received a marketing call in response to a query I submitted on a web site about a week ago.

Another company had already responded within 24 hours after my submission of the query, and within 48 hours I had completed the process of purchasing the service I needed.

I’m assuming that the company that called me today must have a queue of enquiries a week long. That is why I only got called today. This call required someone to spend their time to call me, the cost of the call, and the emotional cost of receiving a “No.”

These are the costs of a long queue. You may think that having many customers in your marketing funnel will result in a better chance of success, but in this case it is actually eroding the company’s success. This lady will now probably call the next customer – who would be the one who submitted the query just after mine – which is therefore also a week old – and probably get another “no.”

I suspect that their success rate on these calls is low. Really low. Like in the single digit percentage kind of low.

This low conversion rate means they cannot afford more call centre agents. Less call centre agents means that the turnaround time is probably reducing. It’s a negative spiral.

What is more interesting is that this is the 3rd of these types of calls I’ve received in the past week – which means that there are a bunch of companies seemingly competing for who is the slowest to respond.

It would seem to me that if they just every day started with calling back the most recent enquiries they would greatly increase their conversion rate. They would probably still lose ones that are two or three days old to the competition – but they were losing those anyway.

By increasing their conversion rate they will be able to start employing more agents, and probably be able to afford more skills development to constantly improve the quality of their agents. Every agent will be responding to the most immediate enquiries first – thus greatly increasing the conversion rate.

This is indeed the experience I had with Outsurance, with whom I took my normal insurance on my car. I submitted a query on their website while I was in the dealership. While my wife was sorting out the transfer of money to pay for the car, I received a call from Outsurance within less than five minutes of my enquiry, and the insurance was done and issued within less than an hour.

It seems counter-intuitive to ignore people in the back of the virtual queues, but actually, by focusing on the most recent queries first, you will quickly ramp up to be able to also get to the back of the queue faster, and at a much lower overall cost.

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