American Express: Optimas Award Winner for Competitive Advantage

    The company surveyed its 8,000 customer care professionals, asking them to prioritize key things that mattered to them, says Mike Nardone, vice president, senior relationship leader, human resources.

    The results were clear. The customer care professionals wanted the ability to develop their careers. They wanted more training. They wanted their compensation commensurate with performance. They wanted the ability to work flexibly.

    In response, American Express established a new compensation scheme, developed clear career paths and training programs for employees and is beginning to offer flexible hours—all to enable representatives to help the company reach its goal of offering "extraordinary customer care," Nardone says.

    As a first step, Nardone and his team established a hiring profile of the kind of call center representatives that the company needed to achieve its business goals. To recruit and retain individuals who fit that profile, American Express increased base pay for existing employees and new hires. Nardone wouldn’t detail the increases.

     The company put together a one-day orientation session for new hires. Traditionally, orientation consisted of a lot of paperwork, but American Express wanted people leaving these sessions energized and clear on the goals for customer care, Nardone says.

    Nardone and his team also established specific performance metrics for the call center representatives that went beyond the traditional call center metrics, such as call-handling time.

    The key metric that all customer service centers use is based on whether customers would refer the company to a friend. So American Express set up a system that scores associates on how they drive that metric, Nardone says. Employees who exceed goals are eligible for incentive pay.

    One of the most groundbreaking elements of American Express’ plan for its customer care professionals involved career development. Historically, there was no clear career path for these employees.

    To address this, American Express established a four-tier career path system. Inexperienced new hires would work at level one and deal with the most generic calls, while employees working at level four would deal with the most important clients and handle the most complex calls. An intranet site allows call center reps to see job opportunities and get a better understanding of what a promotion would entail.

    American Express’ efforts have paid off. Voluntary attrition among its customer care employees has dropped. For 2007, the company estimates that it saved $8.9 million in U.S. attrition savings as a result of the program. Employee engagement has also increased across the board from 2006 to 2007.

    But American Express isn’t done. In December, the company will begin implementing the final portion of this initiative, providing call center workers with the ability to work flexibly. As such, American Express employees will be able to add and drop hours based on the needs of the company and their own availability.

    For designing a program that directly resulted in the increased retention and engagement of its call center representatives, American Express wins the 2008 Optimas Award for Competitive Advantage. Harold Blake, a director in the company’s supply-chain organization, says IBM knew the whereabouts of "every nickel and dime resistor capacitor that went into building a service product."