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Call Center Articles

The What and Why of Call Center Outsourcing

By Peter Lyle DeHaan, PhD

Author Peter Lyle DeHaan

In this column in the March issue, “Perceptions of Call Center Outsources,” I shared from a recent study conducted by ContactBabel, called The US Contact Center Operational Review.  Billed as “the largest and most comprehensive study of all aspects of the US contact center industry,” this was their second edition of the survey.

From that report, I shared respondents’ views of call center outsourcers, addressing outsourcer value, experience, visibility and information, offshoring, and comparability. Here is a summary:

  • “Outsourcers give good value for money.” Twenty-six percent agreed, 52 percent were neutral, and 22 percent disagreed.
  • “Our experience with outsourcing has been very positive.” Nineteen percent agreed, 58 percent were neutral, and 23 percent disagreed.
  • “Outsourcers do not provide the visibility or information that we would like.” Sixty percent agreed, 22 percent were neutral, and 19 percent disagreed.
  • “Our company is very receptive to offshoring customer contact.” Eighteen percent agreed, 11 percent were neutral, and 71 percent disagreed.  (Note that the other statements addressed both onshore and offshore outsourcing.)
  • “Outsourcing does not provide the same service as in-house operations.” Seventy-five percent agreed, 21 percent were neutral, and 4 percent disagreed.

Clearly, we have some work to do in response to these appalling perceptions. Some of this work is needed within our call centers, such as in improving our processes and procedures, with the rest being external. (See Perceptions of Call Center Outsourcers for the complete column, along with my observations and recommendations.)

The external work requiring attention falls in the areas of PR (public relations) and marketing. While PR efforts are largely a group effort at the industry or association level, marketing is something that is done on the call center level in conjunction with sales activities. Towards that end, the report offers additional insight to help tailor your call center’s marketing message and services.

First, consider what types of services companies seek call center outsourcers to handle. Of the organizations surveyed, the largest reason for turning to call center outsourcers was for overflow calls, at 18 percent. Overflow calls include covering for expected time-of-day, day-of-week, or seasonal shortages, as well as covering for unexpected inadequate staffing levels due to illnesses, vacations, and call traffic peaks. This response rate was consistent for all size companies.

The second most frequent reason for outsourcing was “out-of-hours” coverage, which handles call activity outside of the hours when call centers are normally staffed. This was cited by about 14 percent of respondents and was significantly more pronounced (five times) for smaller call centers (those with under 50 agent positions). With customers increasingly expecting to be able to contact companies 24/7, out-of-hours outsourcing is a critical consideration for those organizations that, for whatever reason, are not staffed around the clock.

Conducting market research and handling phone surveys of customers came in third, at 11 percent. This was most common for small (under 50 agent positions) and medium (51 to 200) sized businesses, while less pronounced for larger ones (over 200).

The fourth item being outsourced is not actually call processing, but rather related services that are labeled as back office processes. These include payment processing, billing services, and debt management. Outsourcing back office processes was done by 9 percent of those organizations surveyed. Interestingly, it was slightly more pronounced for medium and larger companies than for small ones. This points to an area of possible diversification for outsourcing call centers.

Ongoing customer service came in fifth at just under 8 percent. It was most sought after by medium-sized companies (those with 51 to 200 agent positions). The category of outbound sales campaigns was next at slightly less than 6 percent, with interest diminishing slightly as company size increased. Lastly was multimedia response (such as email and SMS processing) at less than 2 percent. The interest in this was universally low for businesses of all sizes. Perhaps that is because email response does not need to occur in real time and can be handled in-house during times of slow call volume.

Implicit in these numbers is the implication that many organizations do not outsource any call center activities. This suggests an opportunity to explore why – and to present compelling reasons for companies to consider call center outsourcing.

In summary, the services organizations seek from outsourcers are:

  • Overflow: 18.3 percent
  • Out-of-hours: 13.7 percent
  • Market research / customer surveys: 11.1 percent
  • Back office processes: 9.1 percent
  • Ongoing customer service: 7.8 percent
  • Outbound sales campaigns: 5.9 percent
  • Multimedia response: 1.9 percent

A second area to consider and incorporate into a company’s marketing plans is what drives call center outsourcing. Cost was cited as important (eight or higher on a ten-point scale) by 47 percent of the survey respondents. This varied by company size. Small organizations (fewer than 50 agent stations) were more than twice as likely to cite this than larger ones (over 200 agent stations), with medium-sized organizations (51 to 200 stations) over four times more likely than large ones.

The second most given reason was flexibility; 35 percent deemed this to be important. Flexibility includes being able to quickly add agents or launch new campaigns with greater ease. This desire was proportionally more pronounced as the size of the business increased, with large companies most desirous of achieving increased flexibility.

The inability to recruit and staff capable agents was cited next, with almost one-fourth calling it an important consideration that influences call center outsourcing. This is a perplexing finding, given the current high unemployment rates. Therefore, it is likely that this reason will increase in importance over time as employment rates are pushed up and government regulations and requirements make hiring more challenging. This preference was slightly less important for medium-sized companies (51 to 200 agent positions) than for small or large ones.

Lastly, businesses outsource to call centers to obtain abilities and skills not found in-house, such as multilingual capabilities or technical expertise. This was important to 18 percent of those surveyed and was more pronounced as the size of the organizations decreased.

In summary, the drivers of call center outsourcing are:

  • Cost savings or containment: 47 percent
  • Increased flexibility: 35 percent
  • Inability to recruit the needed staff: 24 percent
  • Obtain special abilities unavailable in-house: 18 percent

Incorporating these findings into sales and marketing plans can help outsourcing call centers better position themselves in the market and target their services more effectively to prospective clients.

[From Connection Magazine June 2009]

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of Connections Magazine, covering the call center teleservices industry.

Categories
Call Center Articles

Perceptions of Call Center Outsourcers

By Peter Lyle DeHaan, PhD

Author Peter Lyle DeHaan

There are many good things happening in the call center industry. Millions of people are employed in productive positions that benefit both commerce and the economy. These jobs are desirable nonmanufacturing positions and essentially nonpolluting, making them highly attractive to state and local governments’ job-creation efforts. Call center agents receive extensive training on customer service skills that are not covered in schools and universities. This expertise is in high demand in virtually all sectors, preparing these people for advancement within their companies or for migration into other industries.

Call center industry associations are proactively and successfully moving forward with certification and self-regulation initiatives, effectively raising standards and improving results. Most importantly, call centers serve all industries by helping them lower customer acquisition costs, increase customer retention, save money in the provision of personal customer service, and increase marketing effectiveness, thus aiding them in becoming more competitive and responsive.

Unfortunately, people outside the industry would never know that. Call centers in general, and outsource call centers specifically, are a much-maligned industry. The media loves reporting on our industry’s small number of failures, oversights, and errors; call center success stories are apparently not newsworthy nor sufficiently entertaining to merit attention. At the same time, our elected officials have found it politically expedient to restrictively regulate us, with reporters delighting in covering said legislation.

Transcending these two dichotomous perspectives is insight into the current state of the call center industry that can be gleaned from a recent study conducted by ContactBabel, called The US Contact Center Operational Review.  It is their second edition and was published in late 2008. It is self-proclaimed to be “the largest and most comprehensive study of all aspects of the US contact center industry.”

The 299-page volume includes information on agent considerations, technology concerns, and general call center issues. It addresses various markets, in which the outsourcer vertical is included. An interesting, yet disconcerting, aside is that in their report they opted to use the label “contact center” instead of “call center” to describe our industry. This was not because contact center is a more accurate and inclusive moniker, but because they perceive too many negative connotations with the term call center. Ironically, this same reasoning was used in migrating from the telemarketing designation to call center several years ago.

The most sobering part of the survey was found in the respondents’ views of outsourcers. Five statements were presented to the participants, to which they responded with agreement, disagreement, or neutrality. These addressed outsourcer value, experience, visibility and information, offshoring, and comparability, as follows:

Value: The first statement considered was, “Outsourcers give good value for money.” Only about a quarter agreed with this assertion, and over half were neutral. (The figures were: 26 percent agreed, 52 percent were neutral, and 22 percent disagreed.)

Clearly, there is a deficiency, either real or perceived, in the economic utility of call center outsourcer services. In areas where value is in fact lacking, it can be improved though lower prices (not a recommended solution) or an increased quality of transactions and reporting. If doubts about call center value are merely perceived but not substantive, then efforts need to be undertaken to more effectively communicate overall competence and the resulting value via an intentional and ongoing campaign. Just as marketing initiatives are used to gain new clients, this same mindset needs to be applied to retain existing ones.

Positive Experience: The next statement considered was, “Our experience with outsourcing has been very positive.” About one in five concurred, and again over half were neutral, with more reacting negatively than positively. (The figures were: 19 percent agreed, 58 percent were neutral, and 23 percent disagreed.)  Although experience tracks with value, the decrease in positive responses suggests that some of the respondents who acknowledge value nonetheless do not enjoy a positive experience. This exemplifies the old adage of winning the battle but losing the war.

Experience is challenging to accurately quantify. Therefore, it is reasonable to assume that this is largely a perceptual issue. There are two areas to address in this consideration. The first consists of interactions between the outsourcers and their clients. This includes: 1) billing accuracy, errors, and corrections; 2) accessibility and usability of reports and data collected; 3) infrastructure reliability; and 4) customer service interactions. Each of these items must be reviewed and assessed so that client angst can be minimized. The other area relates to a call center’s clients’ customers. Are they complaining about the call center to their clients? Do they need to make additional contacts with the center’s clients to fully resolve a situation that the call center could have handled more effectively? Are there times when the call center seemingly causes their clients more work than they save? These are important questions to ask and critical areas to improve.

Visibility and Info: Next was, “Outsourcers do not provide the visibility or information that we would like.” This is a negatively worded statement and includes two variables, so it is difficult to interpret. However, 60 percent concurred that visibility or information was lacking. (The figures were: 60 percent agreed, 22 percent were neutral, and 19 percent disagreed.)

The information issues likely relates to the availability, accessibility, usability, and accuracy of what a call center provides to its clients. This applies to both contact records and general reporting. Visibility may relate to the call center’s management structure and organization. Quite simply, who do the call center’s clients contact for information or assistance? In this regard, call center outsourcers are advised to appoint a single client contact who will be a specific point of access for all customer interactions and queries.

Offshoring: Although the previous statements dealt with all forms of call center outsourcing (onshore, offshore, and blended), this statement deals only with the offshore segment. It reads, “Our company is very receptive to offshoring customer contact.” Over two-thirds reacted negatively to this assertion. (The figures were: 18 percent agreed, 11 percent were neutral, and 71 percent disagreed).

Clearly, this signals significant concern for offshore outsourcers. This can be mitigated by establishing onshore contacts and even onshore agents for call escalation.

Comparability: Last was another contrary statement, “Outsourcing does not provide the same service as in-house operations.” Only a small number took exception to this assertion, while a whopping three-fourths agreed. (The figures were: 75 percent agreed, 21 percent were neutral, and 4 percent disagreed.)  Clearly, there is the perception that in-house call center activity is deemed superior to outsourcer work. Although there is an expected natural tendency to judge one’s own company superior to a vendor, that fact does not provide an excuse to ignore this alarming result.

Addressing the first three items of value, positive experience, and visibility/info will go a long way to combat this comparability concern. Additionally, increased interaction between outsourcer and clients will serve to minimize perceived differences. Whenever it is feasible, outsourcer staff should periodically visit clients to gain knowledge and insights that can help the outsourcer perform better. Conversely, client staff can be invited to spend time in the outsource call center. This will increase understanding, improve empathy towards the outsourcer, and provide valuable information that can be used to mitigate the comparability issue.

In all cases, these initiatives should be implemented now and continued indefinitely, not hastily constructed when a major problem erupts or a contract renewal or continuance is in jeopardy.

Taking these actions is well worth the effort because there are many good things happening in the call center industry today. Remind yourself that millions are employed in desirable, eco-friendly positions; they are being trained for critical customer service roles and provide much-needed services to all sectors of our economy, thereby facilitating recession-busting commerce on multiple fronts. As call center practitioners, we must continue to move our industry forward; we are compelled to do nothing less.

[From Connection Magazine March 2009]

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of Connections Magazine, covering the call center teleservices industry.

Categories
Call Center Articles

Are You In or Out?

By Peter Lyle DeHaan, PhD

Author Peter Lyle DeHaan

Since you are reading this column, it is highly likely that in some way or manner, you are in the call center industry. However, the question, “Are you in or out?” does not query your connection to the industry, but rather your participation within it. Those who operate call centers, classify their activity in two ways. The first is if they handle inbound traffic or outbound traffic; the second is whether they are an in-house or outsource operation. Therefore, “Are you in or out?” is two questions, each with two answers, for four possible outcomes:

1) An in-house call center, doing inbound work

2) An in-house call center, doing outbound work

3) An outsource call center, doing inbound work

4) An outsource call center, doing outbound work

Inbound or Outbound? Inbound or outbound refers to the direction of calls. That is, whether the center makes calls (outbound) or receives calls (inbound). For an outsider – or even an uninformed insider – this would seem to be a small distinction. “What’s the big difference?” They ask. “Both involve agents, use phones, and are supported by technology. If you are doing one, the other should not be a problem.” Not so fast. The differences are as profound as night and day.

Inbound: Since inbound call centers answer calls, agents are in a reactive mode. That is, they wait for the phone to ring (or for the next call to drop from the cue) and then they react to it. Inbound call centers are equipped with ACDs (Automatic Call Distributors) to efficiently send calls to the “next available agent.” Inbound operations are staffed more hours of the day than their outbound counterparts, with most operating 24×7. Agents are scheduled to work in anticipation of projected call volume based on historical data and marketing initiatives.

Outbound: For the outbound call center, agents must be proactive; that is, they need to take initiative. The successful outbound agent has a different personality than the ideal inbound agent. Even if the nature of their outbound work is not specifically in sales, they still need a sales mentality. They need to engage the called party, lead them towards a stated objective, and deal well with rejection – some of which may be personally directed. Outbound call centers rely on predictive dialers to place calls. Outbound centers have reduced hours of operation, limited by law and the demands of specific campaigns. Here agents are scheduled as needed to complete a requisite number of calls within a certain window of time.

There has been much talk about the avalanche of recent legislation to regulate (that is, limit) outbound calling, historically called telemarketing. There is a wide degree of differing opinions on how this has affected the outbound call center industry. At one extreme, the doomsayers assert that the industry has been decimated, sending millions into unemployment and leaving outbound calling as an insignificant fraction of the overall call center industry. The opportunists proclaim that this legislation has forced marginal players out of the industry, or at least pushed them to inbound work, and made outbound calling easier. This is because the 70 million or so who signed up for the Do Not Call (DNC) list weren’t buying anyway. Those remaining, who can still be called, have a higher propensity to buy. Yes, jobs have been lost and centers closed, but much of that, they assert, would have happened regardless of this legislation.

Blended: Not to be overlooked, the concept of blended call centers (those doing both inbound and outbound work) has been pursued, although with varying degrees of success. Blending can occur at different levels. The first is within a call center, where some agents are answering calls while others are placing calls.

The second level of blending occurs with agents who are proficient at both calling disciplines; they can be scheduled for either activity as needed. Most agents cannot successfully make this transition from one day to the next, but for those who can, the variety is greatly appreciated.

The third level of blending occurs from call to call. If an unexpected rush of incoming calls occurs, the outbound reps are automatically removed from the agent pool of the predictive dialer and placed into the agent pool for the ACD. This continues until the rush is over, when the process reverses. Conversely, if it is a slow day for incoming calls, these agents can be automatically switched to the outbound campaign. While this type of efficiency excites upper management, it often works better on paper than in reality because reps who can successfully do this type of on-the-fly mental adjustment are rare.

In-house or Outsource? While the concepts of inbound and outbound are generally understood, the terms in-house and outsource elicit some confusion. An in-house call center is one where the work done is performed for the company itself – that is, internally – and is generally secondary to the main function of the company and the products or services they produce. Conversely, an outsource call center is in business to provide call center services to other companies. Phone work is all they do; it’s their business.

In-house: There are arguably 50 to 100,000 call centers in the United States. The range is so great, because the definition of a call center varies. Of these, roughly 90 percent are in-house call centers.

Outsource: Outsource call centers, though a minority, are increasing in number and importance. This trend is due to more and more companies looking to outsourcing as a way to increase service levels or options, return to their core competencies, save money, or all three.

At outsource call centers, processing calls is all they do. Therefore, they must do it well and cost-effectively if they are to remain viable. They also enjoy an economy-of-scale that is not feasible for the in-house operation. As such, their margins allow the client to save money and the outsource call center to make money.

Unarguably, the outsource call center industry can trace its beginnings to the post-World War I era, when enterprising telephone answering services begin popping up around the country. Even though the label would follow decades later, these entrepreneurs were, in fact, the first outsource call centers. The modern era of outsource call centers began in the 1980s, when the introduction of toll-free numbers made it cost-effectively realistic to centralize call centers. Still, it wasn’t until the last few years that the outsourcing label was applied.

Outsource call centers are very similar in design and function to their in-house counterparts. There are, however, a few important distinctions. First, while an in-house call center can be viewed as either a cost-center or a profit-center, the outsource call center must be a profit-center and is often the only source of revenue for the company. Second, the outsource call center must continually search for and find new clients to serve. Therefore, it has an external sales and marketing aspect that is not needed at in-house call centers. Lastly, in-house call centers service their company’s customers, whereas at the outsource call center it is generally their clients’ customers who are served. Therefore the agents at an outsource call center are working for their client’s, but work with their clients’ customers or prospects.

Outsource is Not Synonymous with Offshore: A recent trend has been moving call center activity to other countries which boast stable technological infrastructures and offer qualified workers who possess lower wage expectations. This is typically referred to as offshore outsourcing and is too often incorrectly shortened to outsourcing. This is incorrect shorthand, as the majority of U.S. call center outsourcing is, and will continue to be, to U.S.-based call centers. Offshore outsourcing, which is getting all the attention, is a small minority of the total call center outsource picture. Although offshore outsourcing will continue to occur and increase, it will be some time before it becomes the majority of all call center outsourcing.

Where Does Connections Magazine Fit In? At Connections, our focus is on outsource call centers. Our articles are written with outsource call centers in mind. That does not mean that we are not a great magazine for in-house call centers. In fact, more and more in-house call centers are receiving Connections then ever before; new subscriptions occur daily! As long as our in-house friends keep the caller/client distinction in mind, Connections’ articles apply as appropriately to them as they do to the outsourcing center.

Also, the content of most articles is applicable to both the inbound and the outbound operation, though occasionally content will specifically address one segment or the other.  

The bottom line is, whether you are inbound or outbound, in-house or outsource, Connections Magazine is for you!

[From Connection Magazine November 2004]

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of Connections Magazine, covering the call center teleservices industry.

Categories
Call Center Articles

Outsourcing Options

By Peter Lyle DeHaan, PhD

Author Peter Lyle DeHaan

Most readers of Connections Magazine are outsourcing service providers, offering an array of telephone-related and contact services to their clients. Just as organizations, businesses, and individuals can outsource call processing to telemessaging and teleservice companies, these call centers can in turn outsource certain aspects of their business to other companies.

Though this can take many forms, the main area of call center outsourcing is call processing. This includes call overflow, time-of-day/day-of-week routing, account sharing, and complete 24×7 outsourcing. Some companies, such as Personalized Communications, will also handle customer service and billing functions in addition to providing 24×7 outsourcing services. A favorable exchange rate makes Canada a prime area for cost-effective outsourcing from the United States. Other outsourcers, such as Asian Call Centers International, are offshore and able to offer substantial savings because of lower labor rates. The sidebar “Outsource Call Centers” lists companies that provide various call processing services to other call centers.

There are as many reasons to outsource as there are call centers that do so. Sometimes companies outsource to save labor expense or counter a tight local job market. Companies may also outsource to expand the scope of their services or to pool resources to handle larger accounts. Another practical reason is to allow for expansion without investing in additional equipment or software. Ansaring, in St. Louis, does just that. It found sharing accounts to be an excellent way to grow its business without additional investment. Ansaring is a six-seat telemessaging business owned by Vicki Tarpley. Tarpley said the company has been very successful at sharing accounts: “It takes a six-seat operation and expands it as far as you want to go, with no investment in additional equipment.” She added, “It allows us to handle large campaigns without adding seats. It’s so easy and it makes money for all the partner call centers.”

Tarpley said that thanks to outsourcing, when her company gets a call for a large campaign, it does not have to turn the prospect away. The only stipulation is that calls must come in on a toll-free number. She finds other companies with the same call-processing platform that agree to share the account. Then account set-up information is sent to each partnering call center. Next Ansaring staffers call the toll-free provider and arrange to have the calls routed to each call center. The toll-free provider will funnel the agreed upon number of calls to each partner. The whole process is seamless to the client. “I can’t imagine doing this without my Telescan system,” Tarpley added. “It is so easy. It’s a matter of a few steps and we can expand to 10 times our size, with no additional investment. We can even handle catalog orders with our order entry system.”

Tarpley also shares accounts provided by other telemessaging businesses. She said one bonus of sharing accounts is shared knowledge. When she is sharing an account, she also shares ideas with other businesses. In addition to these benefits – and the additional revenue – she doesn’t need to add staff or equipment.

In account sharing scenarios, it is fairly straightforward to distribute a client’s calls to multiple call centers, but pulling the collected information back from disparate locations or platforms can be more problematic. In these situations, Web-based packages can solve the problem by centralizing all collected information in a single database. One such example is Amtelco’s eCreator. It is a Web-based scripting application, perfectly suited to provide call centers with the ability to outsource call handling on large or complex accounts. eCreator’s Web-based environment gives the originating call center the ability to publish a script on the Internet. This means that there is no set-up required by the partner call centers. They do not even need to have eCreator, just Internet access. In addition, client changes can be made easily, in one place, without the hassle of having to roll out the script to all the outsourced locations every time a change is made. All of the call information is then immediately saved in a single database, making it unnecessary to merge data.

In other situations, specialized software may be required to handle a specific client’s needs. When the client’s usage rates are high or the special software is inexpensive, it is not a problem to purchase ancillary software. However, if the anticipated monthly revenue is low or the software is expensive, the necessary program can be cost-prohibitive. In these cases, the software can be rented instead of purchased. This can be accomplished by paying a monthly fee for the rights to use a hosted software package, which is accessible via the Internet. Several vendors offer hosted versions of their software. This allows many options for the call center, such as avoiding a one-time capital investment, trying it before buying, or building up a base of clients using that software in order to generate enough revenue to eventually buy it. Application service provider (ASP) companies do nothing but provide hosted software to other companies. Sometimes the ASP writes the software, most of the time it buys the software and shares it among several customers. Hosted services will be covered in detail in the July/August issue of Connections Magazine; those who can’t wait should see the Buyers Guide on the Connections website.

Support services can also be outsourced. One example is bill printing and mailing, which is a service provided by Broadfield Imaging. Another is technical and programming assistance, which is often provided by outside firms, as it is difficult for small call centers to develop and afford a full-time technical guru. Most vendors provide phone support for the maintenance and operation of their equipment as part of an annual service contact. Some, such as Amtelco, also provide programming and special application assistance, including custom scripting, reporting, and development. They can create custom scripts with eCreator, as well as custom reports for the scripting application or based on MDR or billing link data. Custom feature development or interface development with another application is also an option. Not only can their services be used in areas where a call center lacks the expertise, but also when there is not sufficient staff to meet a deadline.

[Also see How to Make Offshore Outsourcing Work for You]

[From Connection MagazineJune 2003]

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of Connections Magazine, covering the call center teleservices industry.