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Creating a Profitable Call Center

By Alice Dragoon

July 15, 2005 — CIO —

Not long ago, agents in the call center of a well-respected global Fortune 50 company endured the weekly distribution of the bathroom-time bar chart, a graph showing how long each of them had abandoned his phone to visit the loo. If an agent’s bar exceeded the benchmark for his call center, he’d hear about it from his supervisor at his next performance review. When call center consultant Lior Arussy handed the disbelieving CEO a copy of one of the bar charts, he jokingly recommended to the executive that the business services company install infrared sensors to detect when agents left their seats.

Once the embarrassed CEO looked at the numbers, he got the message that running a call center as a pure cost center not only produces a sweatshop environment for agents, it’s also bad for business. Pressure to minimize costs was translating into pressure on agents to get customers off the phone as quickly as possible. As a result, close to 50 percent of new customers were bolting for competitors within six months.

"The company was leaving money on the table," says Arussy, the CEO of Strativity Group and author of Passionate and Profitable. "Using very, very conservative estimates, 25 percent of revenues a year were essentially lost because the company was not focusing on customers, but instead focusing on efficiency." The company is now implementing a service-oriented architecture that will give agents quicker access via the Web to the information they need to provide better, faster service. What’s more, the CEO has come to view his call center as a gold mine of customer information. He started listening to calls himself and now requires senior executives to do the same. What they’ve heard has spawned ideas for operational changes that have cut costs and increased revenue.

This company’s blind spot about its call centers is unfortunately not that rare. The temptation to outsource the call or contact center is understandable, and companies are increasingly giving in to it. According to a December 2004 JupiterResearch survey of U.S. contact center employees, 28 percent of respondents outsource some or all of their contact center operations. Dimension Data’s "2005 Global Contact Centre Benchmarking Report" puts the number of companies globally that outsource at least one of their call centers at 20 percent, up from 14 percent last year.

But viewing the call center as a pure cost center is a huge mistake. Although expensive to run (annual operational costs hover between $80,000 and $120,000 per agent, according to Jon Anton, director of benchmark research at Purdue University’s Center for Customer-Driven Quality), the call center also represents the public face of your company. A well-run call center can significantly increase customer loyalty—and a poorly run one can prove a major liability. A Purdue University study found that the average repurchase rate for products that work as advertised is 78 percent. But the repurchase rate jumps to 89 percent when customers have a problem with a product that’s successfully resolved though a positive call center experience. Conversely, the repurchase rate plummets to 32 percent when those customers have a lousy call center experience. If that’s not enough to convince you that your call center is strategic, the fact that it’s a potential wellspring of customer intelligence should.

 

 

 

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