by CIO Staff

The Future of Virtual Agents

May 15, 20012 mins
MobileSmall and Medium Business

Fewer than 5 percent of call centers use work-at-home agents, even though DSL and cable modems have made having virtual agents feasible. Yet while technological barriers are diminishing, other concerns have kept most call centers from jumping on the at-home agent bandwagon. Technology costs have come down, but companies continue to conclude that on a cost-per-transaction basis, using virtual agents is not cheaper than centralized operations. Also, most companies prefer centralized operations to streamline administration and maintain control. (It’s easier, for instance, to handle technology setup and maintenance when all of your agents work under one roof.) What’s more, going into people’s homes represents a liability risk for call centers.

That said, any technique to reduce agent turnover is worth investigating. My Twinn’s 88 percent reduction in agent turnover is remarkable. With overall attrition averaging 15 percent per year, agent retention is one of the most challenging problems“if not the most challenging“for contact centers. For the average call center, 71 percent of the cost per handled call (which averages $6.38) is personnel-related. (Operations account for 54 percent and administration for 17 percent; capital and communications make up the rest.) Reducing turnover therefore not only improves customer service, it lowers costs because it cuts back on the extra training and management resources required to bring new recruits up to speed. It’s impressive that My Twinn has been able to improve its close rate and decrease its number of escalated calls. If My Twinn has been able to cut its overall costs (maybe not cost per transaction), particularly personnel costs, then the strategy is really paying off.

The greater the need for highly skilled agents (such as those with technology expertise), the better the business case for virtual agents. The virtual strategy is worth pursuing if you need highly skilled people. But most call centers remain focused on keeping the cost per transaction down, and the perceived administration and control issues that come with using work-at-home agents make most call center managers uncomfortable. So in the future, instead of virtual agents, we are more likely to see clusters of agents in remote offices where the demographics match the client’s needs (for example, low labor costs, high work ethic).

Wendy Close, a CRM research director at Gartner, is a CRM generalist with 10 years of experience. She can be reached at