turning cost center profit center

Turning a Cost Center into a Profit Center: Why Acting Now is More Important than Ever

Share:

The world has utilized the idea of a call center for over 50 years.  If you were to ask a sample of average consumers and employers what they think of a call center, feedback of mixed opinions is to be expected; of that mixed feedback, I’m willing to bet the majority of impressions will be negative. As you read on, I’ve narrowed down a few causes as to why the majority do not favor call centers, as well I’ve outlined a few areas of to improve that will change the output of the call center, benefiting the business and improving customer satisfaction, turning your cost center into a profit center.

Businesses tend to be at an immediate disadvantage as they lack either proper technological education, research, planning, execution, or businesses have the tendency to perceive call centers as a necessary evil and forego any improvement efforts. Furthermore, the customers calling into, or being called by, the call center, may dread the experience from beginning to end. On the contrary, proper execution and technology can turn a call center into a valuable resource to the business and their customer’s overall satisfaction.

Businesses already invest in technology and resources (engineering and agent), so what is missing? Without speaking to each business operating or outsourcing a call center, I am confident in stating the missing piece isn’t resources, rather technology. How do market-leading businesses make technologically correct decisions across their business (i.e. LAN, WAN, mobility, Wi-Fi, Security, etc.), and seem to miss the mark when it comes to their call center? Having the best engineers and agents cannot combat prescribing the wrong call center technology.

Having worked at a couple of the world’s largest premise-based technology manufacturers, I found that my customer’s would buy the call center technology I offered either because they had purchased from me before, I was in their supply chain, or the manufacturer I represented was a familiar name they trusted to their business. While I was happy to sell my customers the call center technology I offered, neither reason for them to buy it was justified. Nor is it justified to buy a leading contact center platform simply because it’s a leading platform. There needs to be more thought than making a decision based on another business’s buying behavior.

When evaluating which direction to take your call center, it is important to ask yourself or your company a few questions:

  • Is your contact center a “cost center” or a “profit center”?
  • Is your company trying to make more money, control costs, or make customers happy/happier?
  • How can the contact center contribute to meet the goals of the company?

Let’s face it, the contact center is a business unit to your company, so treat and respect it like one.

Lower Costs and Increase Efficiency

To start with costs, it’s important to review the most considerable cost in contact centers; it is not the technology, rather labor. Labor makes up 70-80% of a contact center’s costs.  A fair derivative is technology makes up < 30% of contact center costs. Technology can do more than route a call to an agent, albeit intelligent call routing is important. Technology can add intelligence to your workforce management by providing software to increase agents’ adherence to their schedule.  In my experience, workforce management applications can improve adherence by 10% pretty easily. That percentage in turn lowers your labor costs. If your call center employs 150 agents making $15/hour, 10% savings on labor equals $36,000/month! In addition to improving agent adherence, technology can improve agent efficiency.

Efficiency means your contact center will be more productive (or “get more done”) without hiring more agents. Efficiency can be gained in any number of ways. One way is to integrate your customer relationship management (CRM) to your call center. Integration may provide computer telephony integration (CTI), allowing the agent to easily identify and address your customer calling in (rather than your agent taking 15-30 seconds per call to look up the customer). Efficiency is seen as a good thing, but making your customer feel like they’re known and appreciated, will likely satisfy your customer and enhance the customer’s experience.

Another angle to take when controlling labor is to ensure your agents’ time is not being used carelessly. Have your customers ever called into your 1-8xx number, listened to a menu of commands/prompts, selected their reason for calling in, and your customer had to either be ultimately transferred or call back to reach the right person in order to get helped? In the end, your customer’s reason for calling in has eventually been addressed, but not on the first call/contact. Despite your customer’s frustration, this uncovers another area for improvement in your contact center. Such improvement is called First Call Resolution or FCR. FCR is important because it uses only one agent’s wage, is overall more productive, and most importantly your customer is not as frustrated and getting resolution on their first attempt.

As previously mentioned, agent labor is the majority of your call center’s cost. Agent labor can be fairly monetized using a per unit analysis with regard to an agent being a unit. A rough example to figure your unit value is to take your average daily revenue/contribution per agent, less their daily wage. Another consideration is to review your agent utilization (i.e. 85% of their time at work, an agent is on the phone). If your unit value is less than zero, but your agents are making your existing customers happy and driving continued business, that’s good; if your utilization is high (75% or higher) and your agents are feeling overworked, it’s time to increase your agents. On the flip side, seasonality may be a factor to your business, the need to scale down your agents may be necessary to your company. Perhaps you have a need to turn up a satellite SOHO (single office, home office), or integrate to a disparate PBX platform or a recent acquisition with different voice technology. A very cost effective model to consider is a cloud vendor.

Get Scalable, Agile, and Stable in the Cloud

Cloud call center technology provides you scalability, stability, agility, security, and predictability by the nature of what cloud technology is. If your business demands a change in agent quantity, simply adding or removing agents will be reflected in your monthly invoice. Cloud contact center invoices should reflect a monthly recurring cost for the number of agents’ licenses are being used (think of it as a consumption-based model). As an added bonus, cloud technology’s multi-tenant model means that you’re always on current technology.

On the contrary, premise-based technology is far more rigid in agility and scalability. More importantly, premise-based technology is as new as the moment you sign the purchase order (consider your purchase may not arrive and be running in your environment several months thereafter). This is important because none of know how our customers will want to communicate in the near or distant future. If your premise-based platform is incapable of allowing such future communication channel, platform, or engine, then you’re out of luck and an upgrade could cost you a lot of time and money.

If your call center does outbound calling, and you’re not using a dialer, I suggest you evaluate a dialer. An outbound dialer can eliminate an agent having to manually enter a phone number to dial out (consider wrong numbers and human error being an incremental waste of time). Campaigns related to revenue can be uploaded and trigger outbound dialing actions. Campaigns can simply come from your CRM or another leads source. This integration allows for improved accuracy and meaningful contacts. As FCR is applicable to inbound calls, a similar discipline can be used for outbound calls and that is Right Person Contact or RPC. Through the use of patented software, a dialer’s automated outbound calls can be delivered without a pause (I’m referring to the dead air pause heard when a dialer reaches the agent to speak to the call recipient).

Whether your business is looking to make money, control costs, or make customers happier, these three areas will inevitably effect one another. If you have happy customers, you have continued business and referrals. With controlling costs, you’re likely lowering your bottom line, thus making more money. If you’re making more money, you’re likely out running your expenses, enjoying the extra pay, thus carrying a positive attitude when dealing with customers. The call center that was once just limping along, costing your business money, is now thriving and driving profit.