Call Center Buyer's Guide

Call center service introduction

Hiring an outside vendor to handle your incoming calls can be a daunting prospect. To some of your employees, it may seem like an obvious business decision - others may feel that it is an expensive, risky way to treat customers and prospects. Add in the simmering debate about the merits of offshore call centers and you get a recipe for a contentious decision-making process.

Note: Many call center vendors handle both incoming and outgoing calls. If you want to learn more about outgoing call services, check out our Telemarketing Buyer's Guide.

Call centers are often treated purely as a commodity. Avoid this trap! For many customers, the vendor you choose will be their primary point of contact with your business. Those interactions can have a significant impact on people's perception of your company, positive or negative. Throughout the selection process, try to keep in mind that you are not just looking for a low-cost supplier - you are looking for a partner who will have considerable influence over your brand and customer satisfaction.

BuyerZone.com can help you avoid the pitfalls and make the right choice. This Buyer's Guide will walk you through the process of evaluating your needs, choosing a supplier, and implementing a successful outsourced call center..

<< Back to top

Outsourcing call centers

Call centers can be set up to handle many types of calls:

• Taking orders
• Customer service
• Tech support
• Qualifying inbound leads
• Answering service/messages

There is no magic guideline as to when a business should definitely outsource their incoming call handling. Instead, there are a number of situations when it may be right for your business, most of which revolve around resource planning.

• Significant growth - A new product launch or other major event can bring a huge volume of calls to even a small business. Outsourcing incoming calls to a service provider can eliminate the hassles of trying to ramp up dozens of new employees or investing in major equipment upgrades.
• Save money - When businesses reach call volumes that demand a significant capital investment, either new phone systems, customer relationship management (CRM) software, dedicated call center space, or many new employees, it can be an easy choice to outsource. Call center service providers are able to keep their costs much lower by spreading the cost of employees and technology over many customers.
• Testing and learning - Smaller companies with little experience dealing with customers may launch their phone operations as an outsourced solution. When they have learned what it takes to run a call center and built up enough capital, they can bring the operation in house. Larger companies interested in testing new technologies or programs may find it easier and cheaper to use a call center for testing than to retrain in-house employees.
• Variable volume - Call volumes that are relatively constant or those that grow at a predictable pace are relatively easy to plan for and budget. Businesses that see significant seasonality or unpredictable changes in volume can really benefit from the extra capacity of an outsourced call center. This can include spot overflow, where the service provider is used to cover sudden surges in phone calls, or seasonal assistance.
• Business model shifts - The decision to outsource incoming call management can be triggered by a major decision, such as making the leap to 24/7 tech support. Switching to a two- or three-shift operation can be a huge problem - or as easy as going to a service provider. Another trigger can be the need to offer support in multiple languages.

Call center outsourcing works best for fairly straightforward sales, service, and support. Products that have complex sales cycles and customer support lines that require in-depth troubleshooting are not as well suited to outsourcing.

<< Back to top

Preparing for your call center search

Call center service providers come in different sizes, use different methods and technologies, and have different specialties. Before you even start to talk to providers, sit down and determine what exactly your requirements are - then find providers who match your needs.

The first consideration is simply what types of calls the vendor will handle: orders? informational? tech support? customer service? Hiring and training practices differ widely for call center employees who will focus on sales compared to those focused on support and service.

Next, project your expected volume. Base your estimates firmly in reality - because of monthly minimums and maximums that will be in your contract, under- or overestimating for negotiation purposes is not a good tactic. Make sure you have seasonal numbers if your traffic sees major spikes at different times of the year, and growth estimates if you are ramping up your operations. These numbers are important for helping you find a provider suited to your needs: for the best relationship, your calls should make up more than 5% but less than 50% of the vendor's traffic.

If you have in-house CRM or contact management software, you will want to make sure that the provider can provide connectivity from their system to yours, allowing you to easily exchange data. If the provider uses the same software you do, you may be able to set up a real-time direct connection, allowing you to see updates as they are made.

You may also want the vendor's help handling other types of inquires: email makes up a large percentage of some companies' customer communication, and web chats and instant messaging (IM) are becoming more popular every month. Many service providers will handle these types of inquiries as well.

Some providers have specialties that you may want to utilize. Some focus on particular industries: technology, higher education, or retail, which can make for a smoother launch of your program. Other providers make a niche serving particular audiences with multiple language support or 24/7 staffing. In your preparation, decide what "extra" services you need.

<< Back to top

The offshore call center debate

One of the major decisions to make when considering outsourcing your call center is whether to go with an offshore provider or use a company whose call centers are in the U.S. In the last few years, "offshoring" has really started to take off - and the controversy has taken off with it. While the idea of businesses using foreign plants and workers in manufacturing is less contentious than it used to be, choosing offshore providers for call centers has caused much heated debate. The best advice we can give you is to make sure you make your decision on solid business reasoning, not emotion.

The main tradeoffs are these:

• Choosing an offshore provider is almost always cheaper. Rates can be as little as 25% of what a U.S.-based firm would charge for the same service. The savings are substantial enough that this option simply can not be ignored.
• Your choice of providers can impact your corporate image. There will always be a segment of the population - including some within your own company - that prefer to keep these types of jobs in the U.S. Larger companies usually face more media scrutiny on these issues; for smaller companies, customer perception is the larger risk.

While it is slightly less than PC to discuss it, some of your callers may be bothered by unusual accents. (Of course this can be a factor with American call centers, too.) Other challenges of offshore outsourcing include the difficulty of arranging site visits for evaluation or training. 10- to 14-hour time differences can also make problem resolution difficult.

You can reduce some of the risk and still lock in significant cost savings by choosing providers whose call centers are in the Caribbean, Canada, or other locations where English is commonly spoken. In places where English is not the first language, you may have better success with highly scripted applications, because the call center agents are not expected to have extensive conversations. Simple order placement or informational calling are good examples.

As with most hot-button issues, there is no best answer to this question. Whichever route you choose, make sure your management team is on board and understands how the choice was made.

<< Back to top

Call center factors to consider

There are many factors to evaluate when choosing between potential call centers. Some may be more or less important to your business, but they should all be weighed during your purchasing process.

Price
Overall pricing is the first item many companies use to choose their call center provider. Unfortunately, for some companies, it is the only item. As we stated in the introduction, choosing an external service provider to interact directly with hundreds or thousands of your customers and prospects should be treated as a partnership building, not a bargain-shopping, expedition. Even if price savings are your primary goal in outsourcing, you must consider the overall service that will be provided - otherwise those cost savings can quickly disappear.

Do your best to get apples-to-apples price quotes from the companies you are considering: all per-minute, or per dedicated rep, etc. Remember that training and setup costs can be substantial, especially if they involve international travel. Since pricing is usually based on actual usage, you may want to present a few different scenarios to your potential vendors: ask for quotes for a slow month, an average month, and a busy month to get a better sense of the real costs you will be paying.

Experience
Look for a company with significant experience providing outsourced call center services. Startups can be fine if their management has a good background in the industry, but it is likely safer for you to choose a company that has existing customers and a solid reputation. Industry veterans know the importance of good infrastructure - phone systems, computers, and software - as well as how to adapt with the times.

You may want to look for providers with experience in your exact industry. This can reduce the amount of training needed and help launch your program more quickly - but of course is no guarantee of success.

Customer service reps
Whether they are called agents, phone staff, or customer service representatives (CSRs), the employees who actually answer the phones for the vendor are absolutely essential to your bottom line. The call centers of the 1970s and 1980s earned reputations as unforgiving sweatshops - agents then were generally unhappy, unmotivated, and only stayed in their jobs for as long as they had to. That situation has changed dramatically over the years as providers learned how important a top-notch staff was to the quality of their service. However the environment for employees still varies considerably from employer to employer.

One good indicator is how long the average employee stays with the company. An average of less than a year can be a warning sign. The percentage of CSRs with a long tenure, over three years, can also be a tip-off: 35 to 50% is a good threshold to seek. Ask about the provider's commitment to staff training and promoting from within; employees who have growth opportunities are more likely to stay with their current job.

Additional services
You should make sure you choose a provider who can provide an overall level of support sufficient to your needs. Make sure the account manager who handles your case understands your industry and your business, since they will be your day-to-day point of contact. If you need script development help, investigate the vendor's process and ask to see sample scripts the firm has developed for other customers.

Reporting is another important aspect of the provider's services. Without detailed, accurate reporting, judging results becomes next to impossible. Before discussing reporting in detail with potential vendors, gather input from your staff regarding the statistics that are important to them and how often they will be needed. You should also decide if getting finished reports is sufficient for your needs, or if you want the provider to provide data in a common format (comma separated, Excel format, etc.) so you can run your own analyses.

Some metrics you may want to track:

• call duration
• average speed of answer
• handling time
• calls per time
• revenue
• upsell results

The ability to monitor calls is another area where providers differ. Some require that you call one of their managers, who will then "piggyback" you onto an agent's call so you can hear how effective they are. Others let you dial in to their phone system directly and listen in without any assistance or even notification.

<< Back to top

Evaluating call center companies

A vendor site visit can get you a wealth of information about a call center solution that may be hard to gather otherwise. Visiting the actual call center can give you a sense of how the company treats their employees. Are staffers energetic and pleasant? Enthusiasm and friendliness in a person carries over to phone calls. This will also be a good opportunity for you to look at sample scripts, meet some of the agents who may be working for you, and get a sense of the scale of the operation.

A site visit also gives you a chance to conduct in-person interviews with the agents. In addition to basics like how happy they are, their tenure at the company, and the projects they have worked on, questions such as "What is your next job going to be?" can help you get some insight into their commitment to customer service. You should also feel free to ask for HR records to verify claims about tenure and training.

Another important test is listening to actual calls. Ask to listen to live calls of the type you are planning to outsource: inbound sales, customer support, etc. Pay attention to how well the agents know their material, the overall image they project, how well they can improvise in unusual situations, and how they deal with upset or problematic customers. Also check how the call center supervisor coaches agents to improve their call handling. This the most direct way to evaluate a call center, so plan several listening sessions with multiple agents to make sure you get the information you need.

You can also make your own sample calls. Get phone numbers for some of the vendor's other clients and call them unannounced, as if you were just another customer. Ask a few questions - hard questions if you like - and see how the CSR responds. If geography or timing prevents you from making an on-site visit, sample calls become even more important.

As with any major business purchase, you should request references of both current and former clients. If possible, ask for references to clients in businesses similar to yours, both in industry and size. Some questions you may want to ask when contacting references:

• Did you accomplish your overall goals when working with this company?
• Were you able to track all the metrics you needed around activity and results?
• What was the best/worst part about working with this company?
• What were the agents' biggest strengths and weaknesses?
• Has this outsourcing impacted your customer satisfaction ratings? How?

<< Back to top

Call center services pricing

Pricing call center services is fairly complex. The bulk of the cost is per-minute or per-hour fees for each agent or call, depending on how your contract is structured. The complexity of your script, volume of your calls, and any special services you require will also come into play. In addition, pricing can vary according to quality: call centers that employ highly skilled, experienced agents have higher costs and therefore charge higher prices.

When contracting for call center services, you can usually choose between shared or dedicated agents. Shared agents, also known as blended teams, handle calls from multiple vendors. They may answer the phone for you one minute, and for some other company halfway around the world the next. With the right software and training, this approach works well for many common types of calls. Typically you pay between $0.50 and $1.00 per minute.

Dedicated agents work only for you - almost like an off-site employee. By concentrating only on your calls, the agents are better able to learn your business. Pricing is per agent per hour, and can range from $10 or less for the lowest-priced offshore companies to $25 and up for larger U.S.-based firms. This gives you agents who are more knowledgeable about your company's products, but is more expensive overall.

There are many other fees to consider beyond the basic charges. Many providers enforce monthly minimums, which can drive up your costs if your volume fluctuates unpredictably. You should also expect a setup fee of up to several thousand dollars. Other costs, such as additional commissions, training, programming, and reporting fees, may be covered by your per minute or per hour charges - or may not. Make sure the provider spells out exactly what additional charges you will need to pay before signing a contract.

Contracts, metrics, and SLAs
A call center services contract needs to define more than just the contract term and pricing. It should specify exactly what standards and procedures the call center is expected to follow, how their performance will be measured, and what penalties can be applied if they fall short of the requirements.

For example, a service level agreement (SLA) usually focuses on response times, such as guaranteeing that 80% of calls will be answered within 30 seconds. Depending on the nature of your business, you may want to pay extra to get a higher percentage in less time, or you may decide to save money by setting a lower goal. Some companies do not routinely include SLAs. You can probably negotiate one with any vendor, but some feel that their standard response times are sufficient for most customers.

Other contract options include exclusivity, translation services, secrecy/confidentiality, monitoring rights, and more. When creating contracts of this magnitude, almost anything is negotiable, but remember that you will pay more for special requests.

Contracts are typically six months to a year, with provisions to automatically renew. Some may discount their rates if you agree to a longer term contract - if you are confident in your choice of vendors, you might want to take them up on a two- or three-year term. Others may penalize you for canceling a contract within the first six months or a year, but allow you to cancel any time after that.

<< Back to top

Call center buying tips

• Where are they, really? Be sure you know exactly where your calls will be handled. Even though headquarters and a large call center are in your city, the vendor may have satellite call centers in other states, countries, or even continents. Ask if your calls will be sent to multiple locations.
• Get the service you deserve. Choose a call center where your call volume will make up 5 to 50% of the total volume. Less than that and the agents will not have a chance to get familiar with your services; more than that and you may be pushing the limits of what the center can handle.
• Own your own phone number. Some call centers will offer to buy and set up a phone number for you. Just say no. Buying an 800 number and assigning it to the provider is fairly straightforward. If you ever need to switch providers, it is much easier if you own the phone number. Same goes for email addresses - you create them and have them point to the vendor.
• Keep communications open. Over time, both industry conditions and your business will change. Staying in close touch with your call center provider allows you to have them adjust with you, and also ensures that you can discuss and resolve small problems before they become larger problems.
Sign an NDA. A non-disclosure agreement makes sure that the provider doesn't take the lessons they learn with your business to one of your competitors. This is especially important if your choose a provider who specializes in your industry.

<< Back to top