Call Centers

7389

INDUSTRY SNAPSHOT

The experience is familiar to most: you call a company to inquire about your latest bill and you are routed through a series of push-button options before you speak to a customer service representative with the inside scoop on your account. This represents call centers in action. For more and more companies, call centers were positioned as the hub of all customer service operations and the list of services provided via call centers expanded throughout the early 2000s. Used by banks, airlines, health care operations, telemarketers, retailers, catalog companies, industrial firms, and a host of other industries, call centers were, by the onset of the twenty-first century, the most popular medium of contact between companies and customers. Roughly 5 percent of GDP transactions in the United States are routed through call centers.

According to the research firm Datamonitor, during the mid-2000s the United States was home to 50,600 call centers. However, in the wake of nearshoring and offshoring—whereby operations are moved to countries with cheaper labor and operational costs—call center and agent totals were expected to fall through 2008, reaching 47,500. Other factors contributing to this decline included the federal government's Do Not Call List, which severely impacted the telemarketing industry by allowing consumers to remove their phone numbers from call lists, and call center technologies that continued to automate interactions with customers.

In its January 1, 2007, issue, Call Center reported that the United States employed some 7.5 million contact center agents, based on figures from National Association of Call Centers Executive Director David Butler. Moving forward, the industry was expected to experience continued growth. As Technology Marketing Corporation Founder, Chairman, and CEO Nadji Tehrani noted in mid-2006, the global economy supported the addition of some 100-200 new call centers every month.

ORGANIZATION AND STRUCTURE

Call centers typically are highly automated telephone systems that customers call with a service or billing question, purchase request, or some other inquiry, depending on the nature of the company. Conversely, many firms also use their call centers to place calls to customers, including those with regular accounts and those targeted as potential new business. In a way, call centers are indicative of the never-ending race to squeeze costs and boost the volume of business. More broadly, however, call centers serve as a central buffer between the company and the public, filtering questions and requests so as to free up other workers to concentrate on their particular areas.

Most indicators for measuring call center performance included the amount of time devoted to the average call, the number of calls each agent handled, and so on. In this way, the emphasis tended to rely far more on quantity than on quality. The logic goes that by squeezing the average time per call and expanding the number of calls per agent, the company will reap higher benefits from its call center. Many analysts were seriously challenging that logic, however, noting that it betrays an outlook on call centers from a cost-centered rather than revenue-centered perspective. Instead, such critics contended that the call center could be more fruitfully utilized as a creative new business strategy that aimed to generate increased revenue through enhanced quality and expansion of available services, not to mention promoting new sales.

Indeed, a growing number of companies were beginning to catch on to that possibility. About one-third of call centers surveyed by Ernst & Young in 1999 planned to devote more resources to gearing their call centers toward customer access and sales opportunities rather than simply handling customer service inquiries. Nevertheless, by the mid-2000s some industry players stressed the need to measure more meaningful aspects of call center performance, such as contribution to an organization's revenue, value, or profit.

BACKGROUND AND DEVELOPMENT

The call center as a major component of the U.S. business environment had its genesis in the mid and late 1980s during the massive downsizing and corporate restructuring trends. In part, call centers offered firms undergoing such transformation a cost-effective way to process a greater number of customer services and requests, since a large number of employees could be accommodated in a small office space, thus cutting down on overhead. As call centers moved ever closer to the mainstream, customers came to expect the quick access and convenience they offered, though call centers certainly generated their share of complaints related to the long periods customers spent on hold, a reputation that centers were far from shaking off by 2000.

By the late 1990s, the call center market was growing about 40 percent each year, though within that surging growth, assessments were mixed. Ernst & Young LLP conducted a survey in 1999 comparing call centers by industries and found, unsurprisingly, that banking companies and health care operations housed the most sophisticated and successful call centers. The varying nature of industries, however, ensured that call centers were more easily integrated into some industries than into others. For example, the study found that utilities were among the least successful industries in the application of call centers. In large part, this was due to the large amount of information, such as service schedules and payment histories, that must be verified and processed before utilities customers could be provided with information.

The...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT