5 Ways Call Center Outsourcing Can Help Increase Profitability

For many companies, staffing and managing an internal call center can be a challenging and costly part of their direct-to-customer businesses – representing as much as 3% or more of net sales. An alternative is outsourcing call center services in part or in full to a qualified partner to help support your growing business.

While most of our clients are invested in internal call centers, we think there are cost-effective and customer-centric ways to use outsourcing. But it’s important to perform the right level of due diligence to determine if it’s the right choice for your business.

To help you in your decision-making process, here are 5 ways we have found outsourcing call center services can help companies:

Lower cost per call and order

For many small to midsize companies, call center outsourcing can provide a lower cost per call and per order than an internally managed operation. This is especially true of companies without a highly technical product that requires in-depth knowledge. Outsourcing eliminates the costs of recruiting, training and retaining qualified call center representatives.

Do you know what your costs are and how to compare them to outsourced call centers? So often we only think about the hourly labor rate, but a fair comparison requires determining total costs per transaction. These costs include payroll and benefit costs for management, supervisors and agents; space and utility costs; telecom; IT systems and software; HR recruiting and training (including seasonal ramp-up and employee turnover). Do the analysis and understand your costs per transaction, order and call.

When you do a comparison analysis of outsource vs. insourced, be sure all their costs are included in their quotation. This should include project time and product training costs several times per year to get an apples-to-apples comparison.

Small-to-midsize merchant companies have high peaks and low valleys in transaction volume because they may not be a four-season business, or they’re stronger one season and low volume the rest of the year. If that’s you, the valleys have high costs per transaction.

Focus on core competencies

Outsourcing your call center functions to a qualified call center company gives management more time to focus on developing products, customer acquisition, marketing campaigns and other growth initiatives. A qualified call center company will give you the time to execute these plans and focus on your brand.

Support for after hours and overflow

Much like seasonal support, call centers companies can help you service customers in ways that you’re not able to do with flexibility and acceptable costs. If you have higher-than-planned call volumes, customers will not wait. They abandon calls and shopping carts if they can’t get immediate assistance.

Avoid capital investment

To be efficient and competitive, companies need to invest in technology and systems. Many have under-invested and are not staying current with technologies that provide higher service levels and lower costs. These include chat, VoIP, support for online shoppers on your website, scheduling software, quality call monitoring systems and modern interactive training systems. While all of these don’t apply to every company, the right partner will allow you to reserve capital for other growth-focused initiatives.

Reduce the stress, time, cost of hiring and training

Many retail and omnichannel companies do 60% to 70% of sales and a higher percentage of profit in the last 6-8 weeks of the year. For a number of our food gift clients, it’s their entire sales year. Many companies experience a peak season with weeks that experience order volumes that are often 8 to 15 times higher than average.

Recruiting becomes a time-consuming and costly endeavor. In some markets you may not be able to find qualified call center associates at your budgeted wage. And there is always some percentage of temporary associates that just don’t make the grade or decide this isn’t what they’re looking for.

IT, order entry, customer service systems, ecommerce systems, procedures and product assortments have become so complex that it requires a week or more of training, plus some “buddy up” time to get new associates confident and hitting productivity levels. In the end, many companies bring in temporary and new employees a month or so in advance to gain productivity.

So now that I’ve shown you all this, go back to my first point above. Have all of these costs been taken into account in your analysis? You made find that the numbers add up for an outsourced call center solution.

Curt Barry is Founder & President of F. Curtis Barry & Company

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