Telcos have a love-hate relationship with call centers: They generate a lot of traffic, but much of it is unprofitable. By understanding the main reasons for that unprofitability, contact center operators and enterprises with large in-house call centers can avoid paying the price – literally.
Outbound contact center calls usually average between 15 and 30 seconds. Two primary reasons for this are that a high percentage of people either hang up as soon as the pitch starts, or they let calls from unfamiliar numbers go directly to voicemail.
Over the past 20 years, mobile phones have emerged as a third reason. All incoming calls count against those customers’ monthly bucket of minutes, so they’re even more likely to let calls from unfamiliar numbers go to voicemail. But with mobile penetration north of 100 percent in the U.S. and many other countries, it will be increasingly difficult for contact centers to limit the amount of calls to mobile numbers.
Laws in many countries bar contact centers from calling a mobile number unless the company behind the campaign already has a relationship with that person. But as more customers use their mobile phone as their primary or only phone, more outbound contact center calls will be to mobile numbers. In 2011, 13 percent of outbound calls were to mobiles, according to a ContactBabel study. One year later, it was 16 percent.
Inaccurate call lists are yet another reason why outbound call centers have low answer-signal ratio (ASR). The norm is less than 50 percent completion because call centers often buy outdated lists simply because they’re cheaper. This compares to a typical ASR of 75% or higher for “normal” conversational calls placed by businesses or residences.
Low ASR and low average call duration (ACD) traffic consumes nearly as much of a telco’s signaling and switch resources as do business and consumer calls that typically last for two minutes or longer. This means that telcos make far less profit from contact center traffic. For example, when a contact center has an ASR below 50 percent, it means its service provider is making no money on half of those calls.
If that weren’t enough, dialer applications can generate enormous call volumes in a short period of time. To avoid being overwhelmed during those peaks – potentially to the point that more profitable calls are blocked – telcos have to build excess network capacity. That’s expensive, especially considering that when the contact centers aren’t dialing out, all of that extra capacity lies fallow instead of generating revenue.
For example, most telcos assume only 10 percent of their customers will be using their phone at the same time. Suppose that during election season, a contact center targets a town with 5,000 lines. If a dialer application generates 500 calls at once, no one in that town will be able to make or receive a call.
Greater network capacity avoids that problem, but the funding has to come from somewhere, and the best place is higher rates for call center customers.
ContactBabel’s research shows that 40 percent of U.S. contact centers currently use outbound dialer applications, with another 8 percent planning to add them. That means telcos can expect dialer-driven spikes to remain common for the foreseeable future.
Telcos have a way to both fund that excess capacity and make low ASR/ACD calls profitable: by charging call center operations much higher rates than they charge “normal” businesses. The good news for contact center operators and enterprises with large in-house call centers is that there are at least four ways they can minimize that penalty.
1. Ask about PPAs and avoid telecom providers that have them. Many incumbent telcos and even competitive providers have Profit Protection Applications (PPAs) that reject calls that go as far as the fourth or sixth option in their Least Cost Routing (LCR) table. When comparing potential operators, contact centers should focus on those that don’t have PPAs. Their absence maximizes ASR, which means the companies using those contact centers can be more effective selling or supporting their products and services. The lack of a PPA means a telecom provider understands that high call-completion ratios are critical to running a successful contact center.
2. Spread your cost – and risk. Over the past 20 years, the U.S. and many other countries have deregulated telecom, which means contact center operators and enterprises with large in-house call centers now have more than one telco to choose from. Leverage that competition by having at least two telecom providers at each facility. That diversity provides bargaining power for lower rates, and it maximizes reliability – with one caveat. Make sure that the providers aren’t simply reselling the same network. Otherwise, if there’s a major outage such as a fiber cut, you’ll get multiple apologies instead of the ability to switch to a network that’s unaffected.
3. Leverage the latest network technologies. Look for telecom providers that use new network technologies, primarily VoIP (Voice over Internet Protocol). VoIP significantly reduces those providers’ cost of switching and other resource overhead to the point that connecting and tearing down millions of calls each day has shrunk to a relatively small cost of doing business. As a result, those providers can pass along that savings in the form of 30 percent to 80 percent lower rates for contact center customers than they usually get from traditional telcos.
For example, imagine a contact center that generates 2 million minutes of outbound calls per month to prospects across North America. At AT&T’s typical rate of $.02/minute, that contact center would pay $40,000 per month in call charges. By switching to a provider that specializes in serving contact centers, it could reasonably expect to pay roughly $.007/minute or $14,000 per month. Over the course of a year, that savings adds up to $312,000.
4. Do your part. Contact center operators should try to limit the number of simultaneous calls to a particular provider to avoid the risk of network overload. This is another example of why it’s smart to have multiple telecom providers: It gives you the flexibility to spread volumes around.
Also, consider limiting the number of simultaneous calls to a given Rate Center (a town or a small geographic part of a city) to avoid swamping local networks. As a result, the network serving the aforementioned 5,000-line town now can easily handle an influx of election calls on top its normal traffic load.
These four tips enable contact center operators and enterprises with large in-house call centers to minimize or even avoid the traditional penalty that comes with their industry. Those savings lower their cost of doing business, so they maximize profits while affording better databases.
Cliff Rees is president of Voxox, the most comprehensive cloud-based rich communication service for consumers and businesses.