The What and Why of Call Center Outsourcing

By Peter DeHaan

June 2009

In this column in the March issue, "Perceptions of Call Center Outsources," I shared from a recent study conducted by ContactBabel, called The US Contact Center Operational Review.  Billed as "the largest and most comprehensive study of all aspects of the US contact center industry," this was their second edition of the survey.

From that report, I shared respondents' views of call center outsourcers, addressing outsourcer value, experience, visibility and information, offshoring, and comparability.  Here is a summary:

• "Outsourcers give good value for money."  Twenty-six percent agreed, 52 percent were neutral, and 22 percent disagreed.

• "Our experience with outsourcing has been very positive."  Nineteen percent agreed, 58 percent were neutral, and 23 percent disagreed. 

• "Outsourcers do not provide the visibility or information that we would like."  Sixty percent agreed, 22 percent were neutral, and 19 percent disagreed.

• "Our company is very receptive to offshoring customer contact."  Eighteen percent agreed, 11 percent were neutral, and 71 percent disagreed.  (Note that the other statements addressed both onshore and offshore outsourcing.) 

• "Outsourcing does not provide the same service as in-house operations."  Seventy-five percent agreed, 21 percent were neutral, and 4 percent disagreed.

Clearly, we have some work to do in response to these appalling perceptions.  Some of this work is needed within our call centers, such as in improving our processes and procedures, with the rest being external.  (See Perceptions of Call Center Outsourcers for the complete column, along with my observations and recommendations.)

The external work requiring attention falls in the areas of PR (public relations) and marketing.  While PR efforts are largely a group effort at the industry or association level, marketing is something that is done on the call center level in conjunction with sales activities.  Towards that end, the report offers additional insight to help tailor your call center's marketing message and services.

First, consider what types of services companies seek call center outsourcers to handle.  Of the organizations surveyed, the largest reason for turning to call center outsourcers was for overflow calls, at 18 percent.  Overflow calls include covering for expected time-of-day, day-of-week, or seasonal shortages, as well as covering for unexpected inadequate staffing levels due to illnesses, vacations, and call traffic peaks.  This response rate was consistent for all size companies.

The second most frequent reason for outsourcing was "out-of-hours" coverage, which handles call activity outside of the hours when call centers are normally staffed.  This was cited by about 14 percent of respondents and was significantly more pronounced (five times) for smaller call centers (those with under 50 agent positions).  With customers increasingly expecting to be able to contact companies 24/7, out-of-hours outsourcing is a critical consideration for those organizations that, for whatever reason, are not staffed around the clock.

Conducting market research and handling phone surveys of customers came in third, at 11 percent.  This was most common for small (under 50 agent positions) and medium (51 to 200) sized businesses, while less pronounced for larger ones (over 200).

The fourth item being outsourced is not actually call processing, but rather related services that are labeled as back office processes.  These include payment processing, billing services, and debt management.  Outsourcing back office processes was done by 9 percent of those organizations surveyed.  Interestingly, it was slightly more pronounced for medium and larger companies than for small ones.  This points to an area of possible diversification for outsourcing call centers.

Ongoing customer service came in fifth at just under 8 percent.  It was most sought after by medium-sized companies (those with 51 to 200 agent positions).  The category of outbound sales campaigns was next at slightly less than 6 percent, with interest diminishing slightly as company size increased.  Lastly was multimedia response (such as email and SMS processing) at less than 2 percent.  The interest in this was universally low for businesses of all sizes.  Perhaps that is because email response does not need to occur in real time and can be handled in-house during times of slow call volume.

Implicit in these numbers is the implication that many organizations do not outsource any call center activities.  This suggests an opportunity to explore why - and to present compelling reasons for companies to consider call center outsourcing.

In summary, the services organizations seek from outsourcers are:

• Overflow: 18.3 percent

• Out-of-hours: 13.7 percent

• Market research / customer surveys: 11.1 percent

• Back office processes: 9.1 percent

• Ongoing customer service: 7.8 percent

• Outbound sales campaigns: 5.9 percent

• Multimedia response: 1.9 percent

A second area to consider and incorporate into a company's marketing plans is what drives call center outsourcing.  Cost was cited as important (eight or higher on a ten-point scale) by 47 percent of the survey respondents.  This varied by company size.  Small organizations (fewer than 50 agent stations) were more than twice as likely to cite this than larger ones (over 200 agent stations), with medium-sized organizations (51 to 200 stations) over four times more likely than large ones.

The second most given reason was flexibility; 35 percent deemed this to be important.  Flexibility includes being able to quickly add agents or launch new campaigns with greater ease.  This desire was proportionally more pronounced as the size of the business increased, with large companies most desirous of achieving increased flexibility.

The inability to recruit and staff capable agents was cited next, with almost one-fourth calling it an important consideration that influences call center outsourcing.  This is a perplexing finding, given the current high unemployment rates.  Therefore, it is likely that this reason will increase in importance over time as employment rates are pushed up and government regulations and requirements make hiring more challenging.  This preference was slightly less important for medium-sized companies (51 to 200 agent positions) than for small or large ones.

Lastly, businesses outsource to call centers to obtain abilities and skills not found in-house, such as multilingual capabilities or technical expertise.  This was important to 18 percent of those surveyed and was more pronounced as the size of the organizations decreased.

In summary, the drivers of call center outsourcing are:

• Cost savings or containment: 47 percent

• Increased flexibility: 35 percent

• Inability to recruit the needed staff: 24 percent

• Obtain special abilities unavailable in-house: 18 percent

Incorporating these findings into sales and marketing plans can help outsourcing call centers better position themselves in the market and target their services more effectively to prospective clients.

To read other articles written by Peter DeHaan, go to From The Publisher or check out his blog, Musings of Peter DeHaan.  In addition to publishing Connections Magazine and AnswerStat magazine (for healthcare call centers), Peter also publishes several websites, including ArticleWeekly.com. He may be reached at 616-284-1305, dehaan@connectionsmagazine.com or the Peter DeHaan Publishing website.