Call Center 101

By Peter DeHaan

February 14, 2007

I frequently receive calls and emails from people who want to start a call center.  I used to spend quite a bit of time with them discussing the nuances, ramifications, and challenges of starting a call center.  (They would already be optimistically filled with the upside, so there was no point in covering the satisfaction of helping people, the variety of work, and the profit potential.)  However, after numerous such calls, I grew weary of repeating myself, so I put the basics online and simply refer people to www.StartACallCenter.com.

In talking to these inquirers, I would ask two questions so that I could provide the information relevant to their goals.  The first was, "Will your call center do inbound or outbound work?"  This sometimes confused people.  On inquirer, who professed 15 years of call center experience, responded with, "What do you mean?  I don't understand the difference."

My second question was, "Will this be an in-house or an outsourcing call center?"  This query generated even more confusion.  One caller gasped; her nonsensical retort was, "We're in the United States!"

In similar fashion, when people subscribe to Connections Magazine, they are asked if they are an in-house or an outsource call center.  I am surprised at how frequently this question is fumbled.  In view of all this - and at substantial risk of offending knowledgeable call center veterans - I offer the following:

Inbound Call Centers: Inbound call centers answer calls.  Their agents are in a reactive mode, waiting for the phone to ring or the next call in queue.  Inbound call centers are equipped with ACDs (Automatic Call Distributors) to efficiently send calls to the "next available agent."  Many inbound operations are staffed 24 x 7, with their agents scheduled to work in anticipation of projected call volume based on historical data and marketing initiatives.

Outbound Call Centers: Outbound call centers make calls to customers and sales prospects.  Their job is proactive.  Even if agents work is not sales per se, they still need a sales mentality.  They must engage the called party, lead them towards an objective, and deal with rejection - some of which may be personally directed.  Outbound call centers rely on predictive dialers to place calls.  Agents are scheduled as needed to complete a requisite number of calls within a certain window of time, as limited by law.

In-house Call Centers: An in-house call center is an internal department or division of a company; it provides services exclusively for their own company.  The chief advantage of an in-house call center is that greater control and oversight can be given to the call center, its agents, and their activities.  An in-house call center can be a cost-center or a profit-center.  Cost-centers they do not generate enough revenue to cover their expenses and need to be subsidized by the company, whereas profit-centers generate enough business to cover their expenses.

Outsourcing Call Centers: An outsource call center does work for other companies.  Their business is making and receiving calls.  They often enjoy an economy-of-scale that is not feasible for the in-house operation.  As such, their margins allow client's to save money, while they make money.  Agents at an outsource call center work for their clients, but work with their clients' customers or prospects.  Outsource call centers are increasing in number and importance as more companies look to outsourcing as a way to increase service levels and options, return to their core competencies, save money, or all three.

Offshore Call Centers: An offshore call center is simply any call center that is located in a different country, or "offshore."  Offshoring is often erroneously considered synonymous with outsourcing.  Offshore call centers are a subset of the outsourcing call center industry.  (An in-house call center can be moved "offshore" as well.)  A recent trend has been moving call center activity to other countries that boast stable technological infrastructures and offer qualified workers who possess lower wage expectations.  This is offshore outsourcing, which is too often incorrectly shortened to outsourcing. 

Having considered all this, whatever type of call center you are or the work you do, do it well - that is the essential lesson of Call Center 101.