White Paper | March 2008

PROFITABILITY in the Domestic Call Center

The Indian Domestic Call center industry is already worth about USD 1.8 Billion and is expected to grow by 35% in the next 4 years. Given the tight working constraints of competition, resource expertise, and thinning margins how can domestic call center increase profitability.

MARKET SCENARIO
ccording to a recent research done by a leading investment bank based out of India, the Indian domestic call center industry is estimated to be worth around USD 1.8 Billion. And is expected to grow annually by 35%, in the next four years. Starting as a captive market where companies set up their own call centers, today there are third party vendors who are outsourcing the support center activities from these companies. It was also observed that in 2008 the market share of these third party vendors was 18% which is projected to increase to 30% in the next four years. This means that these third party vendors will command a USD 2 Billion market share by 2012. Financial services and the telecom sector are the two industry verticals which take up the majority of the pie with customer care and sales and marketing activities accounting for nearly 70%. The good news is that the domestic call center industry has grown at a fast pace with a record growth of 85% in between 2004 and 2005 and is growing since then. Looking at this tremendous growth rate, many small players entered the field with high investments to set up call centers with the view of monetizing this opportunity.

The reason for the growth in this sector in India is based on 5 main advantages: Talent pool Infrastructure and government support Operational Excellence Conducive business environment Growing domestic IT Sector

FLIP SIDE
he bad news is that a survey done by a leading daily shows that 60% of the new call centers opening up in India have to close down in the first 6 months of their operation. This is a hard-hitting fact and very concerning. One might wonder why, given that all the ingredients needed to establish and run a successful call center are in

place. Could it be that the domestic call centers are not looking in the right direction? Are there controllable parameters in the equation that can turn around profitability for a domestic call center?

Domestic call center industry is 10% of the international call center market. Profit margins are very less. They are hardly able to breakeven. Sometimes the margins are so less that they have to incur huge losses. With such profit margins there is no scope of scaling up. The SMEs are trying to fight this by enticing more clients. But performance is a huge roadblock. Clients want to look at the productivity figures which are not very impressive. Foray of well established international players in the domestic market is increasing the competition. Compared to the small and mid sized vendors, the bigger organizations have an upper hand because of their experience and connections in industry. Technology is not considered as a parameter for

increasing productivity. There are two reason: - Many are ignorant towards the need. They are not aware that technology CAN help solve the productivity puzzle. - Those who are aware dont pay much attention to invest on technology. Such vendors just implement the first system they can get their hands on, which will cost them less, without thinking about the performance of the system. They don't realize that an inferior system will end up costing more due to need of regular maintenance and repair. It's like buying any other commodity. Invest more on buying a better product and get excellent ROI and service or buy an inferior product with less investment and get caught up in its never ending troubling affairs. Eventually they shut shop without being able to sustain in this highly business critical industry which is equally competitive.

UNCONTROLLABLE PARAMETERS
he profitability of any call center depends on multiple factors. Location, infrastructure, recruitment and training of quality staff to operational issues, management, industry verticals served, market dynamics, process superiority, etc. All these parameters eventually drive the productivity or profitability of the unit. Most of the parameters don't provide preferential treatment to any particular unit. Domestic call centers are well aware of this and are doing their best to monitor and manage these parameters, making sure they are well covered throughout. Unfortunately, this is not helping. For an already functional call center it is practically not feasible to change location and neither is it possible to control the market dynamics. Also due to the constant demand of manpower, they are not left with an

option to introduce a very strict screening process to hire CSRs (Customer Service Representative) according to their skills and abilities. Most of the call centers hire people based on only their communication skills and some basic knowledge. (This is the reason anyone and everyone is getting a job in a call center). Once hired, they are then trained on the technology or process to best suit the job. Ideally this training period ranges from 1- 3 months. But out of 10 call centers spoken to 8 say that they cannot afford to spend so much time on training as they are always running short of people on the floor to handle calls. So they try to wrap up the training in as less time as possible. Result - less proficiency in the process, eventually causing low productivity. Such problems faced by the call centers are not really something that can be controlled.

CONTROLLABLE PARAMETERS
ne particular parameter that is definitive and very controllable (and often neglected) is technology. It is this parameter that can work wonders on a call center's profitability. International call centers are already aware of this fact, but the nascent domestic sector is lagging behind in this respect and has not taken major steps

to leverage the benefits of such technology. The 3 parameters - Manpower efficiency, System Intelligence and Process intelligence have the maximum effect on productivity and they can be controlled using technology.

APPLYING THE FUNDAMENTALS

he most important aspects deciding the fate of any call center are the 'customer satisfaction' or CSAT levels, in case of inbound call centers which are generally support centers and the 'conversion ratio' in case of a outbound call center which are for sales and marketing activities. Technology can provide an end-to-end solution to the call centers, right from the comprehensive communication solutions to the

CRMs, reporting and tracking tools with more enhanced functionalities to ensure higher call volumes, better efficiency and work force management. The trick is to automate as many functions as possible to maximize CSR's productivity so that the manual work could be made more directed and productive.

INBOUND - MAXIMIZING CSAT (Customer Satisfaction)

et's consider the case of inbound call centers first. A caller dials the support center number to get an issue resolved. His first roadblock is reaching the CSR. Generally this time can vary from 1 minute to 30 minutes (in extreme cases). Out of 100 people questioned, 68 people had this as the biggest barrier to calling a support center (source ConoscenZa). They have to wait for a long time before they get to talk to a CSR. Eventually they either hang up or are so irritated by the time someone attends to their problem that they lose all the interest. This is extremely damaging to the company's brand and eventually will affect a call center's overall performance. It's a no brainer to realize that in such a scenario, the client will take his business elsewhere without batting an eyelid. Use an advanced communication technology system that has intelligent IVRs (Interactive Voice Response) for more than just running a welcome message.

call is important to us, please stay on the line the system makes him feel that the company values his time. Every CSR in the support team does not have the same level of proficiency and the skill set. This can cause customer disappointment when the issue cannot be resolved right away. An enhanced system has an answer to this. When a caller is calling in, the system should have the intelligence to understand the requirement and route the call to a CSR or a workgroup best suited to take the call. Enhanced systems have the ability to inform the customer of the estimated wait time. It can also suggest the caller a better time to call when the call flow is less so that they don't have to wait for long time. Some systems have additional functionality like SMS or paging; using these either the caller's issue could be resolved (SMS the information that he was looking for) or the caller could be informed of the time when he can call back. This will maximize customer satisfaction, resource allocation and time management. A system with advanced features of ACD - Automatic Call Distributor, can do this seamlessly. An ACD is a system which uses phone lines, switches and software for the routing strategy. The ACD uses an algorithm that determines the best available resource to respond to a given incoming call. To help make this match, additional data is solicited and reviewed to find out why the customer is calling. Often the IVR is used to ascertain the reason for the call.

An advanced IVR can be used to resolve some common issues for which the caller need not talk to a CSR directly. This ensures that the caller need not wait for long to get trivial information. This saves time for both the caller and the CSR and ensures that the call drops are reduced. There could be messages incorporated in the IVR to ask the caller to give a call back at a time when the call flow is lighter. So instead of just playing the same message - your

INBOUND - MAXIMIZING CSAT (Customer Satisfaction)

Incoming calls in a support center follow the 80-20 rule. Meaning 80% of the calls cover 20% of the problems. And the rest are of the calls are a l i ttl e m o r e co m pl i cated an d uncommon which need the assistance of a CSR to resolve them. Detecting these calls requires intelligence. caller should be readily available to the CSR so that it is easier to understand the problem. There could be a central storage location with all the previous correspondences with the caller including emails, calls, chats etc. And this should be made available to the CSR on the click of a mouse. A robust CRM with advanced features is the way to go. Use of multiple channels like IM (instant messaging) to communicate with senior level agents reduces AHT (average hold time) and also increases the chances of first call resolution without the need of escalation. This adds up to the customer satisfaction as well as overall productivity.

Intelligent systems have the ability of selecting the calls according to the priority. The IVR runs a set of instructions to understand the query type of the caller. Based on this information the query is either resolved through the IVR itself if it is a common query or is routed to a particular CSR based on his skill sets. Advanced systems also have the ability to decide the priority of the call so that if an important call is in queue, it can by-pass the queue and connect to an agent directly without having to spend precious time. Once the caller is through all the waiting and is eventually connected to a CSR, he expects a fast resolution of his query. During the call the CSR has to refer to detailed information and resources to make sure he can provide a good solution quickly. The biggest challenge faced by the CSR is the information accessibility.

5
previously.

For a caller it is painful to explain the problem all over again every time he calls in the support center. So he would prefer to speak to the same person he had spoken to

When a call comes in, the previous history of the

There are two ways of solving this problem. Either make the complete history of the caller available to the CSR who is taking the call or have the caller speak to the same CSR he had spoken to before. Usually call centers choose the first option. But that doesn't prove very effective on the ground. With an advanced ACD+IVR system, it is possible to have the caller to speak to the same agent he had spoken to before.

OUTBOUND - MONETIZING CONVERSIONS

n case of an outbound call center the problems are different. As mentioned before, outbound call centers are for sales and marketing in travel and leisure industry, telecom, insurance and banking sectors, etc. The integrated call management systems in the outbound call center facilities use systematic calls to consumers and transfer successful connections to a designated marketing representative (MR) who is dedicated and has been trained for the specific client application. As a call is presented to the MR, the consumer's name, address, and other available information are simultaneously presented on the MR's workstation along with a client's customized

script. The parameter of measuring the productivity of an outbound call center is generally the average call value. The average call value of a call center is calculated by dividing total revenue generated by number of calls. This has historically been, and continues to be, a top priority in outbound call centers. To increase the average call value, some call centers work on increasing the number of calls only i.e. quantity, without focusing on the quality. Technology plays a major role in balancing the two. Using advanced technology, the average call value can be dramatically increased.

OUTBOUND - MONETIZING CONVERSIONS

One of the most pressing issues with an outbound call center is to get through to the person.

Many times the numbers are incorrect and incomplete. The communication system should have the feature of conducting due diligence on the numbers and remove such numbers from the database automatically without having the CSR to waste time calling these numbers and entering the same in the DB.

Using better reporting and tracking tools goes a long way in identifying the patterns which eventually helps in strategizing operations for increasing productivity. The analytics help in creating comprehensive reports of CSR productivity and performance. These advanced systems provide the facility of sharing these reports on the web which helps in taking on the line, quick decisions. Technology for reducing the idle time of an CSR: An advanced system should have the ability of throwing calls faster.

The other issue is the availability of the person. Most of the times, a person receiving a sales call on his number can't take it because he is busy.

An intelligent system quickly calculates time in a day according to area codes and decides the best time to call the prospect depending on the pattern generated by the earlier calls and suggests a time when the person will be in a position to take the call. The intelligent system prioritizes this and places the number in queue without the need for human intervention. This feature can dramatically increase the conversion rate.

The CSR need not waste time dialing numbers and wait for someone to answer the call. The system should do the dialing by itself and connect the next call as soon as the CSR is almost done with the current call. This saves time for the CSR and increases his time on call and eventually he is able to handle more calls in a day than he usually would. For eg : Every call dialing takes anywhere between 2 5 seconds. If the system can detect and reduce this time by 50%, for a 100 seater unit doing 100 calls per day per agent, this works out to save about 6 hours of productivity per day ! Customer Service after the call: This could work for both the inbound and the outbound call centers. Use of proactive alert management. Once the caller has finished the interaction with the CSR, the system throws a SMS or an email to the caller/customer. Some call centers use this to collect feedback from the caller about the service they provided. This is done mainly to measure the CSAT level. This facility could be used for more than just collecting feedback. The system could send alerts in emails or SMS about the requested information. The customer prefers this as it is saves him the trouble to call back in case the same problem arises again. This can also be used for cross-selling or up-selling activities in case of outbound.

CSRs receive a list of numbers they are to call in a day. The target is to speak to all these people in a single day, but on ground that is not the case. Many calls go abandoned, some people ask to call back, in some cases the call goes to answering machines, some numbers are on do not call list and calls to such numbers can turn out ugly for the CSR. While the CSR is making calls he also has to keep updating on the database side by side which takes up a lot of time and increases the idle time of the agent. To overcome this issue, there are advanced systems available which can remove duplicate & incomplete numbers. Features like real-time list cleansing and busy call recognition saves time for the CSR and increases their productivity.

Smarter Systems for filtering the calling list.

Advanced data mining and analytics for tracking and reporting can help in identifying bottlenecks and resolving them.

Every call dialing takes anywhere between 2-5 seconds. If the system can detect and reduce this time by 50%, for a 100 seater unit doing 100 calls per day per agent, this works out to save about 6 hours of productivity per day !

OUTBOUND - MONETIZING CONVERSIONS

CONCLUSION
he main idea of a call center is to provide 24/7 support and business services that help keep the customers satisfied. These are not just their customers but the end consumers. If the end consumers like you and me stay satisfied, the client stays satisfied and the call center earns kudos. The reverse is also as simple end consumers complain, the client is unhappy and the business moves to a competitor. When all the other parameters are out of control, the technology parameter can be played with. There are many such technical solutions available in the market today. Some are inferior with fewer features and not very advanced. On the other hand there are superior all-in-one systems with excellent features which take care of the end-to-end needs of call centers. The Inferior ones may make a good investment for a smaller call center initially, but in

the long run these systems bring a negative ROI due to their inability to scale and customize for performance. So it is always advisable to invest on better systems even if they are a little higher on investment because the ROI on these systems is much higher. It's about time the domestic call center industry wakes up to the fact that technology is one of the key parameters in deciding the success or failure of a call center. While allocating funds and deciding on the investments, reasonable time and money should be allocated on deciding the most cost effective systems. Hire a consultant if you have to but make sure your investment is sound. Such a system can not only solve most of the operations bottlenecks but also scale in the future to take into consideration the profitability from each agent.

Drishti is a leading provider of Contact Center Software and Enterprise Communications Applications. Drishti offers Communications Technologies that empowers enterprises to dynamically manage Business Processes, Interactions, Workforce and Service Levels on emerging Unified Communications (IP Telephony, Unified Messaging, Conferencing, Presence Management, and Application Collaboration), SOA (Service Oriented Architecture), and SaaS (Software as a service). With its comprehensive and adaptive communications solutions, Drishti powers customer service, telemarketing & sales, collections, financial advisory, and many such processes across various verticals such as Telecom, Technology, Financial Services, Outsourcing and Travel & Hospitality. Drishti's latest offering - DACX Ameyo is a comprehensive Communications Suite for Contact Centers and Enterprises with need for hi-end collaboration capabilities. Ameyo is an all-in-one suite for the businesses to manage their workforce, departments, customers, processes and performance parameters. It provides consistent user experience across various communication channels including Voice, Email, SMS, Messaging, Video and Fax. Built with Distributed Architecture and SOA, it is a scalable and extensible solution with development environment for faster turn-around time.

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