The Hidden Costs of Operating a Call Center

Many companies struggle with the decision of whether to keep their call center operation in house, or outsource it to a professional customer service provider.  Although improved quality of service is a major reason why many companies are choosing to outsource, the issue of cost remains a huge factor in the decision making process.

So, how do you compare the cost of running an in house call center against the cost of outsourcing it to a professional?

At first glance, it would seem to be an easy question to answer.  You calculate how much you are paying your current team of agents, whether per minute or per hour, and then compare it with a quoted rate from a call center outsourcer.

That’s all there is to it, right?

Well, in a word, no.

The reality is that there are a multitude of other costs that should be taken into account when properly weighing an outsourcer’s quoted rate against your own expenses.  Some of these costs are much more obvious than others.

Here are some essential costs, many of which are “hidden,” which should be factored into the equation when comparing outsourced versus in house call center expenses.

  • Payroll – This is the most obvious cost, and in some cases is the only one taken into account by many companies when deciding whether or not to outsource.  Strictly speaking, this is what you pay out to your call center staff in the form of wages and employee benefits.
  • Facilities – Your call center has to be located somewhere.  What is the cost of the building or office space?  If you outsourced your call center operations, could you put this newly vacated space to better use, or save additional money by closing it off completely?
  • Equipment – A good call center requires many different types of equipment, including computers, phone systems, wiring, furniture, etc.  In addition to a substantial up front investment to initially acquire these items, there is also a need for continual maintenance and upkeep for equipment.  Desks and chairs will wear out and need to be repaired, while computer systems will eventually become obsolete as technology improves, and need to be upgraded or replaced.  If you outsource, your company will not have to worry about these maintenance costs, since they would be borne by the outsourcer.
  • Technology – Similar to ongoing maintenance costs for physical equipment, there are also substantial costs related to keeping the level of required technology up to date.  Operating systems and software applications will need to be constantly upgraded to newer versions, and networks will need to be improved to keep up with the constant demand to be better and faster.  A good contact management platform and/or CRM system can be very costly, and often requires a certain level of technical expertise to operate effectively.  What is the cost of acquiring and implementing the necessary call center technology yourself versus letting a professional outsourcing company handle it?
  • HR Costs – In addition to payroll, there are other costs associated with maintaining a staff of workers.  How much does it cost to hire and train agents?  What about the cost of employee turnover?  Attrition rates in the call center industry are usually very high, and there can be a substantial cost associated with having to recruit, hire and train new customer service agents on a continual basis.  The cost of sick leave, employee motivation and other day-to-day HR issues should also be factored into the overall cost equation.
  • Operating Fees – Nobody likes paying expensive monthly bills.  Call centers are notorious power drainers.  How much would you save on your monthly electric bill by outsourcing your call center operation?  What about toll-free and/or long distance charges?  Do you have the appropriate insurance required for a call center operation?  How about on-site security and remote monitoring of the premises?  Janitorial expenses?  All of these things are not free, and the expenses can quickly add up.
  • Time – This is a very important cost that can be easily overlooked.  Running an in house call center requires a great deal of time and energy from upper and middle management on a daily basis.  If customer service is not your core business, and a substantial chunk of time is being diverted towards keeping your in house call center running smoothly, what is the opportunity cost associated with this lost or wasted time?  Outsourcing your customer service immediately eliminates most of the day-to-day hassle associated with call center operation, freeing up time for your star employees and managers to focus on more profitable activities that can make your business grow.
  • Customer Satisfaction – How effective is your in house call center?  Are your customers happy with the level of service they receive from your agents?  Outsourcing to a customer service professional can lead to better service levels, which can improve a company’s overall reputation and drive more sales.  This potential for increased revenue should be considered when measuring the costs of outsourcing.

The choice between outsourcing a call center and keeping it in house is a critical one for many companies.  When making the final decision, it is important that all of the relevant costs are taken into account, including the many non-obvious, hidden ones.  Only then can you get an accurate idea as to whether or not call center outsourcing makes sense for your business, and make a truly informed decision.

Does call center outsourcing make sense for your business?  Once you have calculated your total costs, get in touch with Tacamor today to request a quote, and see if we are the right call center for you!

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