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Looking At Cost Per Call In Call Center Companies

Dec 13, 2007
Cost per call is one of the most usual and most important performance metric when looking at and evaluating performance of call center operations. That is because in all businesses, of course, expenses would be among the most crucial factors to look at when computing profits. Call centers are no different from traditional businesses in that sense. That is because call centers must also first and foremost give ample consideration to the costs incurred when making calls to customers so that comparison with actual revenues can be made.

Because of that, cost per call is widely considered as the foundation of all key performance indicators in a call center business. Costs or expenses on labor like wages, employee benefits, and payments to incentives, and costs for contractors should be given much leverage. That is because it has been found that in any call center business; about 67% of overall costs are accounted for labor. Therefore, it is certain that costs on labor are indeed the biggest factor that should be reduced if the company is aiming to lean or trim cost per call. Of course, all call center operations should strive very hard to lower total cost per call so that profits could be maximized and efficiency be made better.

Other than that, labor costs are also taken against expenses on other operational factors. For example, because call centers basically involved operations using telephony, it is just natural that costs of using telecommunication or telephone equipment and services should also be accounted for. Because call centers are now usually outsourced from third world countries and emerging economies, call costs are usually higher. Those expenses are logically added on top of the costs spent for labor.

Ensuring labor efficiency is one way on how high costs per call can be offset. By that, agent utilization should be made ideal. If there is a high agent utilization rate, it follows that there would be low cost per call. And that for all call center operations would be optimal. So how would firms ensure there is labor efficiency? By looking at and focusing at the rate of calls each call center agent makes per hour or per day, the productivity could easily be determined. The more calls agents make per hour or per day, the more productive they become. Some call centers even set quotas per day that should be reached by agents. However, one pitfall of this is the possibility that quality of calls can be compromised because agents are on the rush to beat call caps.

These setbacks and challenges about costs per call are the reasons why in the past several years, call center companies have been actively putting up operations in emerging economies like India, Sri Lanka and the Philippines. To begin with, labor costs in those countries are significantly lower as compared to those in major countries like the United States and the United Kingdom. The rise of numerous cal centers in those cheap-labor nations are apparently attesting the profitability of putting up businesses in those countries, as quality of services are ensured though costs are dragged down.
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