Advances in online communication tools and contact management software are fostering new attention on call center operations as a key tool for enterprises as they strive to build deeper relationships with their customers. Once little more than bullpens of entry-level phone clerks, call centers are now increasingly sophisticated operations that put enormous amounts of information at the fingertips of highly trained customer service reps, who may be working anywhere around the globe.

“I think what has probably changed is the technology,” explained Lynda Starr, the U.S. vice president of carrier services for Probe Research. “Calls get distributed better, [and] the agents have better information at their disposal.”

Given that call centers can be big budget items, CIOs need to become more knowledgeable about call center development, the different approaches available, and how new technologies can help achieve business goals.

Why call centers can be complex
According to both Starr and Richard Bencin, president of Richard L. Bencin & Associates, a call center management search firm in Brecksville, OH, CIOs and business leaders need to consider several issues before building a call center or turning to an outsource firm to provide similar services.

There are four models for call centers: inbound, outbound, network-based (outsourced), and in-house. The nature of a company’s business often will determine whether the call center is inbound, with customers calling for service, or outbound, which is typical in telemarketing divisions.

The cost of building a call center is always greater than outsourcing—about $4,000 vs. $1,500 per month per agent, Starr said. But building an internal operation provides certain advantages, such as the ability to quickly respond in terms of operations and budget, that aren’t available with outsourcing. That’s exactly why some companies often use a combined approach, according to experts. For instance, an organization can own its inbound service bureau call center but outsource seasonal outbound operations, such as holiday sale pushes or specific campaigns for regional expansions.

Better technology widens locale options
In addition to better online communication capabilities—such as online chat with customers—advancing telecommunications and broadband technology also are widening the potential location of call centers. Initially call centers were real “centers,” housed in a specific brick-and-mortar location. With today’s high-speed corporate connections and consumer DSL and cable modems, call centers can be run from any locale, from overseas to employees’ homes, with reduced overhead costs.

But no matter where a call center is located, the CIO and his tech team are tasked with support and coordinating connectivity, Bencin said. That’s why tech support must be a key consideration when determining the location and approach for a call center. While many companies opt for the typically lower cost of international call center locations, that scenario brings its own issues for American-based tech support teams who provide support for various time zones.

In the United States itself, call centers tend to be located away from urban centers in areas where wages are lower and there is less competition for workers. College towns, with their abundant sources of cheap labor, are big call center locales. Some states, such as Iowa, use tax exemptions to lure call centers.

India, the Philippines, and Jamaica are hot call center areas, since wages are low and unemployment is high. In India, working in a call center is viewed as a career path, so the worker pool is large. Canada is also a popular spot because of a favorable currency exchange rate and because workers typically have a neutral speaking accent in relation to the United States in areas outside of French-speaking Quebec.

Location just one piece of puzzle
Determining location is just half the effort when it comes to call center technologies. The big potential dividends—improved CRM and a solid ROI—won’t be achieved unless a call center is built with the intelligence to find and use relevant data, said Peter Heffring, the president of Teradata’s CRM division.

While a basic call center will almost certainly improve customer response and service efforts, that payoff comes with the extra step—and extra expense—of providing customer service representatives (CSRs) with customer data. This approach automatically leads to staff training costs, since even the best data is useless if CSRs can’t access or translate it into better customer service.

For example, some bank call centers are configured to alert CSRs when a customer makes a big deposit. This lets the bank quickly thank the client and follow up the transaction to make sure the customer didn’t experience any trouble. If the follow-up contact isn’t handled appropriately, this service could turn off customers who view it as intrusive. Good training often prevents this downside.

Call centers tie into CRM
Modern call center technology allows calls to be distributed in a more efficient manner and provides agents quicker and deeper customer information, Starr said. This has led to a new layer of customer treatment: clients with particularly difficult problems can be quickly shuttled to a special agent. Callers considered to be elite customers can be quickly identified and given preferential treatment.

It’s all part of the vital overall customer relationship management (CRM) effort, which ties directly to corporate business goals.

A call center taking advantage of analytic CRM tools can do some nifty things, said Heffring. Businesses can create customized sales offers geared toward specific client bases. Imagine cable company customers who live next door to each other. One is a telecommuter and the other has a sophisticated home theater system. Information generated by online shopping patterns—a cable modem in one case, and an HDTV subscription in the other—can then be parlayed into special offers that lie in the system until the customers call to request a new service or have a question. At that point, the offers automatically appear on the CSR’s screen and can be pitched on the spot.

Closing the loop
Using new call center technology to acquire new customers and keep existing customers satisfied is critical, because it costs far more money to get a new client than to retain an existing account.

The biggest savings, however, come with having technology replace human labor costs. According to Starr, it costs between $4 and $10 on average to have a live operator interact with a caller. That cost, which includes salary, equipment, office space, and other fixed costs, is obviously reduced if labor is taken out of the equation.

The cost per contact can fall to as low as 75 cents when an interactive voice response (IVR) unit is used, and 25 cents per contact if the problem is handled online in a self-service model.