Call centers exist for one very important reason—it’s more economical for a large group of people to answer customer phone calls than smaller groups of individuals to answer those same calls. For example, retailers or hoteliers often send the calls from their stores to call centers because it is cheaper (and often provides better service). What’s the magic? It’s the economies of scale.
Economies of scale are the savings that larger operations get as they spread their fixed costs (the call center infrastructure) over more and more output (calls answered). Larger centers have lower costs per call than similar, smaller call centers.
A while ago, I put together an article on economies of scale for the Society for Workforce Planning Professionals where I developed some cool data on economies of scale. I will recreate those graphs here. The graph below shows the first step to determining the economies of scale. Simply, we determine the number of staff required to hit service standards as volumes continually increase. In this case we determined the number of staff required using a discrete-event simulation model (the most accurate planning algorithm). Note that the slope and intercept of the line will vary for every call center.
Image A demonstrates a classic economies of scale curve. The line looks as expected; as volumes increase, the number of staff required to answer the calls within the service level goal also increases. Where the analysis gets interesting, however, is when we convert this graph into a graph where we track calls answered per agent. In simple terms, we divide the agents required to hit service goals by the number of calls each agent answers.
In Image B, the curve shows us how productive each agent should be. It’s interesting because it readily demonstrates the natural point where a contact center group is at maximum capacity. In this example, with an average handle time of around 400 seconds, you run out of natural economies at 50,000 calls per week, or roughly 150 rear-ends-in-seats. I would have expected the number to be higher.
But there are also other forces at work in call centers. The graph in Image B explains the operational efficiencies we gain by growing bigger, but economies of scale are most often drawn to include the costs of running a center. High start-up costs will greatly increase the point at which economies of scale are exhausted.
Make sure you check out the webinar recording to learn more about how economies of scale can help you forecast. Watch Now.
Let me know what you think!
Confessions of an IT Director – “Initial cloud anarchy caught us by surprise…”
Here’s the good news: IT professionals have evolved and are well positioned to lead as the next wave of cloud innovation addresses increasingly empowered customers and business users.
The next wave is called C3. Interactive Intelligence defines C3 as the next generation cloud platforms that offer comprehensive collaboration, communications and customer engagement services.
Dr. Don Brown, CEO and chief visionary of Interactive Intelligence, explains:
“Companies are going to try to reduce the number of vendor relationships they have. This is not a new trend, but we believe, […]
I was talking to a tech-savvy friend a few days ago, and he was bemoaning an IVR he had recently traversed trying to get to an agent to ask a simple question. He said he had to spend five minutes in the IVR giving various pieces of information, including his home address, before being given the option to speak to someone. During the post-call survey, he gave the IVR low marks, but gave the agent interaction a better grade since that part of the experience was pretty good – once he was able to get to a live person.
I recently read an article about a customer that received his bill and noticed that the company’s contact center agent had intentionally changed his first name to a derogatory term. I was appalled that anyone experienced this. It was good to know that the company performed an investigation and found the agent that conducted himself in this unprofessional manner and promptly terminated his employment.
So what went wrong? While companies monitor for quality and train agents to be empathetic, these approaches aren’t foolproof and a bad apple gets through every so often. But what would provoke an agent to act […]
Today most customers and contact centers would say, “Not really.” Think back to your last few customer service interactions. Does the word “reinvent” come to mind? Probably not.
Isn’t it ironic? We live in what Forrester Research describes as the Age of the Customer, “A 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.” Companies get this and have reinvented the way we consume books (Amazon), music (Apple, Spotify), and movies (Netflix). They have transformed markets and our daily lives.
The world of customer service hasn’t changed so much. […]
I recently received a personalized gift for being runner up in a trivia contest sponsored by a partner company. I opened the gift bag to find not only a gift for me, but something for my dog as well! It was completely unexpected and reflects the emotional connection this company creates with their customers. This experience reinforces my belief in the need for creating deeper relationships with customers. These relationships build trust for the products and company brand, which sustains and grows the overall business.
Before a customer trusts a company brand, they have to trust its’ employees. Across all […]
As a customer experience professional, I am always interested in what customers value most. If we get it right, we can efficiently manage our resources, priorities and engagements to successfully provide the expected value to our customers and ultimately achieve our respective goals.
To that end, we conducted a study with consumers around the world in 2014, “Customer Service Experience Study, Wave II,” and asked two key questions: “What do customers want in a great service experience?” and “What do companies and customers want from the technology that enables great customer experience?” The respondents were categorized as either “professionals” or […]
We have all had those late night and weekend robo calls. Sometimes we get so many (during a political campaign for instance) that it’s all an annoyance and white noise. We might hang up, lose our cool with the person or machine or we might on occasion actually listen and engage the poor soul on the other end. However your customer decides to respond, you can influence how your customers react.
In fact, outbound dialing can be quite productive – provided you have engaged and informed your customer that you will be doing it and more importantly – why! Still, […]
Opinions vary on whether or not there is value in paying more to receive better service. Customer expectations for service have grown especially when that service involves a key utility, like electricity. And, whether it’s fair or not, utilities are expected to always be available, especially when the power may not be. Will customers actually pay more to get a higher level of service?
Our recent study, “Customer Service Experience Research Study” (see page 20) found that the majority of customers (74%) expect good service, and are not willing to pay a fee to receive a higher level of service. […]
When I travel, I will make video calls to my family so I can see my daughter’s face when I ask about her homework, and show my husband that I’m in a nice hotel room that’s safe. This visual interaction allows expressions to be seen and non-verbal cues to be relayed. It has real value. But video still hasn’t gained popularity in the professional space yet- including the contact center.
Not that many years ago, people were talking about how the popularity of smartphones would surely lead quickly to video calls being the preferred mode of conversation. There’s no doubt […]