Businesses often view their call centers as an unavoidable expense. However, it’s possible to turn a call center into a profitable enterprise by making it service oriented, rather than simply trying to get customers off the phone as quickly as possible. You still don’t want agents to spend their time having long conversations with customers on topics not related to your business of course, but you also don’t want to end calls without resolving customers’ issues. The solutions for increasing call center profitability consist of general practices in addition to the monitoring and analysis of the appropriate metrics for your call center.
Solutions for Call Center Profitability
Strategies for making call centers profitable include driving cost efficiencies, maximizing the return on investment (ROI) of customer experience (CX), increasing opportunities for revenue and reducing administrative time.
Drive Cost Efficiencies
The ultimate goal of establishing a call center should be to drive cost efficiencies for that organization. This process primarily involves communicating with customers effectively while making the best use of available resources like time, money and people. Businesses often focus on handling as many calls as possible without regard to the quality of those calls, which is why outsourced agents are often paid by the call. This pricing structure motivates agents to complete the call as quickly as possible, but this practice of valuing quantity over everything else degrades the CX.
A better practice is to strike a balance between the activities that provide faster call resolution and those that provide better quality of service. Accurate call routing, is one of the most effective ways of accomplishing this goal, since it ensures that the agent who handles the call is the one best qualified to do so. Additional factors that can help improve call resolution without sacrificing service quality include accurately forecasting call schedules, level of services offered and required resources. These capabilities ensure that a call center can efficiently monitor and control its costs, thereby improving its profitability.
Maximize the ROI of Customer Experience
Customer satisfaction is vital to the success of any business, especially over the long term. Its call center is the greatest factor for customer satisfaction and has the greatest impact on customer advocacy and retention of any department. Customer feedback on completing calls should be standard practice in call centers, which managers can track to provide continuous improvement. A customer satisfaction (C-Sat) tool should therefore be part of any call center’s suite of software tools.
Omnichannel capability is another feature that a call center solution should offer since it allows you to integrate all communication channels onto a single platform. It also provides greater personalization, allowing agents to build the customer loyalty and retention essential for increasing call center profitability. Tracking all customer interactions on a single platform provides a deeper understanding of the context of those interactions, allowing agents to offer better solutions to the customer’s problem. C-Sat and omnichannel capabilities both help businesses maximize their ROI in a call center, while also ensuring a seamless, consistent CX across all communication channels.
Increase Opportunities for Revenue
Identifying and leveraging opportunities for revenue can be a highly effective means of increasing a call center’s profitability. This process primarily requires agents to convert cross-sell and up-sell opportunities, which also develops customer relationships and enhances customer awareness. Call center managers should closely examine their agents’ training requirements to ensure they have the skills needed to perform these activities effectively.
Reduce Administrative Time
Agents may spend most of their time with after-call work, including call logging and other types of data entry. This problem is often the result of a cumbersome desktop solution that requires the agent to click through multiple screens before reaching the one they need. Streamlining these administrative processes can reduce the time agents spend on non-call activities.
Call Center Metrics to Increase Profitability
One of the most important things to remember about profitability in the call center is that you can’t improve it if you can’t measure it. Identifying the most useful metrics to track is therefore crucial if your call center is to achieve its performance potential. Reaching this goal requires managers to change priorities throughout the day, so an effective call center solution can perform data analytics and real-time reporting. The metrics that can help you improve efficiency and profitability in your call center may be classified into the categories of lead, list, agent and dialing strategy key performance indicators (KPIs).
The best call centers focus on their cost per acquisition (CPA) at the vendor level and the revenue that comes from those leads. However, call centers often look at cost per lead (CPL) instead of CPA, resulting in strategic decision-making about call center operations that don’t consider the whole picture. The first step towards improving the efficiency of lead conversion is to better understand this process by monitoring lead metrics in real-time. Major factors in determining the CPA include agents, leads and the cost of the dialer, but you also need to break these components down by lead source to determine the ROI for both agents and sources.
Cost Per Acquisition
The CPA provides a high-level view into lead conversion costs, which is why it’s often one of the most important call center KPIs. This metric measures the total cost of obtaining a given acquisition, including leads sold by agents and leads that are built to a client.
In general, understanding the CPA helps you optimize your call center’s ROI. It helps you predict each acquisition’s lifetime value, including its marketing costs and profit. The CPA also provides insight into your call center’s activities, along with expenses and opportunities for cutting costs.
Connection rate is the percentage of outbound calls that reach a lead as indicated by the following formula:
Connection Rate = (calls answered / calls dialed) * 100
This metric is typically used to provide a short-term snapshot of lead efficiency, usually on a daily basis.
Lead Conversion Rate
Lead conversion rate (LCR) is the average number of calls needed to make a sale as given by the following formula:
LCR = (total calls)/(total sales) * 100
A low LCR increases CPA, reducing your company’s revenue. Track this KPI in real-time to assess a list’s performance, allowing you to make strategic decisions about leads throughout the day. Several strategies are available for improving LCR, including monitoring and managing the carrier quality. Adjustments to the dial level and timeout can also assist with this task. Automated workflow dialing tools can also help improve LCR.
List KPIs track performance by lead and lead source. Their most important function is to allow managers to turn off lists with a high number of contacts but few sales. They also allow managers to identify lists that perform poorly due to low contact rates.
Contact rate is the rate at which leads result in the agent speaking to a live person just as described by the following formula:
Contact Rate = (people answering the call)/(leads)*100
This metric is key to assessing the performance of your campaigns and quality of your lead lists. They also show whether agents are reaching the right leads at the right time. A contact rate allows agents to spend their time more productively by reaching more people, especially when those leads are more likely to result in sales. A dialer that’s able to deliver the same number of qualified leads with fewer calls is able to improve your call center’s bottom line.
A report on contact rates should provide you with methods of identifying the calls-to-action (CTAs) and lead sources with the best conversion rates. This report shows the number of calls answered, along with other details such as calls that weren’t answered, those that went to voicemail, busy numbers and disconnected calls. Additional information on a contact rate report includes call disposition and revenue earned.
Average Talk Time
Talk time is most often considered an agent KPI, but it also has value as a lead KPI. The average talk time of a list can indicate the effectiveness of that campaign, especially when comparing it to the conversion rate. For example, the combination of a high talk time and high conversion rate could mean that the campaign requires additional interaction with prospects to make the sale.
On the other hand, a campaign that results in agents spending a lot of time talking to customers without making sales is a waste of payroll. A well-written script can often solve this problem by providing more guidance to keep agents on track. Conversion rates in outbound call centers are higher when agents know the right rebuttal to each objection. Talk time can also help provide agents with tips on delivery, which is especially helpful for increasing conversion rates on cold calls.
The value of a list is the difference between the revenue that it brings in and the cost of that list. Assume for this example that a list with 100 qualified leads costs $10,000. Each lead results in an average of $150 in revenue, so the entire list represents a revenue of $15,000. The gross value of this list to your company is therefore $15,000 – $10,000 = $5,000, but you must also subtract the value of the agent’s time and other overhead from the total revenue to determine the net profit of working the list. Careful analysis of these factors is essential for determining where a call center should be spending its time.
List Profit and Loss
A list conversion report provides a quick view of the profits and losses for a call center during a given time period, typically breaking them down by agent and list. It also combines factors such as billable hours and revenue to measure data quality and performance. In addition, a list conversion report contains statistics like average talk time, number of dials, calls to answering machines, transfers and sales. It can also help you analyze trends for lead sources.
List conversion tools should perform computations related to profits and losses in your call center such as the following:
Revenue per Hour = Revenue / Billable Hours
Agent Cost = Billable Hours * Agent Cost per Hour
Total Cost = Agent Cost + Lead Cost + Minute Cost
Profit = Revenue – Total Cost
These tools should also be able to run reports for multiple list types, including called lists, current lists and original lists. For example, a list conversion report may use the original lists for leads, regardless of the lists that the leads are currently on. This report would be able to measure the quality of leads and the revenue that a list produces. A list management system can be highly valuable for listing profits and losses if it allows you to drill down to individual agents. It can also manage different data feeds to identify the ones that aren’t performing well.
Agent KPIs help you understand agent productivity by identifying agents who are top producers and those who may need more coaching. These KPIs are usually compared over time to determine when a performance change may be due to an agent simply having a bad day. It’s also important to use multiple metrics when measuring agent performance to ensure that performance assessments aren’t based on bad data. Modern metrics-tracking tools can provide same-day results, allowing managers to address performance issues right away. Sometimes agents just need a break to recover their usual performance level, but they may also burn out permanently.
Call centers routinely track talk time, but long talk times by themselves don’t tell you whether the agent is using that time to make a sale or is simply getting off track. Streamlining scripts is one possible solution to reducing talk time, which becomes easier with a call center solution that includes dynamic scripting. This feature clearly shows agents the conversation path to take and addresses common questions. These tools may also flag parts of the script that give the agent trouble, helping them become more efficient.
Wrapup time is also known as After Call Work (ACW) because it’s work related to a call that takes place after that call ends. It primarily includes tasks such as assigning dispositions and taking notes.
Call centers track this metric for both individual agents and the entire team. The reporting period is also variable, ranging from a single day to a month or more. ACW can take a few minutes per call, during which agents aren’t making other calls. Furthermore, it can break good agents out of the calling rhythm that makes them productive. ACW may only be a few minutes for each call, but this time can add up and eat into your company’s profits. Automating ACW as much as possible can noticeably improve productivity.
Wait time is the average amount of time that agents between calls. Call center managers have historically placed great emphasis on minimizing weight time by keeping staff levels as low as possible. However, they often find that they can improve agent productivity in the long run by slightly increasing wait time, thus reducing over-dialing.
This strategy requires managers to strike a delicate balance between minimizing staffing levels and preventing agent burnout. The solution is to manage lead lists at a higher level so that agents deliver optimal performance, even if it means a minor reduction in contact and conversion rates. Managers can then adjust the wait times on their predictive dialers based on their lead metrics to find the desired sweet spot.
Calls per Agent
Calls per agent is the number of calls that an agent handles in a given timeframe. Managers use this metric to determine if their agents are on task, which is particularly useful for remote operations. Managing the productivity of agents working from home requires a greater use of monitoring tools and real-time analytics, typically from a cloud-based dialer. In addition to monitoring agent performance, increasing the number of calls per agent requires a call center solution that offers broadcast messaging that allows managers to communicate quickly with many agents. Automated workflow is also useful for improving calls per agent, which includes a time clock, break requests and automatic logouts.
A call center solution that supports its agents’ success naturally increases their motivation to improve. These features generally streamline the calling process by automating as many tasks as possible. They include intelligent, dynamic scripting, workflow dialing, customizable dashboards and the ability to proceed to the next call with a single click. These features save the agent time, helping them to maintain their calling rhythm.
A case in which your CPA is too low even though agents are dialing consistently could indicate a problem with your dialing system. Automated dialers are already standard equipment in call centers because dialing by hand is extremely tiring. However, the dialer must still be properly configured to maximize dialing efficiency. For example, a dialer that automatically resets the list is essential for finding the sweet spot in predictive dialing.
First Call Close
First Call Close (FCC) is the number of sales that agents make on their first contact with the customer. The value of this metric can vary greatly between business models and even campaigns, since it may be unrealistic to expect an agent to close a sale on the first call. Nevertheless, a high FCC can dramatically improve a call center’s overall efficiency, ultimately generating revenue more quickly. Managers should monitor this metric to identify the criteria for a successful sale and leverage them by constantly tweaking campaigns.
The most effective way to improve FCC is to provide agents with a carefully designed dynamic script that guides them through the process of making a sale. The script must also build confidence by building rapport on the first call in a highly calculated manner. Dynamic scripts should also include proven closing techniques.
Number of Sales and Revenue per Agent
The number of sales per agent and revenue per agent are closely related metrics that describe an agent’s daily productivity. Managers also use them to compare an agent’s performance over time.
KPIs related to dialing include average hold time, abandoned call rate and average dropped call rate.
Average Hold Time
Average Hold Time (AHT) is the average time that customers spend on hold before speaking to an agent. Automated dialing systems often make outbound calls and then keep prospects on hold until an agent takes the call. A high AHT results in abandoned calls, reducing the call center’s profitability. The most common solution to this problem is to reduce the dialing level.
Abandoned Call Rate
Abandoned Call Rate (ACR) is the percentage of callers who end the call before reaching an agent. It’s an important metric for call center managers because each abandoned call represents a possible lost lead. The following formula shows how to calculate ACR:
ACR = (Abandoned Calls) / (Total Calls) * 100
Many call centers exclude calls that were dropped within the first five seconds from the ACR calculation, as they’re usually caused by misdialing or dialing a wrong number
A high ACR can be resolved most often by tweaking the dialer settings, especially those related to call forecasting. In some cases, a dialer can be too effective at making outbound calls in the sense that customers answer the phone faster than agents become available. A large number of customers disconnecting during the in-queue message or IVR system can also indicate that you need to upgrade your dialer’s messaging capability.
Average Dropped Call Rate
In some call centers, outbound dialers drop the call after dialing when no agent is available to take the call. The average Dropped Call Rate (DCR) is a critical KPI in these cases because it shouldn’t exceed three percent in a 30-day period for legal reasons. A call center solution should allow managers to view the DCR for each campaign. A high DCR is a sure sign that agents are burning through their leads.
Minimizing DCR requires managers to ensure their staffing level is high enough, with agents using quality leads. Managers must also strike the right balance between wait time and DCR to ensure the dialer and leads are being used as efficiently as possible. This process often involves frequent tweaking of the dialer levels to find the ideal settings.
Call Center Real-Time Reporting
A cloud-based call center solution should be able to customize reports that allow you to access metrics easily. It should also provide analytics to provide valuable insights into that data, helping you identify the agents and lead sources that are performing as well as those that aren’t. A range of filtering options can also ensure you get the information you need from call center metrics.
Schedule a demo with Aceyus today to see how real-time dashboards can improve your team’s efficiency. You can also contact one of our team members for a free solutions consultation.