Which is more expensive to start up?
While outsourced contact centers face the same startup investments that you would (all of which they pass along to you), hiring an outside firm allows you to defer an up front investment in favor of a monthly expense. Outsource companies control capital expenses and labor costs. If they are efficient, they might actually save you money. If they are inefficient (or greedy), they will certainly cost you money.
If an outsourcer operates out of a fancy facility, it may make for a great brochure, but you can be sure that clients like you ultimately pay for their image. Bottom line: If you do outsource, choose the provider carefully.
Building your own physical contact center can be expensive in the short term, (with labor, facilities, furniture, hardware and software) but has great long-term financial benefits. If you plan on operating your facility for ten years or longer, it could be a good investment.
The depreciation looks good on your P&L, plus there may be government incentives. The main considerations: how much capacity do you need and what financial benefits will you gain?
Is there such a thing as a cost-free contact center? Almost. In many cases, the least-expensive alternative is a “distributed” or “virtual” contact center. You may already have a PBX system that supports inter- office call routing. If not, there are inexpensive, hosted services that can deliver calls to your own, select employees, even if they are located in different offices or different cities.
If you already use a service, say like CallSource of Westlake Village, Calif., for call tracking and recording, the virtual contact center may, indeed, be free, in the sense that you can create one without hiring additional employees or acquiring additional work space, computer or telephone systems.
Which is more expensive to operate
We are talking about labor costs beyond hourly wages and productivity incentives. Labor includes taxes, health benefits, retirement plans, paid time off, and costs associated with each employee. There are still other indirect costs like HR managers, trainers, supervisors, and the stress of integrating a new group into your culture.
Outsourcers face the same costs you do. And, they will pass those costs on to you, plus a premium in order to make a profit.
You might think that using an outsource team would be less expensive than creating and maintaining your own contact center team. But, when you build in results, it may not be true. No one, not even the greatest contact center, can care as much about your business as you.
With quality assurance, and consistent and ongoing training, your in-house staff can easily outperform outsource representation. Your own people bring consistency, loyalty, and caring that make a difference on each and every call.
And using your own team in a “virtual” contact center can be virtually cost free. Contacts are directed to people you already employ, specifically, those who are your most effective appointment setters.
While responding to customer contacts is the number one priority, when they are not busy setting appointments, they can perform other duties, maximizing your staffing investment. It just takes a foundation of good training, proper incentives, and ongoing performance review of your team to maintain a solid prospect-to-lease close ratio.
Who provides the best customer experience?
The initial contact is the beginning of the trust and empathy-building process. While most apartment owners and operators prefer to keep appointment-setting within their direct control, many become so frustrated with the process that they cede this important function to an outsource group.
With the ability to share database information, outsourcers have much of the information required to meet your clients’ needs. Still it is frustrating to your callers when an agent is unable to answer simple questions without pausing (often placing your clients on hold) to search a database. Even after such delays, an outsource agent is often unable to answer simple questions regarding amenities, services, location, neighborhood, or other factors that someone personally familiar with your business would readily know.
At Call Center Today, many of our clients feel that they get more consistent results from their own people than from an ever-changing pool of reps at an outsource contact center. Whatever your own employee turnover, the typical outsource call center’s is much higher.
Of course, your own contact center can also frustrate callers. How many of calls go to voicemail? How many go unanswered altogether? More training and better quality control can solve many internal issues, and the investment to resolve these matters remains within the walls of your organization. Designation of your best appointment-setters as representatives of your distributed call center can solve the problems of local knowledge and quick response.
What is more efficient?
Outsourcing can free up supervisory and employee time, and reduce the attention and training you would normally invest in developing the skills of your own people. If your team has not produced good results under your management, it might make sense to outsource training. But, consider whether it is advisable for you to give up these core skill sets and depend, entirely, on another company’s employees to handle your leads.
With proper training and supervision, internal contact centers can provide effective responses to multiple call levels. Because they are your employees, you can reassign them to various roles, as needed.
Reps who handle inbound calls can also make outbound calls. Consider this: even outsource call center miss calls. Sometimes, many calls.
In the case of the virtual call center, not only can your team help with non-contact center duties: office work, training, etc., there may be other people in the office that could efficiently move into contact center roles, as well. Using call distribution technology, you can keep your people in their current work spaces without physically moving them, or creating a physical contact center location.
In the multifamily housing industry, just two appointment setters can handle the traffic for a regional portfolio of 5-6 typical communities.
What is the impact on company culture?
Outsourcing might be a wise use of resources in some cases. Contact center activities might not be in alignment with your company’s core competencies. Internally, your company may lack a leader passionate enough about controlling the lead conversion process to support an internal contact center.
Our clients have indicated that while outsourcing may be a relief to certain managers, it may be viewed negatively by investors or by employees.
Investing in your team and developing their skills can be a positive morale booster — especially with today’s economy. Selecting employees with the potential to develop into contact center reps can be considered a career opportunity. Investing in the development of your people will provide more long-term, positive impact on your business than investing in the development of an outsource team. Investing in your own people builds trust, which usually brings reciprocal loyalty, increased productivity, and positive interaction with customers.
Deciding between developing your in-house team, or outsourcing your contact center, is an important crossroad. Its success depends on, among other things, financial resources, core competencies, existing employees, and company culture. Based on your company’s growth cycle, the best choice may even change as you grow.
If you like the idea of an in-house call center, but bristle at the start-up investment, you might consider a virtual, distributed call center. Consider:
Is an emotional connection with each prospect beginning from initial contact important? Can an outsourcer do this?
Can a third-party with a database interact as fluently with prospects as your own employees?
Do a higher percentage of callers show up for appointments set by your employees, versus an outsource agent?
Will sharing outsource agents with other businesses hurt your results?
Will the high turnover of agents in outsource call centers hurt your results?
Is it important for you to hear what your customers are asking for and talking about?
Our organization often advocates in-house call handling. We believe that, if you can drive culture, training, management practices, and performance, you are almost always better doing it yourself.
Some organizations can’t meet those objectives and still must outsource. In that case, the next step is to find the right third party to facilitate the project.
An emerging alternative to either in-house or outsource call centers is the virtual call center. Using your own, existing resources can save significant money while maintaining core business responsibilities and skills within you organization.
Author: Dan Coen is president of Call Center Today, a consultancy in Woodland Hills, Calif. Email Dan Coen
