A niche ring to it

In the face of tough competition from low-cost overseas call centres, the UK industry is turning to quality and technology in order to take control of the top end of the market and ensure a healthy future. By Alex Blyth

According to Marcus Quilter, director of public relations for the Call Centre Management Association, “The future of the call centre industry lies not in clever software, in sophisticated modelling techniques or even in nice office furniture. It is in people. To maintain its role, the call centre industry must recognise the need to deliver a quality service and accept that that depends entirely on adequate investment in people.” Quilter speaks for many in the industry who do not accept that the migration of thousands of call centre jobs to countries such as India and the Philippines means that the UK industry is in terminal decline.

Over the past few years, the industry has responded to the challenge of overseas competition in a variety of ways. Initially, international outsourcing was widely dismissed as a passing fad. Very few still cling to that hope, but by competing on cost, through the adoption of new technologies such as voice-recognition and predictive dialling, many have remained in business. However, call centre companies are now discovering that once a service becomes a commodity, bought entirely on unit cost, prices are driven lower and lower.

Some argue that there is a place for domestic call centres – in many areas of telemarketing there remains a need for highly skilled and motivated agents, supported by an effective infrastructure. There is a growing belief that, with the right investment, the UK industry can position itself as a provider of these quality services, allowing it not only to survive, but even to prosper.

First Direct, then others

For many years a few companies, such as First Direct, have shown how a personal, tailored service gets results, but now more companies are recognising the importance of investment in staff and technology.

Garlands, a call centre in the North-east of England with about 1,300 agents, says it has benefited from the introduction of innovative people policies. A key problem faced by Garlands – and many other call centres – was staff absenteeism. Investigating the issue further, chief executive Chey Garland came to the conclusion that many sick days were taken, not to recover from illness, but to deal with problems at home. This finding led to the launch of Garlands’ “Touch” programme. Through this scheme, employees are allowed time within working hours to gain experiences that will equip them to deal better with social or emotional issues at home.

The programme includes placements at local schools, working with local community action groups, and training on social issues. Last year, Garlands was named as the 21st fastest-growing UK business in The Sunday Times’ Fast Track 100 table. Garland attributes much of this success to these staff initiatives: “Despite fierce competition from abroad, we’ve made tremendous progress in the past year. I believe this vindicates our continual investment in the development of our people. We recognise that we are very much a people business and that in order to best serve our clients’ customers our employees must understand the problems facing callers and be motivated, knowledgeable and properly rewarded.”

Consumer-oriented call centre companies such as Garlands say that staff motivation, knowledge and skill can be real selling points in a market where call centres increasingly influence brand perceptions, and bad customer service is no longer acceptable. Quality is even more important in the outbound business-to-business market. Ian Forbes, managing director of Alchemis, which provides telemarketing services to high-value consultancy clients, says: “Speaking intelligently and credibly to a senior decision-maker is not easy. It can only be done well by an experienced, knowledgeable and, crucially, motivated person. To achieve this motivation requires original thinking on recruitment, management and remuneration. While the quantity of calls is vital, it is important to move away from the ‘battery hen’ approach to telemarketing and offer flexible management systems to the best agents.”

While many quality-focused companies invest heavily in staff, others believe in keeping abreast of new technologies. Gavin Williams, managing director of 60-seat Bournemouth call centre Carelink, which focuses on outbound business-to-business campaigns, gives an example of one such development: “Vismail is a video file which has been compacted by a factor of over a thousand, so that it can be sent as an easy download in an e-mail. Not only can we entertain prospects with this new technology, but because e-mail is highly trackable, we know when the prospect looked at it, so we are able to be much smarter

in the timing and content of follow-up calls.”

No matter how appealing they appear, however, technological tricks are expensive and need to be carefully evaluated. Colin Rowland, Europe, Middle East and Asia vice-president of Mercury Interactive UK, argues that management should expect as much from technology as it does from agents: “In an environment where every call is monitored for quality, we would expect IT to be monitored in the same way. We believe the industry is changing and that new quality-management initiatives will examine the success of the entire business process, including the way that supporting technology performs.”

Slowly, call centre clients are recognising the importance of quality in call centres. If inbound customer or technical service calls are dealt with well, then customer retention will increase, brands will be enhanced, and profits soar; if outbound telemarketing is done well, the return on investment will improve. As this realisation dawns, so does a willingness to pay more for higher quality services.

Cheaper calls

The example of Teledynamics, the call centre division of research company Taylor Nelson Sofres (TNS), demonstrates that there is still some way to go before the industry fully accepts that it does not have to take part in price wars. Sales director Peter Gale describes how the company takes advantage of its position within TNS: “We’re starting to move telemarketing profiling beyond traditional geo-social models into more psychological profiling. Before commencing a telemarketing campaign, we can apply a market research model and question-set to a sample of the prospect database. It identifies the strength of relationship each customer has with the brand. Committed customers are likely to be more amenable to upselling, so we can give them priority in the telemarketing campaign. We are so confident that this improves our conversion rate that in one recent proposal we offered to reduce our cost-per-sale price by five per cent from the normal rate.” It is interesting and perhaps worrying for the industry as a whole that an approach as sophisticated as this is used not simply to position Teledynamics as a high-quality service provider, but to reduce prices even further.

Teledynamics is not alone in its reluctance to break the downward price spiral, but the industry must wake up to the fact that in the long run it will be unable to compete on cost with low-wage economies and labour-saving technologies. It must work hard to corner the quality end of the call centre market. To fund investment in staff, in technology, and in new structures and approaches, it will have to charge more.

The need for improved call centre quality is certainly there. A survey conducted for Mercury Interactive by BMRB earlier this year revealed that 37 per cent of people using contact centres feel they usually get poor service. Marketers will not accept this destruction of brand equity by low-cost call centres and will look for call centres that have invested in quality. Those that come up to scratch will reap the rewards.

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