Tuesday, 02 September 2008 08:56

Contact Centre Industry Revenue Generation Set To Replace The Traditional Sales Force

The Australian Contact Centre industry generated AU$45 billion in revenue over the last 12 months. At the same time, the reliance on contact centres as a primary sales channel has also increased with 77% of all customer interactions being handled by an organisation’s contact centre, compared to only 6% (a decrease from 8% in 2007) of all customer interactions being handled by the traditional sales force, according to the 2008 Australian Contact Centre Industry Benchmarking Study.
  

Staff turnover, difficulty in recruiting staff and inadequate headcount to meet business requirements are among the biggest challenges currently facing the contact centre industry.

The report also finds that teleworking is likely to increase as centres grapple with turnover and embrace technology; that the Do Not Call Register has had little impact on contact centres; that increasing fuel prices may be driving greater use of contact centres and that over half of contact centres are actively considering the environment.
 
The study conducted in July and August 2008 by specialist research and news organisation, callcentres.net, and sponsored by Autonomy etalk and Zintel, is based on a survey of 152 contact centre managers, representing 393 contact centres in Australia.
 
Industry Growth

The contact centre industry continues to grow in terms of seats but saw some consolidation of the number of individual centres in Australia. The study found the total number of seats rose 6%, or by 10,927 seats, in 2007–08. There are now an estimated 190,927 seats at 3,821 centres (a decrease from 3,850 centres in 2007) operated by 1,806 companies. The reduction in number of centres from 2007 to 2008 is explained by a number of large organisations consolidating multiple centres.
 
Revenue Generation

Most contact centre activity involves providing customer service (56%), but a significant proportion relates to profit generating sales activities. Among those surveyed, 95% of all revenue generated has been from up-selling and cross-selling to customers on inbound calls, with only 5% of revenue generated from proactive outbound or telemarketing calls. However, a lack of skills and sales culture was seen as an issue for many centres.
 
“It appears that the primary sales channel for Australian organisations is now the contact centre, which may signal the complete demise of the traditional field-based sales force which handles only 6% of customer interactions. The primary factors currently limiting a greater ability to generate revenue in contact centres are a lack of sales skills, accounting for 35% of responses, followed by a lack of sales culture at 30%,” said Dr Catriona Wallace, Managing Director, callcentres.net. “Technology being unsupportive of sales in contact centres, 29% of responses, was another limiting factor.”
 
The average outbound conversion rate for telemarketing campaigns in the last 12 months was 23%, while the average inbound conversion rate for up-sell or cross-sell campaigns was 22%.
 
HR management

Human resources has been the major challenge for contact centre managers, with 33% of respondents saying staff turnover was their biggest obstacle.
 
Full-time agent turnover surged from 35% in 2007 to 49% in 2008, with higher attrition rates in the transport and freight sectors, and in large contact centres with more than 100 seats.
 
“In the last 12 months, of the staff who resigned from contact centres, 72% left the contact centre industry altogether, while the remaining 28% moved to another organisation’s contact centre,” said Dr Wallace.
 
The primary reason for staff leaving was that they did not intend to pursue a career in the contact centre industry. This accounted for 31% of responses, followed by 18% for those who said they had changed personal circumstances. Eleven per cent reported general job dissatisfaction.
 
The difficulty of recruiting staff was the second greatest challenge (cited by 32% of respondents), while 26% of those surveyed thought contact centres had an inadequate headcount to effectively meet business requirements.
 
The study revealed that the most effective strategy to retain staff in contact centres was flexibility. “Fifty-six per cent of respondents stated that flexible work arrangements was their most effective retention strategy and 41% believed a reward and recognition program was most effective,” said Dr Wallace.
 
Do Not Call Register

The Do Not Call Register, managed by the Australian Communications and Media Authority, is designed to reduce the number of telemarketing calls people receive. Once a home phone or mobile is registered, telemarketers are required by law to stop calling people, unless they are from public interest organisations that provide services to the community.
 
Even so, most contact centres surveyed said the Do Not Call Register made no impact on their gross revenue and headcount since the law was implemented on 31 May 2007.
 
“Ninety-four per cent of organisations reported that the Do Not Call Register made no impact on their contact centre’s headcount, while 90% reported that it made no impact on its gross revenue,” said Dr Wallace.
 
Fuel Impact

Two-thirds of respondents did not believe that the increase in petrol prices led to a higher volume of customer interactions being handled by contact centres and/or a higher usage of self-service channels by customers. However, 9% of respondents said they had seen a rise, with banking, finance and insurance companies particularly likely to have experienced more interactions.

Environmental Plans

A large proportion of contact centres are now considering the environment, with 59% saying they either have an environmental impact policy or a plan to implement one.
 
“Thirty-three per cent of contact centres have an environmental impact policy and 26% plan to implement a policy in the next one to two years,” said Dr Wallace. “Centres in the hospitality, tourism and entertainment, transport and freight, and telecommunications and utilities are sectors more inclined to have an environmental impact policy.”
 
However, the study shows there is still more room for environmentally friendly initiatives. Only 14% of centres assess or measure their carbon footprint, and only 13% are trying to offset emissions.
 
Contact Centre Budgets

Contact centre operating budgets increased by 12% from 2007 to 2008, predominantly driven by rising HR costs. The average annual salary for a contact centre manager, for example, rose 12% in the year.
 
“An average of 61% of contact centre budgets were allocated to human resources, including salary, benefits and recruitment and training costs,” said Dr Wallace. “Thirteen per cent was allocated to technology, including software, hardware as well as consulting and support services. An average of 12% was for telecommunications, such as telephone charges and services.”

Teleworking

Teleworking is on the rise, [possibly] fuelled by the desire for more flexible working arrangements and greater technology capabilities. Ten per cent of centres had teleworkers, but respondents said they expected this level to more than double to 22% over the next year.
 
This growth will be driven primarily by outsourcers, IT and professional services as well as the hospitality, tourism and entertainment industries, according to the study. Larger contact centres are more likely to allow agents to work from home or other locations outside the contact centre.
 
Investment in Technology

Contact centres plan to spend an average of $260,854 purchasing new technology and $149,535 upgrading and replacing technology in the coming year. This amounts to an average spend of $410,389 per centre on technology – a decrease of 20% on 2007.
 
In the next 12 months, 23% of contact centres plan to invest in customer relationship management (CRM) tools. In addition, 20% plan to invest in workforce management tools and 20% plan to invest in a call (voice only) system.
 
Automatic call distribution (ACD) was the most commonly used technology currently implemented on premises at contact centres, being mentioned by 78% of respondents. Interactive voice response (IVR) was used by 49% of centres and CRM by 47% on premises.
 
Telecommunications

Of total contact centre budget expenditure, telecommunications accounted for 12% (an increase of 1% from 2007), constituting hardware 6%, software 4% and services 2%.
 
“We often see that contact centres are not fully utilising the technologies that they already have available to them.  For example, they don’t realise that they can leverage the information available with an inbound number.  Once they do this their 12% spend on telecommunications actually becomes a tool for business management, rather than a cost.  As it provides tools for workforce management and revenue generation that improve contact centre efficiencies”, said Johan Scholtz, Managing Director, Zintel.   
 
Outsourcing

Only 17% of in-house contact centres outsource some or all of their functionality. Three of the most common functions to outsource are after-hours calls (30%), customer service enquiries (26%) and overflow (20%). Thirteen per cent of those that outsource use an offshore supplier.
 
In the coming year, 9% of all respondents plan to outsource additional functionality; 10% were unsure; and 81% had no plans to outsource further functions.

Customer Experience

An average of 56% of customers who use contact centres reported an overall satisfaction with their experience, according to the centre managers surveyed. 51% said they were likely to recommend the centre or company.
 
“Government, Education and Health, Hospitality, IT and FBI industries had higher levels of customer satisfaction or experience. Telecommunications companies and Utilities had a statistically significantly lower proportion of customers rating both a high level of satisfaction and the likelihood to recommend the company,” reported Dr Wallace.
 

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