Katrina and Disaster Recovery

First, my deepest sympathies to those who are suffering losses because of Katrina. I was heartbroken at the devastation we are seeing in the news. Our prayers are with you.

A catastrophic disaster like Katrina will significantly interrupt business for months. If your call center was located in Biloxi or New Orleans, it will be months before they would be operational. If you didn't have a functioning business continuity plan in place, it could significantly impact your business.

In my experience, most call centers have disaster recovery plans, but few have really taken the necessary steps to make them truly functional.

We would categorize the business interruption based upon the severity of the interruption.

Level 1 - This was some interruption that was under an hour. Maybe there was a temporary power or phone outage. Maybe there was bomb threat and the call center needed to be evacuated.

Level 2 - This was some interruption that was several hours in length.

Level 3 - This was some interruption that was at least a day in length. Maybe it was a major storm that prevented people getting to work that day.

Level 4 - This was some interruption that was several days to several weeks.

Level 5 - This was some interruption that made the building uninhabitable for the foreseable future.

If you are the client and contracting with a call center, you should have them walk you through what they will do in each of these 5 levels. Again, my warning is that many call centers have plans in place, but in reality, they would be very difficult to implement. Press for specific details and don't let them get away with smoke and bluffs.

If there was a call center in New Orleans, then they would be at a Level 5 for business interruption as a result of Hurricane Katrina. There is no way that that call center will be able to operate in the foreseable future. That means that if inbound calls were going there, they would need to be rerouted to another call center (who has the same long distance carrier) who can access the correct computer applications to properly capture and transmit information to the customer. The agents at that new call center would need to be properly trained to receive those calls. The supervisors and trainers and quality teams would have to be all brought up to speed to ensure the proper quality. Again, the steps to accomplish all of this are complex and complicated and few call centers really are prepared for that level of detail.

May God bless those suffering from Hurricane Katrina.

Working with Brokers

One of the biggest challenges for a call center is the challenge to have enough work to keep a stable workforce occupied and engaged. This means having a pipeline of work continually flowing in to replace those projects that are ending.

We followed a process of a mixed channel approach. We had a sales team out beating the bushes, we did advertising (primarily internet pay per click), we exhibited at targeted trade shows, and we used brokers.

There are several types of brokers - from those that simply refer work to you and they never talk to the client again to those that have an ongoing management relationship between the client and the call center. I always preferred to work directly with the client, because if we had the broker in between us, it was one additional break-point where information could get corrupted as it passed between the client and the call center.

Brokers usually charge on a percentage of gross revenue. Most brokers seem to work between a range of 3% to 10% of gross revenue. So if a call center billed $100,000 in a month and the broker was getting a 10% commission, he would get $10,000 in commission.

The contract between the broker and the call center should include how the commission is calculated, ability for the broker to audit billing and collections (to ensure he is getting paid correctly), and the length of term of the contract. Some brokers will demand a fixed commission for the life of the contract. Others will go along with the approach of a decreasing commission rate. For example, year 1 might be at 6%, year 2 is at 4% and year 3 is at 2% and then stops. Others drop to a lower level and stay there for the life of the contract. It all depends on what you can negotiate and what makes sense.

Most brokers will require that they get paid within some many days of when the call center gets paid. Some will push to get paid the same day every month, whether the call center has been paid or not, but I never had one that didn't back off on that point when I pushed it - that really plays havoc with cash flow if you have to write a big check and haven't received that payment yet from the client.

There is a tendency of call centers that brokers have to deal with. This tendency is to be excited about the project when the broker first brings it in and is happy to pay the commission. After some time passes, the call center forgets the broker's contribution and can start to feel resentment at writing a big check every month to someone who hasn't been in the trenches with them.

One way to combat this is to help the call center remember that none of this revenue would be there if the broker hadn't brought it in. Another point to bring up is that they need to know the true cost of their in-house sales and marketing efforts as a percentage of gross sales. If you add in the salary, taxes, benefits and commissions of the inside sales team, plus the expense of their sales trips, hotels, per diem expenses, marketing efforts, advertising costs, trade show expenses, etc., you find that 4-5% of gross revenue may be a good deal.

I have a friend that has no direct sales team and relies almost entirely upon brokers to bring work in. He pays out $400-$600k in broker commissions per year, but he is happy to do so. He says that doing this lowers his fixed overhead and he only pays if revenue is generated. If the brokers aren't bringing in new work, then they don't get paid.

Two brokers I have worked with in the past have been Andy Paulsen and Bill Samuels. They were good to work with and had a good flow of business for us to look at. It is important to help the brokers know what your expertise is and where you will succeed. They have a vested interest in placing work where the client will be happy - it reflects on their reputation as a broker and on their commission. If they place work with a call center that drops the ball, they don't like having to hear back from the client wondering why the broker sent them to a call center that didn't perform and they lose out on that ongoing commission stream. If you treat the clients right that come through a broker, pay the broker promptly and timely, and keep the lines of communication open, you can develop a long-term stream of business through the broker.

Having a Closed Loop

I mentioned this in my last post, but wanted to expand this some more.

As a call center manager, you need to think of potential breakpoints in your process.

Simplified, the process is the following:

Gather information from the Client
Transmit information to all relevant parties within the Call Center
Transmit and gather information from the customer
Transmit customer and performance information to the Client
Evaluate performance
Improve performance

I want to talk specifically about the second step in the process. Assume you are the Account Manager. You need to make sure that the information that you gathered from the client is accurately transmitted and absorbed by:

- the training department
- the operations department
- the quality department
- the telcom department
- the it department

This is a lot of possible breakpoints where information can get dropped or understood incorrectly. We found it to be the most effective if we created multi-function teams that included people from all these departments when we were doing a new project set-up. If you keep each of these departments in a silo, the errors increase and the time to get anything done is extended.

What you want is a closed feedback loop. The client transmit info to you. The information you give to the various departments is the same and verified. That means that the trainer is training on the same things that the quality team is looking for and the supervisor is managing to. If the quality team sees a consistent problem, that information if conveyed to the training team and a heads-up is given to the floor supervisor about the issue. If these steps are taken, in conjuction with your calibration sessions, you will have much more consistent quality and a better service to offer your clients.

More on Calibrated Call Monitoring

I was looking through some old stuff and found this link to an excellent article by Marcia W. Hicks on Calibrated Call Monitoring.

This is a much more extensive review of the subject that I gave it and is a good resource if you really want to do Calibrated Monitoring.

This is a piece from the article:

Calibration means standardizing a process by determining its deviation from the standard, in order to determine the proper correction factors. In a call center, calibration is the process by which you limit variation in the way performance criteria are interpreted. Calibration is a critical element of improving call-monitoring performance.

Calibrated Call Monitoring

Call monitoring is an essential tool for a client to hold a call center to a certain quality standard, but it is also a critical tool to help both parties view what those standards are in the same way.

Quality of a call is a subjective measure at best. Unlike a manufacturing process where you can precisely measure the size or strength of a component of the final product and each component is exactly the same each time, a call is a performance and each performance is slightly different each time. So you want to calibrate those subjective evaluations so they are as close as possible for all parties.

Calibration is the process where there is increasing alignment between the client and between the call center of the evaluation of a call.

A client tries to communicate their expectations of quality to the account manager. The account manager then has to make sure those expectations are accurately communicated to the training department, the operations team who manage the agents on the floor, and to the internal monitoring team. Sometimes there isn't a complete transfer of communication between the account manager and these other groups.

So, if a client can have a monitoring session that includes both live monitoring and taped monitoring, you can try to close that broken loop and make sure that the people responsible for call quality are on the same page as you.

We would have the clients listen to some taped calls at the same time we would have our training team, our monitoring team, our floor supervisors, and even sometimes, some of our agents. The client would complete a monitoring quality sheet at the same time we would have our monitoring team fill out the same sheet independently. Then we would compare scores and see where there was misalignment between how the calls were evaluated. Sometimes we would back the tape up and listen to it again. This allowed us to be very accurate in knowing and measuring quality in the same way the client measured quality.

Why work in Call Center Management?

I don't think anyone went to school thinking, "I want to grow up and work in a call center", but a lot wind up working in call centers.

I know a lot who started on the floor and wound up working their way into management and making a career from it.

I also know a few who have tried to leave the field several times and keep coming back to it.

One of the things that I really enjoyed was working with a lot of very interesting people. I also enjoyed the variety of projects that we worked on. We saw hundreds of different marketing campaigns, and it was interesting to see the different business philosophies. Some companies were brilliantly run companies and some you just knew that they wouldn't last through the year.

I think having some call center management job can be beneficial to your career path. You know what it is like on the front lines, you know how to motivate and manage people, you know how to use metrics to guide your decisions, you know the importance of quality in your product. Those skills are transferable to other areas of the company.

Outbound Disposition Report

A common report you might get from an outbound call center is the disposition report.

This report will usually show the following:

Lead used
Calls attempted
Calls Completed
Calls Dropped
Answering Machines
Messages Left
No Messages Left
Busy Signals
No Answer
Do Not Call Back
Network Intercept

It is important that you have a clear understanding of what the call center defines as a call completed, for it may be different than what you might think it means.

Calls dropped means that a customer picked up the phone and the predictive caller couldn't find an available agent so the dialer hung up on the caller. The new DNC Telemarketing rule from by the FTC requires that a center can not exceed 3% for dropped calls.

More on Outbound Reporting

I thought more about reporting and how knowing what is on the typical outbound call center report is helpful for the client to better manage his or her project.

The typical predictive dialer report has at least the following:

Agent Name
Agent ID
Hours Logged in - that this is hours logged into the predictive dialer, not
hours that they work - work includes breaks, lunch, training, etc.
Talk time
Talk time % - 50% means that the agent is talking 30 minutes out of every hour
Contacts
Contacts per hour
Talk time per call
Completes - this might be a sale, a completed survey, a message delivered, etc
Completes per hour


Many call centers keep this report to themselves. This allows them to know how to manage their people. Usually if you ask for this report, they will give it to you.

Some things to watch for are:

Talk time % - if you have really low talk time, the list may be bad or dead.
- if only a few agents have really low talk time, then they might be
hanging up on customers
Contacts per hour - if you also have really high contacts per hour by a few agents,
then that agent might be hanging up as soon as the customer comes
on the line.
Completes per hour - You will see some with very strong cph (also called SPH) and a
clear group with a very low cph. If you can convince the call
center to either train those low performing agents or move them
off your project, you can get your cph to increase.

If you don't understand a report, ask the client service rep to explain it to you. If you visit the call center, ask the supervisor to show you the reports he or she uses to manage his/her team.

Waterskiing thoughts

I left the house this morning with some friends and went down the the lake and we were in the water by 6:30am. That wasn't cold - just very refreshing. We didn't get great water but found some flat spots near the edges. The mountains were just shadows in the early morning pre-sunrise light. A flock of pelicans and then later a flock of Canadian Geese flew by.

It is so refreshing to go out and be waterskiing early in the day. It has made the rest of the day so much better.

I found that a call center could be so consuming. It is important for the managers of the call center to keep a balanced life, so they don't burn out. I know too many call center veterans who did burn out and lost their effectiveness.

Take time to balance work, family and recreation.

Explaining SPH

SPH stands for sales per hour. That is per agent hour.

If one agent can make one sale per hour, the call center will tell you that they are getting a 1.0 sph (sale per hour) for that agent. So usually, you will have multiple agents working. Then, in your report, you will see an average sph across all the agents. It is important to ask to see the agent specific detail. You will generally find 3 groups - above average, average, and below average. What you want to do is help the call center either improve the performance of the below average group or remove those agents from your project. You need to look over several days of data, because every agent will have a bad day from time-to-time.

This way, you might be able to move your average SPH from a 1.0 to a 1.25 sph. When you are doing hundreds of hours per day, that can really make a difference.

Let's see how that might play out financially.

For simplicity, let's say that you get a hourly rate of $25 per hour and you are running a campaign that run 100 hours per day. Your daily expense is $2,500. Let's say that the call center runs at an average of a 1.0 SPH. For the day, you would get 100 sales, with each sale costing you $25 each. If you could get the call center to improve their SPH to a 1.25, then the daily sales would equal 125 sales and your cost per sale would be $20 each. That becomes a significant savings over time.

Outbound Telemarketing 101

People often asked me what why it was called Outbound Telemarketing.

Outbound Telemarketing gets its name from the fact that an agent is placing a call out to a consumer as opposed to Inbound, where a customer is calling in to the agent.

The outbound industry has been greatly impacted recently by two significant events, governmental regulation and off-shore competition. The Do-Not-Call, and the related Telephone Sales Rule legislation has greatly altered the landscape for outbound telemarketers. Outbound telemarketers also have to aware of ever-changing state legislation as well.

Outbound Call Centers encompass many of the other vertical categories, such as Lead Generation, Sales, Appointment Setting, etc.

Outbound calling is categorized based upon who the caller is. The two basic categories are calling businesses or calling consumers.

Business-to-business agents need to know how to deal with gate-keepers, the secretaries or administrative assistants that filter access to the target of the call. You want to be careful in making sure that the call center is using the right mix of agents as matched to your target customer. If you are trying to reach a high-level CEO or senior executive, you don’t want your callers to be the average high-school grad telemarketer or off-shore agent that speaks broken English.

Predictive dialers are generally not very effective when calling senior executives in a business-to-business type call. Check with your outbound call center to see what kind of technology they are using. I found that the most effective type of tool was a platform that allowed the operator to keep notes about each attempt (things like secretary's name, email address, best time of day to call, when that executive might get back in the office, etc.) Sometimes this is called preview dialing, because you can preview the customer's information before you talk to them. Sales Management packages like Goldmine and ACT! are a good option if you want to do this in-house.

Most outbound call centers experience very high turnover rates, exceeding 100% per year. Finding and keeping qualified and trained agents is a big challenge for most outbound call centers.

Most outbound call centers prefer to bill on an hourly rate, rather than on a pay-for-performance basis. They still have the expense of paying for the agent’s time and for the long-distance and the overhead and if they do it on a pay-for-performance basis, they expose themselves to the risk that they will not make enough to cover their cost.

Some call centers will do a hourly test first and then evaluate the results and then offer a pay-for-performance rate. You may see hourly tests from anywhere from a 50 hour test to a 500 hour test.

If you do agree to a hourly rate, make sure you define exactly what constitutes an hour of billable time. Does it consist of break time, of down-time, etc? Or do they only bill for time where the agent is actively calling.

US-based outbound call centers generally seek to make $24-$26 per hour, but will go as low as $17 per hour if the volume is great enough.

Near-shore outbound call centers will bill between $16-$20 per hour. Near-shore includes Canada and the Carribean and Central America.

Off-Shore call centers will bill from $8 - $18 per hour. Most off-shore work is done out of India, but the Philippines is rapidly developing as a major supplier. Other off-shore call centers are located in South America, South Africa, Europe, Israel, Pakistan, etc.

I will explain more about SPH later.

With the Do Not Call legislation, both the outbound call center and the client has to register with the FTC. The outbound call center will need your SANS number that you get from registering with the FTC. Compliance to these regulations is critical as it can carry very severe fines for violations.

I will talk more about the DNC rulings later.