Guest Column
Jack Beldon
Good customer service is a crucial element in customer retention, but in-house call centers can be one of a company’s largest expenses. Outsourcing customer service to off-shore companies will substantially reduce costs, but at the risk of customer resentment and dissatisfaction. A third alternative, made possible by emerging technologies, is home-based servicing (HBS).
It’s easy to see why the call-center industry has been shifting toward this solution. HBS can offer customer service not only of higher quality than a brick-and-mortar call center’s, but at a substantially reduced cost as well.
Studies show that nearly 20 percent of U.S. enterprises are currently using home-based agents to support their corporate growth goals, among them Walgreens, Office Depot, General Electric and Verizon.
The number of home-based agents employed by the $30 billion U.S. contact-center industry – estimated at more than 110,000 – is expected to triple by 2010, according to IDC.
While the benefits of HBS are clear, relatively little is understood about the processes and technologies required to implement a successful home-based agent model. The recruitment, training and management of home-based agents is very different from that in a traditional call center.
Companies hoping to make the switch must resist the temptation to simply extend current brick-and-mortar practices to a virtual environment.
The Gartner Group reported that 60 percent of companies attempting to build a home-based agent solution will fail. There are a number of reasons for this, but key among them are deficiencies in training, recruiting, operations and technology.
Companies that are successful at implementing HBS solutions consider training to be their biggest concern, largely because they can’t train face-to-face, but rather must do so in a virtual environment. This approach would not be possible without Web-based tools.
McKesson uses collaboration tools for training via Webcasts and online modules, and the company conducts virtual annual performance reviews with its at-home employees, as well.
Given that most (if not all) HBS agent recruitment will be virtual, it is necessary to use a far more rigorous screening process than is required in traditional brick-and-mortar centers. Virtual workers don’t have the luxury of communicating face-to-face, which means they miss out on nonverbal cues. It also means they have to communicate both their point of view and their personality through such media as videoconferencing, e-mail or the telephone.
HBS employees also have to be able to tackle problems head-on, and to generate and implement solutions independently. Because virtual workers don’t have everyday face-to-face interaction with fellow employees, their personal and company ties can be weaker than those of brick-and-mortar workers, meaning that recruitment must test for agreement with a company’s goals and values.
The flip side of these recruiting challenges is the opportunity to tap into a nationwide talent pool.
The allure of working from home brings access to an even broader range of potential applicants – people who wouldn’t consider working in a traditional brick-and-mortar call center. This includes stay-at-home parents, people with disabilities and retirees. All may have exceptional skills and work experience to offer – and at a lower price than traditional customer support.
McKesson Health Solutions states that high demand for the HBS openings allows it to offer agents 16 percent less than brick-and-mortar reps. Forrester Research supports McKesson’s conclusions by asserting that the pay scale for virtual agents runs 15 percent below that of traditional brick-and-mortar agents. Usually, cheaper labor means lesser talent, but not in this case. HBS provides superior customer service at a lower price.
Choosing whether to hire employees or contract independent agents is an important decision in an HBS roll-out. Most HBS vendors contract independent agents. This saves them from having to pay benefits to their agents, and it allows for efficient cost management, since most agents are paid to the minute that they work. Even companies that hire their agents as employees usually do so on a part-time basis, to avoid paying for benefits. Benefits make up 30 percent to 40 percent of a traditional brick-and-mortar rep’s compensation.
There are technological needs for HBS-staffed call-center operations, but to a large degree, current communications technologies are serving the needs of the industry. And as technology improves, the obstacles will decline in both number and severity.
As a result, home-based servicing is here to stay. If you resist incorporating HBS practices into your call-center operations, you will fall behind the competition.
Jack Beldon is a senior associate at Fischer Jordan, a New York City-based consulting firm.
