Buying Your Center's Most Critical Component

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The toll-free and long-distance services you choose will be so expensive yet so rich with features and possibilities that it's imperative you choose carefully, and that you revisit your decision periodically.

Toll-free service was once amazingly simple. You had one company to buy from and little leverage in the pricing plans and service offerings you could get. Companies didn't begin to build call centers until a cost-effective means of making nationwide toll-free calls arose about 30 years ago.

Divestiture and competition created more choices, and the price of call center telecom slowly began to descend. In the early 1990s, just as the three main long-distance companies competed fiercely in a public battle for the home consumer long-distance market, a not-so-public but equally vicious fight for the call center market heated up.

It was helped by resellers and aggregators, which are essentially secondary marketers of long-distance service. Resellers would buy bulk minutes from phone companies at a tremendous discount and resell them at a small profit margin, making money on the spread. Aggregators would combine the telecom traffic generated by lots of small companies until they were able to go to a phone company and commit to big packages of minutes, hence qualifying for the same deep discounts the telcos gave their largest customers.

All these things worked to drive the cost of a long-distance or toll-free minute below 10 cents, in some cases to as low as 5 cents. Of course, things are never as simple as they seem.

The Cost of Value-Added Services

You almost never buy telecom minutes bare; they are the beginning of the process. It's all in the value-added options. What's a long-distance package without some service assurance policy, for example? Without network reliability guarantees? Or better yet, would you pay more per minute if the carrier let you manipulate the network according to your own traffic needs?

What about being able to hold calls in the network, instead of queuing them up in your automatic call distributor? Or park them in the carrier network while the net queries ACDs at several centers to determine which has the right person to answer the call?

The more complex the routing dynamic, the more likely you'll have to go to someone other than the carrier for the software to make it all work. Carriers, however, are eager to help hook you up. (They were not always so eager; phone companies tend to be among the less far-sighted technology companies.)

The carriers have also experimented, with mixed results, with services that perform transaction processing, and even fax processing, in the network. It's like having an outsourcer handle your calls and transactions, but there's no actual outsourced center; it all happens automatically.

They want you to take advantage of these advanced services, whether or not they provide the mechanics, because call centers are a gigantic consumer of telecom minutes. The more time your callers spend hanging out in their networks, the better off they are.

Add to that one other critical reason. If you posit the notion that long-distance and toll free are pretty much the same from carrier to carrier, then what keeps you from hopping from one to another at the drop of a hat? The answer is the hooks they get in you for buying ancillary services. I foresee a day when the value-added services are more important to the carriers than the presentation of transmission minutes. When such a time comes, they'll give away the minutes to their best customers as a loss leader.

Taking Custody of 800 Numbers

So a decision that once was simple - buy on price - has become complicated. But wait, there's complexity on another level. Prior to 1993, if there was a toll-free phone number you wanted to have, you had to buy from the carrier that had custody of that number. You had no freedom to change carriers and bring your number with you. If you had significant brand equity built into your number (800-CAR-RENT, for example, or 800-MATTRESS), you were stuck.

In 1993, 800 portability reorganized the way 800 numbers were given out, changing the dynamic of how you acquire and route 800 numbers. Portability meant you could keep the number if you wanted to change carriers. This gives carriers added incentive to serve you better and to offer more interesting features in their toll-free networks since you're no longer a captive customer.

Remember one thing: They need your business. If they do not serve you well, leave. In fact, you should have arrangements with at least two of the three main carriers for your core service. At a minimum, that protects you against service outages. But it also allows you to compare, month by month, the offerings and prices they charge.

At first, there was a lot of concern (generated in part by AT&T) that portability would cause degradation of service, especially longer call set-up times, because each call to a toll-free number has to be passed along a more complicated pathway to determine which carrier would route it. Happily, those problems never materialized. Portability became part of the competitive landscape and was a strong factor in the rush to grab 800 numbers a few years back. That rush caused the 800 series to run out, forcing the opening of 888 and then, long before anyone thought possible, another series, 877. (Other reserved series are warming up in the bullpen.)

Portability made toll-free an intelligent network application. Users with multiple centers who wanted features such as least cost routing or sophisticated queuing options benefited immensely. Many of these services are expensive though. They can add as much as 50 percent to the cost of a call, putting these options out of reach of many small and mid-sized call centers. High volume users have been the main beneficiaries of price cutting and volume discounts, leaving smaller users with higher costs and no appreciable gain in service.

Through bundled consulting plans and alliances with hardware manufacturers, the three majors are trying to be more than just a series of trunks and switches. Offering everything from complete outsourcing of your center to simple "press 1 for..." services, carriers provide more options for call centers than ever before.

Will the call center of the future pay for carrier services by the transaction instead of by the minute? This is just one possibility raised by the brave new world of call center offerings from the three major long-distance carriers. n

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