Turn Your Call Center Into a Profit Generator

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This is the first of six columns from Mr. Walsh. They will appear monthly.

Sales agents are a cataloger's closest personal link to customers. Agents answer telephones, take orders, cross-sell, upsell, answer customer service questions and resolve customer service issues. Even amid the growth of e-commerce, sales agents continue to touch most of a cataloger's sales and address nearly every customer complaint.

In a recent study of catalogers, I learned just how much leverage sales agents can have on profitability. A mere 3 percent increase in call center revenue can let most catalogers overcome more than a 50 percent rise in call center costs.

Despite these underlying economics, many catalogers continue to treat their call centers as "cost centers." As a result, they miss straightforward opportunities for using their call centers to boost profit. Here are five actions to help most catalogers start transforming their call centers from cost centers into profit generators.

Measure your call center as a profit generator. Do you evaluate your call center based on a productivity measure such as cost/revenue? If so, you are probably underinvesting in your call center. A better measure of performance is profit per call. Profit per call directs call center managers to make decisions based on overall profitability and focuses sales agents on generating revenue from every customer call. Profit per call appropriately places a high value on developing and retaining sales agents and places a lower value on minimizing sales agent compensation and development costs. My column next month will provide a more detailed discussion of measuring call center performance.

Invest wisely in sales agents. Catalogers face enormous challenges in finding enough qualified candidates to staff their call centers, retaining sales agents who at any time may leave for another position earning comparable pay, and gaining commitment from agents who see their employment as transitional or supplementary. No wonder many catalogers outsource call center functions.

But investing wisely in sales agents can give a cataloger an enormous profit advantage. And unlike technological advancements that are easy to duplicate, excelling at attracting and developing agents can become a sustainable competitive edge.

Communicate effectively with sales agents. This lets a cataloger turn an improvement made by one sales agent into a standard practice for all agents. Consider using three levels of communication to translate overall call center results into clear messages that can direct agents. A column in September will provide a simple format for communicating business results and priorities with sales agents.

Stress fundamentals. One simple improvement, multiplied by the number of calls you receive, automatically becomes a profit generator. Do you regularly and systematically review the way your call center converts calls into orders, increases revenue per order, increases the probability of reorder and achieves call center efficiency? An article in October will offer ideas to identify improvements that will yield the biggest payback.

Turn your call center into a powerful marketing force. By its sheer volume of customer interactions, your call center is an important marketing enterprise. Consider three simple actions for turning your center into a marketing force. First, make add-on merchandising a call center responsibility. Add-on sales occur during the four-minute customer call and depend on the effectiveness and the approach of sales agents. Second, assign a sales manager to test and improve your call center's selling approach in the same way you test alternative marketing approaches. Third, tap into sales agents as a main source of fast, accurate and cheap customer research. A November article will have more details.

The steps outlined above are sensible and easy to implement. In today's competitive marketplace, you may find that transforming your call center into a profit generator is your company's best marketing opportunity.

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