Is It Time for a New Formula for ROI in Call Centers?

Is It Time for a New Formula for ROI in Call Centers?

June 13, 2024 | Convoso

by Daniel Foppen, Convoso VP Product & Product Marketing

Introduction

What made a call center successful yesterday will not make it successful tomorrow.

Traditionally, performance marketing call centers relied on a set of well-understood fundamentals to drive business success: high call volumes, efficient call handling, and maximizing conversions. However, the landscape is rapidly evolving, and these fundamentals are no longer sufficient. Several significant changes are altering the dynamics of the return on investment (ROI) model in call centers, necessitating a new approach to achieving success.

In this blog post, we’ll delve into the changes reshaping the call center industry, the new challenges and opportunities they present, and how call centers can adapt their ROI models to thrive in this evolving environment. By understanding these shifts and implementing strategic adjustments, call centers can continue to make money.

5 Fundamental Changes in the Market

Several pivotal changes are reshaping the call center industry and the levers of the underlying ROI model. These changes encompass regulatory shifts, technological advancements, and evolving consumer behaviors, each of which demands a strategic response from call centers. Let’s walk through a few of these:

One of the most impactful changes is the transition from one-to-many consent to one-to-one consent.

Previously, leads could consent to be contacted by numerous lead generation businesses, which allowed call centers to operate on a high-volume model. Now, with leads consenting to be contacted by only a few businesses, the pool of available leads is shrinking.

This shift means fewer, but higher-quality leads, fundamentally altering the economics of call centers. The reduced volume necessitates smarter and faster dialing strategies to maintain efficiency and effectiveness.

The implications of this change are profound. With a smaller pool of leads, call centers must become more strategic in their approach to lead generation and management. They must focus on acquiring leads with a higher likelihood of conversion and invest in technologies and processes that enhance lead quality. This shift also places greater emphasis on the initial stages of the sales funnel, where identifying and qualifying high-potential leads becomes critical.

2. Increasing Lead Quality

As the industry shifts to one-to-one consent, the quality of leads is increasing.

Low-quality leads, which often result in wasted effort and lower conversion rates, are becoming less prevalent. This change requires call centers to focus on more targeted engagements. Improved lead quality offers several advantages.

First, it allows call centers to achieve higher conversion rates, as agents spend more time interacting with prospects who have a genuine interest in the product or service. Second, it reduces the costs associated with handling unqualified leads, freeing up resources for more productive activities. Finally, it enhances customer satisfaction, as interactions are more relevant and personalized.

3. Rising Cost Per Lead

With higher-quality leads and fewer of them, comes more competition and therefore a higher cost per lead. This increase has significant implications for the economics of call centers.

The traditional volume-based dialing strategy (hammering leads) becomes less viable, and there is a greater emphasis on maximizing the value of each interaction. Call centers need to invest in technologies and strategies that enhance efficiency and ensure every lead is handled optimally.

Managing the rising cost per lead requires a multifaceted approach.

Call centers must optimize their lead acquisition strategies to ensure they are targeting the most valuable prospects. This may involve leveraging real-time platforms to identify high-potential leads and investing in smarter contact strategies to increase the likelihood of conversion. Additionally, call centers must focus on improving agent productivity and efficiency to maximize the return on investment for each lead.

4. Automation and AI Integration

Artificial Intelligence (AI) is automating more aspects of the sales process. AI can manage initial interactions and qualify leads, predict customer behavior, and even make suggestions in real time to help agents arrive at better outcomes.

This automation reduces the need for overseas “opener agents” or “fronters” and shifts the focus to higher-value tasks. As regulatory frameworks around AI usage in outbound call centers crystalizes, call centers must adapt to these new guidelines to stay compliant while leveraging AI’s full potential. This will continue demanding a balanced approach.

5. Evolving Consumer Behavior

Consumer behavior is continually shifting, impacting contact rates and engagement strategies. Declining contact rates require innovative approaches to reach and engage customers.

Understanding the evolving consumer behavior is crucial for success. To achieve this, call centers must invest in technologies that enable omnichannel engagement, allowing customers to interact through their preferred channels. They must also leverage data and analytics to gain a deeper understanding of customer preferences around their preferred time of the day to engage, preferred channels, preferred tone and more.

Considering these changes, one cannot help wondering whether the underlying business model fundamentals need to be reconsidered. A business model is built upon a series of numbers that act at levers/multipliers that together drive value.

For example, if the model looks like this:

“Lead behavior” x “type of leads” x “quality of leads” x “cost of leads” x “the human element” x “technology” = Value

…but all of the factors that go into the model are shifting rapidly, then the results will be continuously different.

It is time for a new model to drive value in call centers.

In a future blog post, I will outline some ideas about the main levers to focus on in this new reality.

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