The Cost of Contact
Customer interaction centers ring up some large bills
Costs for setting up customer interaction centers (CICs) can vary from the low thousands to the high millions, depending on how much technology the firm already has in place, the skill levels of its agents, and how responsive the company wants to be.
“It can be like the difference between buying a tent or a mansion,” says Melinda Nykamp, president/CEO of Nykamp Consulting Group, Downers Grove, IL.
Costs to be determined include those for setting up computer telephone interaction; interactive voice response systems; knowledge, campaign and response systems; and hiring and training staff, Nykamp notes.
Simple systems for smaller organizations can start at about $100,000 a year, while more robust packages with greater capabilities for use by larger corporations can run as much as $20 million.
These CICs are built around what’s known as the universal queue. This system routes each inbound contact it receives — whether by phone, e-mail, fax or Web — to the appropriate customer service representative, depending on the nature of the call.
Integrating new CIC systems with a company’s existing call center systems can cost millions of dollars, depending on the two systems’ compatibility and what the marketer wants to accomplish, Nykamp says.
By far, the highest expenses are labor costs. Reps working in CICs are more likely to be paid in the $20-an-hour-range, while less-skilled telemarketing reps are more likely to run about $7 or $8 per hour, notes Nykamp.
“Seventy-five percent of [call center] costs are for labor — and these are industry figures — while 25% are for brick-and-mortar and for software applications like e-mail systems, chat packages and knowledge-based systems,” says Bob Dechant, senior vice president of sales and marketing for Stream International, a Canton, MA-based outsourcing firm.
Dechant says companies can save as much as 33% of their costs by outsourcing. However, while outsourcing can be cheaper, he says, “Companies can give up a lot of their intellectual capital in doing so,” noting that outsourcers aren’t going to have the depth of product or customer knowledge that inhouse people will.
Overall, setting up a CIC can be a costly or not-so-costly enterprise. But “spending money on a lot of software doesn’t create CRM,” Nykamp warns. “It means developing a different mindset.”
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