Nonetheless, there are some specifics of the use of the Return on Investments metric for the call center industry. Call center ROI will be completely different for outbound and inbound call centers, as well as it will depend on the niche you are working in. Nevertheless, if you want to build a successful contact center to meet and exceed your customer expectations, you have to understand the critical role ROI plays in call center operations.
Anyhow, there are many questions to answer - what is call center ROI? How to do ROI analysis of a call center? What is a call center ROI calculator? What ROI call center solutions can offer? What are the ways to improve call center ROI? How to improve efficiency of call center operations? How to calculate contact rate? What is a call center ROI calculator? How to calculate call center outsourcing roi statistics? What is the difference between expenses vs ROI call center?
What is call center ROI?
Call center ROI is a call center metric that measures the return on call center investments. In other words, call center ROI measures whether your call center is profitable or not and what this profit is compared to investments you spent on your call center.
Call center ROI can be used to measure the profitability of the entire department or for call center solutions only. As you could guess, inbound contact centers don’t produce most sales and revenue, they are used for other purposes. On the other hand, outbound call centers are complete sales departments that can generate deals and sales on a regular basis, so in most cases, when we say ROI call center generates, we mean an outbound call center under call center.
It is a generally accepted approach to group the departments of the business into two classes: profit centers and cost centers. Obviously, profit centers are departments that generate revenue, and cost centers are departments that require regular investments but don’t generate any revenue - on the other hand, these cost centers make your customers happy, as in the case of a contact center.
Anyhow, you can calculate call center ROI for an inbound call center if it works with inbound sales, so you will have the needed inputs to make calculations - especially if you use call center ROI calculator. But still, we are going to discuss the ROI call centers generate with sales calls.
Call center costs and call center ROI
Call center costs are another vital concept regarding call center operational efficiency and its management. Call center costs include all expenses you spend on your call center, including setup fees, software costs, labor costs, rental costs, and so on.
Call center ROI is often considered a metric that is similar to call center costs, or call center price, as some people say. Well, that is a wrong statement. Call center costs measure only the amount of money you spend on your call center, while call center ROI shows a correlation between your income and spending. Thus, call center costs (operational costs) are included in the call center ROI formula, but this also means that these two metrics aren’t the same thing.
Another issue is a problem when people think about call center price only, but not about call center value. Value and price are two different concepts. When we talk about call center price, we mean the price of software, labor costs, and all those other expenses. But tell us, what else can convince an angry customer to change his mind and not cancel the subscription? How do you manage customer relationships? What else can build customer loyalty and consistent customer experience for years? What allows you to improve your customer satisfaction score? What else can make customers feel trust to brand and ignore the marketing strategies of your competitors, if not a contact center? That’s the matter. There are things you achieve with a call center that can’t be directly measured, but a call center grows your business and pushes it forward, and it also boosts your revenue.
Call center ROI formula
As with any other call center metric, call center ROI has its own formula.
In most cases, it works in the following way:
Return on Investment (ROI) call center generates = (Total revenue - Total expenses)/Total investments on call center • 100
Even though you can also find different formulas for ROI call centers, this one is the most accurate.
Call center ROI industry standard
First of all, we have to state that there is no generally accepted industry standard for call center ROI. Call center ROI will be absolutely different for an outbound call center that works in the insurance industry and for one that works in the real estate industry. Nonetheless, there are some stats regarding current ROI rates for different industries which are also the highest ones all over the world.
The latest CMI’s report regarding ROI for various industries provides the following ROI rates:
Technology: 28.87%
Capital goods: 16.19%
Basic materials: 15.26%
Health care: 12.62%
Retail: 12.18%
Energy: 11.85%
As you can see, there is no industry with at least 50% of ROI, but that doesn’t mean you can’t generate 50% or more with your call center. Now let’s learn about the main things that influence your call center ROI.
Call center ROI
ROI: Call center solutions
In the case of ROI, contact center solutions play a vital role. contact center solutions, even though they are not the biggest expense on a monthly basis, still cost some money to be used. This also relates to the functionality of the ROI solutions call center - the more features you use, the more you pay. Still, it does not mean those features can help you earn more - that is the most valuable thing about it.
ROI: call center labor costs
Your biggest expense is call center functioning, and this is all about labor costs. The people you hire the most are call center agents. It is vital at least because you have to understand the right number of contact center agents you really need. For instance, some call centers don’t measure their peak hours and downtimes - so, they feel a lack of workforce during high call volumes, which means they lose customers, and they also have too many customer service reps for downtimes, so they spend more on labor costs with less efficiency.
Thus, by optimizing your workforce management strategy and labor expenses, you will boost your call center ROI.
ROI: call center rental costs
Your expenses for the functioning of your office are also a vital part of your call center costs. Even though it is a difficult question to answer - what is better: a remote workforce model or in-office? - but it is a clear fact: rental costs influence your ROI.
ROI: setup costs
The most important investment is set-up investment. In the case of the call center industry, there are two main options. One option is an on-premises call center solution: you have to build all the infrastructure on your own, so it will cost a lot. Hardware isn’t cheap, as well as the price of the setup alone isn’t cheap either. That’s why more and more businesses are choosing cloud-based call center solutions to improve their call center ROI. Also, there is always an option to outsource your call center and this can help to drive ROI forward too. Nonetheless, if you want to build consistency and grow your business successfully, your own contact center would be a wiser choice.
How to improve your call center ROI?
Track your contact rate
Contact rate or success rate or connection rate is an outbound call center metric that measures the percentage of calls that are answered by your prospective customers during outbound calling campaigns. Thus, if you have a 75% of contact rate, it means 75 of 100 calls have been answered by prospects. The contact rate depends on two main factors: the quality of your contact list and the efficiency of your outbound dialer. Also, the settings of your campaign can affect the contact rate. To make your cold calling campaigns as efficient as possible, you require an auto dialer that performs 75% of the contact rate. There is only one auto-dialing mode that can provide such efficiency and productivity - The predictive dialer.
Nonetheless, the contact rate can’t be that high for warm calls and for campaigns where phone numbers to call are chosen manually. For other dialing algorithms, a contact rate of around 55 to 65% is normal, especially if you use preview dialing mode.
Invest in agent training
Additional expenses always mean lower call center ROI, and training always requires additional expenses. But look at the prospects - at the end of the path you will get qualified, skillful, and multifunctional agents who will perform better conversion rates, boost your customer retention, overcome customer objections, deal with difficult customers, and build the reputation and image of your brand. Ask yourself how many potentially successful deals you have lost because of lack of agent skills, or lack of knowledge. That’s it.
You should not use only one training practice or a few of them, you should implement and try different strategies to find which one works better for you and your management team and sales team. In some cases, one-to-one training time is more efficient, while group work is also effective and can provide you with fascinating results.
Plan your workforce management
Workforce management in the case of reducing expenses is your main priority. As we have mentioned above, even a lack of understanding of your peak hours and downtimes means losing money. If you have more agents than you really need, you spend extra money or nothing. And vice versa, if you feel a lack of agents, but do you think it helps you save money, the reality is that you will just lose much more because of the harm your customer service efficiency and productivity suffer from. The matter is to hire enough staff - not too much, but not too few.
You also have to pay closer attention to agent scheduling to make sure that schedule adherence is met, and now agents are involved in coal, avoidance, or other practices of avoiding the work and their direct responsibilities.
Track data
When we talk about efficiency, it is not about the contact rate only or any other metric. All of the data you receive from your phone system should be analyzed and grouped. For instance, even such a thing as dropped calls can seriously harm all your cold calling strategy. The fact is that there are limits for dropped calls in some jurisdictions, for example, if you have more than 5% of dropped calls during your cold calling campaign, you will be fined in the US and some other countries, and even the ban from telemarketing can occur. You have to track key metrics of different aspects of your business, such as response times, cost per contact, average handle time (average handling time), customer retention rates, customer satisfaction rates, net promoter score, attrition rate, and so on.
You have to also pay closer attention to quality assurance. Your agent should be regularly checked to meet quality assurance requirements, and fortunately, modern call center solutions provide you with all tools needed to organize quality assurance sessions.
Work with sales pitches and cold calling scripts
What is really important about cold calling is that even the most experienced agents still need the support of all scripts to meet the expected key performance indicators (KPIs). No one, even the best professional, can’t process hundreds of calls on a regular basis without any case of loss of control over the call flow. There can be difficult customers, there can be conflict situations, and in some cases, agents can just forget what they have to say. The call script is the only tool that provides agents with all the needed information to run the call in the right direction and to provide a positive experience for every prospect. Also, the sales pitches you use should also be tested and analyzed to find out which one works better for your target audience, and which one is inefficient. To test your sales pitches and call scripts, you have to run test campaigns. This is the only way to find out what can hook your prospective customers and what your target audience really wants to hear.
Choose the right solution
The key to success is to find the solution that will cover all your needs, be easily scalable, and doesn’t cost all money in the world. Scalability is one of the most important aspects because you are looking to grow your business and drive it forward, aren’t you? If you will have to spend two weeks to implement one new integration for your solution, or you will have to rebuild all your infrastructure to add ten additional seats for your agents, this will harm your call center ROI. In this case, we recommend you look for cloud solutions only, and we also recommend checking out our article about the call center requirements checklist to find out how to choose the best solution on the market.
Conclusion
As we have mentioned above, return on investment (ROI) is the most critical metric regarding call center operational efficiency and your overall business success. Without measuring return on investment (call center ROI), you will never know how exactly your business is moving forward to profitability, and ignoring the importance of call center ROI can have negative consequences - you can’t build the right strategy and reach your business goals without understanding what are your current conditions.
The main factors that influence call center ROI include set-up fees, solution costs, labor costs, and rental costs. The best ways to improve ROI include agent training, data-driven strategies, focus on tracking agent performance and overall call center performance, and finally, a proper ROI call center solution. Your outbound call center solution has to provide high contact rates, help you deal with dropped calls, and also has to provide powerful reporting and analytics tools for you to check data and make data-driven decisions.
