You Can Go Home Again

While companies such as Red Lion and Countrywide seek to boost service and cut costs through careful use of automation, others are banking on the human touch. In addition to newer technologies, they are experimenting with the ultimate virtual call centre - agents working from their homes.

Companies including Office Depot, Vermont Teddy Bear and JetBlue already use hundreds of home-based customer service agents across the Canada and the US. Home agents don't always replace offshore call centres at these companies. Instead - as in the case of Vermont Teddy Bear - they serve as extra manpower that swoops in during holidays or seasonal business peaks. They give a company flexibility to handle unusually busy days or even hours. In fact, the number of home-based agents is expected to triple to 300,000 by 2010, says Stephen Loynd, a senior analyst at IDC.

Loynd says one reason the trend-which he has dubbed "home-shoring"-is taking off is because it's cheaper than outsourcing to a domestic call centre. (Although the home-shoring trend may be taking off overseas, it's still early days regarding this model in Australia. According to callcentre.net's Organ, about 4 percent of call centre workers are able to work from home, but only about 1 percent do.)

Newer technologies also mean the call centre is becoming increasingly virtual. IDC estimates that it costs $40 per employee per hour (including overhead and training) to operate a traditional call centre in the United States, but only $US27 per hour for a home-based agent. That's still higher than rates for offshore agents, which start at $13 per hour in the developing countries of Southeast Asia and Eastern Europe, according to Forrester Research.

On the plus side, at-home agents are generally older and better educated, Loynd says. "If you have enthusiastic, hardworking agents with a flexible work schedule, they'll be better on the phone," he says. They're also more likely to stick around. While some traditional call centres report attrition rates of 80 percent to 100 percent annually, outsourcer Willow CSN (which uses only home-based agents) claims an annual attrition rate of just 15 percent.

Vermont Teddy Bear agrees that home-based agents can boost customer satisfaction, although it won't divulge actual figures. The company, which reported annual revenue of $US66 million in 2005, doesn't automate its calls or use offshore agents. Instead, it operates a small local call centre in Vermont. In addition, it has used home agents from outsourcer Alpine Access since 2000. Most of the time, says contact centre manager Chris Powell, the centre's 170 seats are not filled. But the maker of handcrafted bears experiences major peaks in business during holidays such as Valentine's Day and Mother's Day and can go from 50 agents to 700 on its busiest days. At these times, home agents help the company respond to orders and shorten customer waits.

Powell says the ability to staff up for short periods of time was more important than cost in the company's decision to add home agents to its call centre strategy. But judging by the average per-order conversion rate (the number of orders per call), home agents excel, Powell says. Last Valentine's Day, he notes, the home-based agents came in ahead of those in the call centre in their conversion rates. Alpine's agents, he says, have a 1 percent to 2 percent higher conversion rate, meaning that if the average order is $100, the at-home agents are bringing in an extra $200 for every 100 calls. "It would appear that you get a higher quality agent for a reasonable price," Powell says.

The Virtual Call Centre

To make sure customers can get 24/7 service, companies rely on agents worldwide. But routing calls and managing a global workforce presents its own set of challenges including making sure that round-the-clock scheduling runs smoothly.

One way to manage agents and route calls from a central location is to use VoIP technology to replace traditional phone systems. VoIP was originally touted for its ability to help companies cut long-distance costs. Now, for call centre operators, it promises a greater ability to oversee a disparate workforce.

VoIP works by converting a voice signal from the telephone into a digital signal that travels over the Internet. Companies save money with reduced long-distance charges and elimination of individual phone lines since all voice and data travels over the Internet. The technology, however, is in its early stages of adoption and users have to overcome security vulnerabilities and quality of service hurdles. For example, calls that travel over data lines can be subject to Internet worms and viruses.

Still, outsourcers are installing IP phone lines in their contact centres. They say the advantages of being able to administer the system centrally outweigh the challenges. "With an IP phone, agents can be anywhere - at home or at a physical site - and we can route calls to them from a central location," says David Eckert, CIO at ClientLogic.

"If you're doing it just for the cost, you're fooling yourself," says Mojgan Lefebvre, international CIO at TeleTech. "The driving force should be to have 24-hour support service, multimedia contact centres with Web, e-mail or voice. That's easier with VoIP."

Analysts also point out that VoIP eliminates the need for call centre managers to integrate voice and data networks, as they do in traditional call centres. Companies don't have to run separate infrastructures for automatic call distribution and IVR applications. VoIP also supports agents regardless of location because it's not necessary to have the traditional telecommunications equipment at each call centre.

For Roto-Rooter, VoIP helped create a system in which there are few service interruptions or delays in answering calls, says CIO Steve Poppe. In the past, the emergency plumbing company had "mini call centres" in each metro area it served, which meant agents could get backed up and callers might stay on hold. Now, three call centres in Baltimore, Chicago and Fort Lauderdale take a million calls a year.

With VoIP, the regional centres are better equipped to handle peaks in call traffic. If there is a problem in one centre, for example, the system automatically routes callers to the next available agent, wherever that agent may be.

Since installing voice over IP at the centralized call centres about two years ago, Poppe says fewer calls are dropped. "We're doing a better job of capturing every call," he says.

Poppe foresees a time when the highly trained Roto-Rooter agents will work from home as well as the company's call centres. "The location of the agent is not important," he says. "What's crucial is taking care of the customer. If you don't, they'll just move to the next company in the phone book."