The cost of picking up the phone

July 2, 2007 4:22 PM

How much do companies spend on call centers?

I'm trying to get a sense of what companies spend on call centers -- both in the low and high ranges. The only research I've been able to uncover (that actually includes numbers) gives me an estimate of about $2 to $75 per call handled by a human being...and the prices drop as companies offer web-based solutions or as they outsource to India. This sound about right?

If so, let's take a company like Microsoft and figure out what they spend each year.

Internal support
75,000 employees making 2 tech-support calls per year @ (let's say) $20 each...$3,000,000.

External support
2 million calls to tech support @ $20 each...$400,000,000.

Sales/vendors/others
1 million calls to _____ @ $20 each...$200,000,000.

And that puts us at an annual spend of roughly $603,000,000 for call-center solutions for a huge company like Microsoft. Am I even in the right ballpark, or am I way off base here in my guesstimate? Thanks.

posted by diastematic to work & money (10 comments total)

Inbound customer service and sales call center at a large regional bank: $3.08 per call, approx 7 million calls per month. That factors everything from salary to technology.
posted by ersatzkat at 4:28 PM on July 2, 2007

Sorry - this is also based on an average handle time of roughly 3 minutes, and an ASA near 0.
posted by ersatzkat at 4:31 PM on July 2, 2007

MS outsources a large amount of their call center work, for one - both domestically and internationally.

Call centers generally cost between $3K and $5K per seat for equipment and implementation - the more agents in the center, the lower the per seat price. Labor rates vary.

The Gartner Group is widely considered to be one of the best sources for all things telecomm.
posted by TeamBilly at 4:32 PM on July 2, 2007

Well, 2 million x $20 is $40 million, and 1 million x $20 is $20 million, just for starters.
posted by dhartung at 6:13 PM on July 2, 2007

My supervisor once told me our calls cost $12 each when you factor in everything.
posted by Zarya at 6:29 PM on July 2, 2007

When I worked in a call center (insurance, customer service type things like adding/removing vehicles and anything else that you'd call your insurance company for), ours was in the neighborhood of $5.00 per call. This was in 2003, when I was working for GEICO (you can imagine how enormous our call centers were, and we were always slammed - boy was I happy to leave that department to join the Internet team).
posted by mewithoutyou at 6:38 PM on July 2, 2007

Microsoft earmarks a big part of the revenue from software sales as unearned income in order to cover future support costs. For a long time, the monkeyed with both the %, and the timing of taking it as earned income to smooth their revenue and profit picture and make it look like they had a nice smooth continuous upward trend, despite the fact that their actual revenues were actually closely tied to the upgrade cycle.

This eventually ran afoul of the SEC or some other regulatory body, and I think they were forced to be more clear in accounting for these costs and income in their annual financial filings. In other words, I'd go over their 10-K and other financials to see if it provides the info you need.
posted by Good Brain at 9:18 PM on July 2, 2007

I don't have an actual number to give, but your range seems decent. Keep in mind that different companies offer different levels of support, and how well trained/educated the employees are will affect the cost of the call. In just the US, you have stuff that ranges from the local CitiCard call center advertising $8/hr jobs to college students, to companies like Westlaw and Lexis (legal information providers) who staff their call centers with attorneys - and pay appropriately.
posted by dicaxpuella at 10:13 PM on July 2, 2007

The Canadian outsourcing call center I work for generally charges $30-$35 per phone hour or 75-80 cents per talk minute, depending on the size of the project - someone buying hundreds of phone hours per day will get a better rate than someone buying 20.

The call center my brother used to work for (again, Canadian outsourcer) charged $1 and up per talk minute and did more work with very small customers wanting only a couple of hours a day.
posted by pocams at 7:41 AM on July 3, 2007

Thank you, all. Sounds like there is no particular industry standard, but rather an approach that defines the cost: the higher the quality, the more the $. Appreciate the help.
posted by diastematic at 2:01 PM on July 3, 2007