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Issue No:12/03/2

Next Issue: Real Options
Previous Issue: Building Intelligence in Budgeting


Organizations worldwide have experienced the importance of investing in mechanisms and systems to capture customer data from various interaction points for understanding their needs and preferences more closely. Database marketing has indeed come of age today, with organizations realizing the need to apply sophisticated analytics on the collected data, to formulate marketing strategies and campaigns.

Call centers are fascinating sociotechnical systems in which the behavior of customers and employees is closely intertwined with physical performance measures. In these environments traditional operational models are of great value —and at the same time fundamentally limited —in their ability to characterize system performance.

While there has been extensive research and application of data mining techniques over customer data, this article focuses on what challenges exist in ensuring optimal resource utilization towards running a profitable telemarketing operation. This is especially important with increased competition among BPO players, with service providers scrambling to configure processes to improve the bottom-line. With regulatory measures affecting profitability of telemarketing services, the bottom line becomes more crucial.

The key operations processes fall under: Planning, Rostering and Transportation Management.

Telemarketing is bracketed under two types: Inbound and Outbound. The functioning of the planning and rostering processes varies between inbound and outbound. The manpower and technology planning are long term operations which focus on forecasting of the right manpower sizing, and the technology required for configuring seats, depending upon dialing plans over a period of say 3-4 months. Also, for instance, ensuring the right amount of bandwidth (based on peak requirements), need to be dealt with differently for both types of processes.

Inbound Telemarketing:
Inbound telemarketing operations are designed to cater to customer responses to promotional and advertising campaigns. Technical support services also qualify under inbound telemarketing, when cross-selling and up-selling opportunities are explored. These are usually the impulse responses of direct marketing efforts. Managing an inbound telemarketing operation involves the following:
  • Accurate prediction of volume / type of responses for each time period
  • Design of shifts (timing and duration) based on response patterns
Inbound campaigns may have more variable shift patterns depending upon the response volumes. When the service level is based on number of seats manned at different time periods, regardless of responses, the staffing becomes less complex. In these cases, the manager's challenge is to ensure that the design of the shift pattern is such that these service levels are adhered to while maximally utilizing available seats.

In inbound campaigns, allocation of weekly offs, and leaves becomes more complex. Since its typically not possible to follow the same pattern of allocation across all employees, the hourly manpower requirements change frequently. Therefore, mechanisms need to be provided to allow for swapping/bidding of offs for upholding employee motivation, which translates into better customer service.

Decision Support Systems aimed at adding intelligence to inbound processes need to be tailored specifically to address the above issues. A new strategy being followed by inbound call centers is to initiate outgoing calls to particular profiles of customers, whose calls had been abandoned. In such an event, the staffing strategy needs to optimally allocate seats for the inbound and outbound volumes. Decision Support systems provide the powerful ability for the manager to judge different scenarios and make the most informed and optimal decision.

Outbound Telemarketing:
Sales efforts driven from calls that are initiated from the call center to customers, come under the outbound category. These calls can be for existing customers for cross-selling / up-selling new product/service offerings or for lead acquisition, in which a list of leads is given, and the objective is to convert leads to customers.

The first step is to profile customer data and understand purchase behavior of customers within lead lists. Based on these, call tables then need to be designed to build a dialing strategy. The formulation of the dialing strategy is the most important element in managing an outbound telemarketing operation. The dialing strategy reflects insights on the customer profiles, and is formulated to ensure that service goals (Penetration, Sales Per Hour) can be met with optimal utilization of manpower and technology resources.

The dialing strategy entails:
  • The percentage of dialing hours (or proportion of leads) to be completed within each period.
  • The design of the number of duration of shifts during the rollout.
  • The split required between shifts across weeks in the rollout. (If more sales are expected in the later shift, the manager would increase the number of agents in that particular shift as the rollout progresses and the list becomes more exhausted).
  • The number of weekly offs which need to be given to ensure that service levels are met while HR compliances are adhered to.
Decision Support Systems for an outbound process would generate optimal agent staffing norms across all shifts in a rollout, given the above inputs. The key challenge in outbound telemarketing is managing the lead list, as opposed to inbound telemarketing where flexbility to scale up manpower plans to response patterns is most important.

The sales conversion rates are typically higher in inbound efforts, since the initiative is driven from the impulse of the customer to purchase (except in cross-selling and up-selling opportunities). Generating sales conversions in lead acquisition campaigns given a list of customer leads is typically a more challenging and stressful for the employees. This aspect needs to be looked at while staffing each of these processes to ensure that the right agent profile is associated with the right campaign. This assures maximal customer service while also controlling attrition rates.


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