Pros and cons of using a pay-per-call service in the call center

Pros and cons of using a pay-per-call service in the call center

I am researching a pay-per-call approach for a 12-person at-home and in-office call center. Can you tell me a little bit about the different types of pay-per-call approaches and which are most effective?

    Requires Free Membership to View

    Login

    When you register, you'll begin receiving targeted emails from my team of award-winning editorial writers on the latest customer relationship management (CRM)and call center technology issues today. Our goal is to keep you informed on the hottest issues facing this fast-changing industry.

    Hannah Smalltree, Editorial Director

    By submitting your registration information to SearchCRM.com you agree to receive email communications from TechTarget and TechTarget partners. We encourage you to read our Privacy Policy which contains important disclosures about how we collect and use your registration and other information. If you reside outside of the United States, by submitting this registration information you consent to having your personal data transferred to and processed in the United States. Your use of SearchCRM.com is governed by our Terms of Use. You may contact us at webmaster@TechTarget.com.

Pay-per-call is a pricing scheme where the customer pays an outsourcer or service provider a set fee per call. Pay-per-call is not an approach favored by most outsourcers, unless they can establish parameters that will ensure a profit. Outsourcers are looking to make a certain dollar amount per customer or campaign and need to set a price that allows them to hit the necessary margins comfortably. So, if they agree to a pay-per-call scheme, they are going to ask you to commit to a call volume, average handle time and service level that will produce a consistent revenue stream. Vendors do not want to do pay-per-call when call volumes have large monthly fluctuations.

There are many types of pricing schemes used by companies today, including:

1. Pay-per-call – a fixed fee for all calls.

2. Pay-per-minute – the customer pays a negotiated rate for every minute that the call center agent or the outsourcer's IVR handles a call. (The rate for agents and IVRs is generally different.) This pricing scheme is often used when agents are shared between campaigns or customers.

3. Hourly rates – the customer pays a set hourly rate for dedicated agents. The number of dedicated agents is also defined in the contract, although both parties (outsourcer and enterprise) can modify that figure during the contract period.

4. Variable compensation – upside goals are built into the compensation scheme. The enterprise establishes revenue or conversion goals and if the outsourcer exceeds them, they are rewarded with some form of pre-negotiated bonus. Of course, if the outsourcer misses their targets, they are penalized.

5. Pay for success – the enterprise pays the outsourcer only for successful outcomes. Outsourcers do not like this approach, as it always pits them against their customers and sets up an adversarial relationship.

Keep in mind when negotiating that outsourcers know how much they need to make on an hourly basis, and will be happy to work with you in creating a traditional or creative pricing scheme, as long as they can make their margins.

Editor's note: Learn the pros and cons of outsourcing the call center.

This was first published in April 2009

Join the conversationComment

Share
Comments

    Results

    Contribute to the conversation

    All fields are required. Comments will appear at the bottom of the article.
    Back to top