Photo of WorldLink88 call center I managed

Many people have asked me for advise on setting up and operating a small business call center. That’s been my niche – always the small business advocate even with call centers. The industry has many descriptions of how many seats a small call center has to have. In my personal opinion based on experience, small means no greater than 100 seats. It’s a number that’s easy to manage even by yourself. Beyond that, I call it mid-sized all the way up to 999 seats where you now start setting up a more formal management team.

From the various informal Q&A sessions I’ve conducted over the past years, I decided to write down some of them in short snippets as my young and agile mind could recall.

Q: How much does it take to set up a call center?

This is always the first question asked when I’m with a group of entrepreneurs interested in operating a call center. There are two ways of setting up a small business call center: (1) buy, build and operate, and (2) lease everything and operate. The major difference is the amount of money you need to shell out. It’s like buying a house to live in and furnishing it with the fixtures you like; or renting one fully-furnished and making-do with what you have. So, if you have the cash to stay in business for more than year despite the usual income cycles of a startup business, then go for the “build and operate” model; this way, you spread your ROI which doesn’t force you to generate a high revenue. However, if you are not 100 percent sure of being in business for more than year, lease as much as everything you can. You can plan to move out in a year’s time to your newly built call center after accumulating enough cash from your income.

The frugal set up cost is about $1,500 per seat (or workstation), inclusive of every machine, furniture, fixture, painting, construction, etc. It costs more if you decide to use expensive but aesthetically good-looking materials. For leasing, expect to spend about $200 per seat, per month, but this not only includes everything you need to set up a seat but also operating expenses like rent and all utilities.

Q: How many seats should I set up or begin with?

Many people think that starting small and building or getting more seats later on is the ideal way to operate a call center. In fact, the magic number I’ve heard is five seats. This is actually unproductive and may pin down your hopes of growing in the long run. Many foreign clients want to outsource part of their business operations with no less than 10 seats. If you only had 5 or 10 seats, how would you determine if a new, prospective client’s program or campaign is better than the one you’re currently running? However, if you had 20 seats and was looking into a new campaign that required an initial requirement of 10 seats, you could test the new campaign with, say, 3 or 5 seats for a few days or a week to see if it fits the skill-set of your workforce and your revenue projections; and you can do this without any major effect on your existing client’s campaign. After a week, if the new campaign proves to be a whole lot better than the existing one, you’ve got a great problem: which do you choose? That scenario differs a lot if you only had 5 seats. With that little, it won’t make you grow – you might just get stuck where you are because you have no room to test and in effect grow your income stream to build or lease more seats.

The other opportunity when having the capacity to add more seats that in about 2 or 3 years time you’ve accumulated hundreds of seats performing beautifully, there’s a bigger chance for a foreign player to buy you out at a substantial amount. Many mid-sized call centers have been bought out in the past not only because of the operating size but the skill-set of the workforce and the types of campaigns and clients you maintain fit well into the foreign buyer’s business model.

Q: What kind of program or campaign should I get?

Most small business call centers run performance-based telemarketing campaigns. Though people always think that fixed-income, inbound-oriented campaigns like customer service and technical support are better, the reality is you have a better chance of making more money in performance-based campaigns. What people don’t realize is that inbound-oriented campaigns have more metrics that the call center must achieve; if you don’t hit your client’s metrics, you actually don’t get paid for those failures. Therefore, inbound-oriented campaigns are also performance-based. The major difference with inbound-orietned campaigns is you don’t get more money if you do better than the metrics. For telemarketing-oriented campaigns, the more you perform (i.e. selling a product), the more you earn. Whether the campaigns are easy lead generation or a full cycle, cold-calling up to closing the sale type, managing a call center that’s running sales-oriented campaigns is akin to operating a direct selling agency or group – it’s fun, involves lots of cheerleading and sales activities, employee tenure is based on pure numbers (no subjective evaluations required), and so on. And ordinary business-people and entrepreneurs understand selling a whole lot better than the intracies of inbound campaigns (what the heck is an AHT?)

Q: Where do I get campaigns?

One of your roles as a small business call center owner, delegated or done by yourself, is to keep looking for campaigns even if you’re happy running the current one – on a daily basis. Call center clients and campaigns come and go, much like any kind of business client who will favor you today but not for eternity. You have to be ready for that inevitable time when your client suddenly bolts out for varying good or bad reasons. So, business development is an ongoing, 54-week job for you; and the internet is aswarm with brokers and direct clients always looking for the right call centers to run their campaigns. A huge number of them cater to the outbound-base, sales-oriented campaigns.

When you find a prospect in the internet, establish the initial e-mail correspondence but find a way to talk to each other. Don’t e-mail each other to death. Verbal communication is always a great way of getting your gut to tell you “This is great!” or “Something’s wrong here.” You can find prospective clients and brokers in social networks like LinkedIn and its many industry-related groups, Yahoo! Groups, Google-ing specific clients and making the pitch, and so on. Like a good salesperson, ask your happy clients if they can refer you to their peers without sounding like it’s going to affect your current business relationship with them. Also market the past campaign experiences of your workforce even if they’re newly hired – these kinds of information give you tremendous weight in the type of campaigns you can get your hands on. For past and current clients, ask their permission to post their company names, logos and short testimonials on your website (yes, you definitely need one.) Alliances such as technology providers are also a good public relations items to post in your website, i.e. Dell for your computers, Cisco for your network, Microsoft for your O/S, etc. Whatever it takes to build credibility as immediate as possible for your startup call center.

Q: How do I recruit good people for my startup call center?

The fastest way to recruit is by advertising in the dailies but that’s way too expensive to do for a small business call center. Online job boards like Jobstreet.com and JobsDB.com provide less expensive ways (the last I paid for Jobstreet.com’s service was 5,000 Pesos per position). However, one online place I go to to recruit experienced agents, team leaders and supervisors is Friendster.com, not Facebook.com. Friendster.com allows me to search specific call center companies written in user profiles and message each of these people invidivually using Friendster.com’s messaging system. However, before you attempt to do this, make sure you complete your Friendster.com profile as expansive and detailed as possible because your recruits will first look at your Friendster.com profile before they answer you back. Don’t recruit blindly – place your full name, company name, full addrress, landline and mobile phone numbers, and e-mail address (for the latter, get a company domain name – only costs $11/year at GoDaddy.com and getting GMail to host your @domain.com e-mail account is free). There are hardly any agent in LinkedIn.com and way too many managers and expats who you don’t need for a small business call center. Facebook.com isn’t recruitment-friendly. Some Yahoo! Groups where call center agents congregate can also help you recruit good people.

Q: How much should I pay my new recruits?

I’ve managed telemarketing-oriented call centers and here’s my commonsense answer to this question. For me, the reason I pay someone a basic salary is for that person to hit his or her quota or functional objectives. Anything beyond that is commissionable, so to say. Now, remember that the Filipino culture has always been employee-oriented and fixed-income salary-based. So, the higher the basic pay, the more enticing you are to them. Match your breakeven levels and margins to the basic pay of your workforce. For example, if a basic pay of 13,000 Pesos equates to $30 per day, per seat, a breakeven level that includes everything from leases and amortization, up to the salaries of your supervisors and manager, add no less than 50% margin or $45 per day, per seat, that’s not bad considering that many telemarketing campaigns pay a lot more commissions than $45 on a per sale basis of their products and services. Your agents might think P 13,000 is low but the amount of sales they need to generate is also pretty low. Then, incentivize their pay with commissions beyond their quota. I usually reserve no less than 25% of margins above my $45 mark for workforce commissions; giving more becomes enticing for them. If you can show them exactly what you’re talking about on paper during the final interview of your selected few, I’m pretty sure you’ll be a great call center to work with. The bottom-line is not to be greedy and your workforce will reward you for doing so.

Now, if your call center is in the boondocks far away from the nearest 711 convenience store and accessible public transportation, you have to increase your basic pay to entice experienced people to come join you despite the location. To arrive at how much should higher pay be, go back to the equation above and determine your breakeven level, margins and the rest of the projections.

Q: Should I set up beside existing call centers or somewhere where I am the only call center in that area?

There are two things you need to consider when choosing your location: (1) available internet bandwidth, and (2) access to experienced people. For the second part, I think I’ve answered the solution to that if you are locating yourself away from major thoroughfares of public transportation (see “How much should I pay my new recruits?”) In addition, I made sure to write “experienced” because you will not have the time, money and patience to teach newbies how to sell. For the first consideration, you need to make sure that your internet service provider (ISP) in that area can bring you to the internet cloud in the smallest amount of hops as possible and in the most stable way it can. Try testing your ISP’s connectivity by using SpeedTest.net and connecting to a server in Los Angeles. If you have access to a VisualRoute software or a similar solution, the better for you to determine everything you need for your voice-oriented internet connectivity. Lastly, it’s inevitable that you provide the expected basic amenities of a call center office: unlimited hot and cold drinking water, microwave oven, a place to wash and store their eating utensils, clean restrooms, bright lighting, comfortable workstations, and a host of many minor things that make a difference.

So, location is dependent on internet access and access to experienced employees. Everything else is replaceable with something similar.

Q: What kind of technology should I get?

Technology here means the kind of tools your workforce will be using when calling or receiving calls. It is what makes your entire call center productive or otherwise. It only means that besides the skills of your workforce and the nice campaigns you’re able to get, technology is the third important piece of the trilogy of major factors that will make or break your small business call center.

Here’s where I become biased. I’ve experienced hands-on installation, implementation and operation of enterprise call center solutions, those that physically resides inside your call center network (also called “premise-based),” and I’ve used hosted call center solutions or technologies that are not residing inside your network but are accessible through the web. For a startup small business call center, I recommend going for the hosted solution because it is subscription-based – you lease the service rather than having to buy the software (which is usually expensive) and the required server-hardware (also expensive) plus the telecommunications costs of calling landline and mobile phones in the country to which you are subcontracted to call. As you work your way up to the comfort level of the day-to-day grind of call center operations, you begin to realize what it takes to make it successful and falling in love with what you do – or not. Leasing is an easy get-away solution just in case your call center operations withers away due to many reasons. Buying software and hardware is like buying a car – only after a few months, the purchase price depreciates plus the next buyer has to acquire the same maintenance agreement with the software and hardware providers you bought them from without any discounts.

Between the few players I’ve encountered in the market like Five-9, Drishti, Touchstar and many others, I’ve found Kunnect to be the most cost-effective solution that gives me about 80% to 90% of what I want (and need). Kunnect is also very user-friendly, meaning I didn’t have to hire expensive IT experts or engineers to manage it (like VicciDial and other Linux-based systems which are usually free but takes several IT people to manage it; and you can’t afford these people to be late or absent – so, you hire more as idle backup). It takes a 3-hour remote training session to learn administration and 5-minutes for the agents to understand it. With Kunnect, I was able to hire home-based Quality Assurance (QA) analysts; that’s less seats to pay for. I didn’t need a report analyst to generate half-day, end-of-day, end-of-week (and so on) reports I’m required to submit to my clients. Because Kunnect was simple to use, I sat down with my team leaders and supervisors for an hour and taught them how to manage the dialer and create the Excel-based client reports on a daily basis. If I was sick at home or vacationing in Boracay, all I need is internet access to monitor the call center, because it’s web-based. I can go on and on – the point is, it fit my bill. After 3 years of using it, Kunnect offered me to represent them in the Philippines and Asia. I accepted only because I knew how effective it was for a small business call center, I knew how to use it (even knew the shortcuts on an operational standpoint) and I just loved their solution. So, there – that’s why I wrote “Here’s where I become biased.”

If you have any further questions related to this post, please go to my Contact Page to write down your thoughts and I will try to answer it as soon as I can.

Maybe, your management team is seriously contemplating setting up a business center – an internal call center – to spearhead a full-blown marketing campaign aimed to destroy competition and capture your market once and for all?

Are you a managing director of a small or mid-sized center looking for a better way of doing things so that the speed of executing a client’s campaign is less than a day and the resulting issues will completely vanish?

Could you be the CFO or the business development head of a “larger than mid-size” call center seeking a solution to accept more campaigns without incurring a large cost of expanding your technology infrastructure?

How about the COO of a large, multinational call center who need a standby call center solution that’s capable of the entire suite of features and functions of your existing system, as part of a “Disaster Recovery” plan?

In any business like the call center business, there are three basic things people like yourself look for:

* Solutions to existing problems or issues;
* Solutions to bring the cost of doing business down some more;
* Solutions to create new businesses.

Here’s my standing offer: just give me thirty minutes of your time to find out if my solution is the solution you’re looking for. I guarantee you that in 5 minutes, you’ll know whether I should continue or not, and just let us enjoy our cups of coffee while it’s still hot. It’s not an inconvenience, not a hassle to accommodate me, not a big preparation like it was a wedding event, not much people needed to harness the message to my story. A small, simple “meet and greet” that can turn out to be a social encounter or the solution you’ve been looking for.

Like many consumer products, there’s always a “look and see” or test phase so that all theoretical analogies aside, will this solution really work on my kind of live operations? I’ll make sure you have that if you need it.

There are only two guarantees I can give you about my solution

1. It’s a robust and redundant full customer contact solution using the best technology available, and

2. It’s back by a global Tier-2 class carrier doing 350 million minutes a month or 6 billion calls a year.

Contact me today and I’ll make the time for you.