How the cloud really affects call center revenue
The phenomenon known as “the cloud” has been one of the most revolutionary business advances in recent decades, especially in the call center. There is no shortage of articles and reports detailing the number of businesses that have successfully migrated their systems to the cloud, including call centers. In fact, it is expected that by the year 2020, 78% of small businesses will use the cloud. To say that the cloud has been successful as it’s entered the mainstream would be an understatement; the cloud is literally changing the way we do business.
We have shared before about the advantages of the cloud and how it impacts revenue, but for today, we’d like to zero in on the revenue question. How exactly does transitioning infrastructure to the cloud affect the bottom line?
Moving IT infrastructure from capex to opex
In years past, organizations typically had their IT resources such as servers, networks, applications and staff, on site. This was true of call centers as well: it was de rigeur for large call centers to purchase an maintain an on-premise ACD with a life expectancy of five to 20 years. This required large outlays of capital expenditures to both purchase the systems and to maintain them over the years. A cloud model eliminates the need for these resources to be housed on site, along with the significant outlay of capital.
Named agent pricing versus concurrent agent pricing
With respect to the call center cloud, there is another rather obscure pricing benefit. Many organizations are still used to the Total Cost of Ownership (TCO) model for on-premise purchases, and they try to compare apples to oranges when evaluating the value of a cloud call center. One insidious calculation that is often overlooked is the “per agent” charge. Per agent can refer to several different pricing models. Most vendors charge by named agents, which refers to every single registered agent with a unique ID. Yes, every single agent that has ever been employed by the company. While a company may have thousands of named agents, it’s entirely possible that only a few hundred would ever be logged in at the same time–but the cloud vendor still may be charging for every single named agent, regardless of actual concurrent usage.
Enter concurrent agents. Concurrent agents refers to the maximum number of agents that are logged on to the system at the same time during a given month. Finding a vendor that charges by maximum concurrent agency rather than by named agents can cut the cost of a cloud implementation by over 60%. Paying by maximum concurrent agency rather than by named agents typically offers cost efficiency because you are paying only for time the agents are actually consuming the service.
Increased business agility
One big drawback of the on-premise model is its lack of flexibility or scalability: if an enterprise invested in an ACD but then experienced a huge spike in call volume, the only solution was to purchase, install and maintain an additional on-premise ACD. And if call volume was reduced for some reason, the enterprise was stuck with an expensive, underused behemoth that required years to pay off.
A cloud model offers a much more flexible and cost effective “pay as you go” pricing model. If a call center, for example, has a temporary spike in call volume requiring additional infrastructure, a cloud call center vendor would be able to accommodate the incremental increase in call volume at a per-minute price that didn’t require a purchasing and installation cycle. This flexibility has proven to be a huge cost savings for companies investing in a cloud call center model.
Transforming the call center from a cost center to a customer loyalty center
This wouldn’t be an article about call centers without a hat tip to the old bugaboo: that the call center is almost always seen as a cost center–and those costs always need to be reduced. However, here’s a statistic that bears repeating: 68% of consumers have reported changing brands because of ONE poor customer service experience. If the call center can be used to drive positive brand experiences, the financial benefits are enormous.
Ian Kingwill wrote an excellent post on LinkedIn citing fifteen different sources claiming it costs anywhere from 3 to 30 times as much to acquire a new customer as to retain an existing one. Whichever statistics you choose to cite, almost everyone agrees that putting time and budget into customer retention saves money in the long run. And our 2015 Call Center Report indicated that empowered agents are the key drivers of positive call center experiences. Agents with access to a cloud platform that can log in from anywhere, at any time and instantly have all the resources needed to address a customer service issue at their fingertips are not only highly efficient; they are also the key drivers of customer loyalty. And a flexible cloud platform with an easy-to-use interface is a key tool to empower agents to deliver positive customer experiences.
A cloud platform, especially in the call center, provides a number of financial benefits that would have any CFO smiling. Ready to dip your toe into the cloud? Check out this case study, by which an outsourcer reduced its calls to internal IT support by 99%, resulting in a cost savings of over $300,000.