Why (most) contact centers fail to make profit
Updated: Jul 17
Most contact centers don’t have a great business case. This is mainly due to a few faulty assumptions.
There is a widespread pre-conception that customer service/support can’t be profitable. This is wrong.
There’s also a belief that you shouldn’t do sales through customer service, if it’s f.eg. technical support. This is also wrong.
There’s also a strong belief (stemming from the 80’s) that you can’t do both service and sales at the same time. This is so wrong that it baffles the mind. Especially with today’s view on business.
But this is not why most contact centers fail to make a profit. It’s simply that no one thinks it can be done, which means that no one tries.
I can give countless examples of extremely profitable contact centers. Most insurance companies, banks and card providers have profitable contact centers. There are several e-tailers and telco providers that do it, but you’ll also find it in media and publishing.
It all comes down to the initial business case. Most companies haven’t developed a business case for their contact center. For me this is quite bizarre, considering that even in traditional industries their customer support/service cost as ratio to their revenue is 10-20% of each order. There is a huge potential for both increased revenues and increased efficiency.
In other articles we’ve shown how to increase profitability through working with specific phenomena such as increased FCR/quality, lower contact debt (better real-time management) and other measures. Our strongest recommendation is however to start with a professional business case, as one would with any department within an organization. This will determine whether your contact center will be a cost center – or ultimately a profit center.
Have great week!