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AskTog, July, 2002

Call Center: Profit or Loss?

How Call Centers can Make or Break Companies

Traditionally, call centers have been answer centers, providing just that: answers. They have been strictly an output device, an unfortunate, but necessary expense.

More and more companies, however, are looking at their call centers as two-way devices, both supplying customers with information, as well as feeding information back into the company itself, both from the call center's experience and their customer's suggestions. They have watched call center costs either stabilize or go down and company profits go up.

A far larger number of companies, though, seems bent on defending to the death against any useful information that might flow back from their call centers.

Many of them have cut themselves off by outsourcing their support operations to marginal outfits that hire an endless stream of minimum-wage workers, setting them in front of a Windows box, and instructing them to type into the company's website the exact same queries the customers have already tried on their own.

Aladdin Systems

One company that appears to have followed the outsourcing course is Aladdin Systems, makers of Spring Cleaning, among other products. I recently bought a copy of Spring Cleaning as part of a four-applications-in-one CD-ROM. As is common nowadays, the CD-ROM was really just a software license, since all the applications were obsolete by the time the disk had passed through the distribution channel. Three of the applications, from Symantec, were instantly updatable, but not so Aladdin's Spring Cleaning.

The application sent me to a website, where I was to put in the serial number of the app. I did so, around five times. It didn't work. Calls to their outsourced customer service center went something like this:

"Hi, I bought Spring Cleaning two days ago and the version I got was obsolete. I need an update."

"Fine. What is your serial number." The operator then typed it in to the exact same web page I had tried and, lo and behold, it didn't work for her, either. "The serial number didn't work."

"Yes, I know that, but I still need the update."

"That will be $39.95. Can you give me your name as it appears on the credit card?"

"I just bought this two days ago."

"Uhuh. That will be $39.95. Can you give me your name as it appears on the credit card?"

On later calls, I tried to shortcut the process:

"Hi, I bought Spring Cleaning two days ago, and it is out of date. I need the update, but my serial number doesn't work on the website. I don't think I should have to pay twice in the same week for the same software."

"You tried the serial number in the website?"


"And it didn't work?"


"Uhuh. That will be $39.95. Can you give me your name as it appears on the credit card?"

After trying this three times with the same result, I asked to speak with a supervisor. I was transferred to the robot lady who explained to me how important my phone call was, then said in her multiple-gender voice:

"There are SEVENTEEN people in the queue ahead of you. The approximate wait time is NINETY-NINE minutes."

The worst of it is that I would bet anything the program only clocks up to ninety-nine minutes. Heaven only knows how long the wait might actually have been.

My total time spent trying to get the upgrade on that first day was one hour, fifteen minutes with most of the time, of course, spent on hold (thank heavens for speaker phones).

I had no intentions of paying again for software I had just bought, so I gave it a shot two days later. Total time: one hour, 30 minutes. The good news? By happy accident, after playing Adventure in the bowels of some phone number I got ahold of some way (I was shotgunning at this point, just trying everything), I actually reached a real-life Aladdin person, who immediately and courteously emailed me a download address for a free update. (Don't ask me for the number; I haven't a clue.)

I suppose you could argue that Aladdin has set things up perfectly. Not only are they (presumably) saving money by outsourcing, they are probably often managing to sell the same product twice! The problem is that I will avoid Aladdin products like the plague in the future. Even if they fix their (lack of) support problems, I won't know, because I won't be back.

If you outsource, you've got problems. The outsourcing company has no natural incentive to help drive down the number of incoming calls. That will only drive down their profits. Unless you set up incentives, they will likely only help perpetuate your problems, driving up your costs.

If you do outsource, you must:

  1. Develop incentives that will encourage feedback.
  2. Ensure that the call center people have at least some training.
  3. Call up your own 800 number once in a while.

When I did get in touch with a supervisor at the outsource center on the second day, she had absolutely no idea how I might get a free upgrade for my two-day-old product. She was a total dead end.

As for my attempt to contact her on the first day, 99 minutes to speak with a supervisor is outrageous! Either Aladdin has no performance requirements at all, or they are failing to monitor their call center activities.


Other companies use their own people, but train them to avoid at all cost any and all intake of information. (I picture classrooms of new operators being taught to stick their fingers in their ears, while saying "La la la la la la la" until the customer stops speaking.)

Lexus USA is a good example of a company that is highly defended against any outside influence that could help them overcome adversity. Lexus sells high-quality motor cars, some of the finest in the world. They accompany their quality product with quality service. The entire ownership experience has been carefully crafted to be luxurious, from the time you enter the showroom to the time you ultimately sell your car.

The dealer may still attempt to screw you on price and unnecessary add-ons, but, to follow the metaphor, at least he'll take you dining and dancing first. However, the most pleasant surprise comes when it's time to get your car serviced. It is done on time, and you are given an actual, no-cost loaner--not a rental from some outfit 3 miles and an hour wait away.

They also maintain a call center with polite, well trained operators, only an 800 number away. They will be more than happy to help you with any problem you have that they already know about.

And that is all they will do.

Their little problem

Which brings me to Lexus's little problem. They sell a marvelous SUV, built on a car chassis, but armed with all-wheel drive. It offers the soft comfort of a luxury car, while delivering a fair level of excitement for those of us no longer in our teens. The car works well, very well--unless you tow it.

If you tow an RX-300, you run a high risk of destroying the transmission. Of course, that's true of many cars, but the RX-300 was designed to be towed. It said so right in the manual, or at least it did until this year, after the little problem became a big, expensive problem.

Towing doesn't seem like much of an issue, unless you are among a growing number of people who, like myself, drive a motorhome. We motorhomers tow cars behind our rigs and, until this transmission problem became apparent, many of us were drawn to the RX-300.

My own RX-300, after being towed more than 12,000 miles in all conditions, works just fine. That's because, first, I've followed the manufacturer's towing instructions explicitly. Second, and just as importantly, at least for me, I've eliminated an important source of human error, for a total cost of less than $2.00. That would seem like a happy ending, and indeed it was, until I tried sharing my solution to the human error problem with Lexus.

The call center had no interest in hearing anything I had to say. It's not that they don't want to hear my solution; they don't wanna hear nothin' about nothin'. They are as heavily defended against incoming information as a Middle-Ages European castle with the drawbridge up and the archers in formation.

The Lexus call center appears to have only two jobs:

One of these jobs is wrong.

The proper functions of a call center

Your call center is vital to you company's continued success. Your people should be charged with several jobs:

  1. Answer questions.
  2. Pass people on to a higher level if you are not able to help them, either within the call center structure or, upon occasion, to others within the company.
  3. Build FAQ's and other website self-help information sources based on frequency and seriousness of calls, thereby constantly reducing the total call volume.
  4. Collect bug reports.
  5. Assign priorities to bugs based on frequency.
  6. Identify those bugs/problems costing the call center the most money and quantify how much money that is.
  7. Pass along potential solutions to known, baffling problems.

As for point six, telling the engineering manager at a huge corporation that 273 people called in the last week about a certain new bug may not elicit much response. Do the math and point out, for example, that it is taking an average of 47 minutes to handle each call, which works out to just under $19,346.50 per week in support costs, annualizing to $1,000,818 per year. That's the sort of figure that can make even the largest company decide that maybe this bug should be fixed right away.

Your results may vary. Perhaps you get 5000 people calling in, and it only takes five minutes per call. Perhaps you work for a smaller company where even $30,000 in lost profits means a lot. Whatever your situation, your call center should be providing hard numbers with dollar signs in front of them.

(A rough rule of thumb for figuring cost per hour per employee is salary per hour times three.)

...he recoiled in horror...

I can't know how many of the other functions the Lexus call center is performing. However, I can report that my experience has been that they will not even escalate technical questions from a potential buyer, let alone a potential solution to a known problem.

Even after I managed to glean the name of an employee that had been involved in the transmission debacle, the call center operator absolutely refused to offer me her email address.

Actually, he recoiled in horror: "I certainly wouldn't want anyone giving out my email address!" No, you wouldn't want that! It's so important that company employees remain cut off from everyone in the outside world, except spammers.

I appreciate that a number of helpful people have likely called Lexus with solutions involving protecting the transmission by wrapping the driver's head in tinfoil. So you handle a few nuts. It is still cost effective if the tenth or even twentieth guy happens to have a solution that could deliver a million dollars directly to your bottom line.

(By the way, I was attempting to give them the solution for free. I've driven Toyota/Lexus cars for 30 years and they are a good company that has taken good care of me. I hate to see them in this fix, and I hate to see them stop selling to motorhome owners, since the car is such a good match. Ironically, the fact that I wanted no money probably raised their defenses even higher--they probably feared I must have my head wrapped in tinfoil even as I spoke. Who else in America would give anything away for free?)

Note that of the tasks outlined above, four of them support feedback into the organization. Call center personnel should see their primary job as giving engineering enough information to put the call center out of a job. Certainly in the computer field, this bears no actual risk, as engineering sees their jobs as manufacturing enough new bugs to keep the call center fully employed.

Sun Microsystems has had a call center that complies with the seven steps I have mentioned for several years. They see themselves and their users in a form of partnership, and critical, well-digested information constantly flows from the call center back into engineering. Engineering, in turn, accepts that information with open arms, making it a key input in the decision-making process. It has saved them millions of dollars.

My story does have a happy ending, of sorts. I finally got through to a real person at Lexus by asking my dealer for the phone number of the district manager in my area. I explained my findings to a woman who has direct knowledge about transmissions and motorhome towing. She listened to my solution, but responded that there's clear evidence that the transmissions are blowing on their own without human intervention.

She went on to tell me about an oil pump I can install that should reduce or eliminate the primary cause of transmission failure.

That's a piece of information the answer center should have given me, but they could not, because it apparently wasn't in their little book of facts. Since they seem to escalate nothing, they have no way of introducing such information into their system.

2003 update: The Lexus lady was correct about the non-human-error causes of transmission failure. In the next 1500 miles of travel, we went through two transmissions, both promptly replaced by Lexus at no cost. We are now towing a Toyota Camry. The Lexus is back in California.

For further reading on the subject, check out

Reader Response

Chris McEvoy wrote:


the behaviour you ask for will never come from call centres because they were set up to take control away from dispersed retail locations, cut salaries and provide a standardised consumer experience.

If you want to deal with real people then you will have to frequent message boards and discussion groups where brave employees can be found explaining policy and giving advice anonymously.

I suggest you spend a day in a call centre, and see how the operators have to ask for permission to use the toilet whilst their every action is being recorded and analysed to produce arbitrary metrics that are used to humiliate and control the operators.

Next time you ring a call centre, imagine you are speaking to someone chained to a bench, having to row to the beat of an overseer (you know the film), and then you may understand why you are getting such bad service.



Actually, things were quite different at the Sun answer center. Employees were well-trained, decently paid, and treated with respect. In turn, they treated callers with respect. The employees were an invaluable source of information as a result.

Some readers have argued that the Sun situation was unusual, in that the callers tended to be system administrators, rather than disgruntled drivers. True enough, but hardly an excuse for turning what should be a two-way street into one-way heading out.

The "treat employees like dirt" industrial business theories that heralded the start of the 20th century have long since been discredited. Unfortunately, the practices themselves, in many isolated areas such as this, seem to be lingering on forever.

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