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MP74091

MAPS CALL CENTRES: UK February 2001

Overview

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Companies covered include: call centres, Acxiom, Advanced Telecom, Brann Worldwide, Broadsystem, Convergys, Direct Dialog, Excell Multimedia, InTelMark, The Merchants Group, MM Group, Sitel Europe, The Telemarketing Company, Thus, Ventura, Blue Pumpkin, Citel Technologies, Davox, DTS, Genesys, IMA, Mitel Nice Systems, Royalblue Technologies, India China,

Table of Contents
Executive Summary
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TABLE OF CONTENTS

Executive Summary	1
1. Introduction	3
The Topic	3
Objectives	3
Methodology	3
Original Research	3
Problem in the Research Process	3
Definition	4
2. Strategic Overview	5
Call Centres More than Double in 5 years	5
Table 1: Number of Call Centres in the UK, 1995-2000	5
Figure 1: Number of Call Centres in the UK, 1995-2000	6
Approaching 400,000 Workstations	6
3. Industry Structure	8
its Smaller than you think	8
Table 2: Call Centres in the UK by Number of Workstations (%), 1998 and 2000	8
Figure 2: Call Centres in the UK by Number of Workstations (%), 1998 and 2000	9
Figure 3: Small Call Centres in the UK by Number of
Workstations (%), 2000	10
Table 3: Small Call Centres in the UK by Number of
Workstations (number of centres and %), 2000	10
Figure 4: Larger Call Centres in the UK by Number of
Workstations, 2000	11
Table 4: Larger Call Centres in the UK by Number of Workstations
number of centres and %), 2000	11
More than a million workers	12
Table 5: Number of Workstations in Call Centres in the UK, 2000	12
Figure 5: Number of Workstations in Call Centres in the UK, 2000	13
Figure 6: Number of Workstations in UK Call Centres (000), 1995-20	14
Table 6: Number of Workstations in UK Call Centres
(000 and %), 1995-2000	14
Set up costs not falling	15
Table 7: Call Centres — Profile by Industry Sector (%),1998 and 2000	15
Lots of Jobs, but Little Promotion	16
Table 8: Lowest and Highest Basic Pay of Customer Service
Representatives in England and Scotland (£ per year), 1997	16
Helpful Public Finance	17
From Costs to revenue	17
Limits on Cold Calling, but Electronic Contracts areOK	18
4. Call Centre Trends	20
Automotive	20
Kwik-Fit	20
Financial services	20
Barclaycard	20
Barclays	20
Britannic Assurance	21
Legal services	21
Accident Line	21
Public Sector	22
NHS Direct	22
Remote Shopping	23
DIAL	23
GUS	23
QVC	24
Telecommunications Services	24
Conduit	24
Travel and Tourism	25
Thomas Cook	25
Thomson Travel	25
5. Call Centre Suppliers	26
Convergys Leads the Outsource Specialists	26
Table 9: Leading Specialist Call Centre Outsourcing and Telemarketing
Companies, 1999	26
Table 10: Specialist Call Centre Outsourcing and Telemarketing Companies:
Ranked by Turnover per Employee and Annual Staff Churn, 1999	29
BT leads advertising	30
Table 11: Major Advertisers of Business Telecommunications Services
and Equipment (£000), 2000	31
Outsourcing and Telemarketing Specialists	32
Acxiom	32
Advanced Telecom	32
Brann Worldwide	32
Broadsystem	33
Convergys	34
Direct Dialog	34
Excell Multimedia	34
InTelMark	35
The Merchants Group	35
MM Group	35
Sitel Europe	36
The Telemarketing Company	36
Thus	37
Ventura	37
Equipment Suppliers	38
Blue Pumpkin	38
Business Systems	38
Citel Technologies	38
Davox	38
DTS	38
Genesys	38
IMA	39
Mitel	39
Nice Systems	39
Royalblue Technologies	39
Training ladder develops	40
6. An International Perspective	41
England increases its dominance	41
Table 12: Call Centres in Europe, 1997-2000	41
Figure 7: Call Centres in Europe, 1997-2000	42
The lure of India…. and china	42
7. PEST Analysis	44
Politics	44
Spreading the Work About	44
Why Not the Outer Hebrides?	44
Table 13: Locations of Call Centres in the UK (% of members of the
Call Centre Association), 1998	45
Too Much to Do	46
Flexible Working	46
Technology	47
Technology to Make Customers Mad	47
Web Integration	47
Web Tears	48
8. Consumer Dynamics	49
Introduction	49
Call Centres Fail to Win Public Approval	49
Call Centres Don’t Help Customers	49
Table 14: Call Centres — An Improvement Over Contacting a Local Branch	51
Crumbs of Comfort for Call Centres	52
Table 15: Call Centres — Remote and Too Impersonal?	53
Frustrated customers	54
Table 16: Call Centres — Efficient for Whom?	56
Young Callers Happier to Talk to Strangers	57
Chronicles of Wasted Time	57
Table 17: Call Centres — Problems of Unfamiliar Voices and Wasted Time	58
Is the Internet Preferable?	59
Doubts Over Call Centre Jobs	59
Table 18: Call Centres — Internet and Employment Attractions	60
Orders Enquiries and Complaints	61
Table 19: Call Centres — Orders, Enquiries and Complaints	62
Table 20: Call Centres — Overall Satisfaction	64
Building Barriers	65
9. The Future	66
Ethos Must Change to Customer Care	66
Where are the Workers?	67
Outsourcing: the Telecoms Hotel	68
Bypassing the Telephone	69
Fraud slows online commerce	71
Probable peak by 2004	72
Table 21: Forecasts for the Future of Call Centres in the UK, 2000-2006	73
Figure 8: Forecasts for the Future of Call Centres in the UK, 2000-2006	74
Conclusion	75
10. Sources	76
Glossary of Terms	86
Specific Definitions	86
A, B, C1, C2, D, E	86
Agent	86
APR	86
Automatic Call Distributor (ACD)	86
Auto to Manual	86
Call Blending	86
Call Centre	86
Call Centre Agent	86
Call Data Recording	87
Calling Line Identification (CLI)	87
Call Logging	87
Call Management Applications	87
Call Monitoring/Taping	87
Call Screening	87
Computer Telephone Integration (CTI)	87
Direct Dial Inward (DDI)	87
Display Screen Equipment (DSE)	87
DTI	87
Electronic Performance Monitoring (EPM)	87
Fax Back	88
FTSE	88
Full Automation	88
GDP	88
Integrated ACD/Database Reporting	88
Intelligent Queuing	88
Intelligent Software Agents	88
Interactive Voice Response (IVR)	88
Load Balancing	88
Manual to Auto	88
NHS	88
NOP	89
OPEC	89
Overflow Handling	89
Private Automatic Branch Exchange (PABX)	89
RPI	89
Screen Pop	89
Speech Recognition	89
VAT	89
Voice and Data Transfer	89
Voice Mail	89
Voice Over Internet Protocol (VoIP)	89
Voice Processing Systems (VPS)	90
WAP	90
A-Z of Definitions	90
Above-the-Line or Main Media Expenditure	90
Annual Growth Rate	90
Below-the-Line Advertising	90
Cif	90
Constant Prices	90
Current Prices	90
Fob	91
Forecasts	91
MSP	91
‘Real’	91
RSP	91
About the Sources Used	91
ACNielsen MMS	91
Prodcom	92
NOP	92
Trade Association Data	93
Trade Sources	93
Key Note Research	94
The Range of Reports	95

EXECUTIVE SUMMARY

Executive Summary

A call centre is a centralised or virtual operation in which a managed and supervised group of people answer telephones and/or make telephone calls. The latest generation of call centres are multichannel contact centres where data from telephone, e-mail, Internet, interactive TV, fax, and internal and external mail, comes together to provide the maximum possible information on each caller, or prospect. Centres using Voice over Internet protocol can link web and telephone communications in real time.

In this review of call centres in the UK, Key Note seeks to find out:

How change in telecoms technology is affecting call centre operations.

What the public thinks about call centres, and how these views may affect companies' strategy.

To answer the second question first, Key Note's National Opinion Poll (NOP) survey has some startling findings. Fewer than one person in six prefers to telephone a call centre instead of a local branch. Call centres may cut organisations' costs but they are failing to be friendly and welcoming enough. The public ring them because they increasingly have no choice. The great majority, more than six people in seven, would rather speak to people in a local office or branch. The public, by and large, do not agree that the efficiency advantages of call centres feed through to benefit them; almost six people in seven disagree. Organisations may assume that, as time passes and call centres become ubiquitous, customers will accept them because there is no alternative. Key Note's NOP research suggests that customers may demand an alternative.

Call centre operators can take some comfort from the finding that just over seven people in ten do not think that call centres make organisations too remote from their customers. However, the affluent ABs are big critics of remoteness.

Fans of automated answering services are outnumbered by those who would prefer to be answered by a real person. Two in every three want to hear a live voice. Automated voices are disliked by more women than men, with seven in ten women preferring to hear a live person.

Almost two-thirds of our sample, and more then three-quarters of ABs, said that it can be frustrating to call an automated telephone answering system. Very few members of the public think that automated answering systems are an efficient way of dealing with incoming calls.

Automated telephone answering systems are not yet fast enough or clever enough. More than half of our sample say they waste time waiting for automated telephone answering systems to connect them to the right department. Call centres are far from popular, but our sample does rate them more highly than the Internet as a means of contacting organisations. Key Note's survey indicates that call centre operators should, do more consumer research, cut call waiting times and avoid completely automated systems that deny callers access to a real person. Organisations which put technology ahead of customer satisfaction risk losing relationships with customers that may have taken years to build up.

Turning to the first question — how change in telecoms technology is affecting call centre operations — Key Note believes that, by the end of 2000, there were around 4,900 call centres with at least ten workstations; around 351,000 workstations in these call centres; and more than a million people with jobs in call centres. Most call centres in the UK — around 85% — employ fewer than 100 people, and occupy less than 700 square metres. The relative importance of `centres' with fewer than 20 agents has been rising, thanks to technologies which mean that agents no longer have to be in the same office or even the same building, although the move to multi-channel telecoms hotels is bringing a trend in the reverse direction.

A 100-seat call centre in 2000 costs approximately £3m a year to run. Typical start-up costs for a 100-seat centre are at least £500,000, around £5,000 per seat, and rising with the complexity of technology. The cost of a 2001-specification multimedia contact centre is around £20,000 per seat. Financial inducements from the public sector are an important support for new investment in call centres.

The UK leads Europe in call centres, having around twice as many as Germany or France. Companies are attracted to the UK for international call centres, because English is the world's second language. There is a growing trend to locate call centres in India, where costs are low and many skilled workers speak excellent English. This trend shows that advanced economies cannot rely on services to keep them afloat now that manufacturing has migrated to low-wage nations.

The call centre factories of today are just a passing phase in communications development. Within the next 5 years, call centre numbers are likely to reach stability and even to fall slightly, reflecting the following:

full automation of straightforward transactions, helped by stronger security systems

companies' response to public demand for knowledgeable people located where they can meet with, and speak to, customers in person.

Call or contact centres will retain an important role in handling straightforward queries, taking telephone orders from people who choose not to use a computer, interactive TV or WAP phone for an Internet-to-distribution centre link, and marketing to people who have not opted out of receiving telemarketing calls.

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Last updated by Amanda Porteous 2002