The lingering question in the minds of many business owners is whether it would be better to build their own center for business processes such as telemarketing, for example, or seeking the services of a third party by outsourcing. Realities on the ground, though, are clear on the trend. At least in the travel industry, travel company call centers are all outsourcing their operations to cut back on their costs and increase their revenues.
Travel companies such as Park Resorts, Expedia, Travelocity, Continental Airlines and Air Berlin have all outsourced some or all of their call center needs. The main reason for this move, of course, is to cut back on costs since many of these travel companies have eroding profits because of rising in-house expenses.
How Effective is a Third Party Solution?
The amount of savings you can rake in from partnering with the right BPO firm is overwhelming. In the travel industry, for example, a company can cut back on its call center costs by approximately 20% while at the same time increasing its revenues by 10% to 15%. How is this possible? One important advantage of outsourcing travel call center operations is the ability to manage workforce more effectively and in accordance with the seasonal nature of bookings in the holidays.
According to experts, a company which decides to build its own call center and employs about 300 full-time workers can end up with as much as $6.8 million in costs per annually including costs for offices. The costs are dizzying especially if you do the math and realize that each in-house employee could cost $11.66 per hour or $22,741 a year.
Using our example once again, a travel company would, on average, convert bookings at a rate of 25%. A leading outsource call center solutions provider can increase that to 32% to 35%– something which is very substantial in these tough economic times.
More and more travel agencies are feeling the necessity to outsource. Expedia, for instance, struck a deal last year to operate a call center, which Thomas Cook previously owned, in Accrington. The call center previously hosted accounts such as Swiss Travel Service, Tradewinds and Cresta. Expedia maintains that outsourcing their call center requirements doesn’t have an impact to the customer experience. By rigorously selecting their BPO partners and setting strict performance goals, the company is able to deliver a very high quality of service to its customers.
Another company that realized the disadvantages of running its own center is hotel chain Ramada Jarvis. According to the company, they were losing thousands of calls each year and about half of their customers decided against calling back before they outsourced their call center operations. Furthermore, they also had difficulty recruiting the right people and couldn’t operate until 11:00 PM.
If you have problems similar to this, then availing of third party solutions may just be the perfect answer to your problem. Think twice, even thrice if you are seriously planning of building your own center. Remember that facts on the ground indicate this is not the wise thing to do, especially in this sour economic climate.