CALL CENTRES: Down with the phone bill

ALEX BLYTH

As Sara Mansfield, telephone fundraising manager, says: "We were struggling to make fundraising from DRTV pay for itself and it had become clear we needed someone full time to manage it. The greatest challenge was to manage capacity around DRTV. By developing our relationships with media and call centres, I was able to get the balance right.

"An early lesson was that dedicated operators are best for a helpline, but when you are running a major DRTV campaign, you need a large number of operators available on a shared resource so they can deal with the peaks in response.

"I have also been able to make significant improvements in our pricing arrangements. We pay per minute and allow no more than 20 seconds 'wrap-up' time per call so we never pay for idle time. I always get a breakdown of all fixed costs and do a detailed cost-benefit analysis. For instance, I look at hourly charges for script amendment. The tendency is to think that your script is good so there won't be any changes, but the fact is that there always are changes, so I make sure it is a fixed cost agreed in advance as opposed to a £50 per hour charge. I always do the training myself so I know exactly how much time they have spent in training and so how much I will be charged for it,

says Mansfield.

As the campaigns have become more and more successful, the NSPCC has invested more heavily in inbound telemarketing and so Mansfield has employed Optima to help with the management of these campaigns. She has been impressed with the service.

"With the scale of DRTV we're now doing, one agency simply wouldn't have enough operators to handle the response, so we need to use several. Optima is able to co-ordinate and manage this complex process,

she says.

Overall, Mansfield is a strong advocate of outsourced telephone fundraising.

"I would never advise anyone to attempt inbound in-house. It is more feasible with outbound calling, but we tend to use our nine in-house staff for campaigns requiring high levels of expertise, and then outsource the bigger campaigns. The telephone has an increasingly important role to play in our fundraising. With upgrades, for example, many segments of our database are less responsive to mailing, but 35 per cent will convert when contacted by telephone."

Call centres are handling an increasing volume of fundraising calls. But high costs and charging methods are putting some charities off. Alex Blyth looks at how organisations can get the best value.

Charities in Britain now outsource more than two million fundraising telephone calls each year. That's because it works. The humble phone is one of the most effective money-raising tools, and more and more charities are using it. Pell & Bales, one of the leading call centre operators, expects the market for outbound calls to grow by 6 per cent this year, and inbound even faster.

But that has presented fundraising managers with a challenge that can sometimes leave them feeling like a teenager addicted to premium-rate chat lines: it all seems like a good idea until dad gets the phone bill.

The cost of call centres is rapidly becoming a key issue for the charity sector. Many feel that they have little scope for negotiation, but as Sara Mansfield, telephone fundraising manager at the NSPCC, has discovered: "It is very possible to make significant cost savings if you know how to go about it."

There are cost issues specific to both inbound and outbound calling.

Most inbound response is from DRTV advertisements that produce unpredictable and "spiky

responses. Up to 80 per cent of responses usually come within five minutes of the advertisement being aired. The exact figures are difficult to predict, and media companies are often unhelpful by running the advertisement at the wrong time or even by giving the charity a free extra advertisement slot.

Often, either the call-handling capacity required is underestimated and so calls from potential donors are unanswered, or it is overestimated and charities pay for operators to sit idle. And the bigger the campaign, the bigger the potential loss if you get it wrong.

Ken Carlon, managing director of Optima, a subsidiary of direct marketing agency WWAV Rapp Collins which offers outsourced programme management, believes he has a way around this. "Many charities buy media based around how much capacity their call centres can handle. At best this is limiting.

We turn the equation on its head and put our clients in the situation where they can buy media without regard to call centre capacity.

"We do this by working with BT to route calls to multiple call centres so that even very large spikes can be handled by live operators, or by the very best voice recognition systems. We are often able to achieve drop rates of below 2 per cent. The call-handling costs are increased because the charity is answering more calls but, to give a recent example, a client paid £40,000 in extra call-handling costs to receive £400,000 extra revenue."

Costs are viewed very differently for outbound campaigns, as Charlotte Thrower, head of fundraising at the National Asthma Campaign, explains.

"Although cost is of course relevant, it isn't as important as the return on investment. That is determined by the quality of the callers. Our supporters are often themselves affected by asthma, so it is crucial that our callers are sensitive to the issues involved. We will always train them ourselves on the different aspects of our charity and the campaign, and I will visit the centre regularly to listen in to calls."

Melanie Oley, of Greenpeace, also looks beyond just the cost. "Use a good agency and supply it with quality data. It is also possible to get a lower price at quieter times of the year. Test scripts to see if the same results can be produced from a shorter call by maybe taking out a non-financial question. Also keep a daily watch on progress. The great thing about the phone, compared with mail, is that you can change it if it isn't working."

Melanie Jackson, of Telebusiness Consultancy, a company which manages call centre campaigns, has some further advice: "Make sure they are calling at a time when they are most likely to get hold of prospects. Ensure you provide enough data to keep them busy for the entire time you have bought. Agree the point at which it becomes unproductive to keep trying to contact someone. Doing just these three things will help to keep down costs."

Another area in which savings can be made is fixed costs. These are charged in addition to call costs and can often make up a significant proportion of the bill. Anthony Newman, direct marketing manager at Cancer Research UK, advises careful scrutiny of these costs: "If the call centre doesn't break down fixed costs into their precise components, then insist that they do so. Then insist they define each component, such as scripting, account management, training, and so on.

"For instance, you may assume that if the company's operators aren't fully trained on aspects of fundraising, such as Gift Aid, that it will train them about this. This isn't always the case and you may find that you are expected to deliver costly and time-consuming training. If they aren't explicitly charging fixed costs then they are probably absorbing it into a higher cost per call. It may be that that works better for you, but the key is to know exactly what you're paying for."

In the same way, call costs can be reduced by paying for time rather than for numbers of calls taken or made. Optima's Carlon argues this point: "The standard is to pay a per-call cost, but this is an expensive way to buy call centre services. The average hourly cost of outbound activity is around £22. If you instead agree to pay £5 per contact, the call centre is probably making 10 contacts per hour and so more than doubling its revenue."

Prank calls are a major issue, often accounting for up to 15 per cent of all inbound calls. Mansfield has found this cost can be controlled: "Although call centres still have to cover their costs for this time, many will agree a reduced rate for prank calls."

Another useful tip comes from Jackson: "Beware of the small print that says you will be charged for each call minute or part thereof. This means that if a call lasts for two minutes and two seconds, you get charged for three minutes. Over an entire campaign, that can add up to a huge unjustified cost."

Of course, the choice of call centre is also crucial. There are many to choose from and they differ considerably in approach and quality. Pell & Bales claims to have around 65 per cent of the market in charity telephone fundraising, and Karl Holweger claims that this gives it a competitive edge. "We probably speak to more supporters of charities than charities themselves do, and this scale enables us to invest in innovative techniques such as creating a unique brand and voice for individual charities,

he says. "Our Charity Gift Aid Consortium also helps reduce costs by approaching donors on behalf of multiple charities."

Kieron Kent, of Ulster-based Forward Emphasis, has a different angle, claiming the company's ethical approach to business gives it an advantage.

"Not only are our staff highly motivated, but we genuinely want each campaign to work and will be quick to let clients know if it isn't. It is more than just a bottom-line issue for us. It is an issue of accountability."

Finally, BSS is a centre that is itself a charity. As chief executive, Peter Calderbank, says: "The key to successful telephone fundraising is to find a partner that charges reasonably and that understands the issues you face. No one is more likely to do that than another charity."

A CHECKLIST FOR CALL CENTRE COST CONTROL

- Get a breakdown of all fixed costs, whether or not they are included in call costs

- Pay for time rather than a set cost per call

- Agree a reduced rate for prank calls

- Ensure you pay only for the time the operators are on the phone, plus an acceptable amount of "wrap-up

time

- Train the operators yourself and visit the site regularly to ensure that standards are maintained

- Keep a daily watch on progress and act swiftly to make any necessary changes

- Develop strong relationships between your media company, your call centre and yourself to ensure that call handling capacity matches DRTV response

- Consider employing consultants to help with initial negotiations

- Consider using a programme management company for large DRTV campaigns

- Remember that for outbound calling, return on investment is more important than absolute cost: look at the quality of the call centre, and bear in mind that more often than not you get what you pay for

- Supply outbound callers with sufficient accurate data

- Test scripts to see if they can be shortened

- Ensure calls are made at the best time and that time is not wasted trying to contact inaccessible prospects

- Consider as many call centre partners as possible, choose the one that best meets your specific needs, and work closely with them to develop a mutually beneficial long-term relationship

CASE STUDY HOW THE NSPCC KEEPS THE CALL CENTRE BILL DOWN

The NSPCC is one of the UK's major users of telephone fundraising.

Over the past three years it has been through a steep learning curve on how best to manage its inbound call centre operations.

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