Outbound call centre from scratch. How achievable is this?

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plan2014

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  • #1
    Hi guys
    Long time reader and just joined up. My company currently generate online leads through various websites for compensation claim companies. We have been going about 6 months and are doing ok. We have just started promoting a new product and want to get behind it in a big way. We sell our leads to a very well established company who are big players in the compensation claims sector. They pay us really well and we would like to capitalise on this.

    I want to expand and start a small outbound call centre up to generate even more leads. I however have no experience at this at all. I have done a lot of research and found some good deals on VOIP dialers etc. Anyway I have got some figures written down and just want to know from someone who has experience how achievable these are.

    I estimate they will speak to an average of 70 people a day and convert 5 into leads. (is this achievable?)

    We are paid £80 a lead

    Working on the basis i pay my staff £6.50 an hour to work 40 hours a week. plus £500 a month commission for hitting their targets. A member of staff would cost £1540 a month

    MONTHLY OUTGOINGS

    £1500 office rent, rates and electricity
    £15400 staff wages
    £1000 dialer and calls
    £1000 data (an estimate)

    £18900 TOTAL

    MONTHLY INCOMING
    5 leads a day per agent = £400
    x 10 agents = £4000
    monthly = £88000

    Using average data i have from other lead companies that sell leas to this particular company only 70% of these leads will complete so that leaves

    £61600 TOTAL

    £61600 - £18900 = £42700 profit

    Do these figures stack up? Have i missed anything out that i need to pay for? Am I being optimistic in expecting an average of 5 leads from 70 contacts? please any help you could give me would be greatly appreciated. thanks
     
    cjd

    cjd

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    • Nov 23, 2005
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  • #2
    The only way to work this out is to test it. Spend a month doing it and seeing what you get - then you're not guessing. Your estimate of one leed from 14 calls seems hopelessly optimistic unless you have a hot list - I would expect a random list of cold calling to be much, much, lower.

    On the cost side, whatever your worst of estimate of costs is, add 25% for what you haven't thought of.

    Don't waste money on an office - with VoIP your people can work from home.
     
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    Aloha Telecom

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  • #3
    Regarding call costs you will have to find a specialist operator who deals with high mass outbound calls. That will be a serious challenge as not many operators will allow it. Operators do not take too kindly to customers floody there network with unanswered call attempts.

    For the amount of agents you have, i'd recommend about £300/mth for call spend (less if its to UK landline only). (this is based on a pattern of 30% mobile, 70% landline). You will also need to factor in the costs of access to the telephone preference database which from last time I checked was around £2500. However an adhoc licence may sound appropriate (I think they still provide these).

    From seeing how some of our clients run calls centres, I thinking your paying a little too much. It depends what kind of turn over of staff your looking for.

    The dialer software you can factor in at about £50-75/mth for the kind of agents you have (i.e only 10).

    However 5 leads from 70 contacts? I'd say more like 2-3 per 100.

    Expect these kind of stats.

    Out of 1000 call attempts.
    200 incorrect numbers (based on a database within 12 months).
    400 goto voicemail/unanswer

    That leaves 400 people to have a chat to.

    Now 350 will tell you where you can put it (usually within 10 seconds of the call.)

    Leaves 50.
    25 will listen, but say no.
    25 will want more information and want to take things further.

    Word of caution. This kind of job is extremely tiring, stressful and takes a special kind of person who can accept insult after insult, but still be fresh for the next call. It will take time and patience, however with a bit of time, there is no reason why it cannot succeed.

    Best of luck
     
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    plan2014

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  • #4
    Hi thanks for your replies. I am only buying the best most responsive data and will only employ the best sales people. I plan on filtering out the weak agents through starting them on trials. I have had a discussion with another company who is pushing the exact same product and these are the figures they have gave me. We are not asking people for money, we are offering to give them it, in compensation they are due. Surely this must be a positive factor?
     
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    SwindonSteve

  • #7
    £6.50 is what you pay a beginner. Commission is only part of the equation. Either way, it's a terrible package doing a terrible job.

    The 'best salespeople' will not be interested in the type of work you do.

    It's a call center for a claims management firm. You will attract people who need a job, not people who see it as a career. You will employ through agencies. You will have a high staff turnover.

    Your figures are over-optimistic and your line of business is all about numbers.
     
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    SwindonSteve

  • #9
    Okay, I've got my coffee now, I realise my replies haven't been constructive for which I apologise. Here's my take on it.

    Your type of work, and I hate to say it because I loathe them, was made for a recruitment agency. That's where you need to start.

    Let's face it, the work is mind-numbing and the average lifespan of a telesales call center worker is around 15 months. I would take the churn and burn approach in the early days and an agency is best placed to manage that for you. You really don't want to lumber the business with costs of being an employer at this stage. The agency will also be able to advise you on the going pay rates and commission rate for your local area.

    With regards to the pay, the point I was, rather clumsily trying to make is that you won't be attracting top talent so get that idea out of your head. The pay is one reason and the job itself is another. You can put as much lipstick on it as you want but be realistic!

    Finally, assuming that there are no further miss-selling scandals waiting to be discovered, what kind of longevity does a business like this have? Have you got a plan to expand your scope onto other types of campaign?
     
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    fisicx

    fisicx

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  • #10
    plan2014 said:
    Am I being optimistic in expecting an average of 5 leads from 70 contacts?
    Click to expand...
    Yes.

    The whole compensation claim things annoys the hell out of people so you might only get a couple of leads per day per operative. And as suggested, you are only going to get people desperate for a job who need some dosh while they look for something less soul destroying.

    Your current business seems to bring in the money, can't you just expand what you already do?
     
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    fisicx

    fisicx

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  • #12
    Like all things it was lucrative for a while but now everyone seems to be doing it this cash cow is drying up.

    What do you do when someone cold calls you at home?
     
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    beasty

  • #14
    It is good to dream to get going, but your numbers seem to be the stuff of fantasy.

    10 employees? Try finding 1

    That 1 employee might not be profitable

    I will eat my hat, after first buying a hat if you find 10 people to work at this rate, earning themselves 1500 whilst adding 3500 each to your profit.

    Anyone with half a brain (If you hope to attract people with half a brain) would see, they could compete with you in their second week as a one man band.

    Anyway.. you will not find 10 people who sit and do this job properly for a day let alone a month.

    The way foward is to find a TELESALES manager.. PAY as much as you can afford and let them take care of this as part of their job, turnover for this work will be insanely high. There may be a 15 month average but your average AVERAGE I would expect to be UNDER 10 weeks! Training, getting up to speed, making a little money and pissing off will the the routine.

    I have done this kind of stuff at all levels from being the grunt on the phone to running sweatshopish centres with over 200 staff, feel free to PM me.

    I will absolutely guarantee if you do get 2 or 3 people, you will have them call in sick with

    Dead aunt
    no internet
    apocalypse is due to happen but only in my street
    sick
    sick again
    stop drinking you might not be so sick
    i already booked holidays i am not coming in
    bus was late so long story short i am not working
    Dead parrot
    Dead cat
    Taking parrot to vet, he might revive him
    Taking cat to the Chinese they might cook him
    etc
     
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    plan2014

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  • #15
    why on earth would i not be able to find call centre staff to work for £6.50 an hour plus commission? I have already posted a job posting and had 11 applicants!!! Plus these people with half a brain (as u put it) dont have or arent interested in setting up the infrastructure to do this themselves. They want a job, thats it, am i missing something here?
     
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    SwindonSteve

  • #16
    plan2014 said:
    why on earth would i not be able to find call centre staff to work for £6.50 an hour plus commission? I have already posted a job posting and had 11 applicants!!! Plus these people with half a brain (as u put it) dont have or arent interested in setting up the infrastructure to do this themselves. They want a job, thats it, am i missing something here?
    Click to expand...
    You're missing the fact that if you pay peanuts, you will get monkeys.
     
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    SwindonSteve

  • #20
    Okay mate, let's have a look at your fag packet calculations.

    You fail to take into account employer NI contributions, Auto-Enrollment of pensions on the horizon, the costs associated with administering the aforementioned, not to mention the umpteen other costs involved with being an employer.

    All of this is based on the assumption that you can employ someone on a pittance and a carrot, without them taking the attitude that that even if they don't hit target, at least they have a few quid in their pocket for going through the motions.

    You are, as Beasty said, dreaming.
     
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    beasty

  • #21
    11 applications will mean if you are lucky 1 decent person who might stick with you, they may be part monkey of course and require time.

    Give them all a job and I would bet you have 1 person after 3 months

    I am not posting to knock you,I am telling you what does actually happen, it should help you when your targets are not quite what you had hoped.

    11 applications means zip, of course you can make a profit of other people doing sales for you but it is NEVER as easy as saying i have 20 staff and they all work for this and i pay them that (low amount) each month i get this, you WILL always be recruiting, always be training and always have people who suck as well as the odd person who does not.

    I wish you luck as I know what it takes to get this done

    You want staff to stick with you and actually do deals, you need to make it worthwhile.
     
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    SwindonSteve

  • #23
    Nobody's lambasting you, just trying to provide a bit of realism to your 'plan'.

    What you want to achieve at the end of the day is a profitable business but the way you're talking here, you will achieve nothing but failure.

    Rethink.
     
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    beasty

  • #24
    On the assumption you retain a single good sales person, I can offer them 10 calls a week that will make them 500 quid.. you can add that to your incentives.


    If you PM me a number I will give you a buzz tomorrow and let you know how I can help.

    Everyone wants help:)
     
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    plan2014

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  • #25
    It's the way u are handing your criticism out to me like I'm a monkey. I'm not even 30 mate and I run 2 successful businesses, I drive a 40 grand car and own 3 houses. I have a brain in between my ears and was just bouncing a few ROUGH figures around to see what people in this field thought. if this is the type of help u get on these forums I think I'll pass. Shame really cos I would probably have a lot to contribute
     
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    dev99

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    Oct 4, 2006
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  • #28
    plan2014 said:
    why on earth would i not be able to find call centre staff to work for £6.50 an hour plus commission? I have already posted a job posting and had 11 applicants!!! Plus these people with half a brain (as u put it) dont have or arent interested in setting up the infrastructure to do this themselves. They want a job, thats it, am i missing something here?
    Click to expand...

    You have had some very candid advice here. It may not fall in line with your thinking but that's reality.

    You will not get anyone that is able to sell for £6.50/h. talking from personal experience.

    You will probably go through maybe 100-150 staff over a period of 2-3 months before you can find your 10 staff.
     
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    fisicx

    fisicx

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  • #30
    Nope, because they want a 40 grand car and 3 houses as well. They will work for you until something better comes along. It's not the money, it's the awful job. Do telesales yourself for a week and you will understand.

    Ps, I've got a 5 grand car and half a house and I'm over 50. But I don't like to boast about it.
     
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    patientlady

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  • #31
    Hi plan2014
    Unfortunately the reality of call centers is exactly as described above and worse. I know of a very large organisation, up north that has spent a fortune on setting up a new call centre. Pay £16,000 basic plus commission (more than £500 per month). The staff have been coming and going quicker than the milkman. Initially they wanted 14 staff but only ever manage to get 4 or 5 on the floor.
    This is almost for me in top ten worst jobs to do.
    As said above, as you are doing well with what you have could you expand on that at all?
     
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    beasty

  • #32
    The issue is not the base pay it is the opportunity if the maximum opportunity is not that great you will have very inexperienced and therefore mostly very poor and demotivated staff.

    Telesales and sales people who know they can sell look at OTE and then look beyond it, if you know you are good if it is not a much bigger number you will not look at it.

    Anyone with any kind of experience will be asking for proof of others getting their bonuses and so you might consider it is important not to just fill chairs.

    Call centres especially start ups should find a great manager as you will need a leader who knows how this works, low end sales staff need pushed daily, hourly and after each call!

    There is a key difference between you and them, you have VISION, you can see past the sales targets to a successful business and this has you pumped up (All entrepreneurs have this) but SALES staff do not have vision, they have a target and meed MOTIVATION, they are very different and MOTIVATION fades, VISION lasts longer...

    You obviously have experience elsewhere but a call centre needs run correctly or it fails.

    You get good at sales you find there are more opportunities available than there are days in the week, so medium term you will not retain anyone, unless they have chronic inertia issues.

    Get one great staff member and figure out a way to keep them, then try and find another couple.

    Walking into a call centre with 8 lets say mostly new, mostly ineffective staff will put off any potential good employee who walks in and they will be dragged down by the group.

    You NEED to take small steps and be as creative as possible with sales targets and financial opportunities, you will hit problems not considered as always and with a single to small group you can more easily work around.

    This post was powered by very strong coffee:D
     
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    Tim Jones

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  • #33
    Hi there

    I own a small call centre myself so I can very quickly relate to what you are saying although our area of specialisation is now more B2B.

    With the experience that we have built up over the last 3 years, which includes a B2C project with similar call volumes, I would suggest that your original numbers could be challenged by the following :-

    1. Average leads per day - 5. Now I'm sure that you will have agents who will hit this number, but the average will in practice be far lower - especially with 10 on the phone - my best realistic guess would be to base the average on 2 to 3 per day.

    2. Data - you will need circa 100 records per agent per working day - so this is circa 20,000 records per month. Make sure you speak to a reputable data company and ensure that you are clear about the criteria that you are selecting, but get a price per month before you embark on this.

    3. Rent - tell us where you are, and we will move in next door - we must be paying over the top here :) (We pay approximately double your budget for rent and rates).

    4. And most importantly, be very sure about your cash flow and payments from clients. It could very quickly all go wrong if this is not carefully managed.

    Good luck whatever you decide to do, but we would certainly pilot this with a much smaller number of heads before scaling up to 10 people on the phones.

    All the best.
     
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    fisicx

    fisicx

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  • #39
    It's not the money!

    It's the job you are asking them to do. As explained the number of sales is going to be very low (so commsion is goiung to be low) and the depressing nature of the job means they won't stay for long.

    This is isn't something you can just throw money at and expect to work. You are going to need supervisior, managers and recruiters to look after training and churn.
     
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