NA Contact Center Study 2006

8/3/2019 NA Contact Center Study 2006

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North American

Contact Centers in 2006:

The State of the Industry

(1st edition)

Principal Analyst: Steve Morrell

AUGUST 2006


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Contents

5 Chapter One: Methodology and Background

6 Definitions and figures9 Distribution and use of this report

10 Chapter Two: The Structure of the North American ContactCenter Industry: Market Size

11 US contact centers and agent positions by size12 US contact centers by vertical market15 US agent positions by vertical market

17 US contact center size by vertical market18 Canadian contact centers and agent positions by size19 Canadian contact centers by vertical market

21 Canadian agent positions by vertical market23 Canadian contact center size by vertical market

24 Chapter Three: The Structure of the US Contact Center

Industry: Geographical Location

24 A note on Canadian contact center distribution

25 The US contact center industry structure by region26 The US contact center industry structure by division29 The US contact center industry structure by state

35 Chapter Four: Market Forecasts to 2010

28 US contact centers, 2004-201030 US agent positions, 2004-2010

32 US vertical market forecasts, 200935 US employment forecasts, 200942 Canadian contact centers, 2004-201043 Canadian agent positions, 2004-201044 Canadian vertical market forecasts, 2009

46 Canadian employment forecasts, 2009

47 Chapter Five: Inbound and Outbound Activity

48 US: inbound/outbound activity by size of contact center

50 US: inbound/outbound activity by vertical market52 US: inbound call volumes54 Canada: inbound/outbound activity by size of contact center55 Canada: inbound/outbound activity by vertical market

57 Canada: inbound call volumes58 The future of outbound calling


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60 Chapter Six: The Use of IVR and Outbound Dialers in NorthAmerican Contact Centers

61 IVR (interactive voice response) in North American contact

centers66 The future of self-service68 Use of outbound dialers in North American contact centers

61 Chapter Seven: Contact center management gender

73 Commentary: The State of the Industry in 2006

79 APPENDIX: ABOUT CONTACTBABEL


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List of tables

Table

number

Page

number

Description

1 7 Statistical assumptions

2 8 Vertical market definitions and examples

3 12 US agent positions and contact centers by size of contact center

4 14 US contact centers by vertical market

5 16 US agent positions by vertical market

6 17 Mean average US contact center size by vertical market

7 19 Canadian agent positions and contact centers by size of contactcenter

8 20 Canadian contact centers by vertical market

9 22 Canadian agent positions by vertical market

10 23 Mean average Canadian contact center size by vertical market

11 25 The US contact center industry by region12 28 The US contact center industry by division

13 33 The US contact center industry by state

14 36 US contact centers, 2004-2010

15 38 US agent positions, 2004-2010

16 39 US contact centers by vertical market, 2009

17 40 US agent positions by vertical market, 2009

18 41 US contact center employment changes by vertical market, 2006-2009

19 42 Canadian contact centers, 2004-2010

20 43 Canadian agent positions, 2004-2010

21 44 Canadian contact centers by vertical market, 2009

22 45 Canadian agent positions by vertical market, 2009

23 46 Canadian contact center employment changes by vertical market,

2006-200924 48 US: outbound activity by size of contact center

25 49 US: outbound agent positions (equivalent) by size of contact center

26 51 US: equivalent outbound agent positions by vertical market

27 52 US: inbound call minutes by vertical market

28 52 US: inbound call minutes by size of contact center

29 54 Canada: outbound activity by size of contact center

30 55 Canada: outbound agent positions (equivalent) by size of contactcenter

31 56 Canada: equivalent outbound agent positions by vertical market

32 57 Canada: inbound call minutes by vertical market

33 57 Canada: inbound call minutes by size of contact center

34 62 Use of IVR by vertical market

35 63 Use of IVR by size of contact center36 69 Use of outbound dialer by vertical market

37 70 Use of outbound dialer by size of contact center

38 71 US contact center management gender

39 72 Canadian contact center management gender


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Chapter One:Methodology and Background

North American Contact Centers in 2006: The State of the

Industry is the 1st in a series of annual reports looking at the structureof the industry from an analytical and statistical viewpoint.

This piece of market analysis is based upon a foundation of fact: thenumerical analysis of a database of over 3,000 US and Canadian contactcenters, called theNorth AmericanContact Center Directory.

The North American Contact Center Directory is one of the largestand most comprehensive databases available of North American contactcenters and their management. Furthermore, it is updated and expandedat least twice per year.

Further information on the North American Contact Center

Directory and how to purchase it can be found at

www.contactbabel.com/usccd.html

This report, North American Contact Centers in 2006: The State ofthe Industry analyses each record of this database, segmenting by sizeof contact center, vertical market and geographical location in order toprovide the reader with unparalleled accuracy in understanding theindustry.

However, ContactBabel realizes that while the North American ContactCenter Directory is a good starting point for analysis, it does not coverevery single contact center operation in the US and Canada.

Therefore, we have estimated to the best of our knowledge the proportionof each size of contact center which is included within the database, andmultiplied upwards to achieve what we believe to be the most accuratemeasurement of the North American contact center industry available, aswell as using vendor shipments and statements to get to a top-line figurewith which we are confident.

Considering that most other market sizing reports rely upon consensus

forecasting or vendor-stated shipments, rather than bottom-up countingof the base blocks, it is to be hoped that the reader will acknowledge thesuperior accuracy of this report.

Please be aware that this methodology works best as a relative measure,rather than as an absolute count of operations or agent positions. This isbecause multiplying everything upwards from a base of solid fact will keepthe relative proportions the same, but will miss anomalies which theoriginal figures did not show. For example, if there is a large contact


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center in a specific small region which has not been included in the NorthAmerican Contact Center Directory, multiplying the figures upwardsfrom this region will not take this into account. Therefore, we would askthat readers please use these any absolute figures only as

approximations, especially where segments are very small.

Although North American Contact Centers in 2006: The State ofthe Industry is not perfect, we are the only analyst firm looking

at the North American contact center industry from a sample of

over 3,000 contact centers and around 750,000 people.

Definitions and figures

Throughout the report, the phrase contact center will be used to refer tomultimedia contact centers (deal with email and Internet contacts as well

as telephony), call centers (traditional, telephony operations) andcustomer service centers, sales centers etc. Although not all of theseoperations will be dealing with non-telephony customer contact, using

contact center as the generic term will help to concentrate thoughts onthe future of the industry.

In cases where figures have not been rounded up or down, this does notimply that figures should be taken to be accurate to the nearest

agent position or contact center. Like every other analyst firm,ContactBabel uses a measure of subjectivity and opinion in order to arriveat a conclusion, and we believe that the reader should be aware of thevarious processes which figures have been subjected to in order to reach

a final number. Therefore, numbers - especially at geographical level -have not been massaged in order to seem more authoritative: please bearin mind that most of these figures are products of initial true raw data,multiplied upwards and segmented into smaller pieces in order to bringout the patterns or themes which ContactBabel believes are important toshow.

Each year, we attempt to map the contact center industry as accurately aswe can at the time. In some cases, new information comes to light thatwas previously unavailable: we choose to report data as accurately aspossible at the current time, rather than to be forced into supporting olddata which may now be proven to be less accurate.

A major segmentation within this report is size band. No contact centerwith fewer than 10 agent positions (seats) was considered within

this report. Although theNorth American Contact Center Directoryhas around 200 mini contact centers with fewer than 10 seats, it was feltthat we could not accurately estimate the number of operations of thissize which we do not have within the database, so the veracity of thereport would be diminished if this size band were included. Other analystsrarely take this size band into account, so any comparisons between


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analysts estimates would be more difficult for our readers were we to doso.

The following table shows the size bands and the average size that each

contact center within the size band was assumed to have.

Table 1: Statistical assumptions

Agent positions (range)Assumed average size within range

(agent positions)

10-24 14

25-50 29

51-100 59

101-150 126

151-200 160

201-250 212251-500 306

501-1000 602

1000+ 1,206

Apart from contact center size band, the other main segmentation isvertical market, sometimes known as business sector. A brief definition ofeach follows.


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Table 2: Vertical market definitions

Vertical market Sub-sectors

Engineering andConstruction

Building suppliers, builders

Entertainment andLeisure

Hotels, ticket booking

Finance Banking, insurance, credit cards, loans, debt collection, creditchecking agencies

Food and Drink Brewers, food suppliers

IT Technology sales and service (external, no internal companyhelpdesks included); ISPs

Manufacturing Manufacturers (often product support and queries)

Medical Pharmaceuticals, healthcare

Motoring Manufacturers, rental, assistance

Outsourcing andTelemarketing

Telemarketing companies and large full-service outsourcers

Retail and Distribution Home shopping, catalogue, parcel carriers, logistics, supportfor physical shopping outlets

Printing andPublishing

Newspaper and magazine advertisements, subscriptions etc.

Public Services Government, federal, state, local, agencies, emergencyservices

Services Non-physical service offerings to public and business; other

Telecoms Mobile and fixed line operators, sales and support

Transport and Travel Public transport information and booking, travel agents

Utilities Gas, electricity, water

Analysis for this report was started in June 2006 and completed in August2006.

To comply with the usual protocol of market analysis, years are reportedas year-end (i.e. the 2006 figures are reporting the state of the industryas it will be in December 2006).

All revenues are in US$.


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Distribution and use of this report

This report is written for the community of people interested in thepresent and future structure and shape of the North American contact

center industry. Amongst others, these may include:

Contact center solution providers: hardware, software & services Outsourcers Contact center managers and directors Customer service directors and those involved in contact center

strategy Consultants Journalists

Analysts

Real estate companies Training providers

New entrants to the contact center industry Government bodies Academic institutes Contact center industry organisations

Regional & national development/inward investment agencies

Although this report is free of charge, no sharing, swapping,

gifting, photocopying or other dissemination of this report must

occur without prior written permission from ContactBabel.

All figures, text and graphs are ContactBabel.


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Chapter Two:The Structure of the North American Contact CenterIndustry: Market Size

There are presently 56,900 contact centers in the US and 3,950 inCanada

The US industry is made up of 3.07m agent positions and the Canadianindustry of 290,500 agent positions

Large contact centers (with over 250 agent positions) employ 34% ofUS staff, despite only accounting for less than 4% of physical contactcenter sites

The retail and distribution sector has most contact centers (19%) and

with finance, manufacturing, outsourcing & telemarketing, telecomsand utilities also important sectors

The mean average contact center size is 54 agent positions in the US,and 74 agent positions in Canada


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US Contact Centers and Agent Positions by Size

As the following graph shows, there are a very large number of contactcenter operations in the sub-100 agent position size bands, with a

significant number of agent positions.

Both the numbers of agent positions and contact centers decline as thesize band is increased, until the realm of the large contact center (over250 agent positions) is reached. Here, a relatively small number of largeoperations employ many hundreds of thousands of people in total,creating a disproportionately large pool of employment in the largest fewhundred contact centers: this is how most people think of the contactcenter industry, and is also the place where any impact of offshoring ishaving its largest effect.

US agent positions and contact centers by size range, 2006

0

5,000

10,000

15,000

20,000

25,000

30,000

10-24 25-50 50-100 100-150150-200

200-250250-500

500-

1,000

1,000+

Agent position size band

Contactcenters

-

100,000

200,000

300,000

400,000

500,000

600,000

Agentpositions

Contact centers

Agent positions


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Table 3: US agent positions and contact centers by size of contactcenter

Size band(agentpositions)

Number ofcontact centers

% contactcenters

Number ofagent

positions

% of agentpositions

10-24 25,250 44.4% 358,000 11.7%

25-50 16,750 29.4% 493,000 16.1%

50-100 8,650 15.2% 513,000 16.7%

100-150 1,900 3.3% 239,000 7.8%

150-200 1,400 2.5% 224,000 7.3%

200-250 950 1.7% 201,000 6.5%

250-500 1,200 2.1% 367,000 12.0%

500-1,000 480 0.8% 289,000 9.4%

1,000+ 320 0.6% 386,000 12.6%

Total 56,900 100.0% 3,070,000 100.0%

US contact centers by vertical market

Each business sector (vertical market) has its own distinct character andplace within the contact center industry.

The retail and distribution sector has the largest number of contactcenter operations. This vertical market includes catalogue/direct mailretailers (which tend to be the largest in this sector), package couriers,retail support for large physical stores, and niche retailers. This area hasbeen growing rapidly, supported by the massive increase in onlineshopping, which requires telephone support.

Financial services organisations run the second-most contact centers ofany business sector. This vertical market consists mainly of banks, creditcard companies, insurance companies, building societies, collectionagencies and credit reference agencies. The first three sub-sectors areamongst the largest users of contact centers, and many of the largestoperations are within this vertical market. Several suppliers of contactcenter solutions have estimated that the finance sector provides between40% and 50% of their total revenues. However, this sector has shown the

most inclination to move offshore, to take advantage of labour costdifferentials.

Manufacturing companies account for 11% of North American contactcenters, although they are generally smaller operations, dealing withcustomer support and sales to other companies rather than the public.The US still has a strong manufacturing base, which means that thecontact center support required is proportionally larger than that found inother mature contact center industries, such as the UK.


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The transport and travel vertical market includes travel agents (bothHigh Street and web-based), public transport companies, airlines, and car

hire firms. 11% of the UKs contact centers are run by these types ofcompany.

The telecoms vertical market accounts for 8.3% of operations, but has amuch bigger impact on the industry as a whole, as many telecoms contactcenters are a considerable size (having a mean average of 79 agentpositions). This vertical market includes both fixed line and mobileoperators.

The services sector is a broad category taking in those contact centerswhich do not fit in easily elsewhere. It includes home security, directoryservices, legal services and home improvements companies.

The IT sector is made up of both technology sales and external helpdeskoperations, as well as ISPs (internet service providers). This report doesnot include the large numbers of internal helpdesks which supportemployees.

The outsourcing and telemarketing vertical market consists oftelemarketing companies and full-service outsourcers, both inbound andoutbound.

Public services contact centers cover a very wide area, from local, stateand federal service supply, through to taking 911 and non-emergency

calls. The sector is experiencing significant investment in its contactcenter operations as it tries to catch up with the private sector and allowcitizens to benefit from longer hours and shorter wait times.

Printing and publishing contact centers include newspaper andmagazine subscription and outbound advertisement operations, along withbook publishers.

The utilities sector comprises those businesses selling water, fuel andelectricity, although such companies increasingly try to market newservices (such as internet access and telephony) to their customer base.


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US contact centers by vertical market

Finance

17.1%

Food and Drink

2.2%

IT

5.7%

Manufacturing

11.0%Retail and Distribution

19.3%

Services

11.0%

Telecoms

8.3%

Transport and Travel

4.8%

Printing and Publishing

1.3%Public Services

6.6%

Motoring

0.5%Outsourcing and

Telemarketing

5.1%

Medical

1.3%

Entertainment and

Leisure2.6%

Utilities

2.6%

Engineering and

Construction0.4%

Table 4: US contact centers by vertical marketVertical market Contact centers Percentage

Retail and Distribution 11,000 19.3%

Finance 9,750 17.1%

Manufacturing 6,250 11.0%

Services 6,250 11.0%

Telecoms 4,750 8.3%

Public Services 3,750 6.6%

IT 3,250 5.7%

Outsourcing and Telemarketing 2,900 5.1%

Transport and Travel 2,750 4.8%

Entertainment and Leisure 1,500 2.6%

Utilities 1,500 2.6%

Food and Drink 1,250 2.2%

Medical 750 1.3%

Printing and Publishing 750 1.3%

Motoring 300 0.5%

Engineering and Construction 200 0.4%

TOTAL 56,900 100.0%


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US agent positions by vertical market

The financial services sector has the most agent positions, at almost500,000, with the retail & distribution sector close behind. Telecoms, and

outsourcing & telemarketing sectors both have over 300,000 agentpositions, and between them, these four leading sectors account for over55% of agent positions.

US agent positions by vertical market

0 100,000 200,000 300,000 400,000 500,000 600,000

Finance

Retail and Distribution

Telecoms

Outsourcing and Telemarketing

Manufacturing

IT

Services

Public Services

Utilities


Entertainment and Leisure

Medical

Food and Drink


Motoring

Engineering and Construction

Agent positions


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Table 5: US agent positions by vertical market

Vertical market Agent positions Percentage

Finance 494,270 16.1%


Telecoms 377,610 12.3%



IT 239,460 7.8%

Services 224,110 7.3%





Medical 58,330 1.9%

Food and Drink 33,770 1.1%Printing and Publishing 27,630 0.9%

Motoring 21,490 0.7%

Engineering and Construction 3,070 0.1%

Total 3,070,000 100.0%


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US contact center size by vertical market

The mean average sizes of contact centers by vertical market are listedbelow, although care should be taken when analysing these figures. The

mean average may not be the most representative measure of averagecontact center size: dividing total agent positions by total number ofcontact centers gives a mean average industry size of 54 agent positions,yet 73% of contact centers have fewer than 50 agent positions. Using amean average approach, the relatively few very large operations skew theresults upwards.

Table 6: Mean average US contact center size by vertical market

Vertical market Mean average size (agent positions)

Outsourcing and Telemarketing 108Utilities 106

Telecoms 79

Medical 78

IT 74

Motoring 72

Transport and Travel 57

Finance 51

Public Services 47

Retail and Distribution 43

Entertainment and Leisure 43

Manufacturing 39

Printing and Publishing 37

Services 36

Food and Drink 27

Engineering and Construction 15

Mean average (all vertical markets) 54


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Canadian Contact Centers and Agent Positions by Size

As with the US, there are a large number of contact center operations inthe sub-100 agent position size bands, with a significant number of agent

positions.

Generally, the numbers of agent positions and contact centers decline asthe size band is increased, until the realm of the large contact center(over 250 agent positions) is reached. Here, a relatively small number oflarge operations employ many people, creating a disproportionately largepool of employment in the largest contact centers: this is how mostpeople think of the contact center industry.

Canadian agent positions and contact centers by size range, 2006

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

10-24 25-50 50-100 100-150 150-200 200-250 250-500 500-1,000 1,000+

Agent position size band

Contactcenters

-0

10,000

20,000

30,000

40,000

50,000

60,000

Agentpositions

Contact centers

Agent positions


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Table 7: Canadian agent positions and contact centers by size ofcontact center

Size band(agentpositions)

Number ofcontact centers

% contactcenters

Number ofagent

positions

% of agentpositions

10-24 1,855 47.0% 40,500 14.5%

25-50 1,100 27.8% 45,000 15.5%

50-100 550 13.9% 48,000 16.3%

100-150 125 3.2% 17,500 6.2%

150-200 90 2.3% 16,500 5.7%

200-250 70 1.8% 16,500 5.7%

250-500 100 2.5% 40,500 14.0%

500-1,000 40 1.0% 31,500 10.5%

1,000+ 20 0.5% 34,500 11.6%

Total 3,950 100.0% 290,500 100.0%

Canadian contact centers by vertical market

There are a lot of similarities between the Canadian and US economies(see the section above), which impacts upon each contact center industryin a similar way.

However, the outsourcing and telemarketing industry in Canada has ahigher proportion of contact center operations than the in US (8.9% vs5.1%). In large part, this is due to the work carried out by lower costCanadian outsourcers on behalf of US businesses, as a lower-risk form ofoffshoring.


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Table 8: Canadian contact centers by vertical marketVertical market Contact centers Percentage

Retail and Distribution 650 16.5%

Finance 625 15.8%

Manufacturing 375 9.5%

Outsourcing and Telemarketing 350 8.9%

Services 350 8.9%

Public Services 325 8.2%

Telecoms 300 7.6%

IT 250 6.3%

Transport and Travel 200 5.1%

Utilities 150 3.8%

Entertainment and Leisure 125 3.2%

Food and Drink 100 2.5%

Medical 50 1.3%



Motoring 25 0.6%

TOTAL 3,950 100.0%

Canadian contact centers by vertical market

Finance

15.8%

Food and Drink

2.5%

IT

6.3%

Manufacturing

9.5%


16.5%

Services

8.9%

Telecoms

7.6%


5.1%

Entertainment and

Leisure3.2%

Engineering and

Construction

0.6%

Utilities

3.8%

Medical

1.3%

Motoring

0.6%

Outsourcing and

Telemarketing

8.9%

Public Services

8.2%


1.3%


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Canadian agent positions by vertical market

As in the US, the financial services sector has the most agent positions, atover 45,000, although the outsourcing & telemarketing sector is in second

place in Canada, with retail & distribution close behind.

Canadian agent positions by vertical market

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Finance



Telecoms

IT

Public Services

Manufacturing

Utilities


Services


Medical

Food and Drink


Motoring


Agent positions


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Table 9: Canadian agent positions by vertical market

Vertical market Agent positions Percentage

Finance 45,250 15.6%



Telecoms 32,500 11.2%

IT 23,750 8.2%





Services 15,000 5.2%


Medical 6,000 2.1%

Food and Drink 3,750 1.3%Printing and Publishing 2,000 0.7%

Motoring 1,250 0.4%


Total 290,500 100.0%


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Canadian contact center size by vertical market

The mean average sizes of contact centers by vertical market are listedbelow, although care should be taken when analysing these figures. The

mean average may not be the most representative measure of averagecontact center size: dividing total agent positions by total number ofcontact centers gives a mean average industry size of 74 agent positions,yet 75% of contact centers have fewer than 50 agent positions. Using amean average approach, the relatively few very large operations skew theresults upwards.

Table 10: Mean average Canadian contact center size by vertical

market

Vertical market Mean average size (agent positions)

Medical 120

Outsourcing and Telemarketing 118

Utilities 117

Telecoms 108

IT 95

Transport and Travel 79

Finance 72

Public Services 65

Retail and Distribution 62

Entertainment and Leisure 56

Motoring 50

Manufacturing 47

Services 43

Printing and Publishing 40

Food and Drink 38

Engineering and Construction 20

Mean average (all vertical markets) 74


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Chapter Three:The Structure of the US Contact Center Industry:Geographical Location

3.7% of the USs employed population work within the contact centerindustry

The South of the US has most agent positions, yet the contact centerindustry is least vital to that region in terms of the proportion of theemployed population working in the industry

The Middle Atlantic and East North Central (aka Great Lakes) divisionshave the most contact center staff, with over 900,000 working in eachdivision

In terms of the importance of the contact center industry to thedivision, there is a significant North-South divide, with Northerndivisions relying more heavily on the contact center industry foremployment

Although we advise caution when viewing state-wide contact centerestimations, it seems that Texas, New York and California have themost agent positions and contact centers

A note on Canadian contact center distribution

This chapter does not consider the geographical distribution of contactcenters in Canada. This is because the North American Contact CenterDirectory, upon which this chapter is based, does not contain the volumeof Canadian contact centers which we need in order to be confident ofdistribution by state/province level. Neither is Canada divided up intomeaningful and significant regions or divisions, in the way of the US,which would allow better estimations (as in the rest of this chapter).

For those requiring some idea of the geography of the Canadian contactcenter industry, we tentatively hypothesize from our directory ofoperations that Ontario contains by far the most contact centers and

agent positions, with around 75% and 85% respectively. Quebec andAlberta seem to have around 15,000 agent positions each, with BritishColumbia being the only other significant area of contact center activity ataround half of these agent positions.

We must again urge readers to note the extreme uncertainty of thesefigures, which are included only for completenesss sake.


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The US contact center industry structure by region

Region is the top-level of US geographical segmentation. Very widely-used, it divides the US into four distinct large regions.

Table 11: The US contact center industry by region

RegionAgent

positions JobsContactcenters

Workingpopulation

% employedin contact

centers

Averagesize

(APs)West 583,159 991,370 12,246 32,392,000 3.1% 48

North-East 810,399 1,377,678 13,344 26,359,000 5.2% 61

Midwest 791,838 1,346,125 14,230 32,724,000 4.1% 56

South 884,604 1,503,827 17,080 50,235,000 3.0% 52

TOTAL 3,070,000 5,219,000 56,900 141,710,000 3.7% 54

Although the South has most agent positions and contact centers, theimportance of the contact center industry to this region is less thanelsewhere, employing only 3.0% of the employed population. Contactcenters are especially important in the North-East especially aroundNew York and parts of New England.


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The US contact center industry structure by division

This section of the report analyses the US contact center industry by ninedivisions. A division is a group of geographically similar states, used

widely within the US and is a generally recognised official grouping. It hasgreater granularity than the regional level provides, but this means thepossibility of inaccuracy further increases.

WA

OR

CANV

ID

AZ

UT

MT

NM

WI

WY

ND

CO

SD

NE

KS

TX

OK

IO

MN

AR

MO

LA

MI

IN OH

KY

TN

MS

AK

IL

AL

WV VA

NC

SC

FL

GA

NY

PA

ME

Contact centers by US division

Contact

centers

7.5k


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WA

OR

CANV

ID

AZ

UT

MT

NM

WI

WY

ND

CO

SD

NE

KS

TX

OK

IO

MN

AR

MO

LA

MI

IN OH

KY

TN

MS

AK

IL

AL

WV VA

NC

SC

FL

GA

NY

PA

ME

Agent positions by US division

500k

Agent

positions


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Table 12: The US contact center industry by division

DivisionAgent

positions JobsContactcenters

Workingpopulation


centers

Averagesize

(APs)Pacific 352,292 598,896 8,864 22,536,000 2.7% 40

Mountain 230,868 392,476 3,381 9,856,000 4.0% 68

Middle Atlantic 549,324 933,851 8,746 19,160,000 4.9% 63

New England 261,074 443,826 4,598 7,199,000 6.2% 57

West North Central 256,423 435,919 4,599 10,387,000 4.2% 56

East North Central 535,415 910,206 9,631 22,337,000 4.1% 56

South Atlantic 450,405 765,689 8,609 26,790,000 2.9% 52

East South Central 108,596 184,613 2,241 7,932,000 2.3% 48

West South Central 325,603 553,525 6,231 15,513,000 3.6% 52

TOTAL 3,070,000

5,219,000

56,900 141,710,000

3.7% 54

WA

OR

CANV

ID

AZ

UT

MT

NM

WI

WY

ND

CO

SD

NE

KS

TX

OK

IO

MN

AR

MO

LA

MI

IN OH

KY

TN

MS

AK

IL

AL

WV VA

NC

SC

FL

GA

NY

PA

ME

Contact center employment by US division

5%

% of workingpopulation employed

in contact centers


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An interesting pattern thrown up here is the North-South divide along theimportance of contact centers to the division. The southern divisions despite a large number of agent positions and contact centers in theSouthern Atlantic division do not rely on the contact center industry to

the same extent as the New England and Middle Atlantic divisions, forexample.

Unsurprisingly, the raw contact center and agent position distributionseems to follow the general areas of high population the North-East,Texas, Eastern Seaboard, California and Great Lakes.


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The US contact center industry structure by state

Please note the following figures are estimations of contact center andagent position numbers at state level. Due to the nature of statistical

analysis, operating at such a granular level may decrease the level ofaccuracy. For example, the presence or absence of a very large contactcenter may be largely statistically insignificant at the national or regionallevel, but may play an important part in determining state-wide data.

For this reason, we recommend that readers exercise extreme cautionwhen using figures from the following section. We are hesitant aboutanalysing specific state-wide data, due to the nature of the small samplesizes at this level of granularity, so there is no commentary of thissection.

WA

OR

CANV

ID

AZ

UT

MT

NM

WIWY

ND

CO

SD

NE

KS

TX

OK

IO

MN

AR

MO

LA

MI

IN OH

KY

TN

MS

AK

IL

AL

WV VA

NC

SC

FL

GA

NY

PA

ME

Contact centers by US state

2,000

Contact

centers


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WA

OR

CA

NV

ID

AZ

UT

MT

NM

WI

WY

ND

CO

SD

NE

KS

TX

OK

IO

MN

AR

MO

LA

MI

IN OH

KY

TN

MS

AK

IL

AL

WV VA

NC

SC

FL

GA

NY

PA

ME

Agent positions by US state

200k

Agentpositions


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WA

OR

CA

NV

ID

AZ

UT

MT

NM

WI

WY

ND

CO

SD

NE

KS

TX

OK

IO

MN

AR

MO

LA

MI

IN OH

KY

TN

MS

AK

IL

AL

WV VA

NC

SC

FL

GA

NY

PA

ME

Contact center employment by US state

6%

% of working

population employed

in contact centers


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Table 13: The US contact center industry by state

StateAgent

positions

JobsContactcenters

Workingpopulation

% employed

in contactcenters

Average

size(APs)

Alabama 30,628 52,068 825 2,069,000 2.5% 37

Alaska 3,079 5,234 80 316,000 1.7% 38

Arizona 75,333 128,066 1,219 2,710,000 4.7% 62

Arkansas 29,717 50,519 570 1,295,000 3.9% 52

California 241,041 409,769 6,722 16,747,000 2.4% 36

Colorado 52,463 89,187 845 2,419,000 3.7% 62

Connecticut 72,811 123,779 1,120 1,728,000 7.2% 65

DC 18,327 31,157 177 277,000 11.2% 104

Delaware 12,645 21,497 138 420,000 5.1% 92

Florida 136,463 231,987 2,476 8,329,000 2.8% 55

Georgia 78,656 133,714 1,395 4,346,000 3.1% 56Hawaii 2,089 3,551 138 617,000 0.6% 15

Idaho 5,018 8,531 177 711,000 1.2% 28

Illinois 185,074 314,626 3,243 6,101,000 5.2% 57

Indiana 37,279 63,374 924 3,035,000 2.1% 40

Iowa 38,768 65,905 727 1,584,000 4.2% 53

Kansas 13,830 23,510 590 1,401,000 1.7% 23

Kentucky 35,270 59,959 590 1,878,000 3.2% 60

Louisiana 10,972 18,652 334 1,923,000 1.0% 33

Maine 27,953 47,520 431 677,000 7.0% 65

Maryland 20,312 34,531 767 2,814,000 1.2% 26

Massachusetts 97,205 165,249 1,848 3,203,000 5.2% 53

Michigan 38,487 65,429 1,258 4,754,000 1.4% 31

Minnesota 62,585 106,395 1,376 2,829,000 3.8% 45Mississippi 11,877 20,191 216 1,237,000 1.6% 55

Missouri 86,219 146,572 1,199 2,862,000 5.1% 72

Montana 2,353 4,000 157 474,000 0.8% 15

Nebraska 46,018 78,231 432 949,000 8.2% 106

Nevada 18,599 31,619 275 1,167,000 2.7% 68

New Hampshire 23,513 39,973 373 706,000 5.7% 63

New Jersey 117,255 199,334 1,926 4,236,000 4.7% 61

New Mexico 16,243 27,613 177 887,000 3.1% 92

New York 256,495 436,041 4,619 8,944,000 4.9% 56

North Carolina 53,333 90,667 1,297 4,106,000 2.2% 41

North Dakota 3,962 6,735 177 347,000 1.9% 22

Ohio 128,708 218,803 2,418 5,550,000 3.9% 53

Oklahoma 17,767 30,204 511 1,665,000 1.8% 35

Oregon 48,660 82,721 806 1,746,000 4.7% 60

Pennsylvania 175,574 298,477 2,201 5,980,000 5.0% 80

Rhode Island 28,243 48,014 275 541,000 8.9% 103


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State

Agent

positions

Jobs

Contact

centers

Working

population


centers

Averagesize

(APs)

South Carolina 29,692 50,476 590 1,939,000 2.6% 50

South Dakota 5,042 8,571 98 415,000 2.1% 51

Tennessee 30,820 52,395 609 2,748,000 1.9% 51

Texas 267,147 454,150 4,815 10,630,000 4.3% 55

Utah 49,612 84,340 413 1,214,000 6.9% 120

Vermont 11,349 19,293 550 344,000 5.6% 21

Virginia 87,651 149,007 1,376 3,798,000 3.9% 64

Washington 57,423 97,619 1,120 3,110,000 3.1% 51

West Virginia 13,325 22,653 393 761,000 3.0% 34

Wisconsin 145,867 247,973 1,789 2,897,000 8.6% 82

Wyoming 11,247 19,120 118 274,000 7.0% 95

TOTAL 3,070,000

5,219,000

56,900 141,710,000

3.7% 54


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Chapter Four:Market Forecasts to 2010

Between 2006 and 2010, the US contact center industry will shrink by2.8% in terms of contact centers, and by 2.0% in agent positions. TheCanadian industry will grow by 5.0% and 8.6% respectively

The North American contact center industry will experience a net lossof over 55,000 jobs between 2006 and 2010

Within the US, the finance, outsourcing and telecoms vertical marketswill shed over 110,000 jobs between 2006 and 2009

In Canada, the outsourcing, public sector and retail/distribution sectorswill add almost 26,000 jobs between 2006 and 2009

Investment in technology in US contact centers will increase by 11%over the 2006-2010 period, moving from $3.36bn to $3.73bn

Canadian contact center investment will grow more sharply, from $314in 2006 to $385 in 2010, a growth rate of over 22% in that timescale


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US contact centers, 2004-2010

Table 14: US contact centers, 2004-2010

Year Contact centers % growth Average size (agent positions)

2004 58,300 -1.0% 53.4

2005 57,600 -1.2% 53.6

2006 56,900 -1.2% 54.0

2007 56,300 -1.1% 54.2

2008 55,900 -0.7% 54.4

2009 55,600 -0.5% 54.5

2010 55,300 -0.5% 54.4

The years between 1990 and 2000 saw the greatest increase in thenumber of contact centers opening. Today, most companies who can

benefit from a contact center have already done so, and are - in the main- either adding new agents to existing premises or are looking more orless seriously at offshore as a place to expand and/or move contact centeroperations.

Although there are now many fewer announcements of new US operationsopening, numerous studies of existing contact centers show that many arestill adding considerable numbers of staff. However, the US is the mostmature contact center industry in the world, and there is also a great deal

US contact centers, 2004-2010

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

2004 2005 2006 2007 2008 2009 2010

Contactcenters

-1.4%

-1.2%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0.0%

Growthrate(%)

Contact centers

Growth rate (%)


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of consolidation, nearshoring (mainly to Canada, although also to Mexico),and offshoring (the Philippines and India are the main destinations). Thisseems to have created a small net decline within the US contact centerindustry, which we expect to continue.

Some operations will close over the next four years more likely throughconsolidation than movement offshore. Many operations are likely to beof a significant size, and will impact on agent numbers. In the main,existing operations will continue to grow very gradually or remain stable,although the increased use of self-service will cause some closures,especially of multi-site operations.


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US agent positions, 2004-2010

Table 15: US agent positions, 2004-2010

Year Agent positions % growth

2004 3,115,000 -0.3%

2005 3,090,000 -0.8%

2006 3,070,000 -0.7%

2007 3,050,000 -0.7%

2008 3,040,000 -0.3%

2009 3,030,000 -0.3%

2010 3,010,000 -0.7%

Consolidation and offshoring will impact agent numbers negatively,although we believe that the growing movement to self-service whether

web- or phone-based will have a longer term effect. In particular, largeparts of the US population are now extremely web-literate and happy tomanage bills and technical help online as their first choice.

US agent positions, 2004-2010

0

500

1,000

1,500

2,000

2,500

3,000

2004 2005 2006 2007 2008 2009 2010

Agentpositions(000s)

-2.50%

-2.00%

-1.50%

-1.00%

-0.50%

0.00%

Growthrate(%)

Agent positions

Growth rate (%)


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US vertical market forecasts, 2009

Table 16: US contact centers by vertical market, 2009

Vertical marketContact

centers, 2009

% of overall contactcenters, 2009

% change06-09

Retail and Distribution 11,200 20.1% +1.8%

Finance 9,100 16.4% -6.7%

Services 6,300 11.3% +0.8%

Manufacturing 6,150 11.1% -1.6%

Telecoms 4,350 7.8% -8.4%

Public Services 3,950 7.1% +5.3%

IT 3,100 5.6% -4.6%

Outsourcing and Telemarketing 2,650 4.8% -8.6%

Transport and Travel 2,650 4.8% -3.6%

Entertainment and Leisure 1,520 2.7% +1.3%Utilities 1,400 2.5% -6.7%

Food and Drink 1,220 2.2% -2.4%

Medical 770 1.4% +2.7%

Printing and Publishing 750 1.3% +0.0%

Motoring 300 0.5% +0.0%

Engineering and Construction 190 0.3% -5.0%

Total 55,600 100.0% -2.3%

By 2008, the gap will have grown between the retail and distributionvertical market and the finance sector. Financial services businesses havebeen the main ones to move offshore, and coupled with the continuingconsolidation of the industry and its contact centers, we expect to see astagnation in the number of finance contact centers. The increasing use ofaccount self-management options (voice and web self-service) in thefinance industry adds to this effect.

Telecoms and utility contact centers are also likely to be under the samecompetitive pressures, with somewhat more dramatic results, especiallydue to the round of consolidation caused by triple-play companies (TV,Internet and voice traffic) emerging from the telecoms sector.

The main area of growth in contact center numbers will be in the publicsector, where eGovernment initiatives continue to grow, and theformalization of departmental customer handling leads to the growth incontact centers. The retail & distribution sector will continue to grow,driven in part by the need to support online interactions.

The outsourcing & telemarketing sector looks to be in for a decline, asmore work moves offshore and nearshore.


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Table 17: US agent positions by vertical market, 2009

Vertical market

Agent

positions,2009

% of overall agentpositions, 2009

% change06-09


Finance 472,500 15.6% -4.4%

Telecoms 355,000 11.7% -6.0%

Outsourcing and Telemarketing 292,500 9.7% -6.6%

Manufacturing 244,000 8.1% -0.7%

IT 232,500 7.7% -2.9%

Services 230,000 7.6% +2.6%


Transport and Travel 162,000 5.3% +3.5%

Utilities 155,000 5.1% -2.9%

Entertainment and Leisure 67,500 2.2% +4.7%Medical 62,000 2.0% +6.3%

Food and Drink 33,500 1.1% -0.8%

Printing and Publishing 28,000 0.9% +1.3%

Motoring 21,500 0.7% +0.0%

Engineering and Construction 3,000 0.1% -2.3%

Total 3,030,000 100.0% -1.3%

Major growth will come from the public services sector, which is a long

way behind the contact center curve that the private sector has been onfor many years. The Entertainment & Leisure, Medical and the Transport &Travel sectors will experience some agent position growth as well.

Due to offshoring and triple-play-driven consolidation, and a movetowards web- or SMS-based contact the USs telecoms and utilitiescontact center sectors will be somewhat smaller in 2009 than today.

All told, the US contact center industry will be 1.3%, or 40,000 agentpositions smaller in 2009 than in 2006.


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US employment forecasts, 2009

The public sector will add considerably to its contact center employmentfigures, but there is little to cheer in the rest of the industry, with a net

loss of 68,000 jobs predicted over the next three years. The finance,telecoms and outsourcing & telemarketing sectors are responsible formost of this, with these three sectors alone accounting for losses of over110,000 jobs.

Table 18: US contact center employment changes by vertical

market, 2006-2009

Vertical marketDifference in contact center employment,

2006-2009

Public Services +27,217Services +10,013

Transport and Travel +9,231

Retail and Distribution +7,055

Medical +6,239

Entertainment and Leisure +5,151

Printing and Publishing +629

Motoring +17

Engineering and Construction -119

Food and Drink -459

Manufacturing -2,720

Utilities -7,888

IT -11,832

Outsourcing and Telemarketing -35,088

Finance -37,009

Telecoms -38,437

Total -68,000


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Canadian contact centers, 2004-2010

Table 19: Canadian contact centers, 2004-2010

Year Contact centers % growth Average size (agent positions)

2004 3,750 1.4% 73.2

2005 3,850 2.7% 73.0

2006 3,950 2.6% 73.5

2007 4,050 2.5% 73.7

2008 4,100 1.2% 74.4

2009 4,150 1.2% 74.9

2010 4,150 0.0% 76.0

The Canadian contact center industry is at a similar point to the UKs still growing, but the rate and amount of growth declining each year. TheCanadian industry is still opening some contact centers as it picks up work

from the US. Although some operations will close over the next threeyears more likely through consolidation than movement offshore thesewill be relatively few in number, although the operations are likely to be ofa significant size. In the main, existing operations will continue to growgradually, and there will continue to be a steady opening of new orreturning contact centers or continuing formalization of existingoperations, especially at the lower end of the industry.

Canadian contact centers, 2004-2010

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2004 2005 2006 2007 2008 2009 2010

Contactcenters

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Growthrate(%)

Contact centers

Growth rate (%)


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Canadian agent positions, 2004-2010

Table 20: Canadian agent positions, 2004-2010

Year Agent positions % growth

2004 274,600 n/a

2005 281,200 2.4%

2006 290,500 3.3%

2007 298,500 2.8%

2008 305,000 2.2%

2009 311,000 2.0%

2010 315,500 1.4%

Growth in the Canadian contact center industry is still definite, although itis at a gentler pace than has been seen before. 25,000 agent positions(over 40,000 actual jobs) will be added between 2006 and 2010.

Canadian agent positions, 2004-2010

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2004 2005 2006 2007 2008 2009 2010

Agentpositions

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

Growthrate(%)

Agent positions

Growth rate (%)


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Canadian vertical market forecasts, 2009

Table 21: Canadian contact centers by vertical market, 2009

Vertical marketContact

centers, 2009

% of overall contactcenters, 2009

% change06-09

Retail and Distribution 705 17.0% +8.5%

Finance 610 14.7% -2.4%

Manufacturing 400 9.6% +6.7%

Outsourcing and Telemarketing 395 9.5% +12.9%

Services 375 9.0% +7.1%

Public Services 360 8.7% +10.8%

Telecoms 285 6.9% -5.0%

IT 270 6.5% +8.0%

Transport and Travel 210 5.1% +5.0%

Utilities 145 3.5% -3.3%Entertainment and Leisure 135 3.3% +8.0%

Food and Drink 105 2.5% +5.0%

Medical 53 1.3% +6.0%

Printing and Publishing 52 1.3% +4.0%

Engineering and Construction 25 0.6% +0.0%

Motoring 25 0.6% +0.0%

Total 4,150 100.0% +5.1%

The retail & distribution sector will add some new contact centers over the

next 3 years, as the increasing use of web-based retailers and theineffectiveness of email support opens up avenues for contact centerwork.

The outsourcing & telemarketing sector (driven partially by US work) willincrease, as will the formalization of the public sectors contact operations.

Consolidation in the telecoms and utilities industries will create a smalldecline in the number of contact centers in these sectors.


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Table 22: Canadian agent positions by vertical market, 2009

Vertical marketAgent

positions, 2009% of overall agent

positions, 2009% change

06-09

Outsourcing and Telemarketing 48,750 15.7% +18.2%

Finance 44,500 14.3% -1.7%


Telecoms 31,500 10.1% -3.1%

IT 25,000 8.0% +5.3%


Manufacturing 19,250 6.2% +8.5%

Utilities 17,250 5.5% -1.4%

Transport and Travel 17,000 5.5% +7.9%

Services 16,350 5.3% +9.0%

Entertainment and Leisure 7,750 2.5% +10.7%

Medical 6,500 2.1% +8.3%

Food and Drink 4,100 1.3% +9.3%

Printing and Publishing 2,175 0.7% +8.8%

Motoring 1,350 0.4% +8.0%

Engineering and Construction 525 0.2% +5.0%

Total 311,000 100.0% +7.1%

Major growth will come from the retail & distribution sector, outsourcing &telemarketing and also public services, which is a long way behind thecontact center curve that the private sector has been on for many years.

Most sectors will see gentle growth, although finance, utilities andtelecoms may see some small decline.


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Canadian employment forecasts, 2009

The outsourcing & telemarketing sector will add over 12,000 jobs to theCanadian contact center industry over the next three years, with the retail

& distribution and public service sectors also adding significantemployment figures. All told, an increase in employment of over 35,000contact center staff is expected, with most coming from growth withinexisting contact centers.

Table 23: Canadian contact center employment changes by verticalmarket, 2006-2009

Vertical marketDifference in contact center employment,

2006-2009

Outsourcing and Telemarketing +12,750

Retail and Distribution +7,650

Public Services +5,525

Manufacturing +2,550

Services +2,295

IT +2,125

Transport and Travel +2,125

Entertainment and Leisure +1,275

Medical +850

Food and Drink +595

Printing and Publishing +298

Motoring +170

Engineering and Construction +43

Utilities -425

Finance -1,275

Telecoms -1,700

Total +34,850


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Chapter Five:Inbound and Outbound Activity

US outbound activity is currently at just over 30%, with Canadasbeing slightly lower at 28.8%

There are over 1 million outbound agent positions within NorthAmerica

Outbound activity is highest in the outsourcing & telemarketing sector,with the finance and retail & distribution sectors also playing a largepart in outbound calling

There will be around 266 billion minutes of inbound calling into NorthAmerican contact centers in 2006


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US: inbound/outbound activity by size of contact center

Table 24: US: outbound activity by size of contact center

There is little linear correlation between contact center size and amount ofoutbound calling. However, mid-sized contact centers seem to dosomewhat more outbound calling than either small or very largeoperations, which may use outsourcers and telemarketing firms more.

(The term outbound agent equivalent describes the number ofexclusively-outbound, full-time agents required. In practice, not all

Agent positions % of outbound activity

10-24 27.2%

25-50 31.5%

51-100 29.6%

101-150 32.1%

151-200 34.8%

201-250 37.6%

251-500 30.7%

501-1,000 31.9%

1,001+ 28.2%

MEAN AVERAGE 30.3%

US inbound and outbound activity by size of contact center

0% 20% 40% 60% 80% 100%

10-24

25-50

51-100

101-150

151-200

201-250

251-500

501-1,000

1,001+

AVERAGE

Agentpositions

Inbound

Outbound


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outbound work is done by outbound-only agents, hence the need foroutbound agent equivalents).

Table 25: US: outbound agent positions (equivalent) by size ofcontact center

Size band (agent positions) Outbound agent positions (equivalent)

10-24 97,512

25-50 155,250

51-100 151,686

101-150 76,754

151-200 77,961

201-250 75,593

251-500 112,694

501-1,000 92,1481,001+ 109,006

Total 931,485

Small (sub-100 seat) contact centers have very significant numbers ofoutbound agent positions, but more as a factor of the overall size of thesegment, rather than any focus of small contact centers upon outboundcalling.


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US: inbound/outbound activity by vertical market

US inbound and outbound activity by vertical market

0% 20% 40% 60% 80% 100%



IT

Food and Drink

Manufacturing

Services

Finance


Telecoms

Utilities



Public Services


Medical

Motoring

TOTAL

Verticalmarket

Inbound

Outbound


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Table 26: US: equivalent outbound agent positions by verticalmarket

Vertical market Outbound activity Outbound FTEs

Outsourcing and Telemarketing 49.6% 154,427

Finance 29.8% 146,594

Retail and Distribution 26.7% 126,054

Telecoms 25.4% 95,341

IT 36.1% 85,902

Manufacturing 30.4% 74,193

Printing and Publishing 38.6% 67,164

Services 30.0% 66,917

Utilities 24.0% 38,044

Transport and Travel 23.2% 36,043

Entertainment and Leisure 22.0% 14,069

Food and Drink 33.3% 11,177Medical 13.3% 7,727

Public Services 21.1% 5,794

Motoring 7.3% 1,559

Engineering and Construction 15.8% 481

Mean average 30.3% 931,485

The outsourcing and telemarketing sector has the biggest focus onoutbound calling, with half of activity being aimed outwards, rather thanbeing connected with inbound customer service. When considering theamount of offshoring that this sector has weathered in recent years, it is

testament to the size of this industry segment that it still has moreoutbound FTEs (full-time equivalents) than any other sector.

The finance vertical market has the largest number of outbound agents,involved in debt collection, persuading customers to change financialproducts (e.g. credit cards) and increasingly, cross-selling and up-sellingto existing customers. Businesses are aware that one of the key movestowards increased profitability is to get customers purchasing multipleproducts, e.g. a personal loan, a current account, a credit card andinsurance from the same provider. A significant proportion of outboundcalling is now being done offshore (especially for lower value products), sowe expect to see the number of outbound FTEs in this sector in the US

decreasing significantly over the next two to three years.


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US: inbound call volumes

Table 27: US: inbound call minutes by vertical market

Vertical market Minutes inbound peryear (billions)

% of all inboundactivity

Retail and Distribution 38.8 16.3%

Finance 39.6 16.0%

Telecoms 35.6 14.6%

Outsourcing and Telemarketing 19.4 8.0%

Manufacturing 13.7 7.8%

Services 15.0 7.1%

IT 13.6 6.2%

Public Services 19.0 5.6%

Utilities 13.2 5.6%

Transport and Travel 17.4 5.4%Medical 5.6 2.3%

Entertainment and Leisure 5.6 2.3%

Food and Drink 2.5 1.0%

Motoring 1.9 0.9%

Printing and Publishing 2.2 0.8%

Engineering and Construction 0.3 0.1%

Total 243.2 100.0%

Table 28: US: inbound call minutes by size of contact center

Size band(agent positions)

Minutes inbound per year(millions)

% of all inbound activity

11-24 27.3 11.2%

25-50 36.6 15.0%

51-100 40.6 16.7%

101-150 19.0 7.8%

151-200 17.9 7.4%

201-250 15.8 6.5%

251-500 30.3 12.5%

501-1,000 23.1 9.5%

1,001+ 32.5 13.4%

Total 243.2 100.0%

The preceding tables are estimates of the amount of inbound call minutesper year into US contact centers. They are based upon proportions ofinbound and outbound activity and agent position numbers from thisreport, with averages of call time and duration applied to them.


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ContactBabel believes there are around 243 billion inbound call minutesper year into US contact centers. Outbound call statistics have not beenincluded, as it is more difficult to estimate the number of outboundminutes. Opinion is divided on whether to count unconnected calls and

calls to answerphones, and the length of outbound calls also variesenormously, making average outbound call lengths misleading.

The retail & distribution and finance vertical markets have around 16% ofall inbound traffic each, with the telecoms sector also playing a significantrole.

By size band, the smallest contact centers are most important, witharound 43% of inbound traffic terminating in contact centers with fewerthan 100 agent positions. However, the very large contact centers (over250 seats) are the most visible and make an attractive target forsuppliers, handling over 35% of all inbound calls.


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Canada: inbound/outbound activity by size of contact center

Table 29: Canada: outbound activity by size of contact center

As with the US, there is a slight increase in the proportion of work which

is outbound in the mid-sized contact center range.

(The term outbound agent equivalent describes the number ofexclusively-outbound, full-time agents required. In practice, not alloutbound work is done by outbound-only agents, hence the need for

outbound agent equivalents).

Agent positions % of outbound activity

10-24 27.2%

25-50 29.7%

51-100 29.8%

101-150 28.8%

151-200 30.0%

201-250 33.3%

251-500 27.6%

501-1,000 26.6%

1,001+ 31.1%

MEAN AVERAGE 28.8%

Canadian inbound and outbound activity by size of contact center

0% 20% 40% 60% 80% 100%

10-24

25-50

51-100

101-150

151-200

201-250

251-500

501-1,000

1,001+

TOTAL

Agentpositions

Inbound

Outbound


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Table 30: Canada: outbound agent positions (equivalent) by sizeof contact center

Size band (agent positions) Outbound agent positions (equivalent)

10-24 11,016

25-50 13,365

51-100 14,304

101-150 5,040

151-200 4,950

201-250 5,495

251-500 11,178

501-1,000 8,379

1,001+ 10,730

Total 83,696

The sub-100 seat sector accounts for almost half of all outbound calling inCanada.

Canada: inbound/outbound activity by vertical market

Canadian inbound and outbound activity by vertical market

0% 20% 40% 60% 80% 100%



Food and Drink

IT

Manufacturing

Finance

Services

Utilities


Telecoms



Medical

Motoring

Public ServicesEngineering and Construction

TOTAL

Verticalmarket

Inbound

Outbound


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Table 31: Canada: equivalent outbound agent positions by verticalmarket

Vertical market Outbound activity Outbound FTEs

Outsourcing and Telemarketing 49.9% 19,179

Finance 28.4% 11,974

Retail and Distribution 25.1% 9,355

IT 34.0% 7,524

Printing and Publishing 37.7% 7,465

Telecoms 24.0% 7,268

Manufacturing 29.7% 4,912

Utilities 25.9% 4,223

Services 27.1% 3,788

Transport and Travel 22.9% 3,361

Entertainment and Leisure 23.8% 1,552

Food and Drink 36.8% 1,286Medical 21.8% 1,219

Public Services 16.4% 306

Motoring 18.4% 214

Engineering and Construction 15.0% 70

Mean average 28.8% 83,696

The outsourcing & telemarketing sector in Canada is even more importantto the overall outbound activity than in the US, (from which it is receivingthis type of work). The finance and retail & distribution sectors also play apart in outbound activity, with a strong presence too from the printing and

publishing sector (outbound advert sales in the main).


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Canada: inbound call volumes

Table 32: Canada: inbound call minutes by vertical market

Vertical market Minutes inbound peryear (millions)

% of all inboundactivity

Finance 3,625 15.7%


Telecoms 3,120 13.5%



IT 1,533 6.7%




Services 1,212 5.3%Entertainment and Leisure 591 2.6%

Medical 520 2.3%

Food and Drink 263 1.1%


Motoring 113 0.5%


Total 23,032 100.0%

Table 33: Canada: inbound call minutes by size of contact center

Size band(agent positions)

Minutes inbound per year(millions)

% of all inbound activity

11-24 3,017 13.1%

25-50 3,348 14.5%

51-100 3,703 16.1%

101-150 1,429 6.2%

151-200 1,386 6.0%

201-250 1,359 5.9%

251-500 3,414 14.8%

501-1,000 2,651 11.5%

1,001+ 2,726 11.8%

Total 23,032 100.0%

The preceding tables are estimates of the amount of inbound call minutesper year into Canadian contact centers. There will be around 23bnminutes of inbound activity into Canadian contact centers in 2006.


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The future of outbound calling

Outbound activity falls into two categories: cold and warm.

While there has been a rise in unsolicited cold calls over the past 5 years,the Do-Not-Call register, poor perception of this activity by customers andagent alike, and the enthusiastic introduction of state legislation on diallerrates means that cold calling looks likely to drop significantly and veryquickly. With new means of contacting prospects, such as SMS or emailhaving become available, the telephone cold call should be losingimportance in the marketing mix of most companies, although many arenow using offshore to telemarket cost-effectively.

The past rise in outbound calling can be attributed to warm calls toexisting customers, in order to cross-sell or up-sell, or increasingly, tocheck customer satisfaction and experience. Based upon customer loyalty

theory, a key driver for CRM activities, warm calling has increased greatly,as metrics such as products per customer and wallet-share have startedto be captured in the leading businesses. The measurement of a contactcenters success is starting to move away from pure performance-basedmetrics (time to answer; average call duration), into more balancedeffectiveness/efficiency measures.

However, in ContactBabels opinion, warm calling is often seen as an easyway to generate revenues without having to do too much extra thinking.Too many companies are trawling all the way through their customer lists,and trying to sell new products and services to customers, regardless ofwhether the customers will need them: there is not enough analysis of

customer preferences and desires first. Add to this some companiesenthusiasm for using offshore agents who may not be fully trained orsuited to selling to the North American public, and it is easy to see how anegative view of outbound has emerged.

There is no real difference between cold calling someone a company hasnot yet sold to, and calling an existing customer without understandingwho that customer is and what they are likely to be interested in: both areunlikely to reap rewards. The latter option is actually likely to alienateexisting customers. Businesses should be very wary of runningindiscriminate cross-selling and upselling campaigns to existing customers it could backfire on them.

Added to this, silent calls - generated by the overuse of predictive diallingtechnology are alienating customers and prospects. Many react to whatthey see as a worrying and hostile experience by registering on the Do-Not-Call register, effectively taking themselves out of the marketaltogether.

ContactBabel would expect to see the following trends emerging withinthe next five years:


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Outbound calling to decrease and stabilize at around 25% onaverage

Warm calling will become more targeted after failures of over-

proactive campaigns to existing customers. However, there will stillbe many companies for whom warm calling means untargetedactivity aimed at large chunks of the customer and prospectdatabases

Direct mail marketing to increase in popularity with businesses

Cold calling decreases slowly and above-the-line and direct mailmarketing becomes more popular

Broadband and always-on devices make multimediacommunication a less-painful experience than many customers

have suffered caused by poor web and database design,narrowband connections and poor eService service levels. This willslow the rate of increase in inbound voice communication somewhatby shifting some service requests onto self-service, maintaining theproportion of inbound-outbound proportion of around 75/25


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Chapter Six:The use of IVR and outbound dialers in North Americancontact centers

IVR (interactive voice response) is currently found in 43% of contactcenters

Printing & publishing, medical and transport & travel contact centresare the most likely to use IVR

Although only 12% of contact centers report using outbound dialers,62% of those in the outsourcing & telemarketing sectors do so


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IVR (interactive voice response) in North American contactcenters

North American IVR usage by vertical market

0% 20% 40% 60% 80% 100%


Motoring

Public Services

Finance

Food and Drink

IT

Telecoms



Services


Manufacturing

Utilities


Medical


AVERAGE

Verti

calmarket

Use IVR

Do not use IVR


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Table 34: Use of IVR by vertical market

Do you use IVR in your contact center? Yes No

Engineering and Construction 0% 100%

Motoring 6% 94%

Public Services 33% 67%

Finance 35% 65%

Food and Drink 39% 61%

IT 40% 60%

Telecoms 41% 59%

Retail and Distribution 42% 58%

Entertainment and Leisure 42% 58%

Services 43% 57%

Outsourcing and Telemarketing 44% 56%

Manufacturing 46% 54%

Utilities 48% 52%Transport and Travel 53% 47%

Medical 63% 38%

Printing and Publishing 73% 27%

AVERAGE 43% 57%

Perhaps surprisingly, the most avid users of IVR are not to be found in themajor vertical markets of finance, retail and telecoms, but rather in theminor niches of printing & publishing and medical.

Many of North Americas finance contact centers are actually smalloperations local banks, for example and do not require routing orautomation assistance.

The transport & travel and utilities sectors are strong users of IVR, fortimetable and ticket booking in the case of the former, and for automatedmeter readings and billing enquiries for the latter.

However, in most countries, IVR usage is directly positively correlated tothe size of the contact center operation, and this is also the case in NorthAmerica.


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Table 35: Use of IVR by size of contact center

Do you use IVR in yourcontact center? Yes No

11-24 agent positions 32% 68%






251-500 agent positions 57% 43%501-1,000 agent positions 66% 34%

1,001+ agent positions 57% 43%

Average 43% 57%

As we would expect to find, there is generally a positive correlationbetween the size of the contact center and the use of IVR.

North American IVR usage by contact center size

0% 20% 40% 60% 80% 100%

10-24

25-50

51-100

101-150

151-200

201-250

251-500

501-1,000

1,001+

AVERAGE

Ag

entpositions

Use IVR

Do not use IVR


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As IVR is a solution which provides major cost savings in volume-basedenvironments, we would expect to find more of the larger contact centersusing it. While this is certainly the case, it does not seem that IVRsuppliers have reached saturation point in any sector of the market.

In larger contact centers with at least 150 agent positions, IVR usage isnot much more than 60% in most size bands. This does suggest thatcommercial decisions not to use IVR have been made, i.e. if size were theonly, or main factor in using IVR, we would expect to see all 1,000+contact centers using IVR, and a gradual tailing-off of penetration rates asoperations got smaller.

Indeed, IVR suppliers still have virgin territory in the smaller contactcenter sector (fewer than 100 seats), where penetration tails off quitenoticeably. This may be due to less supplier effort in this area, possiblycaused by the difficulty of creating a profitable business model for

suppliers to small contact centers. Also, as IVR works best in a volume-based environment, there may be not be the savings to be made, sointerest is less in these types of solution.

The positive correlation between large contact centers and the use of IVRwill be of surprise to no-one. What should be of more interest to suppliersis the usage ceiling which seems to have been reached long before a100% penetration rate has been hit. The following graph shows thepenetration rate by size of contact center, compared to what ContactBabelwould expect it to be if contact center size were, without doubt, the maindriver of IVR uptake (which it should be, being of most use to high-volume environments).

Call centre size

Low

High

Low High

IVRpen

etrationrate

Expected penetration rate

Actual penetration rate

IVR usage: expected vs actual

c. 60% max.

Source: ContactBabel


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The diagram shows there are two main ways for IVR suppliers to increasetheir revenues: sell into the small contact center sector, and change thecommercial decision not to use IVR which around half of larger contact

centers seem to have made.

The small contact center (sub-100 seat) sector, while accounting for themajority of North Americas contact center operations, has proven to bean extremely tough nut for suppliers to crack. The absence in many casesof a suitable sales model, the expense of selling directly and thepreviously unproven status of hosted applications means that smallcontact centers are beneath the radar screens of many of the larger IVRvendors. Add to this that only a proportion of this sector will be interestedin IVR (as it provides best returns by automating large volumes of calls),and the divide between IVR applications and small contact centers is plainto see.

Having said that, ContactBabel believes there are opportunities for IVRvendors in this area, although they may take some hunting down.

Public services contact centers have a very low rate of IVR penetration,which is likely to rise due to the general increase in contact centerinvestment which is being made now. Local government especially, whichtends to have many departments, may benefit from an IVR routingsolution rather than the usual system of having a receptionist answer thephone. However, government operations are not always focused uponefficiency, and solution providers which emphasize the reduction in staffwhich IVR can offer may not be welcomed.

Looking again at the medium-to-large contact center sector thetraditional IVR arena vendors will have to repackage and remarket theirIVR solutions if they are to break through the penetration barrier whichseems to be in place. IVR has been sold as a cost-saving measure, whichis undoubtedly true, but it is also the pet hate of consumers. This may bewhy so many businesses have refused to implement IVR, which wouldotherwise save them considerable amounts of money.

Vendors need to look at why businesses are wary of using IVR. Poorly-implemented IVR is the main problem, where the system is expected todo everything for the business. Vendors could look at supplying bestpractice guidelines based upon experience to avoid these problems.

Many businesses wish to be seen as strongly focused upon customersneeds. The concept of IVRused as a customer assistance tool (andmarketed as such) is much more likely to succeed when harnessed withthe traditional message of cost savings.

Small contact centers can now consider IVR as a network-based pay-per-use model, which should open up new markets for suppliers.


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Touchtone IVRs days are numbered, and has been for some years beenevolving into a more flexible and open solution. Speech recognitionenablement will make it a more powerful tool, and sharing web self-service functionality via voice through a voice portal should also improve

the image and utility of voice self-service.

The future of self-service

Increasing self-service is consistently stated by leading contact centers asone of their major strategic aims for the medium-to-long term (2 yearsonwards). But what of the immediate future where does the interest andactivity really lie today?

Despite touchtone IVR being long in the tooth, companies still predict thatthe number of interactions handled by this channel will increase.

One of the clearest messages to come out of a major study of UK contactcenters (the UK Contact Centre Operational Review it is intended that asimilar survey will be carried out in North America in late 2006) is thatmost businesses are woefully under-informed about the functionality andcommercial benefits of speech recognition, perceiving it to be a complexand technical area that is patchy and unreliable. The reality is verydifferent from this: the technology has improved dramatically in the lastfive years, and speech recognition is now an enterprise-class application,scalable, robust and capable of delivering much to both customers andbusinesses than touchtone IVR.

Businesses predictions of when they will start to use technology solutionsalways need to be treated with a pinch of salt. For example, currentuptake of speech recognition is running at around 5% in the UK, yet 7%of respondents say they will be implementing automated speechrecognition (ASR) within the next 6 months, and a further 7% say theywill be doing so at some point within the next year. Taken at face value,this would seem to indicate that the installed base of ASR will almostquadruple within the next 12 months. Unfortunately for speechrecognition vendors, this enthusiastic response is unlikely to materializealong these lines, as projects always take longer than expected, otherinterested parties get involved and start questioning costs, and prioritieschange within businesses. However, growth will increase and speechrecognition is now coming into the mainstream.

However, these figures definitely show that speech recognition is high onthe agenda of many companies, and that businesses with a large numberof inbound calls should make themselves aware of what the industrycurrently offers, and more importantly, where ASR is going in the future.Recent unpublished ContactBabel research has shown that self-service isthe no.1 technology priority for large contact center businesses in the UK(with at least 250 seats). We would say that speech recognition is one ofthe killer applications of the next five years, and will have more of an


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impact than offshoring on the global contact center industry. Theindustries most interested in benefiting from early adoption of speechrecognition for routing, identification and self-service are banks,telecoms and utilities companies, with some large retailers also showing

interest.

In many cases, there is already a compelling financial reason forbusinesses to use self-service today. In the future, financial andcommercial trends mean that these drivers will become even moreundeniable.

Labor costs will continue to increase, and businesses will decide touse agents only for high value-add work of which automation iscurrently incapable

Staff attrition rates are running at over 20% per year in most

mature contact center industries, and seem to be increasing. Thefull cost of recruitment, training and lost revenues throughinexperience have only recently been fully understood. Keepingexperienced staff drastically reduces costs, and using self-service todeal with the thankless and repetitive work will improve staffretention rates

Speech recognition can act as the front-end security system for thecontact center, taking customers through their securityidentification questions more quickly than an agent could do so, andfreeing up that agents time. Adding biometrics (through voice printidentification) could shorten the process even further, which would

be positive for all stakeholders

Touchtone IVR systems will be coming to the end of their life withinthe next few years. Businesses will use this opportunity to upgradethe levels of functionality that they use. This will reduce the cost ofspeech recognition and integrated web/voice self-service systems,making them affordable to much of the market.


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Use of outbound dialers in North American contact centers

North American dialer usage by vertical market

0% 20% 40% 60% 80% 100%


Motoring

Food and Drink

Finance


Manufacturing

Transport and TravelTelecoms

Public Services

Services


IT

Utilities

Medical



AVERAGE

Vert

icalmarket

% of contact centers reporting dialer usage

Use dialer

Do not use dialer


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Table 36: Use of outbound dialers by vertical market

Do you use an outbound dialer? Yes No

Engineering and Construction 0% 100%

Motoring 0% 100%

Food and Drink 2% 98%

Finance 4% 96%

Retail and Distribution 5% 95%

Manufacturing 6% 94%

Transport and Travel 7% 93%

Telecoms 10% 90%

Public Services 12% 88%

Services 15% 85%

Entertainment and Leisure 17% 83%

IT 17% 83%

Utilities 18% 82%Medical 25% 75%

Printing and Publishing 28% 72%

Outsourcing and Telemarketing 62% 38%

Average 12% 88%

The outsourcing & telemarketing sector is by far the most likely to useoutbound dialers, due to the nature of much of the work they do, and thepressing need to maximise resources and profits within the contact center.

Industries with large amounts of outbound such as printing & publishing also use dialers significantly. As with IVR though, we would expect dialerusage to be more a factor of contact center size than vertical market.


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Table 37: Use of outbound dialers by contact center size

Do you use an outbound dialer? Yes No





151-200 agent posit

Documents

NA Contact Center Study 2006