Best Compensation Models for the Outsourced Call Center
By Nathan Teahon, Vice President, Quality Contact Solutions
When utilizing outsourced call centers, there are many variables to consider when entrusting someone with your telemarketing campaign. One of those is choosing the appropriate compensation model. Below are the most common compensation models utilized by outsourced call centers.
Hourly Outsourced Call Center Compensation
Hourly pricing is the most frequently used pricing structure for the majority of outsourced call centers. The range of prices in this model, like all models, will vary depending on a number of factors. The level of call complexity, type of agent needed for success, size of the campaign, are just some of the factors that are typically considered when determining an hourly rate.
At Quality Contact Solutions, most outbound telemarketing programs are priced between $35 and $40 per hour, plus up-front setup fees and training fees. Size is certainly a factor as well. For example, if a program requires more than 10 FTE’s and the call is less challenging, there is even more flexibility with the price.
One common question I get a lot from people that don’t live in the world of telemarketing comes in wanting to understand what makes up an hour. In its simplest form, a telemarketing hour is one person dialing on a program for one hour. The simple math is if you have 10 people dialing on your campaign for 40 hours per week, that equals 400 hours per week. 400 hours at $35 per hour equals $14,000.
However, at QCS, that hour also includes the behind the scenes support that goes in to making sure that the hour is productive. This includes support from Operations Managers that serve as a single point of contact for their clients. It includes time from Client Services Managers that help setup programs and develop the reports that our clients receive on a daily basis that are crucial for quick decision-making. This includes time from frontline supervisors and quality assurance that are constantly coaching and developing the team. It also includes time from senior leadership team that take the time to evaluate every program on an ongoing basis to ensure clients are hitting their goals and getting a positive ROI.
Hourly plus commission/incentives
Many companies opt for an hourly plus commission or incentives structure. This would most often be paid out with about 75 to 80% in the hourly rate and the other 20 to 25% would be earned as a commission or incentive, based on performance. At Quality Contact Solutions, this is a common structure when we have been doing work with a client for enough time to have accurate modeling to ensure that the numbers work for all sides.
Pay for Performance in Outsourced Call Center Compensation
Pay for performance is most often used for very large programs with proven track records of success. Most outsourced call centers will not accept a pay for performance program unless the client can share a valid track record that allows better than average revenues for the hours that the vendor will put into the program. At Quality Contact Solutions, we will often do a 500 hour concept test so we can accurately model out a long term structure.
Per Minute Compensation for Inbound Call Center Programs
Inbound programs are most often priced on a per minute basis, particularly inbound programs that utilize shared staffing, but there are other factors to consider as well. I recently wrote a separate article regarding Inbound Call Center Pricing Options and would encourage you to look at it if that is a route you are considering.
Nathan Teahon is the Vice President at Quality Contact Solutions, a leading outsourced telemarketing services organization. As a highly competitive person, Nathan brings his ‘A’ game to work every day, ensuring that each of his clients wins on a daily basis. Nathan carefully balances the operations resources and client goals to ensure his clients receive the highest possible results at the lowest cost. Nathan is a true, born and bred telemarketer. He grew up in the business and intimately knows (and has played) every position on the field, including supervisor, quality assurance, call center manager, program management, account management, and call center psychologist. Nathan can be reached at Nathan.firstname.lastname@example.org or 516-656-5133.