Call centre services: the good, the bad, and the ugly

Call centre services: the good, the bad, and the ugly

Article Type: Guest editorial From: Journal of Services Marketing, Volume 23, Issue 5

Call centres represent the service economy of the digital era. A call centre is defined as a centralised or dispersed operation in which a managed and supervised group of people answer telephones and/or make telephone calls and, increasingly, communicate online (Key Note, 2003a). Over 70 per cent of all customer contact occurs through call centres (Feinberg et al., 2002). Companies seeking to improve the performance and contain the costs of their customer service interactions through their call centres enjoy a growing array of technological options: telephone, web sites, online chat, voice recognition systems, etc. (Bianchi, 2007). Most call centre employees are agents who make and answer telephone calls and other communications to and from customers and public. There is one supervisor for about six to ten agents who deals with queries, solves problems, and schedules the work. Above the supervisors are the team managers who manage the scripts used by agents, set and monitor progress towards targets, organise training, and are the link between agents/supervisors and the company (on behalf of which the call centre is working).

Call centres have become an inevitable aspect of service delivery in today’s business world, and are becoming increasingly popular with organisations as their preferred mode of interaction with their customers. Call centres are supposed to be a major customer interface for many organisations, and are often characterised by their role of providing the first, if not the only, point of contact for the customers to engage with their service provider (Dean, 2004). They are generally loved by organisations around the world, as they bring efficiency and cost control to customer service. Call centres in the services sector have helped organisations in managing customer relations more effectively by reaching out to a large number of customers through the communication medium of the telephone, at a lower cost base, and with a higher and faster return per head employed (Brown and Maxwell, 2002).

However, all is not well with call centres. The good is frequently overshadowed in the news by the bad and the ugly. Although meant for customer service, the service quality of frontline staff in call centres is becoming an issue of concern, as more and more consumers are complaining and are dissatisfied with the quality of service received (Anton, 1999). Call centres have been criticised for their employee management practices, i.e. their “sweatshop” approach (Taylor and Bain, 1999) and the “sacrificial HR strategy” (Wallace et al., 2000), where control and efficiency are emphasised at the cost of employee stress and turnover. These have in turn led to poor service quality and low customer satisfaction.

Managers of call centres face many challenges (Robinson and Morley, 2006). They are responsible for operations that are capital intensive, with a high demand for continual investment to keep up with rapid developments in technology. They are also responsible, in many cases, for recruitment, training, performance and retention of large numbers of customer contact staff often working across several shifts. This special issue attempts to investigate the key customer service issues and the key employee-driven performance indicators and their predictors involved in managing call centres.

During the relatively short period of time since their widespread adoption, we have seen strides in knowledge development and knowledge dissemination on call centres in the field of services marketing. Despite the growing importance of call centres (Brown and Maxwell, 2002), there are several critical aspects concerning the mushrooming call centre industry that warrant discussion. We proposed this special issue at a time when call centre as a concept has matured enough for service scholars to take a considered look at their service strategies. In this issue, we are pleased to offer an interesting ensemble of seven research articles on call centre services. As befits the best traditions of the Journal of Services Marketing, the papers are both international and eclectic in scope, while making strong theoretical contributions to the niche area. The articles published in this special issue have been contributed by scholars from the USA, UK, Australia, New Zealand, India, Hong Kong, and the UAE. Also, while most authors are academic scholars, two of the authors are executives working in the call centre industry. Further, articles published in this issue have used a variety of research methodologies, from surveys to mall intercepts and from focus groups to qualitative interviews.

Employee morale issues

Call centre customer service positions have been found to be highly repetitive and “dead-end” jobs (Belt, 2002) that are often characterised by “low status, poor pay and few career prospects” (Deery and Kinnie, 2002, p. 4). Most are labelled as “electronic sweatshops” (Garson, 1988), and are often criticised for their “low-cost HR practices” (Batt, 2000) However, a minority of call centres do employ alternative strategies referred to as “high-involvement practices” (Batt and Moynihan, 2004). Batt and Moynihan (2004) argue that the mass-production model which focuses on maximising volume and minimising costs is more suitable for simple transactions where customers look for speed and simplicity, while the professional service model which stresses on delivering quality service works well with professionals such as lawyers and healthcare specialists who strive hard to building long-term customer relationships with their clients. Since the majority of call centre transactions are dominated by the mass-production model as compared to the professional service model (Batt and Moynihan, 2004), problems relating to service quality and customer satisfaction (Key Note, 2003a; Tuten and Neidermeyer, 2004) continue to exacerbate.

Call centres have been typically plagued by high agent turnover. Surveys such as Pay and Conditions in Call Centres from Incomes Data Services (IDS, 2002), report that the average annual staff turnover in call centres was around 20 per cent, ranging from 1 per cent to 80 per cent. Large centres were reported to have greater difficulty in retaining staff as compared to small centres. According to another survey (Call Centres, 2002), the staff turnover rate had increased from 18 per cent in 2001 to 24 per cent in 2002 (26 per cent of the employers surveyed were in financial services). It is also reported that, on average, a typical call centre worker in the UK stays in a job only for two years (IDS, 2002). It was reported that one in ten call centre employers in UK have a “churn” rate of 49 per cent or more, that is, nearly half of their staff resign during a year (Call Centres, 2001). This has further implications for service quality, since a certain amount of tenure is required to achieve service excellence (Schneider, 1991).

A research conducted by management consultants Nextera Enterprises (2000) found that staff turnover reduced earnings and share values in the call centre business by over 30 per cent. In 2001, staff turnover cost the UK call centre industry over £1 billion a year (McConnell, 2001), while training a new customer service agent costs over £4,500 and sometimes over £12,000 (Key Note, 2002). According to the Call Centres (2002) survey, turnover problems have forced wages up by 8.3 per cent to a median £13,000 for call centre agents. From 1997 to 2000, salary levels rose by around 15 per cent, while inflation as measured by the retail price index (RPI) remained at only 8 per cent (Key Note, 2002). Thus training and competition, coupled with the high turnover, have pushed the salary levels up. Other findings of the survey included that call centre agents received higher pay in the public than in the private sectors, and that the morale and motivation plans and personal development plans, besides improved pay and working conditions, could help reduce turnover. Although some improvements are seen, research suggests that most frontline employees remain underpaid, undertrained and highly stressed in call centres (Singh, 2000).

Thus, turnover poses a great challenge to call centre management. In this context, employee retention and gaining employee’s commitment are becoming two main issues of concern. The reports of various researches into the working conditions of call centres have been alarming (Health and Safety Executive (HSE), NOP surveys in Key Note, 2002). In this context, research has found that working conditions in call centres were poor as employees’ eyesight was deteriorating, accompanied by health problems such as headaches and sore throats. The researchers also report that call handling is a poorly designed job, with agents having little control over their work, little variety of task and a heavy workload.

Attracting and retaining high performing customer contact employees is essential for service performance of call centres. A series of articles in this special issue explore the issues of service employee turnover, recruitment, and performance from a variety of perspectives. Budhwar, Varma, Malhotra, and Mukherjee, in their article “Insights into the Indian call centre industry: can internal marketing help tackle high employee turnover?” endorse the problem of employee turnover in call centres and reveal a range of factors – from monotonous work, stressful work environment, adverse working conditions, and lack of career development opportunities to better job opportunities elsewhere – as the key reasons of rising attrition rates in the Indian call centre industry. Following a triangulation approach involving two empirical studies, the authors prescribe ten internal marketing tools to reduce high turnover rates in the Indian call centre industry.

The article titled “Call center employee personality factors and service performance” by Sawyerr, Srinivas and Wang also expresses concern about turnover and performance issues and addresses them using the personality paradigm. Sawyerr, Srinivas and Wang explore the relationship between five personality factors (conscientiousness, agreeableness, openness to new experience, emotional stability, and extraversion/introversion) and performance (service performance, absenteeism, and turnover intentions) of call centre employees based on a survey of 194 call centre employees and their supervisors in eight call centres. Agreeableness and emotional stability are positively related to absenteeism. Internal locus of control and openness to new experience are positively related to intent to turnover. Internal locus of control and external locus of focus are both positively related to emotional exhaustion, which in turn leads to intent to turnover. However, conscientiousness and internal locus of control are negatively related to absenteeism. Emotional stability is negatively related to intent to turnover and emotional exhaustion. Internal locus of control is negatively related to absenteeism. Openness to new experience is negatively related to service performance. Their findings could be used by call centre management for recruitment and training of their customer contact employees. While the authors examine the mediating role of emotional exhaustion in the personality – performance relationship, they suggest the need for further study to understand the impact of stressors. The role of stressors is explored in this issue by Ashill, Rod, Thirkell and Carruthers.

Many call centres continue to evaluate agents on the basis of productivity rather than quality, which has resulted in call centre jobs becoming one of the ten most stressful jobs in today’s economy (Gilmore and Mooreland, 2000; DeRuyter et al., 2001). This in turn has implications for employee morale and staff turnover (MacDonald, 1998). In their article “Job resourcefulness, symptoms of burnout and service recovery performance: an examination of call centre frontline employees”, Ashill, Rod, Thirkell, and Carruthers explore the relationship between role stressors and symptoms of burnout by examining the influence of job resourcefulness as a situational personality trait in the burnout process, and its impact on service recovery performance. By using data from call centre frontline employees in New Zealand, the authors observe that job resourcefulness buffers both the dysfunctional effects of role stressors on symptoms of burnout and the effects of role stressors on frontline employees’ service recovery performance.

Employee perceptions of their own service quality and its predictors are also important issues in call centre management. In their article titled “Frontline employees’ views on organizational factors that affect the delivery of service quality in call centers,” Dean and Rainnie investigate employees’ views on the organisational factors that affect their ability to deliver service quality to customers. Using content analysis on data generated from ten focus groups of frontline employees working in a telecommunications call centre in Australia, the authors identify nine major themes: management emphasis on sales; performance monitoring and feedback; efficiency demands of call centre work; call centre structures and support; employee-job fit; human resource management issues; teams; service encounter stress; and managerial attitudes. This article complements the other articles in this section on employee performance in call centres by highlighting the role of organisational factors and unique work environments in delivering high levels of service quality. This also connects the employee morale and customer service issues in call centre management, and confirms the belief that only satisfied employees can lead to satisfied customers.

Customer service issues

Researchers report that customers are less satisfied with the call centre service operations as compared to more traditional (in-person) services (Bennington et al., 2000). According to a National Opinion Poll (NOP, 2000) commissioned by Key Note that surveyed 1,000 people across Great Britain to investigate their experiences and views on contacting call centres, call centres have failed to win public approval in the retail banking sector (Key Note, 2003b). Most of the customers are not satisfied with the services provided, especially concerning the service quality of the call centre staff. According to the survey, only 39 per cent agreed that they were satisfied with the services provided by the call centre representatives, and only 14 per cent believed that call centre staff were well trained.

Patwardhan, Noble and Nishihara, in their article titled “The use of strategic deception in relationships”, challenge the traditional notion of relationship marketing given the theoretical importance of self disclosure, trust, and honesty with consumers, and explore the use of strategic deception by call centers to establish relationships with consumers. They conducted qualitative interviews over telephone and in person with call centre employees in India. Based on an overarching strategic deception typology with four categories (American/British/neutral pronunciation, knowledge of cultural norms, use of pseudo names, and hiding the call centre location), the authors report a novel finding that call centres are using these different types of strategy deceptions to win the trust and cooperation of their consumers.

In another research on call centres, KPMG Consulting argued that “loyal” customers were falling in numbers. The survey found that during the year, over 40 per cent of customers had changed at least one of their major suppliers of finance, groceries, utilities or telecom, at least once. The research results also indicated that nearly half of all the customers had made at least one complaint. The main reason behind the findings was that the customers wanted to be treated as individuals, and demanded better service quality from the call centre contact staff. Similar research results were also reported by other researches (NOP, 2000, 2002). Hence, call centres are increasingly criticised for the service quality delivered by the frontline employees.

Similar results have also been reported by other studies, which have found out that “phone rage” (people losing their temper over the phone) has increased in the past five years (The Guardian, 1997). Moreover, customer satisfaction levels for call centres are reported to be as low as 54 per cent (Anton, 1999).

For long, call centres have measured their performance by what is easy to measure (e.g., waiting time or number of callers served per hour) instead of what is important to consumers (e.g., perceived wait time and the quality of calls). Whiting and Donthu address this issue in their article “Closing the gap between perceived and actual waiting times in a call center: results from a field study”. They identify some important factors that explain the “estimation error” or the gap between the caller’s perception of how long they think they waited and how long they actually waited on hold. Using a field experiment, the authors found that music (unless of one’s choice) increases while waiting information reduces estimation error. Callers with more urgent issues and females have higher estimation error. Overall, they found support for the conventional view that consumers are less satisfied as the estimation error increases.

Since overall quality of service of the call centres is critical to the image of the organisation (Gilmore and Mooreland, 2000), service quality is one critical issue that cannot be ignored in call centres. However, consumer perceptions of service quality, customer satisfaction, complaint and repeat purchase intentions are influenced by their attitude towards offshore call centres and the brand image of the service provider firm. Sharma, Mathur, and Dhawan, in their article “Exploring customer reactions to offshore call centres: toward a comprehensive conceptual framework”, explore the moderating influence of attitude toward offshore call centres and brand image of the service provider on the relationships between perceived service quality, customer satisfaction, complaint and repeat purchase intentions. Based on a survey of 285 mall shoppers, they observe that while attitude toward offshore call centres positively moderates the link between service quality and customer satisfaction, brand image moderates the effects of customer satisfaction with complaint negatively and with repeat purchase positively. Structural equation modelling, combined with multi-group analysis and multiple moderated regression analysis, also confirms the positive association of service quality with customer satisfaction, which in turn positively influences repeat purchase but negatively influences complaining behaviour.

In conclusion, there is a need for call centre management to find out what they can do to motivate their customer contact staff as well as to improve the service quality delivered to their customers. The current research evidence demonstrates that neither staff nor customers seem to be happy with the service quality offered by most call centres. This special issue offers some useful solutions to these very important problems.

This special issue is very much a collaborative endeavour. As guest editors, we shared the responsibility for initial screening of submissions, sending out the manuscripts to reviewers, compiling review comments and communicating initial decisions, getting the second and third rounds of reviews conducted, communicating the final decision, and identifying the contributions of each accepted paper. We wish to thank the able team of reviewers who kindly reviewed the many manuscripts that were submitted for this special issue. We thank the editor, Professor Charles Martin for approving the idea for the special issue and providing feedback from time to time. Last, but not the least, we would like to acknowledge the major contribution to the special issue made by Darshan Kitare, the Research Administrator for the Marketing Group at Aston Business School. We thank Darshan for her assistance on this special issue. Overall, we hope this special issue will add to our knowledge and understanding of call centre services through a collection of rigorous, relevant and useful research articles. Happy reading!

Avinandan Mukherjee, Neeru Malhotra