The Contact Center Blog

On-Demand Pricing Vs. Traditional Hourly Pricing

I’ve been reading a lot lately about “on-demand pricing” in the outsourcing world and people keep asking me what it is. On-demand pricing basically means that you pay for what you use, usually at a bit of a premium with some kind of minimum. The concept is by paying a little more per transaction, you will ultimately save money by not having to constantly over-estimate your needs and pay for the wastage. Does that make sense? No? Let’s try an example:

My friend Mike throws business lunches at a trendy restaurant every Wednesday as a tool for attracting potential clients. He invites 40 people to the lunch every week, but really has no idea how many will show up. Sometimes as few as 15 come, but sometimes all 40 show up and a few times the 40 brought friends. The restaurant’s pricing options are:

1. The restaurant would cater a party of 40 for $35 per person with one weeks notice.
2. Guests can order off the menu which works out to an average of about $42 per person but Mike has to guarantee a minimum bill of $450.

Mike found that option 2, paying $7 more per person, was actually cheaper than constantly catering for 40 and throwing out the excess food. Even better, if 43 showed up, he didn’t have to worry about being short on chicken.

In the contact center outsourcing business we call this on-demand pricing. In a traditional contact center pricing model, you pay by agent per hour. This works out well if you get a large volume of contacts (phone calls, chats, e-mails) in a very predictable time frame. With on-demand pricing your usage can fluctuate up and down a little more comfortably. The outsourcer will charge you incrementally (for example 24-7INtouch has packages with per minute pricing) and you will end up paying a little more total for each call, but will save money overall if you need a bit more flexibility. So how do you know if on-demand or traditional hourly pricing is the way to go for your project? Here are a couple of small tips:

Traditional Hourly Pricing	On-Demand Pricing
Contacts come in during regular business hours	24 hour service is required
Contacts are steady and very predictable	Contacts can come in large spikes
Very large volume of contacts (more than 10,000 per month)	A smaller or unknown volume of contacts (small-medium sized businesses)
Volume of contacts is established and fairly stable	Volume of contacts may require some quick unanticipated scalability up or down

The best way to know which model will suit your project is to talk to a professional at an outsource contact center who can help you look at your campaign from both angles to make the best decision.

-Jeff Fettes

Contact Center Best Practices Report

I received an email communication from the CCEOC promoting their best practices report. I thought it might be of interest to call center professionals out there.

This report brings up the discussion - what makes YOUR contact center a GREAT place to work? With high attrition rates in our industry and once great call center communities saturating, it is becoming increasingly important to create a culture that fits with your company brand and helps retain good employees.

Based on 24-7 INtouch's strategy, we keep our environment small and intimate enough to create a positive culture and supportive atmosphere for all employees, especially frontline staff. If Sally knows that she will let her team down by "calling in sick", she might think twice before doing so. We'd also want her to want to come into work because she enjoys who she works with, albeit the actual role is very challenging. Other things in my opinion that make a great call center environment are the little things like being heard and having support - again which can usually only take place within a smaller work community. Of course leadership must also foster this and encourage communication between all levels of the company.

I would like to open the discussion up to see what readers think makes a contact center a great place to work - comments anyone?

MK