The Industry in Numbers

By Sid Mandel and Douglas Duncan

The evolution of personal contact has fostered an ever-increasing need for instant communication with a “where-ever, when-ever” mentality. The need to interact on the move whether by text or by voice, is driving technology and creating a greater need for content. Instant information and communications for the masses is the reality of the day.

That reality comes with a price, the absence of human contact. Technology has automated both the telephone call and the caller’s response. The more impersonal technology emerges, the greater our need for the comfort of the human touch becomes. For those reasons, we conducted an analysis of the size and scope of the telemessaging industry.

Historically, the telemessaging market has always been included in studies of call centers and not defined by itself. The call center industry encompasses the fee-based telemessaging/call centers and dedicated in-house call centers. In order to perform a relevant, contemporary study of the telemessaging market, a telemessaging service was defined as a fee-based, three to 75-seat center. The fee-based call center runs from 75 to 500 seats that are usually inbound order taking centers or outbound telemarketing centers. The large dedicated call centers (financial, credit card, customer service, and commerce centers) usually have 200 to 5000 seats.

According to the U.S. Department of Labor (DOL), there are 8,843 locations that are outbound/inbound and/or fee based calling centers which employ 511,000 people (U.S. Department of Labor, 2000 County Business,, June 24). This represents the broad figures on all fee-based telemessaging/call centers, which include multiple locations for the same organization. There are approximately 4,450 telephone answering services (TAS) which include medical answering services with gross annual revenues of $2.7 billion. They service 2.29 million clients and average about 514 clients each, generating an average of $627,000 yearly. The fee-based telemessaging industry employs 227,000 full-time operators according to the U.S. Department of Labor’s 2001 National Occupational Employment and Wage Estimates.

The telemessaging/call center market is growing despite indications within the telemessaging segment of the industry of less profit and fewer customers. The client base is starting to shift to call centers that can accommodate their business model and supply instant communication and validation. The most underused resource in the industry is the Internet. The uses of connectivity, remote operators, marketing, sales, customer service, human resources, customer relations, call management, bill processing, and customized services are being ignored. The outlook in the near future is positive for modernized centers with 10 or more seats because of the advances in communication technology. Conversely, the future is very dim for the large North American dedicated call centers. With the advent of inexpensive global telecommunications and call centers populated by skilled, yet inexpensive labor from the Pacific Rim and India, companies are now outsourcing much of their customer service, technical, and order taking calls.

Today’s telemessaging company is generally a privately owned business handed down from one generation to the next and has been established for more than 15 years. Recently a few market savvy consolidators have begun prying away the layers of this cottage industry and integrating the technology necessary to keep current with the changing face of today’s world of communications. Inherently resistant to change, the telemessaging industry still embraces technology and ideology from the past.

The demand for live agents is growing as technology achieves more impersonal automation. The need is there! The numbers show a world-wide growth in call center services and the resources they offer. The race to provide personalized touch combined with the technology to facilitate businesses communication is underway. With only 8% of the U.S. and Canadian centers having Internet capabilities, they are falling behind. The rest of the industry remains  mired in the past and oblivious to the changing landscape. Continuing to live off the medical industry without expanding into other markets will spell the demise of the “Mom and Pop” segment of the telemessaging industry. Those who venture out to grab a piece of the outsource market will survive; the others will be swallowed up or fade away when their traditional client base retires.

The good news for the call center industry is that it is growing! Every segment of the industry is growing, fueled by the communication technology that sustains it. Opportunities abound for those capable of understanding and supplying what the consumer wants and needs. Read the facts, examine the details and find out where you fit in.

Sid Mandel holds a Masters in Business Administration. He has blended his knowledge gained from years of experience in the Call Center and Telephony Industries (15 long years) with his experience as a Senior Business Consultant to create the TurboSchedule line of products with Douglas Duncan.

[From Connection MagazineSeptember 2003]