TMCnet Feature
January 26, 2022

Call Centers in the Philippines - The Latest Vendor Rate Update

For businesses looking to reduce costs and increase ROI, call center outsourcing to the Philippines has long been the preferred choice for some of the world’s most recognizable brands, such as Amazon, American Express (News - Alert), and I.B.M. However, since the country's rise to dominance in voice-based contact center outsourcing in 2010, there have been significant changes in both the industry and the global business climate that have contributed to changes in call center agent rates. “For service buyers, it is critical to understand what factors go into call center pricing, so they do not sacrifice quality in the pursuit of savings,” says Ralf Ellspermann, CEO of PITON-Global, one of the leading mid-sized call centers in the Philippines.

Attempting to get an accurate picture of going rates for call center outsourcing in the Philippines can be difficult, not only because there are several different factors that go into pricing, but also because many vendors obfuscate their rates in the interest of remaining competitive. Additionally, much available information on current pricing is simply dated, making it useless. The following is an up-to-date analysis of pricing for call centers in the Philippines, meant to provide service buyers with the information they need to make smart decisions when looking at their options.

Companies may initially find a broad range of rates for call center outsourcing services in the Philippines. To get a more accurate picture of these costs, it's helpful to try to understand them in terms of the hourly rate. Although multiple factors go into call center pricing, the hourly rate a vendor charges will inevitably be closely correlated to the level of service that can be expected. This means that a call center with a higher rate will usually provide better results than a vendor offering much lower rates.

Generally speaking, a premium call center in the Philippines will charge an hourly rate of US$12-14 per hour. A buyer working with such a provider can expect to receive 24/7 support (if so desired), more experienced agents with enhanced technical skills, more advanced technology for handling calls, and more thorough reporting of metrics. In contrast, a low-cost vendor that charges a typical rate of US$6-8 per hour will be simply unable to deliver this level of service. The low hourly rate means less qualified agents with less English proficiency, outdated technology and infrastructure, and poor management, all of which leads to a poor customer experience.

The reason for this large disparity is that cost is directly equivalent to quality. Both premium and low-cost call centers have similar operating costs, and after accounting for operating margin, a premium call center in the Philippines typically has US$9.80 to pay for agent and management salaries, as well as support, technology, and infrastructure, and utilities. A low-cost vendor only has US$5.60 available for these same costs. With the additional revenue, a premium provider with a higher hourly rate can afford to deliver world-class technology, infrastructure, and facilities, and the most highly skilled agents and management. “All these factors contribute significantly to service quality, and ultimately to the success of a call center program,” says Ellspermann. There is clearly no way for a vendor with half the available funds to provide anything close to the same service as its counterpart. The question for a service buyer then becomes, what level of service are you willing to sacrifice to save a few dollars?

To break these costs down further, consider the variance in pricing between voice-based services and non-voice-based services. Voice-based (in English) services make up 95% of all rates that are charged for call center outsourcing to the Philippines. These services are priced from US$8-18 and include functions such as customer care and retention, tech support, and collections. The difference here is a premium vendor at the high end delivers much higher value services such as advanced call handling technology, and superior CX. Conversely, a low-cost vendor would offer little more than a call center with basic services, such as a closed-question survey.

Non-voice services such as chat and email are priced at US$5-14 per hour on average currently and make up a very small portion of call center outsourcing services. The high-end rates are from providers who specialize in and offer advanced chat features, or social media support and the technology to support it. For this type of service, a premium provider can deliver high-value functions like business analytics or research, whereas a low-cost vendor at the low end would provide little more than data processing.

An important consideration for any buyer is the fact that CX has now replaced cost as the most critical factor for most SMEs outsourcing call center requirements. The reason for this is the fact that customers will now go out of their way to avoid poor service, and often make every effort to provide feedback and share not-so-positive experiences. “Poor customer experience leads to lost business, whereas a good CX leads to more sales and increased loyalty,” explains Ellspermann. Premium call center outsourcing providers in the Philippines have accounted for this and realize that a failure to deliver a superior CX will inevitably lead to poor reviews and complaints. In contrast, low-cost vendors simply can't deliver the same level of service and afford the technology investments required to seriously impact customer experience in a positive way.

“When looking for a call center provider in the Philippines, understanding call center vendor rates is critical to know exactly what level of service can be expected. The truth is a low-cost provider will not have half the available resources to deliver anything close to premium services,” concludes Ellspermann.

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