As recent as early nineties, life for the Indian consumer was very bad, be it in telecom services, banking industry or Indian railways. Cartoonists had a field day depicting the sad plight of consumers, who some times, even had to take a day’s off to pay their bills, book tickets or update their bank accounts.

Situation has changed since then with service industries, led by banking and telecom companies, increasingly realizing the value of holding on their existing customers. With the opening up of the economy and increasing competition, companies had no choice but to work hard to gain the market share. Taking care of the customer was the only answer. Led by the private sector, customer care initiatives in India started in spurts in the late 90’s.

Ironically, the international call center market, which also started around the same time, galloped ahead as dollars started pouring in and Western companies increasingly realizing the economics of having their customer care centers in India.

Today, India Inc has become the back office of the world. Largely dominated by the call center industry, the Indian BPO industry has the distinction of offering many back-office services, some of which are considerably high end. Last year, the international BPO industry employed 1,18,500 people and the growth rate is expected to continue at 50%. The impact of the industry on the economy therefore, cannot be ignored.

However, the frenzy of activity has entirely been focused on the export market with hardly any activity in the domestic market. Over the last year and a half, the domestic call center market has also started showing buoyancy, propelled by the growth in the telecom and banking industry. There is enough momentum in the domestic market to believe that the industry is on the upsurge and will hit big time in the next couple of years.

However, unlike the exports market, the domestic BPO space is primarily voice based and very little back-office work. Outbound calls are made for telemarketing, follow-ups of orders and sales, while inbound calls could be for customer inquiry and complaints or response calls for a particular marketing campaign.

However, whether it is inbound or outbound, most of the calls are made in the pre-calls stage. "Once the calls are converted into customers, further inquiries and customer care is taken over either in-house or by some subsidiary of the parent company," says Srikant Sashtri, MD Solutions Integrated Marketing.

While most of the cellular companies have outsourced the handling of their pre-paid customer-care to third party, the post-paid customer care has invariably been retained in-house or to some associated company. Outgoing calls to up-sell certain packages are however, made by the third party call centers.

Call centers have been providing a good deal of marketing support. For instance, Delhi-based DSS Mobile generates as much as 30% of the sales leads for HP India. HP’s toll free number lands at DSS’ call center and agents handle the inquiry and forward the lead to the appropriate dealer and then follow-up to ensure that the "loop has been completed".

In the process, the company not only generates tremendous amount of data, it is also in a position to analyze the data in any which way the requirement may be. For instance, Pravin Kumar, MD, DSS Mobile says, "We take customer complaints for Aquaguard and keep detailed data on the nature of the complaint, follow-ups etc. We can mine the data to provide an analysis of the performance of dealers in a particular area. We have provided business intelligence inputs in many cases and helped companies in developing targeted marketing campaigns and product launches."

Market estimates peg the current size of the domestic call center market at Rs 200 crore which will become Rs 1000 crore by 2006. Says Sandip Sen, CEO of CustomerFirst, "Our rates are not the cheapest, but we have been able to command a premium because of the value proposition."

Echoes Ishita Swarup, CEO, Orion Dialog, "Our rates are at a premium as we deliver value."

Challenges
A key reason for the low profitability is the small scale of operations, that too at multiple locations. Sooner than later, companies will need to address the issue of economies of scale. In fact, a very big challenge for the domestic call center industry is the ability to scale up fast. With the slow take-off of the industry, it was not an issue till now, but the industry has suddenly picked up pace and will grow exponentially soon.

Says Deepak Malhotra, MD, Call Center Solutions,"In March-April 2002, our company had monthly billing of Rs 40-50 lakh which has touched Rs 1.5 crore in December 2003. The rate of growth of the industry has suddenly taken off fast and the industry will find it very difficult to ramp up in the next phase of growth for want of capital."

Since margins are low, the biggest challenge for the industry is to keep costs low, increase efficiencies and focus on profitability.

Says Sandip Sen of CustomerFirst, "The need of the hour is to become professional. We make no difference in the training of the international and domestic call center associates. Our focus is on adding value to the customer and be able to command a premium."

Finally, since domestic call center players are walking in uncharted territory, they have to fulfill huge customer expectations. Says Swarup, "Expectation levels are sometimes very high because customers actually do not know what they want. This is because internal processes are not in place."

It is ironic that we, the people who have staked the claim of being the hub for the Western customer care, do not have a culture of servicing our own customers. But an industry, built on services, cannot ignore serving the domestic market, simply because it draws its manpower from the local populace.

Balaka Baruah Aggarwal Voice&Data

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