Is Your Call Center a Profit Center or a Cost Center?



Positioning Yourself as a Profit Center Will Help Drive Budget Success

 By Peter Lyle DeHaan, PhD

Peter DeHaan, Publisher and Editor of AnswerStatI once heard of a hospital marketing manager who identified their call center as their most cost-effective form of marketing, offering the highest return on investment (ROI). It was a profit center. Further shocking was learning that the entire call center operation fell under the budget of the marketing department. I imagine the call center director had little trouble getting the appropriate budget each year to operate the call center.

The Downside of Being a Cost Center

If upper management views your operation as a cost center, they’ll see your line item on their budget as an expense to control and decrease whenever possible. This results in a scarcity of funds and makes it hard to operate a call center as needed to produce the best outcomes for patients and callers.

Each new budget cycle produces a predictable challenge of fighting to maintain the status quo of your funds. And receiving approval for additional expenditures on software, services, and initiatives to better serve your organization’s clientele looms as a formidable challenge.

If this is your reality, I feel for you. But there is hope: reposition your call center as a profit center.Look for ways that you contribute to the revenue stream of your organization. Click To Tweet

The Benefits of Being a Profit Center

However, if you’re call center generates revenue—either directly or indirectly—you stand a much better chance of coming out on the plus side for each year’s new budget. If you’re a pharmaceutical or durable medical equipment manufacturer, it’s easy to make your case. You track sales, which you then use to offset the cost of your operation. Any expense that produces more sales becomes an easy request to justify.

Even if your call center doesn’t directly handle sales or take phone orders, you can still work to establish yourself as a profit center. It just takes a bit more effort. For example, if you’re a hospital call center, as in the above example, look for ways that you contribute to the revenue stream of your organization.

How to Become a Profit Center

For example, each time you make a referral to a physician or clinic in your system, what’s the value of that connection? Even more significant, what is the lifetime value of that new patient to your organization? Suddenly that single phone call has a value of thousands or tens of thousands of dollars, maybe more.

What about appointments? Each time you set an appointment for one of the providers in your system, what’s its revenue potential? And often that initial interaction leads to a series of follow ups. Though these subsequent appointments may or may not go through your call center, the additional engagements would not have occurred had you not secured the first one.

Without your call center, these things would not have happened. As such, you deserve credit for the critical role your call center played in bringing this new business—and revenue—into your organization.

Start tracking these types of revenue-producing transactions. But don’t just note the number of calls. Instead report the immediate value and long-term revenue potential from each of these interactions. In doing so you’ll help shift your call center operation from a cost center to a profit center. And this will make a huge difference when it comes time to negotiate next year’s budget.

 Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of AnswerStat. He’s a passionate wordsmith whose goal is to change the world one word at a time.