A person holding a rotary phone and dialing

Editor's note: This content was updated Nov. 21, 2022 to reflect current trends and data. It originally published in January of 2022.

Customer service is an essential part of running a modern business. And organizations with medium-to-large customer bases often use a centralized call center to handle customer service issues.

Gartner defines the call center as a "department in which employees receive and make high volumes of telephone calls" with both internal customers (such as helpdesks) and external customers (customer service and support).

Call centers have numerous purposes, including:

  • Customer service and support
  • Account management
  • Market research
  • Telemarketing
  • Billing

What Is a Call Center vs. a Contact Center?

Traditional customer service models relied on customers making a phone call to a company whenever they had a question, concern or problem that needed solving. Thus, the call center was born.

Today, however, customers can connect with brands in a variety of ways — through phone, text message, email, live online chats and more. As such, the call center has evolved into the contact center.

You might see some call center definitions that argue call centers deal exclusively with calls while contact centers handle other means of communication. Most people, however, use these two terms interchangeably.

We'll dig a little deeper into the role of the call center, including the impact of new and emerging technology.

How Call Centers Work

What do call centers do, exactly?

They serve as the hub for customer service. They allow customers to interact with companies without the need to travel to a store, branch or office.

If a customer has a question, wants to pay a bill or make a complaint, they can do so at their own convenience. And they're not limited to phone calls, either. They can also use social media, text messages, email and live site chat.

Still, phone-based call centers have not fallen out of favor, despite the rise of the digital-first landscape.

According to data from a 2022 Hiya report — surveying 12,000 consumers across the US, UK, Canada, Germany, France and Spain — people prefer phone calls over all other communication methods when interacting with brands.

Consumers' top five communication channels, ranked, include:

  1. Phone Calls (32%)
  2. Email (20%)
  3. Text Message/Instant Message (12%)
  4. Video Call (6%)
  5. Chatbots (5%)

The big takeaway from this data? Customers want to talk to humans and get their questions answered in real-time — something phone support can achieve.

How companies offer this phone support typically varies based on their size and the resources and tools available to them. It's not uncommon for large brands to have multiple departments within their call centers, with each handling a specific type of call (complaint, questions, general comment, etc.).

Small brands, on the other hand, might have a single department with a handful of dedicated agents.

Related Article: How to Improve the Call Center Customer Experience

Types of Call Centers

We've already gone over the call center meaning as it relates to methods for contact (phone vs. other methods). However, the definition of a call center is even more nuanced, breaking down into three types:

  • Inbound
  • Outbound
  • Automated

Inbound Call Centers

An inbound call center is one that primarily handles incoming calls.

In this setup, the customer calls a telephone number to reach the brand. In many cases, customers will first encounter an interactive voice response (IVR) system.

This system relies on keywords, such as "pay a bill," "track a delivery," or "account information" to understand the customer request and hand the call off to the right agent.

Agents working in these call centers know how to deal with common requests quickly and accurately to ensure maximum customer satisfaction.

Outbound Call Centers

In an outbound calling center, agents make outgoing calls to people on a qualified list.

The company pulls this list from its customer relationship management (CRM) platform and filters it to ensure employees only contact those who've opted-in to communications.

Organizations typically use outbound call centers for promotional campaigns, sales or market research. However, they're subject to government regulation in many parts of the world, with guidelines dictating how and when companies can call residential phone numbers.

The Telephone Consumer Privacy Act (TCPA) in the US, for instance, lays out restrictions on the use of telephone equipment, such as automatic dialing systems.

Due to these restrictions, many companies have transferred their outbound communication methods to non-phone options, such as email and text.

Automated Call Centers

Many modern contact centers rely on IVR systems to automate call routing. Some smart systems also handle common customer queries without the need for agent intervention.

For instance, a customer can call in, state their address and receive updates on the status of a package. They might also enter their account number and payment information to pay a bill.

The system can also reroute the call to an agent if the customer prefers speaking with a human or has a complex ask.

These self-service options save time for customers and free up agents to work on more complex tasks. Plus, the system can easily reroute the call to an employee if the customer prefers speaking with a human.

Virtual vs. Office-Based Call Centers

Before the rise of the digital age, call centers were located in physical offices. Today, thanks to the wide availability of fast, reliable internet, many call center agents work from home.

These employees are backed up by the same technology as traditional call centers, and the end-user experience remains the same. All a virtual call center employee needs to work is internet service, a computer and a headset.

Because agents can work all over the globe, call center availability can span multiple time zones, which is a significant advantage to businesses looking to offer 24/7 availability.

Virtual work is also beneficial to employees, as hours are more flexible and workers don’t have to commute to an office space or adhere to a specific dress code.

Call Center Technology

Call center intelligence comes down to the technology a brand employs to handle calls and ease agent workloads.

Most established brands utilize technology such as:

  • Computer telephony integration: Synchronizes computers and phone systems, allowing customer data to show onscreen during a call.
  • Interactive voice response: Uses pre-recorded menu options and keywords to direct inbound calls.
  • Automatic call distribution: Routes calls to the agent or department best suited to the inquiry.
  • Omnichannel routing: Syncs, updates and manages all communication channels, including phone calls, text, email and live chat.
  • Team chat messaging: Allows internal teams to communicate via instant message for quick collaboration.
  • Call recording: Records phone calls automatically or on-demand, typically for quality control or training purposes.

Today, many call centers turn to cloud-based solutions, which tend to be more flexible and adaptable than traditional software.

With cloud-hosted software, brands don’t have to house or maintain hardware. This type of solution is also available anywhere at any time, making it advantageous for companies with home-based agents.

Related Article: Are Your Call Center Operations Making Employees Leave?

Metrics That Measure Call Center Performance

Call center operations are vital to companies because they deal with customers at various stages of the customer journey — from inbound sales to billing and account cancellation.

This pivotal role makes it necessary to track the performance of the center and individual agents and look to strategies for call center optimization. To do this, brands utilize metrics that break down into three categories:

  • Historical: Help managers understand the historical demand of the call center, allowing the team to better forecast, schedule and plan for the future.
  • Real-time: Show the current demand the call center faces, helping managers understand intraday demand and better handle staffing levels.
  • Customer-focused: Give an idea of the quality of customer service that callers receive, both on an overall and per-agent level.

Let's look at some of the top metrics brands turn to when it comes to accessing their call center operations and customer satisfaction.

Average Time to Answer

What is a call center industry key performance indicator (KPI) that will give you an outlook on the customer experience? Average time to answer.

Average time to answer is a measure of how long it takes for an agent to pick up an inbound call. This includes the time a customer spends on hold but not the time a customer might spend interacting with an IVR system.

According to Call Centre Helper, most industries follow the 80/20 standard when it comes to answering calls: answering 80% of calls within 20 seconds.

Slow answer times could mean a number of issues, such as:

  • Poor call routing
  • Undertrained agents
  • Not enough agents available

Reducing this average time to answer can help improve other call center metrics, including customer satisfaction and call abandonment rates.

First Call Resolution Rate

The first call resolution rate is the percentage of calls resolved on the first attempt, with no need for the customer to call back or follow up on their query.

Companies often consider this metric on a per-agent level, as an agent with a high first call resolution rate typically indicates an acceptable level of expertise and customer service skills.

It's not a metric to look at in isolation, however. If an agent frequently deals with complex queries that require external action, for example, callbacks may be out of their control.

One way companies can strike a balance between acceptable average handling times and high first call resolution rates is to adopt an IVR system that screens and routes calls.

Average Handling Time

Average handling time is the total length of time a customer is on the phone. This metric gives an idea of how long it takes for agents to resolve customer problems.

If employees handle calls quickly and efficiently while maintaining an acceptable first call resolution rate, companies will see customer satisfaction, loyalty and retention go up.

One challenge that comes with average handling times is determining what a good time is for each type of call. Tech support queries, for instance, may have longer target times than billing queries.

Transfer Rate

Transfer rate measures how many calls an agent can handle without having to pass the caller to another department.

The percentage of calls an individual agent can handle should be as high as possible. Ideally, the first call resolution rate should be higher than the transfer rate.

A high transfer rate could be a sign of several issues, including:

  • Lack of agent training
  • Confusing IVR instructions
  • Incorrect routing of the call

Customer Satisfaction (CSAT)

The customer satisfaction score is a rating of how satisfied customers are with a company's products, services or interactions.

Unlike the metrics listed above, CSAT requires the customer to provide feedback.

To request this feedback, brands send out a simple, single-question survey to customers at the end of a call, such as:

How would you rate your overall satisfaction with the customer service you received today?

Customers then choose their satisfaction level with a rating between one and five — or one and 10 — with one being very unsatisfied and five being very satisfied.

CSAT scores can be used to evaluate performance both at an organizational and per-agent level.

Related Article: How Call Center Analytics Drive Customer Satisfaction

Working in a Call Center

Modern call center agents are in high demand.

Those with exceptional people skills can often flourish in this position because it involves a lot of talking, empathy and problem-solving. It also offers benefits like flexibility in working hours and, often, working location.

The position is not without its challenges, however. Dealing with customers — especially those with questions or experiencing a problem — can be unpredictable in nature.

The Bureau of Labor Statistics predicted that employment of customer service agents is likely to remain stable between 2020 and 2030, with an expected 361,700 job openings per year.

The average salary earned by customer service agents is $17.23 per hour, or $35,830 per year — lower than the national median across all careers. However, call center jobs are often open to those with a high school diploma or equivalent, while many other positions require a bachelor's degree or higher.

The Job of the Customer Service Advisor

Call center agents are both problem solvers and brand representatives. They often deal with more than just phone calls too. Other job duties include:

  • Processing orders and payments
  • Responding to and acting on complaints
  • Making outbound customer calls
  • Up-selling and cross-selling products and services
  • Managing in-house customer databases
  • Collecting and analyzing customer feedback
  • Training new call center agents

Key Skills for Call Center Agents

Call center agents are at the front lines of a company — they're often the first to speak with customers or the first to hear about complaints, questions and other commentaries.

When brands hire for this role, they often look for skills like:

  • Organization
  • Empathy
  • Attention to detail
  • Effective communication (with customers and colleagues)
  • Ability to learn and retain new information
  • Creativity (needed for problem-solving!)
  • Understanding of customer privacy and security
  • Ability to handle pressure and time constraints

Individual call centers will have their own focus areas depending on their industry or the products and services they provide.

A tech support hotline, for instance, will likely require employees with extensive technological knowledge. A product-focused call center, however, might look for employees with a sales background.

The Pros and Cons of Working in a Call Center

Like any job, working in a call center has advantages and disadvantages.

Pros of Working in a Call Center

Some of the biggest benefits of call center work include:

  • The barrier to entry is low. Someone could gain this position with a high school diploma or equivalent and little to no previous experience. It's a great stepping stone to positions in sales and customer experience.
  • It offers valuable experience. A call center agent will gain many transferable skills, including communications, product knowledge, problem-solving and team collaboration.
  • The work is flexible. Many call center agents can work remotely or in a hybrid capacity. The hours also tend to be flexible, ideal for those in school or with other commitments.
  • There's opportunity for advancement. Those who remain in this position for an extended time can get promoted to team leader or other more senior roles. Even those in junior-level positions can typically earn bonuses.

Cons of Working in a Call Center

Unfortunately, call center work comes with a few potential drawbacks, such as:

  • The work can be challenging. Workers often deal with unhappy or irate customers and may not recieve a lot of recognition for work well done.
  • The work is mostly sedentary. Most shifts include sitting in front of a computer all day. Workers must actively remember to stretch, walk around and drink water.
  • The job can have high turnover. In 2021, the call center attrition rate was 42%, according to a NICE survey.
  • It can be hard to bond with colleagues. The high turnover and workload challenges can make it difficult to form long-term relationships.

Call Centers Promote Customer-Brand Relationships

No matter what product or service a company offers, it needs to keep the lines of communication with customers open. That relationship is what keeps customers satisfied and builds loyalty.

The call center is a vital component of brand-customer communication — without it, brands would know less about their target audience, miss out on significant parts of the customer journey and, ultimately, lose business.