Why do call center start ups fail?

Why start a new call center business?

Some call centers are started by sales people determined to go it alone, and some are founded by astute entrepreneurs. In inside sales, fast growing companies see setting up a call center operation as a way to grow capacity, close more deals, and increase sales.

In all kinds of industry sectors, where there is a new product, service, acquisition or market adjustment, sales and service lines and the switchboard can get overloaded fast. For some businesses the answer is to set up an in-house call center operation. For others it is the trigger to find outsourced call center partners.

Is a call center start up just for calls?

The simple answer, as you know, is: not any more. Call centers have become contact centers. Calls, emails, texts, social media, web chats, video and all kinds of online service channels are now essential and expected from the modern call center start up. The demands from end customers and clients for multi-channel capabilities have added many extra layers of complexity to a new call center start up operation.

Too big to fail?

LeadDesk works with call centers of all shapes and sizes, from entrepreneur agents up to five-hundred-plus-seat giants. We also work with all sizes of enterprises with inside sales teams, B2B specialists, multi-site networks and distributed teams.

As well as understanding the business and successes of our clients, we have also observed the factors behind failure. Of course, we have witnessed the paths of organizations that did not choose LeadDesk and we have also seen when, unfortunately, some companies have folded.

There are about one thousand decisions and tasks you need to undertake to get a call center start up from idea to reality. That’s a lot of potential for error. Of course, there are some big choices, like location and call center software, where suppliers take care of hundreds of those issues for you.

But, what are the fault lines? What are the major potential points of failure?


The magnificent 7 reasons call centers fail

1. Personnel

The ability to attract and retain the best agents is key to success. Personnel are the biggest operational costs for call centers of any size.

There are a few factors to consider: A logical place to start is your location and its physical catchment. Are there enough skilled agents nearby? Are you capable of recruiting, enabling and monitoring remote agents? Can your software handle it? Then there is the soft side. Do you have the skills to keep your agents motivated, help them work more productively, and keep the best agents working for you?

And it’s not just people skills. Soft values are important. Company culture is important. However, your choice of technology and tools has a big part to play. Call centers that fail typically use weak software that is unable to evaluate agent performance, that’s awkward for agents, and doesn’t gamify the agent experience.


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2. The call center’s role

There are some basic questions that some call center start ups never answer. Are we inbound or outbound? Are we strategic or tactical? Are we cutting edge or traditional? What is our approach to customer service? How do we present our results? How do we get new business?

Some call center entrepreneurs or business managers lack any idea of what their offer is for clients, and what could make them stand out in the market place. There are inside sales teams that have no clear role within the organization, no clear relationship with other internal stakeholders and worse, antagonists on the board from inception. It’s not a surprise that these call centers are some of the fastest and most spectacular to fail.

3. Scalability

Call center start ups must plan for growth. Internal call center business units must be able to scale up or down. All call center businesses need to be able to adjust to peak demand from different clients, campaigns and seasons.

Technology, facilities and personnel must be able to scale rapidly without penalty and without disruption. Management need to have the skills to handle change, expansion or contraction. Scalability must be a strong thread in call center business planning to avoid failure.

4. The call center busines

A key thread running through struggling and failed call centers is that they did not anticipate the particular needs of the call center business. The clichéd call center factory is a myth. Modern call centers are sophisticated businesses working with cutting edge technology. The margins can be low and the competition is fierce. And the competition is using every advantage.

Part of the uniqueness of the call center business is reliance on dedicated software that must be totally reliable, and offer a consistently high quality experience. This can mean call center-grade call quality over VoIP, and also mean highly responsive online customer service with user journey tracking – all things that are technology-dependent.

Call centers also rely on call center-class speed of decision-making. The right software monitoring and automation tools help here, but the right, rapid business decisions are needed for the outset. Failing call centers have usually failed to do their industry research and did not get expert industry advice.

5. Industry sector factors

Not all call center business is the same. Different industry sectors have very different demands. The technology you need, the regulations you must comply with, the leads you need, your success criteria and your risk profile can all vary dramatically.

Consider this: in some sectors, such as publishing telesales, we have seen call centers fail because they did not adopt the industry standard software used by the highest volume clients and their outsourcers. In consumer construction campaigns, call centers need leads that include insightful building data. In B2B, call centers need efficient meeting booking tools and the ability to bring in third parties to the process.

Call center start ups, with their first client waiting, often underestimate the different resources required to switch sectors. The same phenomenon can be found in inside sales. If a sales team is set up with a specialism, to serve a specific product line or business unit, it may be hard to adapt to add value to other product lines or business units later.

Conversely, with the right software and awareness of sector-specific demands, you can be successful.

6. Technology and software

Call center operations are typically run based on one software platform. The choice of software is absolutely critical. The strengths or limitations of your software will dominate the actions of your agents, managers and business decision makers. Your software dictates how your agents interact, how you monitor, how you report, how you integrate with other systems, and your software, and its reliability determines if you are always closing deals – or looking at a blank screen!

Conversely, your choice of software can solve many of those one thousand issues. Choose the right software! It’s arguably the most important decision you have to make. Get hands on demos. Get the vendors on your short list to put you in touch with other businesses like yours.

7. Agility

Call center start ups are borne out of need or opportunity. They do not appear in a vacuum. If you’ve got clients to service, and customers to contact, you need to get up and running instantly. There is no time for systems training. There’s no time to ramp up software. You need systems that work, now. You need people to work, now.

And, once you are up and running, you need to have the capability to constantly evaluate and improve your performance. And you have to do it. You have to improve and demonstrate improvement to every client on every campaign. Your choice of call center software is pivotal here. Many new call center units within large organizations have failed as they were tied to legacy hardware technology, or stuck with CRM systems that they had to fight against from the start.

You also need to be able to adjust to new campaigns, new results, new channels, and new regulations, rapidly. A lot of call center businesses that fail are just too slow.

Is your call center start up doomed to failure?

How can you avoid disaster?


LeadDesk call center software includes everything you need to get up and running. LeadDesk is the perfect choice for new call centers of all sizes, internal business units and start ups. All you need is a PC, headset and internet connection. We help call center start ups grow. Scalable, reliable, compliant, fast. Very, very, fast. No training required. And you only pay for what you use. Get in touch. Try it.