Editor's note: Michael Mitrano is a principal at Transition Strategies Corporation, a management consulting firm serving the research industry. The author would like to thank Todd Myers of Opinion Research Corporation for his helpful review of this article.

When I came into this industry in the early 1980s, many clients felt that if you didn't do your own telephone interviewing, you couldn't assure a quality job. That feeling was particularly true with respect to large full-service research companies, which presumably had the business volume and management resources to support their own phone center if they chose to do so.

Since then, a lot has changed. While some clients still feel that their suppliers should carry out all of the research steps in-house, most no longer feel that way. At the same time, running a phone center has become more difficult than it was 20 years ago - and it wasn't easy then! For these reasons, many more full-service companies outsource their telephone interviewing. Should you?

The considerations

In weighing the decision to start a phone center, increase your phone capacity, cut it back, or get out of that business altogether, the astute research company executive has to consider a number of factors. Among these are cost, quality, scheduling control, and technology.

Cost

Phone interviewing has been under cost pressure for years as respondent cooperation has dropped and interviewer wages have risen. With data collection as the biggest item in most study budgets, it comes under great scrutiny. Is it cheaper to outsource your work than to do it in-house? Sometimes it is. Three variables come into play.

Location is one of the most important determinants of phone center cost. As phone interviewing has moved completely to CATI and high-speed data connectivity has become common, managers have realized that phone centers can be located far away from the researchers they serve. In fact, the best locations for research companies are usually the worst for phone centers. Being close to clients and a skilled professional labor pool is great for company headquarters, but co-locating a phone center there may mean that you pay high rents and labor costs in order to secure the bottom rung of the local workforce as your interviewers. In contrast, an isolated small town can bring you both low costs and a more committed, stable workforce.

Second, managing operational facilities requires different talents, styles, and tools than running a staff of professional researchers. Managing these facilities at a distance - and perhaps in a part of the country with culture and values that differ from those at headquarters - is even trickier. The stronger operational management of a data collection company can sometimes get gain greater productivity from a workforce than the managers of a full-service company could.

Finally, one's ability to keep a phone center full has a huge impact on cost. With their dedicated sales forces, some interviewing subcontractors can keep their facilities fuller than their full-service counterparts. While the carrying cost of empty interviewing stations is relatively low, the cost of interviewer recruiting, hiring, training, and "learning curve" - along with excess supervision that one often carries during slow periods - is high. Phone centers that can avoid the worst peaks and valleys have lower costs than those that can't. I'll talk more about strategies for reducing the inconsistency of your workload later in this column.

If you get both inside and outside bids on the same projects to see whether your internal facility is cost-competitive, be sure that you have captured all internal costs in your inside bid, and that the assumptions about the current year's volume that went into determining your inside prices are realistic. When you get inside and outside bids regularly, track them in a spreadsheet to see how your cost competitiveness changes over time.

Quality

Phone interviewing quality is affected by many factors. The values and attitudes of top and middle management are key. These determine the emphasis placed on interviewer selection, training, and monitoring. The geographic location of the phone center determines the workforce it can draw on, and the starting and top pay rates affect who it can attract and retain. The type of work a center does is important as well: if interviewers and supervisors are accustomed to work that is difficult and demands high skill, they will be better on jobs requiring that skill than people who do mostly simple, straightforward studies. Finally, the organization's technical skill affects quality. If questionnaire programming, sample management, supervisory tools, and technical infrastructure are not set up properly, even good interviewers can't produce their best work.

Does it follow from this that you can get the best quality by doing the work yourself so that you can control each of these variables? Not necessarily! Here's why:


  • Unless you have the resources to open and manage a facility anywhere in the U.S. or Canada, you are limited by your geographical range and, thus, the interviewer pool in that area.
  • While your organization's values may reinforce quality, you may not have the operational expertise to hire people and develop procedures that deliver this quality.
  • Even for quality-oriented research companies, cost is very important - and quality costs money. If you can't run a center with high efficiency, you won't have the dollars available to pay the rates needed to get and keep the best interviewers. Likewise, you won't have the budget for adequate training and monitoring.
  • If your interviewing volume is all peaks and valleys, you will have a harder time producing quality work. During the slow periods you will lose high-performing people who need regular work and can get it elsewhere. During the peaks everyone will be under great pressure for production and quality may suffer.

I believe that doing your own telephone data collection does not necessarily assure higher quality. If your values, skills, workload, and geography are all favorable, you'll do excellent work. If all of these stars are not in alignment, your work may not be better than that of potential subcontractors.

There is one big quality benefit to doing the interviewing in-house. While you may not have complete control over the phone center's overall quality (for the reasons just mentioned), you do have complete control over who works on each project. There is huge variation in quality between the top and bottom quintile in nearly all phone center interviewing staffs. If you own the facility, you can be sure that the best people are put on the studies that most need them. If you don't, the needs of other clients and the budget and schedule requirements of their jobs will compete with yours.

In part two next month, we will conclude by looking at the roles that scheduling control and technology should take in your decision-making.