We all know from a number of the Net Shepherd and Answers.com press releases that The Answers.com business model is to be a virtual call center for organizations. Here is an excerpt from their website that describes what it is that they are setting out to do . . .
Today, Answers.com develops, markets and supports online customer service tools. Our goal is to help businesses manage their customer service inquiry volume efficiently while maximizing overall customer satisfaction and reducing costs. Through our advanced question and answer technology, Answers.com provides the best tools for online customer service support.
answers.com
So, now that we know this, I decided to do some digging to see if I could pull up some more stats on just how big this market is. I even got tired of hearing myself spout off that the market is huge without backing that claim up with some supporting information<ggg>. Here is some of what I found . . .
Crazy Canuck
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Industry Size
The global call center software market will nearly triple in size, to be $8.5 billion, by 2003. Growth will be driven primarily by demand for Web-enabling software and media-neutral call monitoring solutions. The aggregate market for all call center software is currently worth $2.9 billion. Customer care software is the largest segment of the call center software market, with sales in excess of $690 million in 1999. 90% of all mergers and acquisitions aimed at call center software vendors has been initiated by companies with no historical experience in the call center software space. (This is $7 billion in M&A over the last four years.) Growth in the call center software industry will not occur uniformly within all of the software segments. Market share claimed by each of the three CRM sub-segments (customer care, sales force automation and help desk software) will diminish slightly between 1999 and 2003. Global spending on software that supports Web-enablement will grow more than six-fold between 1999 and 2003, from $245 million to $1.6 billion. The value of the market for call monitoring software is set to grow from $120 million in 1999 to $850 million in 2003.
Datamonitor, 11/99
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Online retailing revenues in North America are expected to top $36 billion by the end of 1999, with a projected growth rate of 145% in 1999. Based on data from 328 online retailers, 158 of which participated in a detailed survey, they found that total 1998 online revenues across all categories reached $14.9 billion, representing 0.5% of all retail sales. Online orders in 1998 were up 200% and the number of online shoppers was up 300%.
62% of the $14.9 billion of online revenues in 1998 were from retailers who had businesses that predated the web. Customer acquisition costs for online-only retailers are $42 per customer, almost double that for multichannel retailers at $22 per customer.
The Boston Consulting Group in a report for the online retailers trade association Shop.org, 7/99.
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The average cost of handling a call in a telephony-based center ranges from US$50-74, and the average cost falls 43% in a web-based call center.
Nortel, citing statistics by Forrester Research, 7/99.
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The worldwide call center services market totalled $23 billion in revenues in 1998, and is projected to double to $58.6 billion by 2003. (This is based on dividing the overall call center service marketing into these segments: consulting, systems integration and outsourcing.) Outsourcing is the largest segment, with $17 billion in 1998, or 74% of the total market, headed for $42 billion in 2003.
IDC, 6/99
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Outbound telemarketing reached a record $482.2 billion in sales in 1998, including $209.5 billion in sales to consumers.
Direct Marketing Association, 1/99, U.S. Direct Marketing Today: Economic Impact, 1998.
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$700 billion in products and services were sold through call centers in 1997 and this figure is expanding by 20% annually.
GeoTel citing Telemarketing Magazine, 9/98.
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3% of the US working population is currently employed in call centers, for a total of 1.55 million agent positions in the US call center market. At a 6.5% CAGR, the number of agent positions will grow to 1.979 million by 2002.
Datamonitor, 1998.
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