Call Center Industry in the Us

Industry: The Telemarketing and Call Centers industry has a low level of concentration. In 2012, the top four players are estimated to have a combined market share of about 20.0% of total industry revenue. These large globalized companies operate with about 140,000 employees. The market share for the top four has been relatively steady over the past 5 years, falling from just 20.9% in 2007. The small decline may be attributed to increased business by non-employers, who have few barriers to entry due to the low startup costs. Sole proprietorships account for 75.7% of industry firms, but only represent 2.4% of the total workforce and earn just 1.5% of industry revenue.

Among firms with employees, 35.6% employ fewer than five people. Despite 87.1% of firms employing less than 100 people, the majority of employees are located in large call centers. In 2012, an estimated 571 enterprises have more than 100 employees, with nearly half the companies employing more than 500 people. Although IBISWorld does not expect this trend to change drastically during the next five years, industry consolidation will ultimately increase the size of the biggest firms.

Key Success and Client Acquisition Factors

Ability to quickly adopt new technology: Companies that use Voice over Internet Protocol and web-enabled call centers can reduce costs, improve margins and offer more services to clients.

Ability to provide services in diverse locations: Industry operators can gain an advantage if they are able to service clients in rural areas, where access to in-person services and sales is difficult.

Provision of superior sales service: As the number of incoming calls has declined, companies that cross-sell and up-sell clients’ customers have a competitive advantage.

Access to a multi-skilled and flexible workforce: Operators must have a pool of suitable labor that can be trained and called upon in periods of elevated demand. Similarly, low employee turnover reduces costs.

Having a...