Example of Call Centre Expenses

Message Center Expense - from Operating Expense Budget

Murray plans to use the services of a message center (often referred to as a call center). Moreover, when customers see Murray's advertisement, they will be prompted to call a 1-800 number for additional product information. All "customer calls" will be received by the message center. Moreover, the purpose of the message center is to sell callers Murray's product.

When talking to the General Manager of the "Message King", a local message center in his home town, Murray discovered each call would cost him \$0.50 cents. Since he feels 1 out of every 2 callers will purchase his product, and since he is forecasting 4,000 customers in 200X, Murray expects to receive 8,000 calls through the Message Center in 200X. In addition to the per call cost, the Message King charges \$100 per month for service charges. Therefore, the total "Message Center Expense", appearing on Murray's 200X Forecasted Income Statement, is expected to be \$4,600 (8,000 callers x \$.50 cents per call + \$100 per month x 6 months = \$4,600). For simplicity, Murray decides his 200X Forecasted Cash Flow Statement will show equal payments (Cash Outflows) of \$766.66 each month (\$4,600 / 6 months)

Due to anticipated technology advancements, the General Manger of the "Message King" assured Murray that his cost per call in 200Y would reduce to \$0.4625 cents. The monthly service charge, however, will remain at \$100 per month. Therefore, the total "Message Center Expense", appearing on Murray's 200Y Forecasted Income Statement, is expected to be \$8,600 (16,000 callers x \$0.4625 cents per call + \$100 per month x 12 months). Once again, Murray decides his 200Y Forecasted Cash Flow Statement will show equal payments (Cash Outflows) of \$716.66 each month (\$8,600 / 12 months).

Categories: Forecasting