The History of the Call Centre – Updated

I was once asked by a researcher for the BBC, for a documentary on contact centres, for the date of the first call centre in the UK.

This question stumped me.  I knew of some early ones, but what was the first?  I have done some research and the early results are quite surprising.

The Creation Myth

Like many revolutionary technologies, the call centre has a creation myth.  This states that call centres as we know them today originate from the Automatic Call Distributor developed in 1973 by US firm Rockwell (the Rockwell Galaxy) to allow Continental Airlines to run a telephone booking system.

As it turns out, this was all good marketing baloney.  Rockwell did indeed develop their ACD in 1973 and it was installed that year.  But it certainly was not the first.

Rockwell’s claim to the first ACD installation may be inaccurate, but they were certainly amongst the first and most successful manufacturers.

Early Automatic Call Distributors (ACD)

But the basic features of the modern call centre can be recognised almost ten years before this, in the mid-1960s. Private Automated Business Exchanges (PABX) began to be used to handle large numbers of customer contacts.

The Oxford English Dictionary defines the term ‘call centre’ as follows:

call centre n. an office staffed and equipped to handle large numbers of telephone calls, using computer technology to assist in the management of calls, supply of information, etc.; esp. such an office providing the centralized customer contact and customer service functions of a large organization.

That computer technology is the Automatic Call Distributor, and its development is closely linked to that of the call centre. ACD systems allow calls to be filtered and assigned to the best possible agents available at the time. An algorithm determines which agent receives which call.

The invention of ACD technology made the concept of a call centre possible. Essentially it replaced the human operator with a far more flexible automated system capable of handling much greater numbers of calls.

The First Call Centres

The first ACD systems would probably have emerged in the 1950s to handle central operator enquiries at the main telephone companies.  To date we have not been to find any concrete evidence of this so far.

The earliest example of a call centre we can find in the UK is at the The Birmingham Press and Mail.  They had a GEC PABX 4 ACD, installed in 1965, as seen in the photos.  Thanks to the British Telephones website for allowing us to reproduce them.

Already the hallmarks of the call centre can be seen in the rows of agents with individual phone terminals, taking and making calls.

The Ericsson PABX ET 4 was a fully automatic Strowger Telephone system with a cordless operator’s console. It superseded the PABX No. 3 and was manufactured by Ericsson Telephones of Beeston, Notts. The ACD system was an adaptation of this PABX ET 4 system.

Early Adopters

By the early 1970s, PABX systems were beginning to include ACD technology, allowing the development of large-scale call centres.

In May 1972, the New Scientist magazine reported that Barclaycard had installed a Plessey PABX at its Northampton processing centre. This included an ACD to allow up to 72 enquiries to be dealt in cyclic order. The agents on this system were able to check the credit card records of Barclaycard’s 1.6 million customers via a microfiche reference system.

At the same time, Barclaycard’s competitors Access installed a computerised system allowing very fast access to customer records. It was an indication of the future direction of contact centres.

In 1972 Gas World reported the installation of an ACD system at British Gas in Wales.  The system had the capacity to handle up to 20,000 calls per week.  This may have been the first multilingual system as it handled both Welsh and English calls.  It was reported that Welsh-speaking customers in Aberystwyth at first found it strange to be telling someone in Wrexham of their problems.

Big Names Enter the Market

Throughout the late 1970s and 1980s technological advances consolidated the importance of call centres to business. Many of today’s big names established themselves in the UK during this period.

Datapoint began working with TSB Phonebank (now Lloyds TSB). [Does anyone know the date when TSB Phonebank started?]

Direct Line started their call centres in 1985

In 1985, Direct Line was founded by Peter Wood, becoming the first company to sell insurance entirely over the telephone.

Call centre technology allowed these companies to base their entire business model on telephone sales. In the USA, Aspect Telecommunications was founded by Jim Carreker.

Aspect’s systems improved upon the early ACDs. They allowed calls made from touch-tone phones to be routed more efficiently by distinguishing between types of calls and connecting them to specialised teams of agents. This cut down call waiting times, and allowed call centres to deal with an increase in call volumes brought about by the introduction of toll-free phone numbers.

Aspect’s flagship product was the Aspect CallCenter, somewhat fittingly, as the company went on to become one of the world’s largest manufacturer of dedicated ACDs.

Aspect entered the UK market in 1989, with Microsoft as their first customer. The deregulation of the UK telecoms industry led to a drop in service costs, and as a result the UK contact centre industry became larger than in any other country except the USA.

ACDs systems fuelled innovation, such as the launch of First Direct in 1989. First Direct was the UK’s first direct-banking company and proclaimed itself ‘the future of banking’ with an unusual television advert.

By the Mid-90s Everyone Was at It

Sure enough, more banks would follow First Direct’s lead, with TSB Phonebank officially opening two 300-seat contact centres in Glasgow and Newport. These contact centres used ACD systems that linked with one another and enabled the company to route each call to the most appropriate advisor, across both sites.

Take a look inside the TSB Phonebank call centre, as of 1994 (source: TSB / Call Centre Europe)

Soon after, other banks felt the need to keep pushing innovation, with Nationwide opening up 24-hour banking services in 1995. This was supported by a system that allowed for  speech recognition and IVR units.

Also, in 1995, Halifax moved on from having a separate customer service department to just having a 35-seat call centre, which won European Call Centre of the Year less than two years later.

Network Connectivity

Up until the 1980s, call centres were connected to telephone networks using analog lines. But, from then on, the industry began to see the impact of digital connectivity.

The first wave of digital connectivity in the contact centre came in the form of the DASS II (Digital Access Signalling System), which used digital trunk lines for connecting a PABX or ACD system to the telephone network.

For linking ACD and PABX systems, a DPNSS (Digital Private Network Signalling System) was used to network call centres

However, by the 1990s – when digital technologies began to grow in sophistication – the DASS II systems began to be replaced by Integrated Services Digital Network (ISDN) systems, using the Euro-ISDN protocol.

With this transformation came a change in “communication protocol” – the set of rules installed in contact centre systems to determine how information is sent from one system to another. So, the DPNSS protocol was replaced by QSIG.

However, things have progressed further since the 1990s, and the beginning of the 21st century saw the emergence of IP telephony systems. These systems allow contact centres to transmit telephone calls over the internet. With this system came the SIP protocol.

But, as of present, things have gone one step further with the introduction of Computer Telephony Integration (CTI) systems. Having a CTI system in the contact centre supports coordinated telephone and computer conversations.

Here’s a poster, again from the 1990s, advertising Syntellect (now part of Enghouse Interactive) CTI systems (source: Enghouse Interactive)

In late 1995, BT introduced Caller ID or Caller Line Identity (CLI), which enables the contact centre to identify which customer is calling, before the advisor can pick up the phone. This function enabled the contact centre to use innovative call routing strategies and made it easier for the caller’s details to “screen pop” onto the advisor’s screen.

This is how Ericsson advertised their CTI system in the 1990s (source: Ericsson)

When the Term ‘Call Centre’ Was Created…

The OED lists the earliest published use of the term ‘call centre’ as being as recent as 1983, in Data Communications, in this sentence:

Each of these ‘*call centres’ is staffed with agents who work with Honeywell intelligent terminals, enabling them to quote rates and compute discounts given to large users.

The Introduction of Toll Free Telephone Numbers

In 1985, shortly after the term call centre was created, the UK brought in 0800 numbers, as British Telecom introduced freephone services.

These 0800 numbers made the call centre much more accessible, meaning that contact volumes began to soar, with the prospect as having simple queries resolved at no cost.

Yet, the introduction of freephone service came a remarkably long time after their introduction in the US. Across the pond they were introduced in 1967 as 800 numbers.

The Evolution of Headsets

The highest quality of headsets used in contact centres today may include noise-cancellation technology, cordless functionality and so on, but it has not always been like this.

Here is an advert for Plantronics headsets from the 1990s (source: Plantronics)

Yes, advisors may now get a selection to choose from, and face a binaural or monoaural conundrum. But let’s look at the headsets of old, by using some old promotional posters by headset connoisseurs like Plantronics as seen above, and GN Netcom (now Jabra).

Take a look at how GN Netcom were advertising headsets in the 1990s (source: Jabra)

Dot com Mania

In the 1990s the call centre industry continued to grow, spurred on by the rise of the internet. From 1995 onwards, internet-based ‘dot com’ companies attracted vast amounts of investment from venture capitalists excited by the potential for rapid growth offered by the online economy.

As websites became the central point of contact and sales for an increasing number of companies, call centres were essential in dealing with customer service and technical support. Unfortunately it didn’t last, and by 2001, the ‘dot com crash’ saw many internet-based companies go bust.

Rise of the Offshore Call Centre

The call centre was still on the rise. By 2003, the industry consisted of 5,320 call centre operations employing 800,000 people in the UK. 500,000 of these people were working in agent positions. The industry had grown by 250% since 1995, and was still growing.

The early 2000s saw a trend for large companies to transfer customer service departments overseas. Cheaper labour costs and, in some cases, better skills in the workforce made offshore call centres attractive to businesses seeking to cut costs.

Locations in India, the Philippines and South Africa aggressively marketed themselves as offshore call centre destinations. India was particularly popular, as a large number of graduates available for call centre work made for cheaper and technically able agents for technical support phone lines.

Late 2000s: A Backlash Against Offshoring

Offshoring slowed the growth of the industry in the UK. But few companies moved their whole customer service operations overseas, and by midway through the decade, a backlash had begun. Customers sometimes had trouble understanding the English spoken by overseas agents. Companies with large offshore call centres attracted negative media coverage for taking jobs away from the UK.

Over the last three years, some companies have actively advertised the fact that their call centres are in the UK. NatWest launched an advertising campaign in 2007 based around guaranteeing that customers would speak to agents in the UK rather than overseas. Some companies have also moved customer service operations back to the UK.

The call centre has now been an invaluable business facility for three decades. With the recent rise of social media and technology that may allow call centres to become virtual networks of homeworkers linked by cloud computing, it appears customer service is swiftly evolving.

Call centres are a vitally important source of jobs. As Call Centre Helper reported in 2010, figures from ContactBabel show that more than one million people are now employed by contact centres in the UK.

Also, in the mid 2000s, flat plasma screens started to replace big lumpy CRT screens (cathode ray tubes), as shown in this picture from our 2005 site visit to the Connect2Cardiff call centre

The Emergence of Cloud

1999 started the journey to the cloud when Salesforce appeared with its cloud-based CRM system. Initially aimed at sales teams, it started to spread across the rest of the enterprise.

While hosted solutions had been around for some time, Salesforce were a big driver in the support of the cloud concept.

Around 2004, cloud contact centres started to emerge, with companies like Basingstoke-based NewVoiceMedia being one of the pioneers.

Other cloud technologies followed, with companies like Business Systems introducing Opex Hosting for call recording and Invision introducing Injixo cloud workforce management.

However, this was a system that was “on-premise” – meaning that customer details could not be accessed in an emergency situation such as a power cut.

With this being a problem in the evolving contact centre world, cloud contact centres started to emerge and have grown in popularity over the past decade.

For example, in November 2011 we found that 71% of contact centres had no plans to move to the cloud. But in our 2017 report “What Contact Centres Are Doing Right Now – How Do You Compare?“, we found that less than 41% responded in the same way, as shown below.

2011

This poll was sourced from the article: Half of Contact Centres Now use Cloud-Based Business Applications

2017

This poll was sourced from our report: What Contact Centres Are Doing Right Now – How Do You Compare? (2017 Edition)

While this growth is impressive, there are those contact centres that are still holding back, due to concerns over the reliability of cloud. So, there is still some work for these cloud technology-based companies to do yet.

Call Centres Have Become Contact Centres

While the term “call centre” is still used by many, most within the industry consider it to be outdated, with “contact centre” being their preferred term.

The change from call to contact centre is more reflective of the variety of contacts that “contact centres” now receive. For example, a call centre would just send and receive phone calls, whereas a contact centre would also handle email, live chat, letters and so forth.

In fact, according to Google Trends, people searching for the term “contact centre” surpassed those looking for “call centre” in 2011.

Social Media

The change from call to contact centre coincided with the emergence of certain digital channels becoming mainstream within the industry. For example, in 2011, only 43% of contact centres responded to complaints on social media, but this figure is unthinkably low in today’s climate.

2011

These are the results of our 2011 poll : Only 43% of Contact Centres Respond to Social Media Complaints

The Emergence of Live Chat

To further highlight the digital revolution that is happening in contact centres, the following two polls show the increased uptake in webchat – more commonly known as live chat – and social media from 2013 to 2015.

2013

This poll has been sourced from our article: Only 38% of Contact Centres Have a Webchat Channel

2015

This poll has been sourced from a 2015 webinar: Best Practices for Voice, Email and Webchat

The growth of live chat and social media hasn’t just changed the name of the contact centre. In fact, the automation opportunities that these channels allow for is also changing the make up of the contact centre.

Taking live chat as an example, chatbots can be used to handle a large number of simple enquiries on the channels, as long as they are “fed” with the right information. However, they are unlikely to be able to handle complex queries at this point in time.

2023

With the changing contact centre landscape and the impact of the covid pandemic, contact centres were incensed to offer more channels to their customers to improve accessibility and CX, a trend which has continued since, as we can see from the graph below:

Although voice channels make up the largest percentage of channel mix, others like SMS, Social Media and Live Chat are taking a reasonable percentage.

2016 – Artificial Intelligence and Chatbots

In truth, it is quite difficult to forecast the impact that Artificial Intelligence (AI) will have on the contact centre, but it certainly seems to be a strong focus for many contact centre software firms.

Also, the fact that some contact centres are already using elements of it does suggest that it has a future. These AI uses include:

• Replacing IVR processes
• Capturing data during customer interactions
• Website navigation

Although, if we had to make a prediction, it seems likely that the first mainstream use of AI will be in the back office. This will probably be through the capture, analysis and sharing of data across different channels.

For more on the future of AI in the contact centre, read our article: Will Robots Replace Humans in the Contact Centre?

Our history of the call centre is far from complete, and we’d like to include your knowledge. If you have any memories, information or stories about call centre history, drop us a line.

Many thanks to all of the people who have helped to contribute so far to this article and given us permission to showcase some of their old advertorial. This includes: Derek Massey, Phil Wright, Dirk Speas, Steve Morell, Bob Freshwater from the British Telephones website, TSB, Plantronics, Jabra, Enghouse Interactive and Ericsson.

Author: Jonty Pearce
Reviewed by: Jo Robinson