Title

Should Metris Internalize Their Outbound Telemarketing Through Acquisition?

Author

Martha M. Young, Concordia University, St. Paul

Date

2000

Document Type

Capstone

Degree Name

Master of Arts

Chairperson (Advisor 1)

Dr. Kimora Kachelmyer

Reader (Advisor 2)

Jane Gorence

Abstract

Metris Companies markets consumer credit products and fee based services. The relationship between these parts generates the power of the organization. By cross-selling fee-based services to its credit card customers, and using its card as a payment vehicle, Metris deepens customer relationships and creates multiple revenue streams.

Metris has two divisions: card- and fee-based division. As the company budgets month to month, they strategically plan for the future through a forecasting tool. This tool enables both the card- and fee-based divisions to forecast assumptions for 2001. The assumption for outbound telemarketing is that it will generate 1.4 million hours in 2001 at a total cost of $34 million dollars. As the business looks to increase efficiencies and sales, a model has been proposed to internalize a portion of the 1.4 million hours through building a call center. Through internalization, projected impact of a outbound call center (100-200) seats would generate 360,000 hours of the 1.4 budgeted at a cost per hour of $21.

Knowing how much business Metris generates from outbound telemarketing, knowing there are more government rules and regulations that will be mandated at the state and national level, it is a strategic move for Metris to internalize a portion of its telemarketing for performance and quality control bench marks. Whether Metris builds or buys a call center, the end result is increased control of a low cost revenue-generating machine.

Through research, case studies, interviews and financial justifications, Metris should internalize a portion of their outbound telemarketing through a build due to the cost savings, revenue generation, and because the company wants to leverage this business but not be in the outbound business as a whole.

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