Typical of banks establishing call centers, Boone County National Bank did it about 18 months ago to improve service.

But recently Boone County telephone representatives began pitching home equity loans, lines of credit, and certificates of deposit.

"We're putting a big emphasis on the sales side of it-bringing up products and services" when people call in, said Vicki Dunscombe, senior vice president of the $600 million-asset bank in Columbia, Mo.

Given their emphasis on personal relationships and assistance, community banks have been slower than bigger ones to push products over the phone. Now the likes of Boone County are cross-selling in an attempt to turn call centers-classically "cost centers"-into revenue generators.

"The next level is when you see it not only as a customer service tool, but as a sales office," said Ken Johnson, director of affiliate education at Alex Sheshunoff Management Services Inc., Austin, Tex.

Few community banks have made money from call centers. But Dina Vance, vice president of FTR Inc., a bank consulting and training firm in Lombard, Ill., said it is only in the last year that smaller banks have become interested in turning them into profit centers.

"It has been proven profitable in the big banks, and it can be the same for the small banks," she said.

About two-thirds of banks with $500 million to $1 billion of assets will have a call center by yearend, according to Mentis Corp., a Durham, N.C.- based research firm. That would be up four percentage points from last year.

A community bank call center typically employs a handful of agents. They have access to customers' account information and answer routine inquiries, often confirming account balances or determining whether a check has cleared.

More advanced agents would evaluate the customers' accounts and suggest changes, such as refinancing a mortgage or opening an interest-bearing checking account.

Gary Norcross, who heads Alltel Information Services' community bank group, said smaller banks want to turn call center agents into salespeople to offset technology costs and salaries.

"Most community banks are pretty thrifty," he said. "They want sales to justify the expense."

Others look at selling as a service enhancement.

"If you don't mix sales and service, you're not delivering superior customer service because the customer will still have to go into the branch," said Michele Blair, vice president of Brenton Banks in Des Moines.

Brenton is looking to sell more mortgages, insurance, and commercial loans through its three-year-old call center. Over the past year, its agents have been trained to interview customers and discern which products would appeal most, Ms. Blair said.

The $1.7 billion-asset bank is also installing an automated telephone banking line to better handle basic needs such as confirming transfers of funds. With more customers using the automated line, Ms. Blair said, the bank's 27 agents should have more time to sell home equity loans or other specialty products.

Eventually, Brenton would like to increase its call center staff and assign new agents to make outgoing sales calls.

Cold calling is where many small banks draw the line. Mentis research indicates only 5% of community bank call centers make outbound sales calls.

Michael C. Miller, president and chief executive officer of First National Bank in Asheboro, N.C., said customers in his community have enough contact with the bank.

"These folks see us at night at the (American) Legion ball games or at the community arts center," he said. "They don't need us to call them at dinner time."

Bankers who have tried outbound selling said customers can tell the difference between a call from their community bank and a cold call from a long-distance carrier, for example.

Oklahoma City-based Guarantee Bank centered its first out-going call campaign around customers' birthdays. Agents phoned customers and wished them well, then asked if they were satisfied with their banking services.

Customers liked the happy-birthday message and the conversations sometimes led to sales opportunities, said Thomas Legan, president and chief executive officer of the $400 million-asset bank.

"Our approach to outgoing calls would not be hardcore," said Mr. Legan, whose bank is considering stepping up its outbound program. "We find good reasons to call them first."

Despite the desires to make call centers profitable, none of the bankers interviewed for this article said their call centers boosted their bottom lines. Brenton, for example, opens only one new account for every 100 calls to the center.

Sheshunoff's Mr. Johnson said the smallest community bank, with only one or two agents, may never be able to make their phone operations profitable. Larger community banks in metropolitan areas have clearer advantages.

"If they are in a competitive environment and have a sophisticated product mix, they are more likely to do more selling," he said.

But bankers also see indirect benefits. Call centers free up personnel in the branches to spend more time selling. And the improved service may pay off through increased customer loyalty and revenue.

"It's a much more expensive way to answer the phone and take care of customers," said Ms. Dunscombe of Boone County National Bank. "On the flip side, we hope it will result in higher retention and some sales."

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