Survey Scouts Cities for Customer Service Centers

When Capital One Financial Corp. announced it would open an operations center in May near Dallas, the nation's 10th-largest card issuer said it chose the site for reasons including its central location - helpful in serving a customers across the nation's time zones.

Strategic Marketing and Research Technology Inc., a telemarketing firm in San Francisco, opened an eastern location in Buffalo in November for a similar reason - to reach its clients' customers in a timely fashion. The telemarketing firm sells its services to card issuers and their cobranding partners.

A recent survey of operating costs at customer service centers, conducted by Boyd Co. of Princeton, N.J., identifies a number of considerations for telemarketing and card companies in picking a location. The 1995 survey compared cities by looking at labor, utility, occupancy, telecommunications, and other costs.

Expenses were highest in New York City, said John H. Boyd, president of the consulting firm. Annual costs there for such companies averaged $4.2 million.

New Brunswick, Canada, was the cheapest location, with annual costs averaging $2.6 million.

"Call centers operate on thin margins so much that card companies are using strategic site selection as a way to enhance those margins," Mr. Boyd said.

Issuers have long taken into account which states have prohibitive usury laws. That's why most card operations are in South Dakota, Delaware, and Nevada. But Mr. Boyd said companies must now be sensitive to tax policies as well. Some states, for instance, extend their sales taxes to interstate long-distance service.

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