December 2008 Archives

Here is one way to cut costs, increase utilization, and in doing so keeping contact center teams employed in these tough times and that is to seek cooperation with other similar operations and either share capacity or go into together on a joint center (s). That will save scarce resources that can be better deployed elsewhere and enable cost-reducing economies of scale.

There are few reasons why for example charities, colleges and universities, healthcare organizations, legal and medical professionals, and businesses with strictly local market bases such gas, electric, and water utilities, retailers in buying groups can't get together this way. After all they are not competing with each other.

Along the same route, if your organization is an enterprise, why not donate any spare capacity to small locally-based charity or fundraising campaign, tax laws permitting. Yes, this may take money from some teleservices firms, though the candidate beneficiaries are unlikely to be substantial enough to afford paid telemarketing.

On the other hand it may mean that more resources will go to the sadly growing lines of those truly in need. It may also enable you to prevent having some of your staff join those ranks by keeping them productive and their skills honed, until the economy turns around. Lastly it makes you and your teams feel good by assisting others by giving what you can offer in deeds, expressed in words.

Rich Tehrani's superb piece on the solid shape of Nortel's carrier business, coupled with recent stories on the troubled communications/enterprise products firm got me to thinking: does Nortel's future lie in the convergence of carrier networks and hosted solutions from Fortune 500-scaled CRM to workforce management i.e. the cloud?

Companies are very interested in the hosting model because they want to get away from buying licenses and bolting in hardware just as they no longer, with few exceptions, own their buildings: to save capital costs and give them greater flexibility.

Enterprise solutions, like buildings, are infrastructure. They don't define the firms' value propositions. Instead their products, pricing, service, and their people do. Slowly, in contact centers and in other fields such as media and PR, organizations realize that they don't need buildings either, or if so, they need much less space than in the past.

The challenge for hosting i.e. the cloud, a.k.a. SaaS is reliably and seamlessly handling the huge volumes of data and interactions through it. That is why heavy-duty enterprise-scaled contact center-based or using applications such as CRM, performance management speech analytics, speech rec, and workforce management/optimization have been licensed for clients' premises, and why hosted/SaaS has been confined to SMEs.

If any firm can make enterprise-scaled hosting possible, and to make licensed premise software and bolted hardware practices of the past it is Nortel. Only Nortel has both the carrier-and-enterprise-grade engineering and expertise to make this happen. Nortel's strength in carrier landline and wireless products is not matched by any of its enterprise solutions competitors e.g. Avaya, Cisco.

The markets are there: carriers, ASPs, and CRM/ERM/database solutions firms. Nortel can easily support a mashup say between Verizon Business and an Oracle or for the Canadian market, Telus and CDC, makers of Pivotal. Hosted top-drawer solutions may provide cost-reduction/customer retention-seeking enterprises the tools they need to survive the economic climate and prepare for recovery: and likewise for the carriers offering them.

By going to the cloud, both Nortel, the carriers, solutions developers, and their customers can take flight, and grow...if nervous investors allow them.

Kudos to the U.S. justice system, which has given lengthy jail times to three Canadians convicted in a multimillion dollar telemarketing scam. The Canadian Press reported that Lloyd Prudenza, the last of them has been sentenced to 15 years by a U.S. court, according to the Competition Bureau of Canada.

The wire service said that compatriots David Dalglish and Leslie Anderson were given sentences of 19 and 23 years respectively in July 2008 and ordered to repay nearly $5.6 million of the $8 million the U.S. government says their scheme raked in from 40,000 Americans.

The three used the name "First Capital Consumers Group" in targeting U.S. residents with blemished or no credit, promising them by unsolicited telephone calls a MasterCard or Visa credit card for an advance fee of $189 to $219.

"Our cross border efforts have succeeded in bringing the last individual involved in a scam that defrauded many consumers to justice," the bureau's deputy commissioner, Andrea Rosen, said in a statement. "The severity of these sentences should serve as a warning that deceptive telemarketing is treated seriously on both sides of the border."

It is efforts like these--Canadian and American authorities have been working closely together for the past several years on 'telefraud', that are helping to protect telemarketing as a valuable sales medium.

Kudos too to the Federal Reserve Board, the National Credit Union Administration, and the U.S. Office of Thrift Supervision (OTS) for cracking down on another set of dubious credit card activities: the customer-hostile practices of card issuers.

The three agencies issued a final rule that bans practices they say are often cited as unfair to consumers, such as raising the interest rate on an existing credit card balance when the consumer is paying the credit card bill on time.

The new regulations require that consumers receive a reasonable amount of time to make their credit card payments, prohibits payment allocation methods that unfairly maximize interest charges and, in the subprime credit card market, limits fees that reduce the credit available to consumers.

"I am extremely proud that OTS leadership has culminated in this important rule to ensure fair treatment for the millions of Americans who use credit cards," said OTS Director John Reich.  "The rule will enhance public confidence in financial institutions and establish a level playing field for institutions that want to do business fairly without suffering competitive disadvantages."

While these changes will cost credit card firms they will also save them and make them more money in the long-haul: by avoiding waves of long and angry calls to their contact centers from irate cardholders and by retaining them as customers interested in having profit-making debt when the economy turns around...

In short what the FRB, NCUA, and OTS have done is force-feed CRM to an industry long on greed and short on sight...

Rest assured customers and would-be buyers of Nortel's contact center and UC solutions.

The famed Canada-based communications solutions supplier is not going to hang up on you. If Canadian media reports are any indication, Nortel will increase its focus and presence on the enterprise--including contact center--markets. Which is not a bad thing given Nortel's excellent reputation for product engineering and innovation. Nortel has an alliance with Microsoft on UC that can be developed, overcoming its poor channel presence and marketing.

The (Toronto) Globe and Mail (and TMCnet.com) reported that Nortel will likely be spinning off its data and carrier divisions to avoid bankruptcy or disappearance, leaving it with enterprise solutions. There is too much competition especially offshore in these spaces, especially since the hardware and software can be produced cheaply abroad, which are also where the growth markets are--and these countries' cultures often prefer to deal with others in their regions rather than those outside.

Ironically, such a stripping down and repositioning would make Nortel's offerings akin to that of Avaya's: both firms share similar Bell manufacturing roots. Yet Nortel would be dependent on Microsoft to grow its space while Avaya has an excellent marketing arm. That makes for an interesting competitive triangle with Cisco. As Jon Arnold pointed out, in between is Microsoft that is not a big fan of Cisco, and Cisco is an arch-rival of Avaya. Avaya is also using increasing its use of open source, which is anathema to Microsoft.

Such an outcome with Nortel promises to be a richer, more competitive marketplace for business and contact center customers, what the cutting-edge open-source firms like Fonalty and aggressive carriers like UCN knocking on the door, and which wouldn't mind a piece of the enterprise pie.

A recent Wall Street Journal article on Web 2.0 brought home a key point for firms wanting to present themselves to this evolving and morphing mélange of business and social networking sites, of blogs and wikis in their CRM strategies: be prepared for the bad as well as the good.

Web 2.0 strips away for many organizations the comfortable and secure façade of the illusion that their products and service is the best there is, relatively insulated from what customers in general think of them thanks to what has been at this point de facto one way marketing.

These online forums and sites provide a loud, globally read, if occasionally unfair public opinion led by the leaders in those peer groups that geometrically magnifies the power and presence of the actual number and types of customer feedback received. They supply what can be a push forward and sometimes a push back to enterprises and their offerings. They also enable competing firms both overtly and covertly engage in influential positive and negative campaigns through their surrogates.

What Web 2.0 does is to immerse the firms participating or dragged into in public life. Everything about an outfit, their executives, and their offerings are fair game. Just like those who run for or are engaged in the business of elected office. As one who has run for public office, worked on many election campaigns, and who has covered such races, I can attest how challenging being able to promote and respond can be.

Web 2.0 requires, therefore, the same skills exercised by the political pros in devising and staying on message and deftly handling criticism and opponents. If you are to launch a Web 2.0 strategy you may want therefore to look for managers who have had successful election campaign experience and want to make some real money: public life does not pay handsomely. If there is anyone knows the game of people it is them.

I own two Dells: the desktop Dimension 5150 that I am writing this on, and an Inspiron laptop that my wife uses. Both machines are OK, and that is a good thing...as I have not exactly been thrilled with the service that I've needed and received from its offshore agents.

So when I heard from a TV show producer about Dell planning to charge its American account holders $13 a month for onshore support or new customers $99/year, I switched to PR mode to quell the temptation to let out a snarky remark, along the lines of 'it's like paying someone for not hitting you'.

Instead I expressed my skepticism, alluding to the unsuccessful efforts to convince Americans to buy often higher-priced Made in the USA goods in the 1980s to save jobs, rally around the country...especially now with the economy being so tight. People may dislike the quality of offshore service but would they want to spend the money that they can use for other needed purposes...like to buy food and help pay bills...just to ensure that they get onshore agents instead?

While it is true that no one can relate to Americans better than Americans, the dubious U.S. educational quality and 'this job demeans me, I'm doing you a personal favor so don't %^&# me off' customer service attitude that I've come across so often makes me question the value of 'buying American' for service. I will give Dell's offshore staff this much: while their customer service skills are not exactly great the agents in contrast are bright, polite, and willing. In countries like India the abject poverty serves as a stark reminder of the price of failure.

There is of course, a third option, which I'm real curious if Dell has adequately explored, and which I told the producer about, and that is 'homeshoring' i.e. working from home. As told many times, having contact center work handled by people out of their domiciles cuts costs, improves productivity, and taps into a higher quality workforce, while helping to clean up the environment through eliminating commuting.

If Dell had done just that--announced that it is bringing its customer care management literally back home at no charge to American agents--which would allow many to keep their homes by avoiding commuting costs and deducting home office costs--it would have been lauded rather than laughed at.

Dell, please call home...

Amidst all the economic doom and gloom, including contact center closures it is very rewarding to see teleservices companies expand.

One of these, and one which truly deserves to grow, is Thomas L. Cardella & Associates (TLC&A). It has been for the past new months expanding existing and opening new contact centers in Cedar Rapids, Coralville, Keokuk, and Marshalltown, Iowa. It also has at-home agents.

TLC&A has been focusing on and as a result experiencing strong growth serving the direct marketing needs of Fortune 500 clients in the financial services, insurance, publication, specialty retail, technology, telecom, entertainment, utilities, and travel industries.

One of these clients, Office Depot, has contracted with TLC&A to provide B2B teleservices, which led the teleservices firm to announce that hiring will begin immediately for 60 new full time Office Depot account manager positions in Cedar Rapids and Coralville, paying up to $14 per hour.

Little wonder that TLC&A was able to snag and grow with the Office Depot contract. The firm's founder and namesake is Tom Cardella, a highly acclaimed and well-respected teleservices entrepreneur who launched Access Direct in 1995 and quickly grew it to have a payroll of 2,000 employees in the state.

The honors he achieved include ten consecutive quality awards from Customer Interaction Solutions, Ernst & Young Emerging Entrepreneur of the Year Award, Small Business Administration Entrepreneurial Award, Inc.500, and induction into the into Customer Interaction Solutions Hall of Fame. CIS and TMC founder Nadji Tehrani featured an interview with Cardella in the August 2007 CIS Boardroom Report.

In 2000 Cardella sold Access Direct to IAC/InterActiveCorp (IAC), parent company of Ticketmaster, Expedia.com, LendingTree, Match.com, Home Shopping Network, and teleservices firm Precision Response (PRC). In January 2003, IAC asked Mr. Cardella to run PRC that employed 12,000 people worldwide.

When IAC sold PRC, in November 2006, Cardella returned to his Iowa roots and formed TLC&A in April 2007. In twenty months his firm has grown to four locations and over 500 employees and is ranked as one of the fastest growing contact center companies in the U.S.

TLC&A's 'formula' is meeting clients' needs with solutions including inbound customer service, outbound teleservices, e-mail management, chat, and customer support services, using cutting edge IP, multimedia routing, list analysis and custom-designed call attempt parameter algorithms. The firm aims and achieves quality service on the inbound and better success rates and less inconvenience to customers on the outbound.

Keep up the great work, Tom! You are an inspiration to the industry and to businesses everywhere who are seeking to survive and grow in these challenging times.

Businesses that have office-type employment, including contact centers who complain that they can't find enough workers and who say they are forced to close shop are probably not seeing the "people for the box" i.e. limiting the size of their labor pool to those who are willing to commute in.

StarTek is, as the media reported closing its Regina, Saskatchewan contact center in March 2009, citing the province's booming economy and other contact centers soaking up the labor pool. That is of course after accepting $3 million in taxpayer goodies to locate there in 2003 including job training plus a five year property tax abatement...

Yet I wonder: did StarTek ever consider setting up at-home agent programs outside of Regina, like Sitel has done in a constellation around Albuquerque, New Mexico? Did it look at the alternative of satellite (10-12-24 agent) centers in the many smaller cities across Saskatchewan, like Estevan, Moose Jaw, the Battlefords, Prince Albert, Swift Current, Weyburn, and Yorkton? Virtual-Agent Services has successfully developed and deployed this concept in nearly 20 small New Brunswick communities. The article didn't report this; the story would have turned out to be much better for StarTek from my vantage point if it said the teleservices firm had pursued those options. Maybe the reporter didn't know to ask such questions...

I have a good friend, a smart young guy, whose family has a farm outside of Regina that has broadband access. He is figuring out his career so he is doing two part-time jobs in Regina itself, including in a hotel and in a specialty foods place; he has impeccable customer service skills. He is the type of individual who would do well working from part-time as a contact center agent, but there is no way he would allow himself to be confined to a cube row. Why not reach out to people like him?

I live/work in a small city also located in an agricultural area which has several contact centers that are always crying out for people. Yet none of them either have appeared to ever stepped outside of their cube farms to reach out to those work in and around the real farms who would be happy for the opportunity but who cannot, or afford the drive in for contact center wages.

That's a pity, because both at-home and to a smaller extent satellite working are the best strategies there are to cut costs ($10,000/agent/year), hike productivity, provide money-saving wageless benefits i.e. no commuting, and deliver high quality service by cultivating some of the finest most loyal employees anywhere.

Forget home and business computers. mCommerce is the killer app for eCommerce, and together it will enable retailers to be successful now and going forward provided it is fully integrated with the stores.

Thanks to at last the widening 3G and nascent 4G networks, and increasingly user-friendly smartphones that permit easier keying and surfing, prospects and consumers are researching and buying online, anytime, anywhere. They will want the convenience of finding a product on a website, like a must-have gift, then texting or calling the merchant and having it set aside for purchase at the nearest location, then guaranteeing it with a credit card.

The Acquity Group has correctly identified, in a recent white paper, that eCommerce will be the top channel for growth in 2009. It is seeing major department stores, specialty retailers, and manufacturers continue to invest in improving eCommerce. It says the competitiveness of these industries and the increasing demands of consumers will continue to force these organizations to invest despite economic conditions. Cuts will occur, but because of the strategic importance of the online channel it will be the last place people stop investing.

The Acquity Group says "leaders in this space see the downturn as an opportunity to gain greater market share over their competitors and continue to grow sales in their
online channel. The rest are beginning to realize the importance of this
channel as well."

What is also needed is for the smartphone makers to think bigger and come up with a device about the size of a 4x6 pic with a keyboard that can actually be used, with minimal errors, and a screen that can actually be seen (especially for those of us 40+ and who have the disposable income), for some real serious online shopping, e-mailing, and work...