August 1999

BY NADJI TEHRANI,
EDITOR IN CHIEF, EXECUTIVE GROUP PUBLISHER

This past April, as a guest of France Telecom, I had the great honor of being invited to Paris to personally meet with several call center executives and various dignitaries at France Telecom and the French government. In addition, I was fortunate to personally visit several hand-picked "best-in-class" call centers, including those of France Telecom, EuroDisney and Teleperformance International.

To say the least, I was extremely impressed with France Telecom and the French government's complete commitment to the call center industry and call center excellence. France Telecom, the host of this prestigious media event, is the second largest carrier in Europe, with 26.6 billion dollars in sales. The company has mobile phone operations in 25 countries and feels that call centers are extremely mission critical, and feels strategic tools for sales and customer service.

France is blessed with being one the world's most popular tourist attractions. More than seventy million people (France's population is sixty million) visit the country annually. Many of these tourists find France to be one of the most desirable countries to live in, which has brought a great number of citizens to France from other countries, thus providing an extremely rich resource of multilingual agents for call centers.

An Innovative Approach
Given that many corporations around the globe are naturally cautious and conservative about their investments abroad, France Telecom deserves tremendous credit for inventing a new approach to attracting foreign business. Called “hotel call centers,” this highly innovative idea deserves the ultimate respect and consideration. It allows a corporation from any country to determine whether or not their products or services are viable and can, in fact, be sold or serviced by a call center in France, without first spending millions of dollars in capital. With the hotel call center concept, any corporation can rent a call center, including its staff, ergonomic furniture and technology, for as little as one month to determine the feasibility of whatever product or service that a company wishes to market in France. As such, the downside risk is extremely limited, i.e., several thousand dollars are spent versus millions of dollars. This innovative approach, which basically uses the principle of pay as you go or pay as you need, has encouraged many corporations around the globe to consider France as one of the most desirable call center locations in Europe.

Technologically, France Telecom provides state-of-the-art call center solutions. France Telecom’s infrastructure includes a 100 percent digital transmission network and a near 100 percent digital switching system. In addition, the network has 1.7 million kilometers of fiber encompassing the entire country and the most advanced transmission (Synchronous Digital Hierarchy) and switching technologies (intelligent and high-speed ATM network). Some of the latest American products and applications I witnessed in use in various French call centers were from such companies as Hewlett- Packard, Cisco Systems and Nortel.

France Telecom also demonstrated their involvement in Web-enabled call centers. They are using an eFusion platform with Microsoft Explorer or Netscape.

In short, cutting-edge technology, as well as consultation and guidance, is provided by France Telecom for new call centers wishing to locate in Paris and anywhere else, particularly in the south of France.

For more information on France Telecom, contact Dante Bellisari, Director, Call Center Solutions, France Telecom, at 212-332-2182.

Inbound Call Centers Dominate France And Europe
By and large, the majority of the call centers I visited in France (as well as numerous other European countries) focus on inbound call center services for customer service, help desk, customer care, customer relationship management, etc. That fact bothered me immensely, although I do understand that it occurs for cultural reasons. Nevertheless, I have long been an advocate of the fact that for true and profitable call center operations, inbound must feed outbound. At the majority of inbound-only call centers I visited, I found that the agents (TSRs, CSRs) are challenged at 50 percent of their ability to perform, at best. The reason: everyone sits around waiting for the telephone to ring. It seems that not much of anything else gets done between calls. If I were the call center manager, I would never let something like this happen. I am of the opinion that a great call center staff must work on all cylinders all the time. Otherwise, there is no point staying in business (see my February 1998 editorial for TMC’s corporate culture and expectations). The bottom line is that too many of the inbound call centers I have visited in the U.S. and elsewhere seem to be inefficient. One of the few exceptions I have seen is the EuroDisney call center, which by the way, is the biggest France Telecom project in Europe. Incidentally, EuroDisney Hotels are at maximum capacity annually and EuroDisney Paris is extremely profitable. The EuroDisney call center handles mostly French, English, German, Spanish, Dutch and Scandinavian language calls. It has 150 stations handling pan-European calls and, of course, mostly inbound calls. Incoming calls from European countries come directly to the call center and a native speaker will respond. France Telecom acts as a consultant to this extremely exciting call center, and the two seem to function in a true partnership. I had the opportunity to walk down aisles and witness that in every row of cubicles, agents spoke a different language. In other words, agents in aisle “one” spoke French, agents in aisle “two” spoke German, agents in aisle “three” spoke Dutch, etc. It was quite an exciting feeling to see that the wonderful industry this publication helped to bring to the forefront of acceptance back in 1982 (please see my July 1999 editorial) has become such a powerful and mission-critical tool of business worldwide. And thinking that we were the pioneers who started it all practically from scratch back in 1982 was very gratifying. Although the EuroDisney call center was also primarily inbound, the heavy incoming call volume made it look as busy as an outbound call center. I did not observe a single agent not having to do something all the time.

Another call center, which was particularly well managed and 100 percent busy at all times was that of Teleperformance International. They are one of the most successful teleservices outsourcing companies in Europe and elsewhere. I was extremely impressed with this particular call center and its management. (Please refer to an insightful interview with Teleperformance’s president and CEO, Daniel Julien.)

The Necessity For Inbound To Feed Outbound
Long ago in this editorial column, I mentioned a case of a lawn furniture company using a Midwest teleservices company to conduct an inbound and outbound sales project. The lawn furniture company, which will be called the XYZ Company, advertised their furniture on local television and company A (teleservices company) handled all of its incoming sales calls. XYZ company later came along with a new cold-calling list to be called outbound by the teleservices agency. When this test was being run, the call center manager noticed that only one agent was extremely successful and outsold all others by better than 10 to 1. When they researched the successful agent’s techniques, they discovered that he did not use the cold-calling list, but instead, he was re-calling all of the inbound callers who had already established interest in buying lawn furniture. Thus, he was able to drastically outperform his colleagues by better than 10 to 1. I hope you will agree with me that if Europe ever starts using inbound to feed outbound, their revenue from call centers should increase by better than 300 to 500 percent.

Global Industry Growth And Stats
The following represents graphic and numerical indicators for the growth of the call center and related technologies. We have also provided the reasons for growth and slower growth of certain segments within the call center industry. As you will notice, the average growth of the call center industry including the teleservices and in-house operations seem to range globally between 20 to 25 percent. I believe that the growing acceptance of Internet and CRM will continue to boost extremely rapid growth of the inbound call center, but if such call centers do not use inbound information to feed outbound, they will leave a lot of money on the table.

The continued growth of outsourcing to teleservices agencies in the U.S. is presented in Chart 1. As you can see, outsourcing has increased by 18.7 percent over the past year as measured by the cumulated growth of billable minutes of the Top 50 inbound and outbound teleservices agencies. Over the past year, inbound growth represented a steady growth rate of 27.1 percent, while outbound growth has slowed to 12.5 percent. Among the factors influencing inbound growth is the increasing awareness and implementation by corporate America of customer relationship management, e-commerce, customer retention and help desk/technical support. Factors slowing outbound growth I have previously pin-pointed in this column include the management at many teleservices agencies having their eyes on Wall Street, not on Main Street and the resulting merger and acquisition activity, overcapacity, price erosion, declining quality and the tight employment market.

According to Datamonitor’s European call center statistics, the average call center growth rate in Europe is 25 to 30 percent, with approximately 10,000 call centers currently operating in Europe. In the mature call center markets, the U.K. has a 16 percent growth rate while The Netherlands has a rate of 14 percent and Ireland one of 11 percent. In the developing European markets, Italy’s call center growth rate is 60 percent, followed by Germany at 43 percent, Spain at 36 percent and France at 25 percent. The leading vertical markets for European call centers include financial services, consumer goods, technology, utilities/telecoms and travel/tourism.

Recent statistics provided by Telstra highlight the growing importance of the Asia/Pacific region in the global call center community. The region now has 25 percent of the world’s GDP and 33 percent of the world’s purchasing power. Australia leads the way in call center growth at 25 percent annually, and there are now approximately 5,000 call centers in the Asia/Pacific region.

As you can see from the above statistics, call centers are truly an integral and expanding part of the global economy.

Sincerely,

Nadji Tehrani
Executive Group Publisher
Editor-in-Chief
ntehrani@tmcnet.com 

When I first entered Paris as a student back in the 1960s, I was shocked with what I observed. Having come from a predominantly conservative, Middle-Eastern culture to an open society such as Paris was indeed a cultural shock. In our high school back in the old country, there was a solid wall between the boy’s high school and the girl’s high school — indeed we were not allowed to even look at the girls, let alone talk to them. But when I got to Paris, it was the other way around, and then some. Expression of affection was prevalent everywhere between couples of all ages. It was in the streets, subways, University quarters, everywhere. I was shocked culturally as you can imagine. But I adapted fast for, to succeed, one must have a flexible, positive, can-do attitude.

In this most recent trip to France, however, while much of that expression of love was still going on, I felt that it was a different environment. For example, the standard of living has improved dramatically. In the 1960s, the most common way to travel was either by a small motorcycle called a “Vespa” brand and everyone seemed to own one or alternatively a two-horse-powered car made by Citron, which was called (simply translated) two horses. As you can imagine, there was no power in the vehicles and both were extremely cheap. In short, in those days we were mostly poor and happy but had plenty of time for love. Today, life is stressful and you will find very, very few of those types of cars except one recently introduced that is no bigger than 3 feet by 3 feet. I often wondered how safe one would feel inside these cars? Another major improvement that I noticed was that there seemed to be no anti-American feeling. I simply did not observe anything but ultimate respect for Americans among both the highest-ranking government and corporate officials. In not one case did anything come up that was less than respectful for the great technological contributions the United States has made to the world. Last but not least, I took a tour of my old college neighborhood, La Rue St. Jaques, where I had an apartment while attending the University of Paris, which is practically next door to La Rue St. Jaques. The environment was still great. It is still loaded with tons of happy students and sidewalk cafes all around and I just couldn’t help but think back to the good old days and how things have changed in France as well as in my life. Yes, in those days I had virtually no financial means, but I learned from the French what real life and the joie de vivre (joy of life) is all about: without which life has little, if any, meaning. Yes, we had no money but we were truly happy and had plenty of love. As The Beatles said, “Money can’t buy me love.” I hope you enjoyed this little social note that comes to you from Paris with love.