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Customer Interaction Solutions
October 2006 - Volume 25 / Number 5

Evaluating The Home Agent Model

By Tracey E. Schelmetic
Editorial Director, Customer Inter@ction Solutions


 
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It’s November, which means this is the time of year editors start thinking about their end-of-the-year wrap-ups. We start to think about “themes.” While not wanting to be so predictable as declaring 2006 “The Year of Something-Or-Other,” as any subset of the tech industry is too complicated to be summed up in a single sound bite, it’s nice to reach into the mix occasionally and pull out the biggest and most important bits and talk about their significance.

We started hearing about the home agent model just a few years ago (though some companies, including West Corp. (News - Alert) , have been practicing the model for many years). At first, some industry players considered it to be a novelty. IP contact center technology, the great enabler of the home agent model, was at first positioned to be merely money savings for long-distance costs. It wasn’t long after that we began hearing about the other benefits an all-IP call center could offer. Distributed call centers, rather than one mega center, allowed companies to “follow the sun” in their customer service. IP contact center technology also allowed company management to check the call center stats anytime and anywhere. It enabled outsourcers to allow their clients to check on a customer service campaign’s status at any time, even listen in on calls. Companies could take advantage of cheaper real estate and labor markets, not to mention more advantageous labor pools. Couple the advent of IP call center technologies with the explosion in home broadband adoption rates, and it wasn’t long after that we began hearing about successful home agent programs in the mainstream business news.

Some people in the industry considered it an outlandish prospect at the time, not understanding that the home agent would be logged into the call center’s telephony systems, workforce management software, CRM, reporting, etc., not out mowing the lawn or washing the car, and that their progress would be just as easy to monitor as any on-premises agent who drove to the call center each day.


It was not long after that the concept of offshoring customer care roared into the general public’s psyche (thanks, Lou Dobbs) and companies with large customer bases got used to the idea of call center agents being located “somewhere else.” Still...the largest traditional teleservices agencies, both domestic and foreign, have been somewhat slow to pick up the concept. Only five companies in the 2006 “Top 50 Teleservices Agencies Ranking,” a list prepared every year by Customer Inter@ction Solutions magazine, reported using home agents.

There are a few companies, however, that recognized the potential of the home agent model long ago; these companies (and their customers) have been consistently reaping the benefits of this admirable concept.

Golden, Colorado-based Alpine Access, a provider of outsourced inbound customer care, employs more than 7,500 home-based agents. (This is a point of pride for Alpine Access, as many of its competitors offer independent contractors for their home agent programs. By contrast, all 7,500 of Alpine Access’ agents are company employees who receive benefits.) Organizations such as J. Crew, Office Depot, 1-800 FLOWERS and the IRS are among Alpine Access’ portfolio of customers.

Alpine Access’ CEO, Chris Carrington, told me that since the home agent concept has entered the public’s consciousness, the growth of both the pool of potential applicants and the companies seeking call center services via the model has been astonishing. Last year, in 2005, Alpine Access received an average of 1,000 agent job applications per week. This year, the number is closer to 2,000 per week, which translates to more than 80,000 applications thus far in 2006. Because of the sheer number of applications received, Alpine Access is in the enviable position of being able to pick and choose the very best applicants: the company hires approximately two percent of the total applicants.

As a result, said Carrington, the company has been able to assemble a much more highly educated, mature and experienced workforce than a traditional call center. The average age of an Alpine Access call center agent is 39, as opposed to an average age of about 23 in traditional brick-and-mortar call centers. The education stats on these employees is impressive, as well: more than 75 percent of Alpine Access’ agents have at least some college (eight percent has post-graduate degrees). Carrington states that it’s more than just demographics: intelligent, trained agents who are content with their jobs make the very best agents. “One of the great success factors we have found is that happy agents make happy customers,” said Carrington. “Good home agents enjoy and are passionate about their jobs.”

Teleservices giant West Corp., which offers a program called West at Home, finds similar education and maturity statistics with the independent contractors it uses as home agents. Over 80 percent of West at Home agents have some college education, compared to a national average of 34 percent in traditional brick-and-mortar call centers. The company estimates that these higher quality agents help increase sales conversions by 15 percent and provide a 10 percent increase in quality against key performance indicators.

The extensively large pool of applications for each available home agent job allows providers of home agent services to be exceptionally choosy. The result is an educated, motivated, articulate and skilled pool of call center agents. Home agents tend to be considerably older, on average, than brick and mortar-based agents. This is desirable, because agent maturity leads to far lower turnover than can be found in the call center industry at large, reduced training costs, higher quality customer service and better customer loyalty.

Security And Other Concerns
At the dawn of the home agent model, there was an oft-cited perception that such a program was unworkable because of distance, a lack of hands-on management and the inability provide in-person training. Alpine Access’ Carrington stated that increasingly, that impression appears to be dissipating. “We’re seeing more clients becoming comfortable with the idea. There’s been a progression in call centers. First, there were in-house call centers, then service outsourced within the U.S., then call centers outsourced offshore. I think companies have become comfortable with not being able to see and touch their agents. Work at home agents are not halfway around the world. In a way, companies see it as gaining control over their outsourcing,” said Carrington.

Security is one of the greatest concerns companies have when contemplating using a home agent provider. Says Mark Frei, senior vice president, West Corporation, “This [security] is probably the biggest concern for most companies, especially those in industries with regulatory issues such as financial services and insurance. West maintains a highly secure environment in all of its operations by using SSL encryption in all transactions. We have built multiple firewalls to ensure that agents can never access or manipulate databases that are resident at West or a client location, and we have extended all of these security measures to our home agent system, making these operations as secure as traditional call center operations.”

Given a recent spate of news snippets detailing data theft in India and other offshore locations, it’s possible the home agent model, which keeps U.S.-based agents under the control of U.S. companies and does not allow home agents access to information they do not need, it’s probable that security-conscious companies will find more, not less, comfort over security issues utilizing home-based agents rather than with offshore outsourced programs.

“Right Shoring”
For many companies, the home agent model is a component of what the industry is increasingly starting to call “right shoring,” or choosing a combination of domestic in-house, home agent, near shore and offshore outsourcing to create the optimum balance. Convergys Corp embraces the “right shoring” model. The company will evaluate labor markets and costs, consider the political climates both domestic and abroad and complete for clients a detailed financial and risk analysis in addition to customer, operational and technical impact analyses. This information is combined with corporate marketing and customer management goals to create a recommended sourcing model, including detailed implementation plans. In other words, for companies not wild about offshore outsourcing, for patriotic reasons, quality reasons or both, the home agent model, as one component or all of a “right shoring” program, is increasingly being seen as a cost-effective, high-quality answer to offshore outsourcing.

The Telework Coalition (TelCoa) is a Washington, DC-based non-profit organization that addresses all types of mobile and home agent scenarios. Chuck Wilsker, President and CEO of TelCoa, agrees about the benefits and the model’s potential to take some of the business traditionally lost to offshore outsourcing. “The many benefits of using [home] agents include much greater retention, an expanded labor pool, higher morale, increased quality and productivity, lower costs — especially real estate and related expenses — more flexibility to immediately respond to changing customer needs, and the ability to be prepared in the event of business disruptions caused by weather, illness such as the avian flu and acts of terror. These benefits are a major reason why we have seen such a significant growth in the home agent segment of the industry. Whether looking at an outsourced or insourced model, this is a wonderful way to not only keep these jobs in America, but also bring home many of those that have gone offshore,” said Wilsker.

Training And Evaluation

For most companies that provide home agent services, agent training is supplied remotely, just as the agents’ services are.

Working Solutions refers to itself as the largest professional independent agent community in the world, with some 36,000 independent home agents. The company, based in Plano, Texas, states that its agent attrition averages less than 10 percent, an astonishing figure in the call center industry. Training is done remotely. Working Solutions’ Distance Learning OnDemand engages the agent in action-oriented learning methods that require a high degree of interaction and participation.

With regards to Alpine Access’ hiring procedures, Carrington stated, “Like the job, the hiring process is completely virtual. It’s a simple three-step process. The first step, the candidate applies online and fills out a tech evaluation that is scored by the system. If the candidate passes that, they go to the second step, a voice audition that we record and listen to. If the candidate passes that, they have a person-to-person interview over the phone. It’s a quick process. It’s one of the reasons we can get through over 80,000 applications.”

West’s Mark Frei describes his company’s hiring process. “The hiring process is completely online with interviews taking place on the phone. Applicants take a qualifying test and undergo a thorough background check. In terms of any special qualities, our HR professionals are looking for self-starters who are also good communicators. HR is also able to put geographic or previous experience focus on hiring that would probably not be possible if locked into a specific site location. This is evidenced by the fact that West has home agents in all 50 states. We’ve found this to be more effective than a ‘switch’ based solution, which restricts hiring to a certain physical location in a single city. Incidentally, our HR costs have been reduced because other than the interviews, our hiring process is fully automated.”

Most home agent providers have rigorous training process in place that were specifically designed for their home agents. With the inability to provide classroom training, these companies have had to get creative, providing training via a combination of video programs, e-learning, simulations, remote coaching and customized certification programs. Most of the providers’ programs allow for continuous evaluation and cross-training to be sure agents remain committed to providing high-quality service. (Readers can view Convergys’ checklist for potential applications to its home agent program at www.tmcnet.com/390.1 for details and frequently asked questions.)

Home agents are paid in a variety of ways. As mentioned earlier, Alpine Access home agents are company employees. Other providers pay their contractors in a variety of ways, including a rate per talk minute. As an example, Convergys (News - Alert) pays agents an average of 20 cents per talk minute, though rates will vary by the complexity of the program, as will the required minimum number of hours worked. Contractors are responsible for taking care of their own taxes.

Scaling Up, Scaling Down
One of the great benefits of the home agent model is how quickly it can scale to meet clients’ needs, which can often be quite cyclical — by season, by month or even by day, depending on a company’s business. Alpine Access is able to scale intraday between 30 to 50 percent within just minutes’ notice. The West at Home program estimates 40 percent staffing flexibility in the same timeframe. Should needs spike due to a marketing campaign, a commercial, or even an outage or technical problem, home agent providers can take steps to quickly bring agents online who are not currently scheduled. This allows client companies to scale their call center resources by many hundreds of percentage points in just weeks or months.

Home agent provider Working Solutions’ CEO Tim Houlne explained it this way. “Much like the supply chain process leveraged by auto and PC manufacturers, the remote home agent industry provides specific agents on a ‘just in time’ basis to meet the inevitable spikes in demand that come for products and services, while profiling agents to closely meet their specialization requirement. Companies can save money and increase customer satisfaction by outsourcing their calls centers to providers who leverage industry professional home agents.”

LiveOps, based in Palo Alto, California, says that via its LiveOps platform, any client can ramp a virtual contact center from 10 agents to more than 400 agents within 10 minutes. As a result, LiveOps can handle any volatility in call volume, with only a 1.5 percent abandon rate. The company calls its LiveOps Live Agent service “America’s largest private network of independently contracted home-based agents, with over 7,000 active agents located across the 48 contiguous states.” The company also provides the suite of contact center solutions used by its agents. (This is a common occurrence in the home agent model: many providers have developed their solutions internally to meet the specific needs of the home agent process, not having found exactly what they need in the call center solutions marketplace.)

LiveOps explains its exact process as follows: When a consumers dials one of LiveOps customers’ phone numbers, the 800 number for the specific product or service for which the person is calling is immediately recognized. The call becomes a digital signal, or VoIP call, and is routed to the first available agent who has historically performed well with calls for that product. The call is switched back to a traditional phone signal, and a script pops up on the agent’s home computer as his or her phone begins ringing. The agent answers the phone, reads the script and helps the customer through the call. If the caller has questions not answered in the script, the agent has Home Agent Service Providers Alpine Access (www.alpineaccess.com)
ARO Contact Center (www.callcenteroptions.com) Convergys Corp. (www.convergys.com)
West Corp.
(www.west.com)
Willow CSN
(www.willowcsn.com)
Working Solutions Inc. (www.workingsol.com)
many other places to find the answer, including a comprehensive FAQ list, real-time chat with agents, and community forums. Agents have all the tools necessary to make each customer call a success, rendering the quality of customer service equal to that of a traditional contact center.

Tim Houlne of Working Solutions reflects on where the industry is today and where it has come from. “Ten years ago, the high-speed Internet connections we rely on today were still in development. And the support technology, compared to what it is today, was absolutely Byzantine. People told us the remote agent concept was still that; and we would fail because the service quality we needed to deliver was impossible because the technology had not yet caught up to the dream.”

Said Houlne, “Employing high quality agents has become a basic requirement for today’s more selective corporate buyers who understand long-term customer loyalty and value.” [Editor’s note: Look for strong growth in the near future for Working Solutions. In the early autumn, the company announced its purchase of Top 50 teleservices provider Advanced Data-Comm.]

In these days of strong emphasis on the quality of customer care (at least in the press releases of many companies, whether in reality or not), cost is still important. West estimates that its West at Home program can reduce per call costs by 10 to 15 percent while simultaneously offering a 10 percent increase in agent productivity over traditional brick and mortar call centers.

In January of 2006, analyst group IDC issued a report predicting strong growth for “homeshoring.” At the time of the study, IDC (News - Alert) estimated that there were 112,000 home-based phone representatives in the U.S. By 2010, IDC predicts that number could triple and reach over 300,000 as companies increasingly develop and invest in home-based agents, either with their own employees or by hiring outsourcers.

“Over time, offshore outsourcing of customer care will be associated more and more with its neglected sibling, homeshoring,” said Stephen Loynd, senior analyst for IDC’s CRM and Customer Care BPO service. “Ironically, outsourcing will therefore be associated not only with the offshoring of U.S. jobs, but also with the expansion of employment opportunities in the U.S. Offshoring’s underestimated sibling, homeshoring, is about to hit a growth spurt.”

Given that offshore outsourcing for voice calls can often be a one-way trade-off: the reduction in costs is bought and paid for by a reduction in quality either because of heavy accents, cultural disconnects or just negative perception, a new call center model that offers more knowledgeable, mature agents effecting improved customer service for a reduction in overhead can mean only one thing: from the home agent model, we’ve seen only the tip of its iceberg. CIS
By Tracey E. Schelmetic
Editorial Director, Customer Inter@ction Solutions


 

Case Study: Effective Staffing For Fluctuating Call Volume
By Steve Sanden, Cincom Systems, Inc.

In 1998, West Corp. approached ShopNBC, an upscale TV and Internet retailer, about outsourcing order calls for products featured on their programs. West learned that the shopping network needed a customer contact provider that could maintain adequate staffing levels and effectively handle the highly variable call volume generated by the network’s programming.

Further, ShopNBC wanted a contact center that could manage the call volume with the expertise of a dedicated call environment. Achieving those goals would require efficient staffing and scheduling systems, and agents who had product knowledge and proficient communication skills.

After analyzing ShopNBC’s needs and objectives, West determined that the client would benefit best from a blended solution of West at Home agents and call center-based agents. West at Home is West’s work-at-home agent program that provides companies with extreme staffing flexibility and highly educated agents at a cost that is lower than traditional call center fees. By blending the West at Home and call center agents, West is able to quickly adjust staffing levels to meet their demand, making it possible to answer more calls and maximize sales conversions for the shopping network.

To ensure an exceptional level of service for ShopNBC’s customers, a customized training program was developed for both home-based and traditional agents. Through this program, West was able to quickly train its agents throughout the country and provide them with the information they needed to effectively take incoming orders related to the shopping network’s numerous product offerings, which include jewelry, consumer electronics, home goods, apparel, cosmetics and more.

To better process ShopNBC’s variable call volume, West utilized their proprietary staffing and scheduling system, Spectrum, which allowed West to more quickly and efficiently adjust staffing levels to meet the shopping network’s changing demands for agents.

West’s scheduling flexibility and staffing systems made it possible to quickly, efficiently and consistently deliver results, which met ShopNBC’s highly variable demand for agents. As an example, when ShopNBC’s hourly call volume exceeded projections, West was able to immediately ramp up by increasing the number of West at Home agents that were available to answer calls received by the shopping network. As a result, West at Home agents were able to handle 40 to 60 percent of ShopNBC’s call volume, which at times exceeded hundreds of calls per hour. In this case, West’s staffing flexibility and rapid response was key to helping ShopNBC acquire more customers and increase revenue. CIS

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