Since 1986, when we introduced the idea of the Top 50 Service Agencies, we have
witnessed vigorous growth in the outbound sector. Our motivation for initiating the Top 50
rankings was our observation of a genuine need for corporate America to learn about the
vital services that outsourced teleservices companies can provide. Here are some examples
of the benefits provided by outsourcers:
- They can usually do a far more efficient job of marketing than an in-house department
- As a neutral party, they can make a more credible assessment of the value of the product
or service sold by the client company.
- Most are equipped with more high-technology than in-house companies, thus the client can
expect far superior results at lower cost than purchasing the equipment for themselves.
- Since teleservices is the only thing service agencies do, it's their core competency to
generate leads, build databases, and support sales, e-commerce and customer relationships.
- Teleservices companies can perform sales, marketing and customer service functions at a
fraction of the cost to an in-house company simply because the agency can spread its costs
across its client base.
For all of these reasons, and more, service agencies have continued to flourish since
we began tracking their growth in 1986. In fact, with the current focus in corporate
America on customer relationship management, their future has never looked brighter. This
is not to say, however, that the service agency industry is not faced with challenges: it
is, and it's important to look at what those challenges are.
To begin with, I'd like to draw your attention to Figure
1. The graph shows the number of billable minutes for all outbound service companies
ranked in the Top 50 over the last six years, as well as the percentage increase in
billable minutes from year to year. You'll notice tremendous leaps in growth in our 1996
and 1997 rankings, followed by a much smaller increase in 1998 and an even smaller
increase in 1999. Even if you take into account the fact that the percentage of growth for
previous years is based on smaller totals, this year's percentage growth has decreased
Why is this the case, you may ask. Our assessment of the situation is as follows:
1. We believe the rapid activity in mergers and acquisitions among outbound service
agencies has created significant over-capacity in certain companies, thereby forcing
management to fill seats at all costs. Unfortunately, that means to utilize its full
capacity, management will accept client contracts at any price, regardless of
profitability. When that's the case, there's little room for training - quality falls and
clients go elsewhere.
2. Similar to point number 1, when top management in companies that are investigating
mergers and acquisitions lose focus on Main Street because their eyes are on Wall Street,
quality suffers and clients respond by pulling their business.
3. Some agencies may be suffering from the high employment levels we're experiencing
across the country. When you can't hire people, you can't make calls. This is especially
critical for outbound firms where skill levels are so important and turnover can be as
high as 300 percent.
4. Perhaps points 1, 2 and 3 are not the case at all. Perhaps the service agency
industry simply took to heart the advice I offered in the March 1996 outbound Top 50
issue. In my Outlook, entitled "A New Era Of Opportunity For The Industry's
We Must Protect Our Industry From Undisciplined Expansion," I
marveled at the service agency industry's explosive growth, but I threw up the red warning
flag not to let growth continue at the price of quality. In that March 1996 Outlook I
we must keep our composure, and remember to concentrate on those things
that have laid the foundation for our industry's success. Specifically, let us never
forget that our success is built on our laboriously earned know-how, our unsurpassed
performance, and our unstinting dedication to quality."
"Indeed, our industry has thrived even as other segments of the economy have
stagnated. Our quality is what has made all our success possible.
"And it is our quality that will guarantee the industry's future
. The key is
to accept only that business which we can handle with our customary professionalism. We
have worked too hard to lose the good will our industry enjoys. For example, communities
welcome teleservices operations, and the government has grown to recognize our
contributions to the economy. But all this could change if we forget to maintain quality.
I, for one, reject the notion that teleservices is a 'flash in the pan' industry. Yet I am
concerned that all our hard work could be swept away if we get distracted by 'gold rush'
"Can we maintain quality as growth accelerates? It seems to me we have no choice:
We must maintain quality at all costs!
"As outsourcing is joined by other growth-promoting trends, we must make sure
growth doesn't get out of control and undermine our ability to deliver high-quality
I'm not trying to pat myself on the back, but perhaps teleservices agencies realized
there was some wisdom in these words and actually slowed down their high-speed growth to
concentrate on quality instead.
What do you think? I'd love to hear your comments and theories on this subject.
Speaking Of Quality
All call center management, whether in-house or teleservices agency, can learn a great
deal about improving their quality by attending CTI Expo Spring'99 in Washington D.C. this
May 24-26. In addition to five dynamic keynotes, the Conference program offers 13
information-packed seminars on Call Center Technology, 13 more on People & Learning as
well as all the latest information on CTI and Internet Telephony in additional sessions,
not to mention five FREE Learning Centers. You simply do not want to miss this event.
Please visit the Expo Web site www.ctiexpo.com. As
always, your comments are welcome!
Executive Group Publisher