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March 1999


Outbound Teleservices Call Center Growth Slows Significantly
But That May Be A Blessing In Disguise

BY NADJI TEHRANI,
EDITOR IN CHIEF, EXECUTIVE GROUP PUBLISHER


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 can.
  • 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 significantly.

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 Growth…But…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 wrote:

"…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' mentality.

"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 service."

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!

Sincerely,

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


Figure 1. [Click here to return to text]

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Congratulations To The 1999 Top 50 Outbound Teleservices Companies

I would like to take this opportunity to extend our sincere appreciation on behalf of the entire call center industry as well as the entire staff of Technology Marketing Corporation, publisher of C@LL CENTER Solutions magazine, to the 1999 winners of our industry's coveted Top 50 awards. Those of us who have followed the industry since its inception in the early 1980s and know the call center industry inside and out, also know how difficult it is to become a member of this elite and prestigious group of companies.

Fourteen years ago C@LL CENTER Solutions magazine pioneered this great institution known as the Top 50 inbound and outbound teleservices award program primarily to give due recognition to a group of hard-working people whose primary function is creating sales and thereby protecting and/or creating hundreds of thousands of jobs in corporate America. We know how difficult it is to hire, train and retrain multitudes of people and help them develop great careers, and also how difficult it is to deal with many demanding customers in a highly competitive environment. Earning a Top 50 award year after year is indeed one of the most difficult accomplishments, if not the most difficult, within the teleservices area. You bring respect to our industry through your excellent quality, while generating job security for the thousands of Americans who work for the companies that benefit from the revenues you generate when they outsource their telesales and teleservices functions to you. We salute you for a job well done. We stand in awe of your well-deserved growth. It is a pleasure to work with you on a daily basis.

[Go to the Fourteenth-Annual Top 50 Outbound Teleservices Agencies Rankings]


Live, Multimedia Blended Call Center To Be Featured At CTI Expo Spring '99

When I spoke recently with Ed Arriola, vice president of sales at InkTel Marketing, a Miami-based service agency and division of Avanti/Case Hoyt, only one question seemed logical: "Do you think you can raise a fully functional, blended call center in two days?" Those words ushered in another TMC first: The first LIVE multimedia blended call center to be seen right on the show floor of CTI Expo Spring '99. This is not a demo!

I came across InkTel Marketing during research of turnkey call center solutions and was impressed by Arriola's explanation of the benefits of running on communications server technology. "This comprehensive software-based solution," Arriola explains, "yields unlimited flexibility and rapid implementation of client initiatives."

Leveraging its new technology, InkTel has attracted many marquis clients and has already reached the 200-seat capacity in its new Miami call center. InkTel plans to open a second 250-seat call center in the near future. "Our technology enables us to have a virtual network between all of our locations, which was extremely important to us for purposes of expansion, overflow and disaster recovery," Arriola concluded.

InkTel Marketing uses technology by CellIT, Inc., a provider of enterprisewide multimedia solutions for the high-volume call center/service agency industry. CellIT provides the capability of utilizing existing PBX resources while seamlessly integrating ATM-based broadband technology once existing PBX resources have been exhausted. CellIT's CCPRO is a next-generation communications server solution that provides complete inbound and outbound functionality while requiring no external support.

The only place in the world where you can objectively learn about live, next-generation, multimedia blended call centers is at CTI Expo. A two-day, blended broadband call center installation requiring no integration with live agents is unheard of. We at TMC definitely wanted to see it, and we will at CTI Expo Spring '99 in D.C. this May. InkTel Marketing will train and staff the agents and has enlisted Kajax Engineering, a systems integration firm based in Arlington, Virginia, to roll out a completely functional call center, running live inbound and outbound services on behalf of CTI Expo Spring '99. Kajax provides complete solutions that include vendors such as 3COM Corporation, FORE Systems, IML, Tadiran Telecommunications, Knowledge Source, SMEDS, Hallmark Computers and CellIT, Inc. What role will each of these vendors play in our two-day call center extravaganza?

There is one way to find out: Come to the exhibit hall of CTI Expo Spring '99 in the Washington Convention Center, May 24-26 to see this next-generation call center in full force. Please see www.ctiexpo.com for details.

Seeing Is Believing

CTI Expo will once again be the "must-attend" event to find the latest in products and services for call centers, CTI and Internet telephony. But please don't take my word for it; see many unsolicited testimonials from this show at www.ctiexpo.com/testimonials. Many more unsolicited testimonials can also be found regarding our first CTI Expo in Spring of 1998 in Baltimore. Even established shows don't get testimonials like this. In fact many of the testimonials compare us to all of the established shows you may already be aware of. CTI Expo is that good.

If you are still reading and haven't made your plans to attend CTI Expo, you are like me - you need to be convinced. You are the kind of person that doesn't get swayed by dozens of testimonials - you need to see it for yourself.

Fret not. We have made it easy for you to see CTI Expo in all its glory. Just go to www.ctiexpo.com/ctiexpo. We have a 3.5-minute streaming video of our show that says it all.

Sincerely,

Rich Tehrani
Group Publisher
Technology Marketing Corporation







Technology Marketing Corporation

2 Trap Falls Road Suite 106, Shelton, CT 06484 USA
Ph: +1-203-852-6800, 800-243-6002

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