In the realm of call centers, how crucial are creativity and innovation? What are some of the factors that make the industry fail?
Lack of marketing is one reason why a call center falls short of its full potential. It is critical to recognize that the industry’s ultimate goal is to sell its value proposition. Clients may evaluate your integrity when you sell for value rather than money, which also will keep them in a long-term business relationship.
In this episode, Richard Kommit, President of Kommit & Company, and I talk about his experiences in the Call Center business. We also talked about some of the challenges that the industry face.
Learn about building long-term business relationships, selling your value, and how to sustain a Call Center business.
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Or go to Jason’s HUB – www.JasonCutter.com
Connect with Richard on LinkedIn
Richard grew through the ranks of a startup that became a global digital marketing agency, ultimately prospecting and launching a critical relationship with an international telecom.
Founding and growing a BPO service provider with global clients including AT&T, American Express & HP, Richard grew the business to 200 employees and structured a successful multi-tiered exit.
Serving as a trusted advisor to other entrepreneurs, Richard honed the concept of “multiple bites of the apple,” where all stakeholders continue to prosper with the amplified success of the enterprise.
[00:00:00] Jason: [00:00:00] Richard. Welcome to the scalable call center sales podcast.
[00:00:04] Richard: [00:00:04] Thank you, Jason. I’m glad to be here and thank you for asking.
[00:00:08] Jason: [00:00:08] So I am really excited for a number of reasons. One, this is the first episode of my new podcast. I had one before and when I was thinking of the concept for this and I wanted to do it we had been talking about some projects and I was like, this would be a great way to start because not only do you have the business that you do, where you’re helping with mergers and acquisitions, but also all of your experience you’ve had in the call center space, leading to what you do.
[00:00:35] I love the fact that you have that experience and then you’re super niched with your business. Now, not just like a general business broker, who’s doing everything for everybody, but very focused. So why don’t we talk a little bit about, your background and what led you into the call center business?
[00:00:52] We were talking about this earlier offline and where that comes into some of the challenges for call centers.
[00:00:58] Richard: [00:00:58] Sure. I was working for a company that was in the coupon book business back in Boston over 30 years ago. And they were one of the few companies that were truly successful at it in that they gave the books.
[00:01:14] Two, one out of three people that worked in downtown Boston. And as a result with this guaranteed distribution, they were able to charge a thousand dollars a coupon. So we got the best restaurants and retailers, and I was the seventh employee hired at that company. When I left that company, there were over a thousand people and that company had gone public as digital.
[00:01:35] So I really got an opportunity to see how a company can scale and grow as long as you take care of your employees. And as long as you attract and keep the best talent and avoid employee turnover and have a really terrific sales group selling your value proposition out in the marketplace. After I was at that company for about five years, I found out that at and T wanted their at and T 800 directory to be sold.
[00:02:06] And just very much like a yellow pages. They wanted to stimulate 800 users. And Michael brought her, the owner of the company was not interested in pursuing that business. That was just too mundane for him. And another gentleman at brought a sauce for comfrey by the name of Brian Shubhra was a very close friend of mine.
[00:02:25] He had gotten me the job initially. He was the second employee there and. I said to Brian, this is our chance, Brian let’s go in and talk to Michael and get this business. And Brian says, I’m very comfortable here. I’m doing terrific. And times look great going forward. And I said, Brian, we really need to start our own company.
[00:02:45] So we walked into Michael’s office and Michael said, you know what, why don’t you say that? You’re a micro P and L within Bronner software company. And fly down to basking Ridge, New Jersey and pitched this business. And if you get the business it’s yours and you can leave with that business. I said, that’s great.
[00:03:02] So we sat down and wrote a deck, which was essentially a slide presentation. And we sent it down to ATNT and we followed up with a phone call and they invited us down to present. And we presented on a Monday morning and on Friday afternoon, I got a call from a gentlemen from at and T and he said I’ve got some good news for you.
[00:03:23] You’ve got the business. You’re going to be one of our sales agencies. And I said, Dave, that’s great news. However, we’re a micro P and L within Bronto sauce per comfrey. And as a result, we’d really need a free long distance in order to get started. And he said, Richard, that’s a tariff item. I can’t give you that.
[00:03:41] And I said, then Dave, we’re going to need $10,000 in seed money to help get us started. And we’ll build this whole operation around you and we won’t let you down. So he said you son of a gun. I really wanted to wrap this up today. Let me talk to some people and I’ll get back to you. At the beginning of next week, I got off the phone.
[00:04:00] I said, did I just make the biggest mistake of my life? 15 minutes later, the phone rang and Dave said, Richard, you’ve got your $10,000 will be up next Wednesday to see your operation. This was Friday afternoon. There was no company. We had no name for a company. We had no furniture. We had no office space.
[00:04:19] So my dad was in the used office for inter business in upstate New York. Before we walked out the door, I said to the office manager of Brunner Salzburg, I said, we have no office space. He said Michael has 6,000 square feet in downtown Boston that we’re not paying on for the next six months.
[00:04:36] He said, why don’t you ask Michael, if you can have that stuff. Michael said with my blessings, you can have it. 6,000 square feet is a lot of footage. We drove up to Albany, New York. We picked up the furniture and our U hall. We came back making phone calls along the way. This was before cell phones and we hired four or five people.
[00:04:55] And. We got the furniture set up as best we could. And we had those four or five people there and a few of our friends and at and T walked in the door Wednesday morning and saw our operation. And within the first year we did a million dollars worth of fee selling over $5 million worth of directory advertising.
[00:05:15]And the story was built from there. We built that company for 10 years to 200 days.
[00:05:19] Jason: [00:05:19] That’s amazing. And not just from a journey story, the background that kind of led to this point. One of the things that you told me when you shared bits of this story before was how there’s a lot of people in the call center space that aren’t creative, they’re stuck, or they’re looking at things in one way and not really expansive.
[00:05:43] Do you want to talk a bit about that and what you learned and then also how that translates to what you see now?
[00:05:49] Richard: [00:05:49] Yeah, I think there’s a couple of things. It’s not that every one in the call center business is not creative. As much as the call center business is spinning a lot of plates in the air.
[00:05:59] And it’s a business that has a fair amount of challenges on a day-to-day basis. And a lot of things appear mission critical on a day-to-day basis. It can be a very stressful environment. Many call centers have 100 to four per 400% turnover of their entire staff. Every year. It tends to be an industry that is at the lower end of the wage scale.
[00:06:21] It tends to be an industry that sometimes it doesn’t seem to attract the most creative. Outgoing industrious people for whatever reason. And I think that really limits the outcome of the business. And what happens in my experience is the number one reason that a call center fails or doesn’t meet its true potential is because of a lack of sales.
[00:06:50] And what ends up happening is the owner tends to get so busy running the operations of the business on a day-to-day basis and wearing many hats that they fail to remember that ultimately their job is to be out in the marketplace, selling their value proposition. And what is their unique value proposition?
[00:07:11] Okay. Their unique selling proposition, their USP. And unfortunately, if they don’t do this work and they’re not successful doing this and this exercise, they end up on the expense side of the equation. And what I mean by that is they end up selling on price as opposed to value. And what happens is there’s always another call center in the United States, nearshore or offshore.
[00:07:35] That’s willing to do that business for that client for 50 cents or a dollar less an hour. So you end up in a situation where you’re always fearful of losing that client. When you sell on the revenue side of the equation and you actually create revenue. And save churn and really create incremental revenue for your clients.
[00:07:54] You can then command top dollar and you truly do create that partnership with your client and you become integral to their business and a true partner. And as a result, your business flourishes, you can therefore hire better employees. That want to stay for a longer period of time because you’re giving them life-changing wages.
[00:08:16] They can buy houses and cars, et cetera. And my experience is that if you take care of your people first and avoid employee churn, that will really assist you in being able to satisfy your clients.
[00:08:31] Jason: [00:08:31] There’s so much good stuff in there that I want to recap a little bit. There’s the, you said there’s the cost side versus the revenue side, right?
[00:08:40] The value side. And like you pointed out a lot of companies, especially call centers are getting into a battle of either a race to the bottom or being seen as a commodity or losing out to that other center. Who’s willing to do it for less, because there’s always somewhere around the world that will do it for less.
[00:09:00] And it’s like any sales to me when you first told me this concept, it made complete sense because there’s a lot of people in sales. In selling anything where they’re selling to price, they’re selling to features and benefits instead of selling to the value and when you’re selling value and you’re helping the potential customer, see the value of what it is that you’re offering and what the impact is for them in any way, every way possible.
[00:09:28] Then what happens is price becomes less and less important. What’s more important is the value and the results, versus the cost. And I could totally see that with call centers where they’re just thinking they’re a cost center. People are outsourcing for a lower price for a reason. And the call center mentality is okay.
[00:09:47]Then that’s us. Instead of know where your revenue partner we’re going to help you. I worked at Microsoft a long time ago in Texas. And we were a cost center in their opinion, and treated like a cost center. We had, broken. Parts we had, 11 inch monitors that were left over from other projects.
[00:10:08] They treated us like a cost center instead of, what it could be for customer service and tech support and retention. So I think that’s interesting. And then I love the other part too, about paying wages and paying more and helping your employees stay to me. This reminds me of the Costco versus Walmart debate.
[00:10:30] Richard: [00:10:30] Absolutely my favorite store, Costco. I was there yesterday talking to the person that worked there about why do they like it so much? And he said they pay us great wages. It’s very flexible. And everybody in Costco has a smile on their face. How do they do that. How do people at Southwest airlines that are in the airline industry?
[00:10:50] How are they smiling while they’re working on the plane while they’re all owners there and they understand that they’re owners, it’s really interesting. There’s a a book called the fifth discipline and a gentleman by the name of Peter Sangay from MIT that wrote that. And what he talks about is creating an effective learning organization and most companies get compliance from their employees.
[00:11:14] So I’ll give you this wage and you do what I’m asking you to. And people do it begrudgingly, and they may do a decent job at it until they find another job. But if you teach the person why they’re doing what they’re doing, what the overall benefit is to them, the company, themselves, and to the client, and you create an effective learning organization, everybody is rowing the same way at the same speed, and then people will take a bullet for you.
[00:11:43] And that’s been my experience. Money as important as it is about number four, number five, on the scale of what people are looking for, they want autonomy in their job. They want to be able to make a difference. They want to be able to master their own little domain. These are all the things. Owners tend to forget.
[00:12:01] They’re so worried about utilization and having butts in seats and making sure that those individuals are smiling and dialing for 45 minutes of the hour. They lose sight of everything else that’s happening in this.
[00:12:16] Jason: [00:12:16] Yeah. And there’s always that balance, right? Going back to the Walmart, Costco comparison, Walmart generally has high turnover.
[00:12:23] They have high loss of items, a lot of internal theft that happens versus. Costco right where it’s high retention, high level of employee engagement, higher wages, and you get what you pay for. And what’s interesting is when you look at those two models and compare them, and I’ve seen some centers where they’re run more like a Costco, where they pay more, they’re focused, more engagement, they’re focused more than just the money, but also the culture.
[00:12:50] And the engagement by everyone and the learning, the growth, like you said, and those, they don’t have the turnover issues that they’re not running it on that end of this spectrum. Now, if we shift a little bit, you also said that one of the biggest challenges for call centers, call center owners, they’re spending most of their time in the operation instead of out there selling, filling the pipeline, getting new clients, do you think that’s because a lot of call centers are started by.
[00:13:19] Operational people or people who are coming from, if we look at Michael Gerber, E-Myth revisited a lot of people, they’re technicians, they’re working at a company almost like yourself, right? Where you’re at a company and you’re doing this and you’re like, Hey, we should start our own business.
[00:13:33] And they go out and do it. You’re more on the sales side, which is helpful. But do you think that’s what causes a lot of call centers to get started, but then also lack in the sale.
[00:13:43] Richard: [00:13:43] I think that’s a possibility. I also think what ha what’s what happens is when the call center is. Is competing on price.
[00:13:54] They don’t have the extra profit in dollars in order to hire the key people that should be running the operation on a day-to-day basis. It’s all about people, process and technology, right? So the technology is somewhat ubiquitous now and available to everyone and inexpensive. When I started my call center, we were paying 25 cents a minute for pro Watts.
[00:14:17] Right now you’re paying about a penny. A minute. For about a thousand dollars or less a seat, you can set up a call center right now. So the technology is somewhat of a level playing field. We’ve talked a little bit about people. The process is really important for a couple of reasons. If we have a good operations, a good client service, a good quality control mechanism within a company, the agent feels that they’re part of a greater system that works.
[00:14:44] So they feel that. Rules apply when they do well, they’re compensated well. Their calls are being recorded. Quality assurance is looking at those calls and listening to them, coaching them, helping them and helping them grow within their organization. They have the opportunity to be promoted from within they’re feeling better.
[00:15:05] If we’re in contrary to that, if the call center is selling on the expense side of the equation, Those people aren’t in place. And the call center owner is doing a lot of that themselves. So they aren’t the visionary. They’re not laying out the strategy. They’re not jumping on the plane and selling.
[00:15:24] We had five clients when we started 18. We’ve had one when we started at ACNC and our first year and a half, we had at and T American express you’ll look, Packard H and R block. So we went after the big players. We would have them fly to Boston. We’d send them a plane ticket for their flight and with as many people as they wanted to bring, they would come to our office and then we’d sit with them for a half a day and really talk about what were their pain points in their business.
[00:15:54] And they would. Really open up and discuss with us what was bothering them. And as a result, we would custom tailor programs for them and then create incremental wins for them. So for American express, we were getting paid $5,000. Every time we got an American express restaurant, a holdout, they called it to sign up with American express.
[00:16:19]They didn’t know that they didn’t know that a call center could do that work for them. We were sitting with American express and we said, Hey, I think we can help you with this. And frankly, you don’t, you’re not successful a hundred percent of the time, but if you don’t try, you don’t know. So our people were extraordinary.
[00:16:36] The other thing that we did in our call center was we were located right on the Atlantic ocean in Boston and many call centers save the best office. For their upper management and they put the call center folks in somewhat of a dark environment. Exactly. We did the opposite. We had, all of our agents could look out at the ocean when they were speaking on the phone and it empowered them.
[00:17:01] They felt terrific. They felt like they were part of something and it just, it worked really well. So those are the types of things that I think can really make a difference for a call center.
[00:17:12] Jason: [00:17:12] I love that both the, to me, it triggers a servant leadership, right? Where your job is to serve the other people and people working for you or people following you.
[00:17:24] And then also not having that entitled. I’m the boss. So I’m entitled to this and this. I’m the boss, so I want to help everyone else succeed and be happy and win. And if everyone else is doing well, then I’m doing well easier and better. And I love that. So there’s the lack of the pipeline.
[00:17:43] There’s filling it. There’s going after the sales. One of the things that you told me. Rarely the obvious reason is that you’ve seen centers and owners and leaders of centers where they’re not out there selling too much because they’re actually afraid of getting too much business.
[00:18:03] Richard: [00:18:03] Yes, that’s very true.
[00:18:04] Does that come into it? Very true. So the most difficult staffing model is the accordion staffing model. So where you have a situation where you have a 60 seat call center, but you’ve figured out a way to be able to ramp that up to a hundred seats either by utilizing another shift, being able to use another location or subcontracting out a portion of your business, if it comes in the door.
[00:18:28] So what happens is the call. Owner or sales team is looking for business to fit their call center. Instead of just looking for business that they’d be really good at and that they could succeed at, in my opinion, I’ll give you a great, for instance, we there was a tax software called tax cut that H and R block had, and.
[00:18:51] I got the idea that we want it to be their call center. And I flew out to Kansas city and we spent a day. And when I left, I had the order. Now we had never done anything like that before. I’m a big believer in the braille method. So I like to feel my way through things and. I got back and my head of operations said, wow, Richard, you shake the tree.
[00:19:14] And many times in a piece of fruit comes down this time a watermelon came down. We got it done. And we implemented the program. The interesting thing for H and R block was they did most of their business in a 60 day period. So the other 10 months of the year, they did not do a lot of business.
[00:19:29] So we got the idea of saying to them, Listen, let us, we have these incredible people calling in for your product. Let us sell other things. I love Lucy TV shows different kinds of screensavers, a whole variety of other products. You’ve already gained the trust of your customers. Let us. Expand that sale for you.
[00:19:56] And they did, and we made them more profitable. And then the other thing that we did was we made most of our revenue in those two months, which was really difficult for us as a call center because the other 10 months of the year we’d get very little revenue from them. And we went back to them and we said, I’ll tell you what, we’ll give you a 3% discount.
[00:20:15] Let’s split it. Our the two months of revenue for our company into 12 months. And why don’t you pay us on the first of every month to even out those peaks and troughs for us? So we kept them as a client for five years, and that’s how we did it by working with them and letting them know our pain points.
[00:20:34] They kept an open line of communication with us. And as a result we were successful.
[00:20:40] Jason: [00:20:40] I love it. What would you say is one of the biggest challenges that you faced? When you had your call center operations prior to your current business?
[00:20:50] Richard: [00:20:50] One of the biggest issues that we had was in 10 years, I don’t know if there was ever a time that the payroll was in the bank at the beginning of a payroll cycle, we paid every two weeks and the bigger the company, the more difficult it was to get paid.
[00:21:07] I found that really interesting. So we had an incredible. Finance staff that would stay in touch with our clients. We would always schedule a call with our clients before a bill went out and then let them know what extraordinary things happen throughout the month. So there’ll be no surprises. Then the bill would come and then we would call them a week after and start asking them for payment.
[00:21:33] And that’s, that was one of the key issues for us was just cash. The second is always for any call center is attracting key talent. How were you doing that? So we would have our own job fairs. We would advertise in places that people normally wouldn’t think about advertising by putting signs on the sides of trucks by paying a really good.
[00:21:57] Referral bonus to our employees, if they would bring in family, friends. The other thing that was really good that we did on the employee side on the hiring side was we really embraced the part-time employee. We found that a part-time employee working four hours will give you roughly 75% of the productivity that a full-time a full-time equivalent will give you.
[00:22:19] And very often somebody that’s just coming back into the workforce. Or someone that’s older or somebody with a disability will really work very diligently for you. We actually also implemented a program with blind people to see if they could be terrific on the phone using software that was developed to help them interact with their computer and be effective for customers.
[00:22:42] So I just think you’ve got to think outside of the box and areas like recruiting and and also B. In touch with your clients, pick up the phone when they call and call them frequently, make sure you have really good established contacts with them on several layers. So there are times when you have to ask for a favor and that you can do that, and you can also do favors for your client and build them up in the favor bank.
[00:23:08] So that’s a couple of.
[00:23:10] Jason: [00:23:10] Yeah. I think that with the clients, it’s all about that relationship. And then you get you through and like you said, credits on both sides. You help them, they help you. If you need something super fascinating to hear the comment about it. Potentially in 10 years, never having the money in the beginning of a payroll cycle.
[00:23:27] When you know that you have payroll due and you think, Hey, 10 years successful, I’ve got all these big clients, but they have long pay cycle. Anyone who’s running a call center has been in charge of the finance side of that knows that just because you have payroll every two weeks doesn’t mean your clients especially big corporate clients care about your needs.
[00:23:46] And then I love the fact that you’ve said about the part-time. I have never executed that fully, but I’ve always thought that was a good model. And like you said, the people who are wanting to work part-time or can only work part. Have limited choices in the marketplace. And if you give them a home and you support and appreciate them, then they will give you what they’ve got.
[00:24:07] And it’s fascinating because I fully believe that probably in those hard working four hours, they’re giving you nearly as much as a full-time person is giving you stretched out over eight hours with breaks and lunches and distractions and hanging out. And I think that’s fine. So let’s talk about the business now that you’re in with mergers acquisitions, helping call centers, what are some of the biggest challenges for somebody who’s looking to sell their business?
[00:24:40] So they’ve gotten to a point, one of the things you told me is that everybody. W every call center, every business out there will sell right to somebody at some point, to either because they want to, because they have to, maybe they pass away and then it gets transferred to somebody else it’s, no one lives forever.
[00:24:57] And so at some point it’s going to change hands, but what are some of the challenges with the potential call center owner? That’s looking at it.
[00:25:05] Richard: [00:25:05] I think there’s really three that come to mind. What is my call center worth is number one, and very often a call center. Owner believes that his call center or her call center has a extraordinary value.
[00:25:21] It’s putting a roof over their head. It’s feeding their family. And they’ve got a lot of people there and the market really will dictate what the value is. And the value very often is a multiple of something called trailing 12 month adjusted EBITDA. And really the multiples these days are in the four to six times.
[00:25:45] Range. So if you have a business that is doing $6 million of revenue and $1 million of adjusted EBITDA, and those adjustments are every normalizing the owner. Salary personal expenses automobiles, et cetera and extraordinary one time items that have happened, but will not be repeated like a lawsuit that came up or something like that.
[00:26:12] So there are some extraordinary legal fees. Those can all be added back as well. In that instance, you’ve got a million dollars of EBITDA, so you’ve got a business worth four to $6 million. How you get to the top end of that range is if you’re an inbound center versus an outbound center, if you’re on a growth trajectory, if your clients are recognizable, long-term.
[00:26:38] And if there’s not client concentration, if you’re not reliant on one or two or three clients. So the first thing that the owner wants to know is what is my call center, where the next thing they want to know. When’s the best time to sell every call center thinks they’re three months away from doubling their business and that’s an exaggeration, but everyone feels that then that next client told me they’re going to be tripling their business.
[00:27:03] And I really want to take advantage of that. And there’s no need to worry there because our process is going to take six months. To nine months, sometimes even a year. And we’re going to be replacing those better months that the call center owner is going to be experiencing each month that we’re engaged with the client.
[00:27:22] So that’s the way that they can get that upside. In addition, sometimes there’ll be something called an earn-out, which is going to give the call center owner an opportunity to earn even more money. A second bite of the apple a year after the transaction. If they’ve grown the beard. And sometimes if the owner wants to continue to stay involved, they can get a third bite of the apple by sticking around and waiting for the larger entity to be sold.
[00:27:49] So that’s really the value piece and The third piece is really the legacy piece are my key employees going to be taken care of. I’ve built this business from scratch. This is my baby. What is the the flavor, the look, the, feel the character of the company going to be, that’s buying me.
[00:28:09] Is it similar to my own belief system? And how I treat my employees. So those are the three big areas. And what we do is much like the way I used to sell. We sit down with the owner and really find out what’s the perfect exit for them. And we work towards that exit. And that’s why we specialize in call centers because there is a lot to this business and there is a tremendous amount of transactions happening right now as.
[00:28:42]Business process outsourcers BPO’s are looking to get larger by acquisition. So when you look at the make versus buy model, very often a larger company would rather buy a company than try and grow just organic.
[00:29:00] Jason: [00:29:00] Hey, it’s Jason here. We’ll be right back to the podcast in a moment, but first, are you ready to help your inside sales team close more deals?
[00:29:06] In my experience, there’s a certain percentage of your team that acts more like order takers than sales professors. The first step to creating a scalable sales team is to equip your reps with the right mindset and proven strategies to transform them into quota breakers, to build a team of authentic persuaders that will crush their goals.
[00:29:24] Email email@example.com or go to www.cutterconsultinggroup.com makes sense. And it’s interesting about the valuation part, because I think that’s just true for probably all humans is whatever you’re selling. You always. Overvalue the importance of it and how much somebody else is willing to pay for it, when somebody wants to sell their house or their car, or even some used furniture, it’s always of course this is worth so much more because I’m attached to it. And I could see that, obviously you get down to the numbers. And it’s really what the market is willing to pay. And I love those buyout options.
[00:30:04] So for anyone thinking about that long-term is okay, you’re always one client away who said, they’re going to triple your business, or if that’s the case, that’s perfect because there’s some options when that does happen. Now, if that’s been your hope for years and it’s never really come through, then, the rubber will meet the road, but at least if that is true, then you don’t have to wait.
[00:30:23] Because like you said, the process is gonna take awhile. Plus there’s some off. Which are really cool. And then I love that legacy piece, which is, you’ve built a team depending on how you’ve done it. You’ve built a family. You want to take care of everybody. And so in doing that, you want to make sure a new buyer is going to be a good fit.
[00:30:42] You don’t want to leave everyone hanging high and dry. And I think that’s fascinating about the acquisition model, the buy versus make and where that fits in. What about companies where they’re struggling or they don’t have enough in the pipeline. You’ve mentioned real briefly, like that diversity either they’re in one industry or one or two industries, and they’re super concentrated and not diverse, or they have one or two companies that are providing most of the revenue.
[00:31:10] And they’re not very diverse. Basically their eggs are all in one basket. Is there anything that you would advise them to do to fill that pipeline or to start doing that? When like, when you’re engaging with them? Is that an appropriate time? Is it too late at that point? What are you, what do you usually tell that the kind of narrow focused,
[00:31:27] Richard: [00:31:27] Jason, this is really where your services come in.
[00:31:30] This is the type of issue that plays. Most call centers. Remember when the client is talking to the call center, they want to make sure that they have enough capacity and that the call center has enough capacity. They also believe they’re drinking their own Kool-Aid. So they believe that their sales efforts are going to bring in X calls and they want to make sure that they’re answered.
[00:31:58] So they have a tendency to exaggerate there. Their worth, so to speak. And what happens is they call center owner has a tendency to believe what they are saying, and therefore doesn’t keep the pedal to the sales metal quite as diligently as they should. I think that you need to sell your way into. Not having customer concentration.
[00:32:28] What we define customer concentration is any one client representing 20% or more of your business. And if you can keep your client concentration below that, not only will you get top dollar, but you’ll also be able to be once again on the revenue side of the equation, because you won’t be able to be held hostage by a client.
[00:32:52] That is overly large within your organization. I think that it’s really Imperative that once you do well as a call center or a BPO in a particular industry that you look for other players that are within that industry, because there are things that you learn from working with that client that can be applied to other clients.
[00:33:16] And nowadays it’s very rare that a client will ask you to sign an exclusivity agreement within a vertical or within an entity. So I think it’s very important that immediately once you’ve achieved success, that you start looking to other players within set industry and be able to multiply the number of clients that you have there also.
[00:33:40] Understand that you there, if there’s a will, there’s a way. And to go back to our previous point, don’t worry about overselling. If all the business comes in at once, which it never does, but if it does one of the best things you can say to a client or a prospective client yeah. We’ll get started with you in about a month.
[00:33:59] We’re too busy to do your implementation right now. That will make you seem even more sought after everything is pretty much the dating paradigm in business. And if you appear that you are. Not quite as available, it can really help you. One of the things that I learned when we were pitching American express is I was down in New York and I was speaking to them and they said, oh, Richard used to work at Bronner’s sauce per country.
[00:34:27] I said, yes. How do you like Bronto sauce for comfort? They said they’re terrific. But they’re really expensive. And what I learned from that is if you’re truly delivering value, cost becomes secondary. And if you’ve developed a relationship, a multi-tiered multi textured relationship with that client, when your name is brought up, or your company’s name is brought up to either reduce business or to let go of your firm, there are people stakeholders within that organization.
[00:34:57] That are fighting on your behalf. The other thing is, do you know your client’s birthday? Do you know what lights them up? If they like golf? Are you. Are you sending them things, either articles related to golf? Are you sending them a piece of golf equipment? If they love cigars, are you getting them their favorite cigars?
[00:35:17] If they like a certain type of bourbon and you live in North Carolina, are you getting them that bourbon that they can’t get in their hometown and shipping that to them? These are the small things. Believe it or not, that make a big difference and humanize and personalize the business relations.
[00:35:35]Jason: [00:35:35] And I think that’s a great reminder.
[00:35:37] And a lot of times in terms of business development in sales, there’s B2B business to business, there’s B to C business to consumer direct to consumer, variations of that. And when you’re dealing with a business and you’re trying to get their business, let’s say like American express at the end of the day, it’s actually just human to human right age to age, that person at American express is a human.
[00:36:00] They have their challenges, their problems, their goals, their hopes, their worries about their job, their KPIs, their hobbies, and interests. And if you just remember that, Have a relationship and sell to the human instead of just a business, then it creates a different thing, right? Because there’s always a human and here’s, what’s fascinating too.
[00:36:20] And I have several clients that, build relationships with this in mind as well, is that if that person from American express or from your client leaves and goes somewhere else, and you have a relationship with them and they have one with you, then they will, when they get to that new company, want to bring you in as that resource.
[00:36:39] For where they’re at now.
[00:36:40] Richard: [00:36:40] And Jason, there’ll be three other people within the company where the person has left that are still fighting for you and still love the business that you’re doing so that you don’t lose it at that time.
[00:36:53] Jason: [00:36:53] Yeah. And so it’s interesting too, that accordion model, but the selling, even if you don’t have the capacity and then you want to ramp up and how there is something a little off too.
[00:37:06]Hey, we want to hire you for this. When can we get started? And have you run our campaign? Oh, we can start tomorrow. We have agents ready to go. It’s okay, why do you have agents ready to go? Dating, Hey, you want it? Like I’m available now, if you want to go out right now, it’s that seems weird.
[00:37:21]It’s it gives off the same.
[00:37:23] Richard: [00:37:23] Exactly. Exactly. It’s nice. Once in a while to not be quite as available in business.
[00:37:30] Jason: [00:37:30] Yeah. I mean it says, and it’s just interesting how the human brain works and the relationship dynamics, business personal. What do you see as the near future of call center operations?
[00:37:44]Richard: [00:37:44] I would say about 80% of the call centers that we’ve spoken to have been very busy during COVID.
[00:37:51] They had already started to migrate to a work at home model. So COVID was a blessing in some respect for them that this technology was available, their employees delivered great utilization. There are great technology tools that now evaluate employees, even when they’re not in the center. So you can analyze productivity, utilization and so on.
[00:38:16] So I think the future looks quite quite good for call center. Providing once again, that you are truly on the revenue side of the situation. I know call centers that are charging $45 an hour now. And I know call centers that are charging $23 an hour right now. And. While the call metrics and KPIs, so to speak are essentially very similar what they’re doing and what the perceived value by the client is, are dramatically.
[00:38:52] So I think it goes down to things like managing by walking around. So if you own your call center, are you there? Are you talking to people? If you do an 11 at night till 7:00 AM shift, are you showing up some time with pizza and saying, Hey guys, I just thought I’d hang out with you tonight and see what’s going on.
[00:39:13] We used to do something called, have lunch with the precedent where. My partner and I would have six people. Each month come and have lunch with us. And for us, it was just another lunch for them. They were saying to their spouses or their significant others that day, while I’m having lunch with the owners today, I think that owners forget the fact that they really are the adults in the equation and that employees are the children, so to speak.
[00:39:43] I think that. How you present yourself in the office environment, people are always looking to see, are you confident? Are you happy? They’re always looking for this area around the eyes and seeing if you’re happy are, are you exuding the kind of energy that you want your employees to exhibit? Or are you letting the wear and tear of the business, get you down in such a way that it’s wearing on your face and you do need some time away, or you do need somebody else to take some responsibilities off of you.
[00:40:17] Jason: [00:40:17] It’s interesting too. The parent child kind of dynamic in a sense that, like you said, they’re modeling they’re looking, they’re following, they’re taking cues from above, right? The leadership always sets the tone in any group, in any organization, the negative side of that, which is the fish stinks from the head down.
[00:40:36] If there’s problems at the top or, there’s a. Ideology from the top, it will filter down. There’s a lot of call centers and a lot of companies that I interact, even as a customer where interacting with the employees, I literally know what the company culture is from the top down based on how they’re treating people, right?
[00:40:54] Like you, Southwest, for example, we could look at like a Zappos, for example, where customer service high and other companies, where I can tell that they don’t actually care about people. They care about money and it comes right. But it’s interesting too, in that parent child dynamic that you’re talking about, where if you look at, most kids don’t want stuff, they don’t want you to buy them something because you’re not around.
[00:41:17] They just want you to hang out with them. They want that quality time. So like you said, showing up, you’ve got a late night shifts showing up at midnight with some pizzas and hanging out. That’s way more important than just sending pizzas.
[00:41:29] Richard: [00:41:29] Yeah. The presence give the presence. Of your presence.
[00:41:34] And very often the call center owner doesn’t even have the ability because they’re moving so fast with so many challenges to really think about the fact that when they walk around and you actually remember somebody’s name, or you recognize somebody. Or you have management coming to you and recognizing key accomplishments from rank and file employees.
[00:41:58] And then you walk up to them and you say, Margaret, that was really an amazing sale you made today. That’s one of the biggest sales we’ve ever had with this client. They’re really excited. I want to commend you. That stays with that. Person for weeks, if not months, they talk about that. And it’s just these little things make such a big difference and they’re just, it’s a lost art, the art of communication.
[00:42:24] Jason: [00:42:24] It’s interesting because how I feel is most people want to be seen, heard and understood, which usually falls under empathy. Being empathetic and understanding you and communicating, asking questions, listening and. Treating you like somebody and somebody special instead of just, business.
[00:42:44] And I could see the challenge too. If you’re an operational minded leader, you’re thinking about operations. You’re thinking about how many widgets can we make and how many levers do we need to pull? And what are the KPIs and losing sight of the people, which is fascinating because if you’re more on the sales side and you’ve become really good at sales, then you realize the way to be effective with potential customers.
[00:43:07] No matter what you’re selling is the empathy piece. Know and trust as bog Burt says as part of that process. And so I’ve seen sales related owners with a background in history and sales treat their teams totally different than an operational minded or background type of owner.
[00:43:25] And then how they treat everyone. Both, good and bad. So I’ve seen that whole scale. What would you say is. Key to your success in scaling call centers. I know you talked about selling and getting more anything in particular for scaling up your call center operations, right?
[00:43:46]Richard: [00:43:46] I think there’s a couple of things there we’ve touched on the fact that technology is very inexpensive right now.
[00:43:51] So I’m a big believer in being ready. Okay. So I’m a big believer in having a business plan for a year, strategic initiatives and sitting down and saying, Hey, we have a hundred. Agents right now, we really want to have 200 agents by year end. That’s going to give us the opportunity to go after larger clients and it’s going to fulfill our financial objectives as well.
[00:44:16] So as soon as you know that, and as soon as you’ve made the decision that you’re going to invest in the sales process, to be able to step into that realization, you need to make sure that your technology. In fact in place or that you can pull the trigger on technology and within a two week startup be ready to go.
[00:44:37] The other thing is, and we just can’t emphasize this enough, happy employees are the gifts that keep on giving. So I happy employee will get promoted and that happy employee that’s promoted will become a manager. And how often do you hear somebody talking about? I liked the job, but I don’t like who I work for.
[00:44:56] I don’t like my boss, so that happy employee becomes a happy manager. And then that. Creates exponentially a happier environment. The reason I bring this up is can you get people to go the extra distance? So can you get people to refer an extra two people for the month? Can you get them to work an extra shift?
[00:45:20] If you give them an extra bonus for an initiative, can they, for three weeks? Or a six week period, be able to deliver you extra hours. And what you can find sometimes is that your, some of your part-time employees can in fact stretch, they can become your accordion and can get you to the next level. And these are the types of things that you really need to ask your people about.
[00:45:46] Also what goes hand in hand, and this has benefits. Some people are not working in a call center because they want to be a call center representative for the rest of their lives. They want additional schooling and maybe tuition reimbursement is something that they really need help. Maybe you should be asking your employees, what benefits are they looking for that are truly needed and desired?
[00:46:09] Does that help them feel like they’re part of a family and being taken care of all of these things go hand in there. So when you’re scaling up, you’re going to have to look at your initial staff and ask them to deliver more. You’re going to have to ask them for referrals, and then you’re going to have to go out into the marketplace.
[00:46:27] And once again, sell your value proposition on why somebody should come to your company.
[00:46:34] Jason: [00:46:34] Makes sense. And you touched on this earlier, and this is a big thing. I work with a lot of my clients on which is you want to scale. The goal is scale to grow, to expand as a business, right? And for some companies it’s from two to 10 summits from 50 to 200, scale is relative. So it’s not just about how do I get to a thousand people. But the one big thing that gets in the way of that is that turnover, a high level of turnover means that you. Sometimes pouring water into the bucket as fast as it’s coming out of the hole in the bottom, sometimes worse, right?
[00:47:09] Sometimes the hole is bigger at the bottom than you can even fill it. And you’re going backwards over time. And obviously things like benefits, happy employees, corporate culture, the things that we talked about, training development, future one of the biggest things that I see missing. And I’m curious to hear how you guys dealt with this.
[00:47:30] We want to move that person up, right? They’re a good agent. They’re a good salesperson. We’re going to move them up to a manager. They should be good at that as well. A lot of companies just fail to get of any training, any coaching, any development, they just assume, Hey, because you did the job really well.
[00:47:43] You’ll be able to get others to do the job really well. And it’s two different skills. And then that’s where the house of cards start to fall apart and go backwards because that person isn’t good. Maybe you have to demote them. Maybe they leave and then. Actually steps back, not just back to square one, you’re actually in the negative.
[00:48:02] How did you deal with that in your organizations with that? Or what are you seeing with clients that are doing it well in that promote from within.
[00:48:11] Richard: [00:48:11] So two things that really touches on number one, I think everyone should go through the exercise of really, truly adding up every single cost associated with an employee leaving and replacing that employee.
[00:48:26] So let’s start with the recruiting cost. And go to training that employee for two weeks or four weeks or six weeks, and how many weeks truly before they’re as good as the person that was leaving. And I think what you’ll find is it’s thousands of, so very often back to a previous point, it makes more sense to give more benefits or a higher wage for a lower return.
[00:48:53] That’s piece number one piece. Number two is most companies aren’t training because everyone is moving so fast. And there’s this feeling at the company that everything is mission critical. And if we don’t do it immediately, oh my gosh, the sky is going to fall in and there’s not a plan. There’s not a strategy.
[00:49:16] There’s not an implementation around moving up an employee with an organization. So what skills does that person have and what skills don’t they have? What skills make them a great agent? And do they have the skills for confrontation? Should you be putting them through a disc assessment or some type of a personality test and finding out what is missing?
[00:49:40] Should you be. Subscribing them to a newsletter or an online training course. What’s missing all of these things. Take time and energy. Once again, if the owner is spinning eight plates in the air, the owner does not have the time in order to truly evaluate the strengths and weaknesses of the promoted employee and doesn’t ensure their success.
[00:50:05] I live in an area where there’s a tremendous amount of technology companies. They’re hiring hundreds and hundreds of employees per company per year. They don’t do a great job in training because they are growing so quickly. And how short-sighted is that? Because once again, every time one of these employees leaves, it’s thousands of dollars that they’ve lost and missed opportunity.
[00:50:30] Jason: [00:50:30] Yeah, that missed opportunity is the huge one, right? The opportunity cost of that ramp up of a new person. If it takes them six months to be able to consistently reliably hit their quota and their numbers. How many, there’s obviously the missed revenue for those six months, but how many people did they talk to, especially if we’re talking about sales, inbound, or outbound, how many people did they talk to you that somebody else could have closed?
[00:50:55] And what does that equate to from a revenue standpoint, then you get into the big numbers, right? Especially like I have some clients in the B2B space and then you’re in the a hundred thousand dollar range because of this so much missed opportunity because it takes so long to ramp up and the asking to hear you.
[00:51:13] Richard: [00:51:13] The other piece of it is when you do have high attrition at a company, it creates an unsafe environment. You’re working next to somebody for months, you start going out to lunch with them, you get to know them and they’re gone and it really shakes people up. They need that. That consistency of being able to work with certain people be able to bounce ideas off of people.
[00:51:36] So I just think it’s really important that we do whatever we can as business people to reduce turnover.
[00:51:43] Jason: [00:51:43] And I, it’s interesting hearing you talk about it. Hopefully this resonates with some people out there. If you’re listening to this, hopefully you can evaluate this, the spinning plates.
[00:51:55] The essentially the firefighter mode, right? Where everything is on fire, or I’ve got to deal with this. I’ve got to triage that I’m in reactionary mode versus something you said earlier. Separating that having the operations run itself, build the sales, invest in those kinds of things, such that you can go to the visionary mode, flying at 30,000 feet and having a vision of everything and then planning ahead and being proactive instead of reactive in the centers. I’ve seen that and companies in general that I’ve seen where the owner leadership presence. The people at the top are able to do that and extract themselves from the fires that are happening.
[00:52:36] They can actually prevent those fires in the future because they’re thinking steps ahead. They’re like, okay, we need training. We need this development. We’re going to promote this person. What are we going to be able to do to support them? Who do we need to bring in externally? Who do we have internally?
[00:52:52] And so it’s one of those things where there’s just two different modes and for it to escape, It takes not being in firefighting mode all the time. It’s just not possible to do that. I want to ask if there’s any more advice to these call center owners or anything else, but I feel like we’ve covered so much, any final thoughts that you’re thinking about, either the industry, people who are selling people to help them succeed.
[00:53:17] Richard: [00:53:17] Once again, I think it’s a wonderful time to exit. I don’t know if there’s ever been as much dry powder as much capital on the sidelines as there is right now. So I think it’s a very unique time. I think that there are multiple parties that are looking to acquire call centers. And one of the things that comment in company does is that we help to optimize your company.
[00:53:42] While we’re in the process of putting together all of the information necessary in order to market you. So our team are established prior owners and operators of call centers. We know the challenges that you have. We know what you’re facing on a day-to-day basis. And I really truly believe we can make a difference.
[00:54:02] Our clients are happy. They exit, they get time and time is the acronym for things I must earn. They get that time off. They want that time with family, the ability to travel and all of those things that 5, 10, 15, 20 years of working day to day and in a business as demanding as the call center business.
[00:54:23] Yes. If you’re considering exiting, we’d love to hear from you. And if you need help in developing your sales pipeline and getting out of your own way of your sales process, somebody like Jason can be just a tremendous asset to your company. So I think the two of us can really help out call center operators at home.
[00:54:46]Jason: [00:54:46] And I appreciate that. And before we wrap up, I just want to share really quickly what we do at cutter consulting group. So we help frustrated business owners create scalable sales systems through coaching, through training to help transform those teams from order takers to quarter breakers. And if you want more information on that, you can go to cutterconsultinggroup.com and Richard for you the best place for them to go and find what you’re doing is gokommit.com G O K O M M I T.com. Correct.
[00:55:18] Richard: [00:55:18] That’s it.
[00:55:20] Jason: [00:55:20] Anywhere else. Do you post anything? Do you have other resources? Are you on social media?
[00:55:24] Richard: [00:55:24] We have a really nice white paper on there to help you walk you through your evaluation and answer questions you have and we’re available. I hate to say it.
[00:55:35] I answer my cell phone seven days a week, so you can give me a call anytime at all. When you go to the site, you’ll see a phone number to get ahold of me as well.
[00:55:44] Jason: [00:55:44] And I can appreciate that. And you and your team have been great since I met you and Eric through some networking, a match made in heaven for you and I, which I appreciate the relationship and where this is going.
[00:55:56] You help call centers. I help call centers. It’s definitely some fun stuff in the future. Richard, thanks for being on the scalable call center sales podcast as guests. Number one of the new show. I appreciate your time and all the value you share.
[00:56:09] Richard: [00:56:09] Thank you, Jason. It was an honor and a privilege, and I really appreciate you asking me, take care.
[00:56:16] Did you get some inspiration of ways to help your call center sales team win bigger, stronger, and faster. Hope you are fired up to scale your sales operations. If you got value from this podcast, please go in and leave a rating and review. Also make sure to forward this episode to anyone else, in the call center space, we appreciate your support in growing the scalable call center sales podcast, family.
[00:56:41] And if you have any comments, ideas, or feedback, contact us at cutterconsultinggroup.com.