Customer Disservice on the Rise

By Matthew A. DeBellis

Redherring.com, November 23, 1999

Providing customer service is more than a key to reducing customer churn. It could also become a customer–retaining added-value service for competitive local exchange carriers (CLECs), Internet service providers (ISPs) and even traditional phone companies, according to some new service providers. That's the proposition behind a new type of hosted service that manages a company's call center infrastructure. Companies entering this new market include Echopass Corp. (Burlingame, Calif.), which began offering its hosted service about six months ago, selling its service directly to small and midsize companies and large enterprises, as well as through partnerships with service providers such as Qwest Communications International Inc.

What companies like Echopass offer is a fully hosted service that lets call center agents respond to all types of communication media–fax, voice, e–mail, Web chat, voice mail, Web collaboration. In the case of Echopass, all the business customer needs is a PC for each call center agent and a local–area network (LAN) to link them together.

What Qwest and other Echopass partners get is a new "sticky" service to sell that also generates additional revenue. These partners install a dedicated transmission pipe–typically a T1 or T3, depending on the volume and the number of agents –that hooks directly to what Echopass calls an Echocenter, where the various communications media are integrated and then routed to the agents' PC in the form of voice over Internet protocol (VoIP) or text in a Web browser.

The service can spare businesses the considerable cost of purchasing, installing and managing a multimedia contact center system, according to Echopass. The challenge, as with most emerging markets, is convincing potential customers to try something that lacks a long successful track record, analysts said.

"Its a technology and marketing gamble, but one that a lot of people are paying considerable attention to these days and that shows considerable promise," said Drew Kraus, senior industry analyst of telecommunications at Gartner/Dataquest (San Jose, Calif.).

This service model isn't entirely new. Kraus points out that telephone companies tried, without much success, to market voice– only outsourced call center services that were based on Centrex. Kraus thinks, however, that companies like Echopass stand a much better chance of success with these new, but Centrex–similar, call center services.

"The Centrex–based services were offered by phone companies–try to find someone who is worse at marketing than the old phone companies," said Kraus. "These new services will be marketed by the new generations of ISPs and CLECs as well as being marketed directly by the companies offering the services."

Kraus, nonetheless, expects that selling the service won't be easy. "A lot of companies are questioning whether they are ready to outsource what is mission– critical functionality," he said. "They need something to get them past that fear hump".

To help potential customers over that hump, Echopass came up with its "11% Call Center Challenge." To qualify, customers sign up for a 12–month contract for 20 seats, with monthly service charges costing $650–$1,000 per seat. If the customers' agents are not 11 percent more productive (in terms of number of interactions taken and average handling time) after 30 days, the contract and all charges will be cancelled.

The company plans to continue the promotion until Feb. 15, 2001.

"I'd like to see our challenge increase from 11 percent to 22 percent," said Art Coombs, CEO of Echopass. "That's the level of reliability that I'm shooting for."