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Good times for virtual call centers, Part 2

Aug 19, 20033 mins

* Brick-and-mortar call centers may soon be a thing of the past

Last week, we discussed how Willow CSN remade itself to better compete in the quickly emerging virtual call center market. Here, we’ll look at Alpine Access. The Denver firm experienced 100% growth in 2001 and 2002, and the Denver Business Journal named it Colorado’s fastest growing private equity firm in 2001. The company recently brought in a new CEO, Reginald Foster, and has signed up eight new clients so far this year.

Alpine Access employs about 2,000 part-time at-home call center agents with plans to hire more. “At this point we’re close to capacity,” Foster says. “Our people are pulling double shifts, but morale is very high. There’s a sense here that our ship has come home.”

Foster, like Willow’s CEO Basil Bennett, hails from enterprise services firms American Management Systems and Unisys. Most recently at Unisys, Foster lead the $250 million communications group. When he talks about the potential of virtual call centers, Foster cites his company’s success and that of its competitors, but also the recent move by the West Group, a leading brick-and-mortar call center that recently added at-home agents. 

“West’s move validates the market,” Foster says. “It will increase competition, but whether that’s a problem for us depends on your view of the potential market opportunity.” In time, all the low-end commodity call center work will go overseas to India, Costa Rica and other countries, while the high-value work, which demands high-quality agents, will go to the home-based model, he predicts. “What’s the value of having a bricks-and-mortar call center? It imposes so many strictures on the flexibility of how you do business,” he adds.

When Foster recently met with many of Alpine’s customers he says, “I never saw such a delighted group of customers in my life – especially for the services industry. We deliver them better metrics, we’re beating our competition by 5% to 15% every week, and we often beat their in-house agents too.”

Today, Alpine Access has no plans to expand beyond the Denver area – not until it exhausts the local employee base. It relies on local network outsourcer InFlow to handle its automatic call distribution and data center management. Clients include 1-800 Flowers, several marquis-name catalog and e-commerce retailers, as well as several retailers that sell direct via TV infomercials. 

Foster credits much of Alpine’s success with its agent model. Unlike Willow and Working Solutions, Alpine’s at-home agents are company employees, not independent contractors. They’re trained online and only come into the office once, to sign a proof of U.S. citizenship form. They also gather yearly for a company picnic.

“Hiring agents lets us supervise them much more closely than is possible under the independent contractor model,” Foster says. Under IRS regulations, a company “has the right to control or direct only the result of the work done by the independent contractor, but not the means and methods of accomplishing the result.”

“If you want a quality workforce, you have to provide the right degree of support and supervision,” Foster says. “Our customers say they’re more comfortable that our agents are employees who we take responsibility for.”

As it stands, the half-dozen virtual call center companies – or “teleservices providers that use home based agents,” as Alpine prefers – are about evenly split between using the employee and contractor models. We’ll look at the argument for using contractors in a future column.