Looking inside the offshore call-center business

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Cyber City Teleservices has come a long way since since 2000, when it had eight call center operators and three customers. Today, the company has 3,000 operators and more than 70 customers at its two locations in the Philippines – one at Clark Air Base near Manila and the other at Davao, about 600 miles away. The company is also looking at locations in Vietnam, Thailand and China, where management believes that the model used in the Philippines can be successfully replicated.

I learned these facts and more about CCT and the offshore call center business courtesy of Erv Magram, managing director of the company’s catalog division, who invited me to CCT’s First Annual Customer Forum and User’s Conference. The event started on Monday night with a networking dinner at Ben Benson’s Steak House in New York and continued Tuesday with a program of presentations by company executives and other experts in teleservices.

One of the reasons the company is keen on “expanding its footprint” in other countries is that HSBC Private Equity (Asia) Ltd bought a major share in CCT about a month ago. Paul Kang, director of the HSBC fund, praised CCT’s management, its customer relationships and its technologies and employee training practices. He said he fully expected the company to double or triple its sales and profits in the next 3-4 years.

Mark Watson, CCT’s chief technology officer, listed the tools the company has created in-house, from being able to activate 800 numbers in 24 hours rather than the customary 30-40 days, to establishing routing and redundancy solutions between and among Clark, Davao and the company’s affiliate in Colombia, South America.

Linda Chando, the Call Center Services VP, said the company had built a training school on the Clark Air Base compound to explain what American customs, and customers, were all about. She pointed out that agents received between two and fourteen weeks’ training after being accepted by CCT, with additional training in all vertical markets covered by the company. She said the average agent’s performance score is 87% and the attrition rate is between 2%-3%, far below that of domestic call centers.

There were many other interesting presentations by experts in the teleservices field, including Liz Kislik of Liz Kislik and Associates; Tim Searcy, CEO of the American Teleservices Association; Jay Baney, president of Haband; Curt Barry of F. Curtis Barry & Associates; and Angela Donaghy, CCT’s corporate counsel.

But one of my favorite discussions was with Erv Magram, former owner of the Lew Magram Catalog, who described how the business was started by his father and later operated by Erv and his sister until they sold it in 1997. It seems that Lew Magram started by selling socks and ties in the Dawn Patrol Barber Shop on 53rd St. and Seventh Avenue in New York in the 1940s. When a retail store next to a barbershop became available, he signed a lease and started selling dress shirts.

The big break came when Jack Haley (the Tin Man in The Wizard of Oz) bought a custom-made dress shirt and told his friends all about the store. Within a short amount of time, every Broadway actor was patronizing the store, and Lew Magram took on the moniker “Shirtmaker to the Stars.”

I can remember the ads back in the 1950s in The New York Times and various men’s magazines carrying ads from “Lew Magram, Shirtmaker to the Stars.” Eventually a successful catalog of menswear was created. But then, while Erv and his sister were running the business, another problem arose in the late 1970s. Custom-made dress shirts and other high fashion men’s wear lost their popularity. Erv recalls it was list expert Don Mokrynski who advised him one day to start offering womenswear in the Lew Magram Catalog – and this brought on another 20 years of success.

It’s a great story. But the Cyber City story is not too shabby either. Founder and chairman Jonathan Rosenberg informed me that it was like a family when they started and it’s still like a big family, even though they have over 3,000 employees. He added that the top management all live in modest houses in a compound on the Clark Air Base.

In response to a question about what happens to the Philippines business when the company enters Vietnam, Thailand and China, vice chairman Warren Golden (a former executive at the Lew Magram Catalog) assured me that the company is in the Philippines for the long haul.

-Posted by Adrian Courtenay
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