Virgin America stays local

When theánew low-fare airline Virgin America began selling tickets for the first time July 19, it was with an entirely home-based call center. The move reflects a growing trend among companies with call centers to recognize the importance of the interaction between customers and local call-center agents.

“Companies are starting to sit up and take notice that the contact center is a customer touch point and not a cost center,” said Sheri Teodoru, partner/program director at marketing research firm CFI Group.

For Virgin America, which begins flying August 8, using home-based agents could prove to be a shrewd move since airlines, on the whole don’t have much of a reputation for customer service. Virgin America, Burlingame, CA, is also in the position to benefit from being associated with the Virgin brand, which is known for offering superior customer service on its Virgin Atlantic and other Virgin airlines.

Part of what’s driving the move to home-based agents is that the offshoring of call-center jobs is beginning to lose appeal.

“A number of factors went into this decision; however, one reason is that we believe people who are best positioned to sell, represent and speak on behalf of a product and service are individuals who can actually use the product or service,” said Todd Pawlowski, VP of airports and customer service at Virgin America.

Virgin America’s customer-service agents are independent agents scattered across the country and managed by Arise Virtual Solutions, which uses a patented scheduling and workforce management system and Oracle call-routing platform to ensure clients’ call-center needs are met. The airline is also selling tickets through its Web site at

CFI recently polled consumers about their satisfaction levels with call centers. Those who thought a call center was outside the US rated their satisfaction level with the call-center experience 26 points lower – and were almost twice as likely to defect – than those who thought the call center was in the US.

The problem seems to be mainly about communication according to Teodoru. “Off-shore reps are not able to meet customer needs as well as reps in the US because of the language barrier,” she said.

As anyone who travels on airplanes suspects, however, customer service is not always a priority for airlines. Many think that “cutting or even completely eliminating [call centers] is going to save them a lot of money,” said Christopher Elliott, author of the syndicated travel column The Travel Troubleshooter. For example, new no-frills airline Skybus, which offers flights as low as $10, appears to have no call center.

“Since call centers are expensive to staff and run, one of the ways we keep fares low is by communicating with our customers via e-mail and our Web site instead of the telephone,” Skybus says on its Web site.

Companies like Southwest Airlines that do think of themselves in the customer-service business have stood out, giving themselves a marketing advantage that Virgin America is apparently also trying to gain, according to Elliott.

But home-based agents don’t just speak English. They typically have a good command of the language as well as other important skills. At least this is the widely accepted theory in the call-center industry.

“The demographics of home-based agents align themselves well with travel-related companies as the agents tend to be more traveled, more highly educated and experienced,” Virgin’s Pawlowski said.

Being able to attract and retain call-center agents can be an issue for companies in industries such as high tech, travel and pharmaceutical, where there is a need for a certain level of skill, said Alan Hubbard, senior VP of customer-management technology for research firm The Aberdeen Group

“The only way companies in industries that require highly skilled agents can attract them is to allow them to work from home,” he added.

Such companies are increasingly using some combination of offshored, home-based and on-site agents without sacrificing customer service, according to Hubbard. Aberdeen recently surveyed 175 companies about their call centers and over 35 percent experienced a 10 percent increase in customer satisfaction after instituting some form of an agent-distribution strategy.

The key is providing agents with the right technology to enable them to do their job, including VoIP, automated call-distribution and the ability to access the necessary information. Some form of electronic training also helps to address new products and technology.

“The flexibility and scalability of this model provides a better opportunity to match the agent resources with call-volume demands,” Pawlowski said.

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