Bouncing Around Ideas and Having a Blast
Telemarketing Turned Upside Down
by Unlikely Bristol-based Duo
By Mark Batterson
“What a long, strange trip it’s been” is how Jerry Garcia of the Grateful Dead once summed up his life’s journey. That’s an assessment with which Mark Facey wouldn’t disagree. The lifelong “Deadhead” has cultivated a marketing idea he spawned in the early-1980s as sales director for an electronic switch manufacturer into a dynamically evolving customer communications tool that has tilled telemarketing roots up.
“We’re essentially a dating service,” says the Garcia look-alike Facey, president of Facey & Co. “It’s a romantic dance in which we hope to establish a business-to-business relationship for our client and keep them coming back. The concept is not going away ever, but the method of delivery is changing.”
But his more buttoned-down partner, vice president and CFO Jeff Neistat, likens what they have nurtured more to farming. “You have 100,000 acres on which you need many employees at planting and harvesting time, but during the growing season you have no need for all of them. There are certain cycles like that in every business.”
Six years ago, the Bristol-based Facey & Co., its seed sprouted in 1986 from aiding manufacturers assess responses to their trade journal advertising, branched off a subsidiary, American Customer Care (ACC), with a much broader root-base. As in farming, the timing of the sowing and the weather conditions to follow determine the yield of the harvest.
Today, in the aftermath of the financial turmoil caused by the collapse of the dot-com era and the 9/11 disaster and the rippling effects of privacy issues in the telemarketing trade, ACC has itself firmly planted in a freshly plowed field ripe for growing direct customer dialogue.
The company now has seven call centers equipped to handle the dual-tasking of inbound and outbound customer communications. What makes it unique, however, is that with ACC’s 1,500 call stations, a client’s incoming calls can be routed to an agent who knows its specific needs. “With us you have someone who is trained only on your product. When they’re done with your inbound work, they can then move on to other outbound work and you pay only for the time spent on your inbound call,” says Neistat.
The ‘Trip’ Begins
At age 16 Facey was uprooted from his native Long Island when his dad tired of the daily three-hour commute to and from work in Manhattan. Admittedly, his “New York state of mind” didn’t mesh with the late 1960s he found in his family’s new home, Williamsport, Penn. “It was the middle of nowhere. I didn’t like it a whole lot. It didn’t have what the Northeast has,” he wistfully recalls.
After graduation with an electrical engineering degree from Lycoming College, Facey worked for four years at a car dealership in Williamsport, eventually running the place. “But I still didn’t appreciate Williamsport.”
In 1977, he set his sights on an MBA from the University of Connecticut. Even though his initial application had been rejected by the Hartford-based business school (“Probably because of a less than stellar undergraduate record,” he now admits), Facey still went to Hartford and talked his way into an admission. “I asked the dean to give me six months with no credit. If I got A’s I’d been in. I got A’s. It was a great experience,” he says.
Once in school he had to support himself. He quickly landed a sales post with then Carling Switch Co. (now Carling Technologies) working days and attending class at night.
After nearly nine years and having risen to director of international sales and marketing, his tenure at Carling ended abruptly when he was fired in 1986. But it had been the exposure to manufacturing of all types – from commercial applications to NASA contractors to marine producers – that created the distraction, an idea for his own business, that cost him his job. (Again, Facey admits his fate was probably of his own doing. “My company was in the works and I was less than diligent at my job. But I thank [them] because it forced me to move forward.”)
While still at Carling, Facey had viewed the millions of dollars spent annually on trade journal advertising as the seed for a future business. Initially, instead of creating labels for mailing more information, he had his sales staff cull Carling’s reader feedback and call them on the phone to determine which were qualified sales leads for personal contact. The concept was highly successfully, and it wasn’t long before, spurred on by a friend in trade publishing, that he began his own company.
That friend, the late Ray Carey, publisher of Electronic and Electric Product News for engineers with whom Carling advertised, had a dilemma. Carey was facing a circulation audit that he saw was going to be short of target because of dwindling advertising response. If the numbers weren’t matched, the result would cost him revenue. Facey called Carey’s subscribers with a prepared questionnaire gleaning the necessary information to satisfy the audit.
Five months on that one job had solidified Facey’s thinking. “I didn’t know anything about auditing of publications. It wasn’t something in my little universe. But I knew it was something we should become the best we can be at. So we concentrated in publishing.”
With a couple of partners and $60,000 in financing Facey & Co. hit the ground running. “The intention was to find out who the customer is and provide an ongoing dialogue with that customer so he can help our client design needed products and maintain other customers,” says Facey today.
It wasn’t long however that it became apparent his communications model generated information vital to advertisers as well.
The first success came with Duracell battery, inventor of a new technology – the lithium battery. It was being marketed to computer manufacturers as a back-up for memory, Facey recalls. Through Facey & Co.’s qualifying of advertising responses, Duracell found a much broader market for the product – all manufacturers of products with dynamic memory. “We helped them directionally to make the right product decision going forward,” Facey notes.
Another early success for Facey was Apple Computer’s launch of the first usable notebook computer. “It wasn’t selling like they thought it would, so we studied their inquiries to advertising discovering that because it wasn’t back-lit users couldn’t see the screen in dimly lit locations,” he notes. “They would have evolved that way eventually, but our information helped them move forward.”
For its first decade, Facey & Co. flourished, growing to become a leader in the magazine subscription and advertising qualification market with a 200-station call center in its start-up location on the fifth floor of 225 North Main St. in Bristol – where company headquarters remain today.
‘Warm Fuzzies’
By 1996, with further growth restricted by Connecticut’s business costs and its labor market, Facey turned to his family’s roots in north/central Pennsylvania. It was an area with a depressed job market, but populated by people he knew had strong work ethic and tight neighborhood bonds. “They are people with friendly voices who give you warm fuzzies,” Facey fondly recalls.
The Williamsport, Penn., area had been a center of commerce through World War II as the coal, steel and lumber necessary for America’s industry found its way through the region. That changed after the war, and it became back-filled with needle trades boasting “look for the union label in clothing,” says Neistat. By the 1980s that trade had gone off-shore in search of cheaper labor. So Facey & Co. bought an old schoolhouse in Trout Run, Penn., added to it, and with 150 employees started a second call center.
“Connecticut is great at manufacturing [a product line] to the threshold of profitability, which comes all of sudden, but your growth is then limited by capacity,” Facey says matter-of-factly. “Your next costs for more square footage, equipment, and people are what affect the bottom line.”
Neistat completes the paradigm: “Sales go up, but profit stays flat. Reinvesting elsewhere your sales can stay flat, but your profit goes up.”
It’s the intellectual power of the region that convinces Facey to stay based in Connecticut. “The people in the Northeast are a different breed. I don’t know if it’s more deciduous trees providing more oxygen or what?” he says. “There are places where plant and people are less expensive, but the cost to that is brain power.”
A year before opening the Trout Run facility, Neistat and his financial background had joined forces with Facey and his communications model. He had been a partner with the accounting firm of Kostin Ruffkess & Co. of Farmington counting Facey & Co. among its clients. Facey had made a partnership offer two years earlier that Neistat had declined. But in 1995, when Facey made the same offer — no money to buy in, just offer intellectual property — Neistat accepted. “He didn’t need me. He just wanted someone to bounce things off of and have a blast doing it.”
When Neistat came on board, Facey & Co. had a 200-station operation. In the decade since, the company has grown to a 1,500-station operation in four states and revenues have grown five-fold.
By 1998, publishing clients were demanding more services than simply circulation audits and ad tracking, says Neistat. They sought assistance in handling inbound calls on complaints, general ad info, back issues, and changes in subscriber info, all services clients had traditionally handled in-house. Problem was the technology then available couldn’t meet those needs, he says.
Fashioning a Network
“It sounds brilliant now,” Neistat says smiling, “but back then we felt the future was in inbound operations.” Acting on that notion in 1999, Facey & Co. started ACC to develop such an inbound operation.
But the dot-com boom was still feeding the trade publishing industry, billions of dollars in start-up cash was being funneled into the system as dot-coms sought instant name recognition. “Everyone wanted to be first to market, because they figured they would be the biggest and when things settled out they’d shrink to a manageable size,” the accountant recalls. “We thought the dot-com boom wasn’t going to last and the publishing trade would take a big hit when it crashed.”
Soon dot-coms were biting the dust, a few of the largest settling into the market, and many related trade magazines disappeared. “It seems like we knew what we were doing,” Neistat says today.
Facey notes the dot-com implosion, which hit Facey & Co.’s publishing trade hard, was also a major factor in the ACC’s rapid growth. “Prior to 1999, there was a technology wall. There were two different systems for inbound and outbound operations,” he says. “You couldn’t convert outbound systems to dual use unless you had incredibly deep pockets.” Until then, he adds, phone companies had their systems and computer firms held the data technology – “They both wanted to cross the lines, but they weren’t kissing cousins.”
Fueled by the dot-com crash the industry “has seen a lot of production gains in the U.S. in the past five years because the technology had already been provided and was sold for nickels on the dollar,” Facey says. He cites cell phones as an example – the upgrades in systems and affordable rates would not be available if the crash hadn’t happened.
ACC capitalized on the phenomenon by purchasing available technology “at bankruptcy prices,” he says. For two years, the company experimented with platforms and by 2001 had successfully integrated systems to where every Internet-equipped station could be used as an inbound/outbound hybrid.
Following the 9/11 attack, Facey & Co.’s business “went away instantly,” recalls Facey, as many magazines stopped publication and most clients ordered no outbound calling for six weeks. “Fortunately, with ACC we had already differentiated ourselves [into the inbound field],” Facey says.
“Our niche is helpful customer service,” Neistat emphasizes. “We create a very quick 30-second relationship based on touch points that have the customer invested in the conversation. … Making that little relationship is the key to what we do.”
“Our clients like someone answering the phone who is like themselves and not working off a script. You have to converse with the caller, to use your brain,” Facey says. “Off-shoring is an opportunity to save some money on transactions, but provides a very limited human face on conducting business.’
“If you’re considering going that route, we’re not the company for you,” Neistat says flatly. “It is valid for pure transactions when the operator doesn’t have to go off script or sell complementary products or deal with high-end customers.”
He cites Dell Computer as an example. The computer maker continues to use off-shore centers for home PC sales, he says, because that’s $600 and a one-time customer. But for large clients who buy hundreds of PCs or servers, Dell has brought their high-end customer service back to the states. “You have to look at your customers as a lifetime annuity – the high-end account you’re expecting for years.”
“If up-selling or cross-selling is important to you, off-shoring is not for you; or if your market is age 45 or older. [Clients] have to get through that hoop of ‘Do we want to save some money on this function?’ What is that little bit of savings worth when [an off-shore operator] is talking to your customer and goes off script getting lost because of cultural differences?” Neistat adds. “Half the hourly rate times half the hourly productivity equals the same amount you spend. Production and data entry are different. That’s just cheap labor. Personal communication is a different thing.”
Technology Cuts Costs
“With inbound service you have to take all contacts,” he notes. “You have to have more people than you need to handle spikes in calling. A spike may be only 40 minutes or an hour out of day.”
ACC has developed the technology to integrate all electronic communications into each call station, whether it be via telephone, fax, e-mail, or Internet chat. While Web-based contacts are growing, most customers still prefer the sounds of a friendly, comforting voice on the line.
With its Automated Call Distribution capabilities, ACC quickly directs an inquiry to its agents best equipped to help the caller with specific information. “We also have a hotline, called a warm transfer, that can refer the caller directly to our customer’s representative,” Neistat adds.
Of course, the company offers Interactive Voice Response options providing callers interaction with a recorded menu, either through voice recognition or keyed responses. This system can reduce costs for clients by providing necessary information without operator contact, but also streamlines the caller’s needs for proper personal referral.
A Unified Messaging System handles incoming e-mail and faxes routing them directly to the appropriate agent, as well as the ability to play e-mail text as speech through a phone line. The system also allows for broadcasting of e-mails or faxes directly from operators’ stations.
And the integrated system includes a “text chat” option in which callers can initiate a real-time chat with an operator from a customer’s Web site. This feature allows ACC agents to walk callers through the customer’s Web page and assist them in ordering.
This option is further enhanced by Voice Over Internet Protocol allowing agents and callers to speak directly through microphone-equipped computers.
