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NOVO 1 Taps New Site Director for Holland Contact Center

Fort Worth, Texas (January 11, 2011) – Patrick Blanchard has been named site director for the NOVO 1 contact center in Holland, MI. He joins NOVO 1 with more than 28 years experience in financial and telecommunication call center operations.

Most recently, Blanchard was vice president of call center operations for Huntington Bank, a $53 billion regional bank holding company. Prior to that, he held the position of vice president of call center operations for the Sky Financial Group. .

Blanchard possesses significant customer service experience through a variety of roles, such as site leadership, business development, inbound and outbound sales management, management development and training.

“Patrick brings a wealth of experience to NOVO 1″, Chief Operations Officer Eric Rothert said. “He will lead two critical areas of our business, including client management and development. He will also provide thought leadership with a keen focus on operational excellence. The addition of Patrick to our team positions us well to advance our strategic priorities in West Michigan and strengthen our brand.”

Blanchard holds an undergraduate degree in English and Spanish from Florida State University and a master’s of business administration from Georgia State University.

He and his wife, Susan, have two children and reside in Hudsonville, MI.

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About NOVO 1
NOVO 1 is a leading customer contact center with operations in Fort Worth, TX, Billings, MT, Waukesha, WI, and Holland, MI. The company has more than 1400 employees and generates annual sales in excess of $43 million. NOVO 1 is recognized for delivering the ideal customer experience for their clients with American-based solutions that reduce complexity through a proprietary Customer Obsession Program and Smart Desktop technology. Find out more online at www.NOVO 1.com.

Contact:
Jack Wilkie
NOVO 1

Office: 817-355-8909
Mobile: 515-321-5467
jwilkie@novo1.com

The experiment is over. The results are in. Companies are rapidly bringing back contact center jobs which were sent to India, Philippines, Mexico, and even Central / South America merely ten years ago. However, some companies, late on the off-shoring wave, are still sending jobs and customers off-shore. They haven’t heard the news – it doesn’t work!

My position is not based on nationalism. American centers do not do everything right. In fact, many back office functions, properly re-designed, can be effectively off-shored at a fraction of the cost – as long as there is no direct customer contact. So, we are not against off-shoring because it is an “America First” position. We are against off-shoring customer contact because the economics prove it rarely works well. It is generally not a good business decision. Customers don’t like it. And it is not a lower-cost solution. So why do it?

Off-shore tax legislation is unnecessary

The recent off-shore tax legislation that did not pass in Congress was unnecessary. It was shelved, and rightfully so. Companies who off-shored customer contact are already experiencing financial penalties from customers who are taking their business elsewhere. Historically, a bad decision that affected customer service took about three years to fully impact shareholders. We know that cycle has shortened considerably in recent years.

Today’s business leaders preach that service is not a commodity; but a differentiator – so why treat service as a commodity, and off-shore it to the lowest cost provider? That does not make good business sense.

Terms and Trends

Outsourced vs. Off-shored. The writers of the new TV program “Outsourced” clearly have not done their homework. The term should be “off-shored”, not “outsourced”. Outsourced refers to companies who contract for some of their work to be performed by another company that specializes in a process and delivers better value. Off-shored is what the name implies – sending work across the ocean to another part of the world, with a perceived labor rate advantage.

Near-shored. Generally refers to a trend to send work to a nearby country, such as Mexico, the Dominican Republic or Canada. For Spanish-speaking calls only, Mexico has been a good alternative. Countries like the Dominican Republic, whose populations have many relatives in the US, have had some limited success.

Most centers we see returning to the U.S. or their country of origin are exiting India, but others are returning from near-shore countries also. Last year, a highly respected personal investment firm brought their call center jobs back from Costa Rica. Their customers spoke out. The company listened.

Two years ago, a premium credit card company brought their jobs back from India and the Philippines to their customers’ points of origin in the UK, Australia and Canada. They realized a reduction in their total costs by up to 15%.

Captive centers. Captive off-shore centers are run by U.S. or local managers of the core company. These centers seem to be operating better than those belonging to companies that have both off-shored and outsourced. While there are exceptions to this rule, our experience suggests that creating two barriers (off-shored and outsourced) between your company and your customers is problematic. This is not based on a scientific study, but an observation and consensus from a number of industry consultants and experts.

Country-jumping. Annual turnover rates can exceed 150% in India, and four-year contract renewals, rate increases can exceed 40%, due to the shortage of strong English-speakers to meet the demand. Accordingly, it is no wonder that companies are participating in this new exercise. In the last five years, the migration has been from India to the Philippines. In India, the problem most customers experience is lack of context. The reps are trained to read from a script, and, if any divergence from the script is necessary, the rep is lost (sometimes repeating the script over and over again). Another common problem is the inability of Americans to understand the cadence of the Indian dialect. And, most people don’t even consider the reverse problem – if we are having a hard time understanding the Indian representatives, they are having equal difficulty understanding us.

The Philippines has been somewhat less problematic. They have 50+ years of history working with Americans following WW II. Their English is much easier to understand. Philippine agents are less formal in their demeanor and speech pattern, and more conversant with how Americans conduct business. But with well over 200,000 call center jobs currently in the Philippines, we will soon tap out that market again because of language limitations, wage inflation and turnover issues. Then the global search for the “next best location” will begin again. In fact, it is happening already. We get calls at our company all the time asking where to go next?

Think about making it the U.S. for American customers.

Three reasons companies embraced off-shore

Internet Infancy. Ten or fifteen years ago, when off-shoring of call center jobs was in its infancy, the internet was, as well. Internet commerce was not yet adept at automating or answering the easy calls. The IVRs were not facile at ANI capture and were poorly designed. So, easy calls were still handled by phone reps. Fast forward ten years. Any smart business has now automated the easy calls – either through IVR, internet or mobile apps. Tier 1 calls, like password resets, order entry or information calls, have generally been automated. What remains are Tier 2 or 3 calls — problems, complaints, suggestions, and complex sales transactions. These tier 2 or 3 calls cannot be handled by entry-level positions. They are context-sensitive calls requiring complex interpersonal skills, cultural sensitivity and the ability to work the high wire. That is, without a strict script or call flow guide.

Demand for lower cost. An emphasis by companies strictly on their next quarter’s earnings created a requirement for lower costs. Many of these companies thought they could achieve dramatically reduced costs off-shore. Additionally, domestic companies could avoid the costs of higher-cost benefits. Many large outsourcing companies readily complied with these objectives, since the outsourcers’ profit margins were much higher off-shore than on-shore. Outsourcers gave their clients what they wanted – and often did not understand or advise them of the consequences.

Introduction of VOIP. In the mid 1990’s, international telecom options allowed for lower telecom costs through the use of VOIP. Prior to that, the cost of call delivery was prohibitive.

Is service a commodity or not?

If service is not a commodity, and truly a company differentiator, then why are companies off-shoring the service jobs to the lowest cost producer?

Consider the Contact Center Customer Satisfaction Index below for First Contact Resolution Rates. The effectiveness and customer satisfaction data differential between on-shore and off-shore centers is truly stunning.

2010 Contact Center Customer Satisfaction Index*

*Source – CFI Group

The majority of the issues associated with low off-shore customer satisfaction rates have nothing to do with attitude or “willingness to assist”. Rather, they have to do with language and the “ability to assist”. Our experience consulting with companies, who have off-shored, indicates that when short calls are backed out, the real AHT was actually 39%-105% longer than on-shore calls of the same type.

Average handle times can at first appear lower in off-shore locations. But once “short calls” are factored out, the handle times are actually much longer. In monitoring inbound calls to off-shore centers, we listen to many “short calls”. Short calls are not necessarily the reps’ fault. Short calls occur when the caller realizes they have reached an off-shore center, and simply hang up.

If you have an AVAYA switch, there is a pre-programmed “short call” report that shows the percentage of calls that were under 5 seconds in duration. You can compare your short calls for off shore, with short calls for on shore centers. If you see a significant difference, then maybe your customers are telling you they are trying to reach an on-shore center. There are other reports available from call recording systems that can report on under 30 second calls and under 60 second calls, both of which may indicate frustration with the off-shore process. Caution: If you are a large center with high call volume, don’t try to program the average ACD switch for this latter data, as it might bring your switch data reporting system to its knees!

Most companies won’t talk openly about repatriation

You’d think companies would herald the return of their contact center jobs back to the U.S. – but with the exception of a few companies like Delta, AT&T, Dell, US Airways and United, most companies won’t admit they have come back. We know of tens of thousands of jobs and many other Fortune 1000 companies that have returned. But they declined to let us use their names in this article. Wouldn’t you think they would make a big announcement? Isn’t this a customer- centric decision you would want to share with your customers?

The reasons why many companies won’t admit that they are gradually, or not-so-gradually, coming back includes:

• Mea culpa. Not wanting to admit they made the original mistake.
• Silo organizations. Decision making within a large corporation sometimes allows one division to bring back jobs, while others in the same organization want to keep their divisions off-shored. Customers would get confused if there was an announcement of bringing jobs on-shore, if some jobs remained off-shore.
• Contract Obligations and Brand Messaging. Some divisions within companies have long term contracts with poor “out clauses” with which they must contend, while other divisions can terminate at-will. Again, customers might be upset if a company announced the return of US-based service, while one or more divisions remain off-shore.

The business case for bringing jobs home

The reason many executives were originally sold on off-shoring was based on a myopic view of the wrong metrics – such as cost per call and cost per minute. We know now those are the wrong metrics of success – especially when taking into account first contact resolution (FCR). As a former consultant, I have helped many companies make the business case for bringing their call centers home- whether that is the US, or another country.

For the purpose of your analysis of whether you should consider repatriating your call center work, consider all the variables below. Note that we do not focus only on “Total Cost of Ownership”, because we are not just evaluating costs. We also need to consider quantifying the intangibles – like customer loyalty, word-of-mouth advertising, as well as risk of wallet share, lost cross-sell and customer win-back opportunities.

As many savvy customer service and marketing executives know, FCR has a direct, and an almost one-to-one correlation with the sales conversion ratio. With more than 70% of all centers attempting to sell or cross-sell on service calls, we must focus on other variables in addition to costs.

Below are the principle variables you will want to consider.

• FCR
• AHT
• % short calls (under 5 sec, under 30 or 60 sec)
• Off-shore labor rate and average rate increases Vs. new US base operating models which include work at home (at up to 20% less than the brick and mortar model)
• % Attrition
• % X-sell, conversion ratio and average ticket
• Effectiveness of acquisition and win-back programs
• Risk of share of wallet (tied to FCR)
• Customer Loyalty – quantifying word of mouth loyalty with CSAT differences

Limited off-shore successes. A few of us have had some great off-shore call experiences – recent experiences with an ISP and a telecom organization come to mind. But we experienced far too many horrific failures of communication. The great experiences appear to be “one-off” and not very repeatable. I speak at conferences all over the US about repatriation – and there is general consensus that our position is correct. We really like and respect the people we have met in the off-shored centers. They are good people who want to feed their families and have a better life. If companies want to off-shore, they should determine the right kind of work to off-shore. Work with a good business case that justifies its relocation. This other experiment is over.

FORT WORTH, TEXAS (Sept. 2, 2010) – NOVO 1, a leading provider of inbound and outbound customer interaction solutions and a portfolio company of the Glencoe Capital Michigan Opportunities Fund, has opened a new 37,000 square-foot customer-service facility in Holland, Mich.

“There is no better way to celebrate Labor Day than by creating new jobs in America,” said Mary Murcott, CEO of NOVO 1. “With the opening of our dream Michigan contact center we will be creating 300 new jobs over the next several years.”

NOVO 1 has invested in excess of $2 million in the call center with an emphasis on security, technology and commitment to the environment.

“West Michigan embodies an entrepreneurial spirit and public/private sector cooperation so vital to job creation in today’s marketplace,” added David Evans, Chairman and Chief Investment Officer of Glencoe Capital, LLC. “Michigan’s greatest asset and the engine of its vitally important economic recovery is the intellectual, interpersonal and initiative skills of its people, which have grown strong despite the adversity its citizens face. These qualities are what NOVO 1 saw in bringing its major operation expansion to Michigan.”

The new Holland contact center features a spacious and open design to facilitate collaboration with team leaders and agents. The center will accommodate 291 customer service representatives and 21 team lead stations. Three multi-synched training rooms feature state-of-the-art multimedia allowing for 72 training seats and 3 training instructor seats.

AT&T outfitted the facility with its telecommunications solutions, including AT&T Connect® conferencing and fully managed VPN service. The AT&T VPN solution is particularly important for NOVO 1 because it provides high levels of flexibility, reliability and security.

“Everyday, AT&T invests in its infrastructure and network to deliver stronger service and more advanced products for our customers,” said James Murray, President of AT&T Michigan. “Those investments also help promote expansion of new businesses and the creation of jobs in communities like Holland and across Michigan. We’re proud of our investments in Michigan and celebrate the opportunity to come from today’s grand opening.”

Not only does the center have state-of-the-art telecommunications equipment, but NOVO 1 also demonstrates its commitment to the environment with the center’s green features, including:
• An Active Power Rotary and UPS system .that is non-toxic, 98% efficient, with no lead acid core batteries, doesn’t require special ventilation, no spill containment required and takes up a small footprint.
• 100% recyclable and sustainable carpeting throughout the contact center. Energy Star compliant computers and monitors

In addition to its green features, security at the contact center is paramount, and NOVO 1’s Holland Contact Center has local and remote monitoring around the clock. Sensitive areas have three layers of security. There are no exposed data cables from Network Systems equipment to computers. Cables are buried in a concrete floor in under-floor conduit. Customized workstations feature a locking chase that physically secures customer service representative computers from access by agents. Only designated IT personnel have access to the computers. No CD, DVD, media or USB thumb drive intrusion is permitted. Electrical receptacles are secured so there is no uninterrupted power supply (UPS) overload.

“We’re proud to have NOVO 1 as a new member of the Chamber and West Michigan business community,” said Jane Clark, President of the Holland Area Chamber of Commerce. “Our people, location, infrastructure and spirit of cooperation make it possible for companies like this to call Holland home.

The Honorable Kurt Dykstra, Mayor of Holland added, “The City of Holland is recognized as one of the best places to live and work by Kiplinger Magazine and the Gallup organization. A pro-business environment fosters the required economic development to enhance the area’s quality of life.”

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*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

NOVO 1
Since 1987, Fort Worth, Texas-based NOVO 1, www.novo1.com, has dedicated itself to tailoring contact center solutions to support clients’ business goals in building customer relationships and growing their brands. The company delivers adaptable solutions implemented with proven processes and people for industries, such as healthcare, financial, retail, energy and logistics. Whether it’s a healthcare service, B2B logistics dispatch, or retail customer retention program, NOVO 1 provides a scalable, safe, and seamless extension to any business.

GLENCOE CAPITAL
Founded in 1993, Glencoe Capital is a private equity firm focused on lead-sponsored acquisitions and growth equity investments in lower middle-market companies. Glencoe Capital and its affiliates manage a number of private equity funds, including the Michigan Opportunities Fund and Glencoe Capital Partners III, L.P.

For more information, contact:
Jack Wilkie, NOVO 1
817-355-8909
Mobile: 515-321-5467

NOVO 1 OPENS NEW FACILITY IN MICHIGAN

Fort Worth, TX (July 19, 2010) – NOVO 1, a leading provider of inbound and outbound customer interaction solutions and a portfolio company of the Glencoe Capital Michigan Opportunities Fund, has opened a new 37,000-square-foot customer-service facility in Holland, Mich.

With the opening of the new facility, NOVO 1 will hire an additional 300 personnel over the next several years.

“The community in Holland and its surrounding area have a dynamic workforce, and the city is listed as the happiest place to live in America by Gallup-Healthways Well-Being Index,” said NOVO 1 CEO Mary Murcott. “The new facility allows us to respond to new opportunities in the Midwest market while creating more jobs in the U.S.”

NOVO 1 serves hundreds of corporate clients in the healthcare, transportation, insurance, financial services, telecom, utilities, retail and publishing industries. Its new facility was opened with assistance from a $1 million grant from the Michigan Economic Development Corporation (MEDC). The company also has operations in Texas, Montana, Wisconsin and employs more than 1,100 customer-care specialists.

“We are extremely pleased with NOVO 1’s growth and look forward to its continued success,” said Doug Kearney, a principal with Glencoe Capital. The Michigan Opportunities Fund purchased NOVO 1 in 2009.

Glencoe Capital’s Michigan Opportunities Fund represents a groundbreaking partnership between the public and private sectors, leveraging equity capital to make lead-sponsored acquisitions and growth equity investments in companies in the State of Michigan or in businesses that want to expand operations into the State. The Fund invests in growing companies that can generate attractive returns to investors while promoting business growth and fostering job creation that together help improve the economic vitality of the State of Michigan. The Fund completed three portfolio investments in 2009 and closed one new investment in January 2010.

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About NOVO 1 Since 1987, Fort Worth, Tex.-based NOVO 1, www.novo1.com, has dedicated itself to tailoring contact center solutions to support clients’ business goals in building customer relationships and growing their brands. The company delivers adaptable solutions implemented with proven processes and people for industries, such as healthcare, financial, retail, and logistics. Whether it’s a healthcare service, B2B logistics dispatch, or a retail customer retention program, NOVO 1 provides a scalable, safe, and seamless extension to any business.

About Glencoe Capital Founded in 1993, Glencoe Capital is a private equity firm focused on lead-sponsored acquisitions and growth equity investments in lower middle-market companies. Glencoe Capital and its affiliates manage a number of private equity funds, including the Michigan Opportunities Fund and Glencoe Capital Partners III, L.P.

For more information, contact:
Jack Wilkie, NOVO 1
(817) 355-8909

NOVO 1 Elects Two Healthcare Industry Board Members

Marianne Udow-Phillips, Leslie Viegas Bring Expertise, Insight from Blue Cross; University of Michigan Healthcare

FORT WORTH, TX (March 23, 2010) – NOVO 1, Inc., a leading provider of customer contact center solutions, announces the election of Marianne Udow-Phillips and Leslie A. Viegas, both respected leaders in the healthcare industry, to the company’s operating board of directors.

Marianne Udow-Phillips is director of the Center for Healthcare Research & Transformation, a nonprofit partnership of the University of Michigan and Blue Cross Blue Shield of Michigan (BCBSM) with the mission to promote evidence-based care delivery, improve population health, and expand access to care. Previously, she was appointed as director of Michigan’s Department of Human Services by Michigan Governor Jennifer Granholm, serving from 2004 to 2007.

Before her appointment by Michigan’s Governor, Udow-Phillips served in a succession of leadership roles in a twenty-year career at BCBSM, most recently as senior vice president of health care products and provider services. She also served as senior vice president and vice president of plans and operations for Mercy Alternative and Care Choices.

Leslie A. Viegas brings to Novo 1 extensive business and industry experience earned in an exemplary 37-year career in health insurance, property and casualty insurance, auto travel services, technology and management consulting. Most recently, until his retirement in 2008, Viegas was executive vice president of operations at BCBSM, where he served in a succession of positions of increasing responsibility during seventeen years with this $24 billion health care insurance company that insures over 4.3 million people in Michigan. His responsibilities included operations, automotive and national business, federal business, marketing/product development, business intelligence and information technology.

Prior to joining BCBSM, Viegas was a Vice President with AAA Michigan in Dearborn from 1984-1990, where his responsibilities included customer servicing, information technology, emergency road service and insurance processing. In addition, he was the Corporate Secretary of the organization. Before that, he was a partner in the management consulting division at Arthur Young & Co., in Detroit

NOVO 1, a leading provider of inbound and outbound customer interaction solutions to clients in several industries., is a portfolio company in the Michigan Opportunities Fund, managed by Birmingham, Mich.-based Glencoe Capital. With revenues of $43 million in 2008, the company ranked as the 25th-largest inbound services provider in the domestic US in 2008, according to Customer Inter@ction Solutions magazine.

“Leslie Viegas and Marianne Udow-Phillips each bring unparalleled industry experience as well as deep operational expertise to NOVO 1,” said David Evans, Chairman of the Michigan-focused investment fund. “All of us at the Michigan Opportunities Fund as well as the management team welcome Mr. Viegas and Ms. Udow-Phillips’s participation in guiding NOVO 1’s future growth.”

“We are thrilled to have both Marianne and Leslie join NOVO 1’s board of directors,” said Mary Murcott, CEO, NOVO 1. “The healthcare industry is a key focus for us and their diversified knowledge and hands-on insight will be of tremendous value to us as we navigate this market.”

ABOUT NOVO 1
Since 1987, Fort Worth-based NOVO 1, www.novo1.com, has dedicated itself to tailoring contact center solutions to support clients’ business goals in building customer relationships and growing their brands. The company delivers adaptable solutions implemented with proven processes and people for industries, such as healthcare, financial, retail, and logistics. Whether it’s a healthcare service, B2B logistics dispatch, or a retail customer retention program, NOVO 1 provides a scalable, safe, and seamless extension to any business.

ABOUT Glencoe Capital
Founded in 1993, Glencoe Capital is a private equity firm focused on lead-sponsored acquisitions and growth equity investments in lower middle-market companies. Glencoe Capital and its affiliates manage a number of private equity funds, including the Michigan Opportunities Fund and Glencoe Capital Partners III, L.P. The firm has over $1 billion under management.

Glencoe Capital Michigan Opportunities Fund Acquires NOVO 1

Acquisition Reflects NOVO 1’s Fast Business Growth; Commitment to Customer Care and Contact Center Expansion

FORT WORTH, TX (March 9, 2010) — NOVO 1, a leading provider of customer contact solutions, has been acquired by Glencoe Capital’s Michigan Opportunities Fund. The fund, managed by Glencoe Capital, a private equity firm focused on lead-sponsored acquisitions and growth equity investments in lower middle-market companies, focuses on such businesses that have the prospect to expand business operations in the state of Michigan or are actually located there. NOVO 1 plans to open a customer care and contact center in western Michigan this year that will employ more than 300 personnel.

The Michigan Opportunities Fund acquired NOVO 1’s inbound telephone customer service business and certain other assets of the company. With revenues of $43 million, NOVO 1 currently has six contact centers throughout the US, including Texas, Montana, and Wisconsin, with its new headquarters located in Fort Worth, TX. The company has more than 400 corporate clients and employs more than 1,100 customer-care specialists for diversified industries that range from healthcare to retail.

“Our investment in NOVO 1 continues the Michigan Opportunities Fund’s strategy to invest in growing companies that can generate attractive returns to our investors, while promoting business growth and fostering job creation that together help improve the economic vitality of the State of Michigan,” said David S. Evans, Chairman and Chief Investment Officer, Glencoe Capital.

Jason Duzan, Managing Director, Glencoe Capital’s Michigan Opportunities Fund, stated, “With NOVO 1, Glencoe Capital is supporting a growing business that has a solid operating platform, a management team that averages 15 years with the company, and a history of success.”

Formed in 2000, the company will continue to operate under the NOVO 1 brand name and will be managed by its current management team.

“NOVO 1 is on an exciting and targeted course to multiply its growth in the next several years,” said Mary Murcott, CEO, NOVO 1. “As Glencoe understands our core business and is highly successful in its market reach, we will be poised with their support to leverage opportunities that will allow us to expand regionally and nationwide.”

ABOUT NOVO 1
Since 1987, Fort Worth-based NOVO 1, www.novo1.com, has dedicated itself to tailoring contact center solutions to support clients’ business goals in building customer relationships and growing their brands. The company delivers adaptable solutions implemented with proven processes and people for industries, such as healthcare, financial, retail, and logistics. Whether it’s a healthcare service, B2B logistics dispatch, or a retail customer retention program, NOVO 1 provides a scalable, safe, and seamless extension to any business.