Glencoe Capital

NOVO 1 call center in Holland growing rapidly
Pete Daly
Published: January 31, 2011

HOLLAND, Michigan – A new NOVO 1 customer contact center that opened last summer in Holland had expected to have about 50 employees on the job by year-end – but already has 160. NOVO 1 just added a new site director there, too.

Mary Murcott, CEO of the Texas-based company, said that many American companies that began using offshore call centers 10 or 15 years ago “are bringing those call centers and contact centers back home, but nobody seems to want to talk about it.”

Murcott maintains that American companies can save 15 percent by “bringing their contact centers back to America” from India and the Philippines. About 12 percent of the people employed taking calls from customers on behalf of American companies are based overseas, she said.

Many American corporate executives who decided to offshore their call center service “have been looking at the wrong metric,” she said, because they haven’t been looking at all the “ancillary costs” of overseas call centers – especially the cost of customer dissatisfaction when a customer’s problem can’t be resolved on the first call, and perhaps not even by the third or fourth call.

In many cases, the language difference is a challenge, but compounding that are situations where the overseas call center worker simply doesn’t fully comprehend what the customer’s specific problem is back here in the U.S.

Murcott said that when U.S. business began off shoring customer contact centers 10 or 15 years ago, “there were a lot of easy calls to put over there.”

Now, she said, customer inquiries that are easy to resolve are typically handled on the company website or by phone via interactive voice response.

“Now what is left are the hard calls, the ones that are contextually sensitive, the ones that require higher interpersonal skills to communicate. And quite frankly, while we love the people over in India and Philippines, we don’t think they’re up to it,” said Murcott.

Murcott added that many new call centers are now being set up on the outer islands of the Philippines, “where the language is a really difficult barrier.”

Murcott recently wrote an article entitled “The Business Case for Repatriation of Contact Center Jobs Back to America,” in which she stated that “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.”

Murcott writes that most companies won’t talk publicly about the repatriation of their call center locations, because they don’t want to admit they made a mistake, or because some of their other internal divisions will remain off-shored.

Recent off-shore tax legislation that did not pass in Congress was unnecessary, maintains Murcott, because “companies who off-shored customer contact are already experiencing financial penalties from customers who are taking their business elsewhere. Historically, a bad decision which affected customer service took about three years to fully impact shareholders. We know that cycle has shortened considerably in recent years.”

NOVO 1, founded in 1987, has its corporate headquarters in Forth Worth, Texas, with additional customer service centers in Billings, Mont.; Waukesha, Wis., and Holland. It has more than 1,400 employees and generates annual sales in excess of $43 million.

In 2009, NOVO 1 was acquired by Glencoe Capital and is now part of Glencoe’s Michigan Opportunities Fund portfolio of companies. Founded in 1993, Glencoe Capital is a private equity firm focused on lower middle-market companies. The Michigan Opportunities Fund, one of two funds Glencoe now operates, was established in 2008 and “represents a groundbreaking partnership of public and private interests in the deployment of private equity capital,” according to the Glencoe website.

The Michigan Opportunities Fund makes lead-sponsored acquisitions and growth equity investments in companies that conduct a material portion of their business operations in Michigan, and it may also invest in companies located outside of Michigan that demonstrate a strategy for expanding business operations into Michigan.

In January, NOVO 1 announced that Patrick Blanchard had been named site director for the Holland facility. Blanchard, a resident of Hudsonville, has more than 28 years of experience in financial and telecommunication call center operations. Most recently, he was vice president of call center operations for Huntington Bank, and prior to that, vice president of call center operations for the Sky Financial Group.
Blanchard said NOVO 1 is different because most customer contact centers in West Michigan are part of a corporation, while it is an independent business providing service to corporations.

He noted that NOVO 1 is still looking for another 12 to 15 customer service representatives. Applications are accepted for NOVO 1 jobs at the Michigan Works service centers in Ottawa and Allegan counties.
The Holland contact center has room for about 350 employees; NOVO 1 received a $1 million federal grant plus other local incentives to locate in Holland, with the agreement that it would employ 350 people within three years.

“We still need to fill probably another 200 to 250 seats” to fill the NOVO 1 contact center, said Murcott, which will require getting more client companies.

Right now the Holland facility serves companies in transportation, logistics and telecommunications, she said. Throughout the U.S., it also serves other industries such as health care, financial, retail and energy. The services range from dispatching trucks to answer customer service calls and making calls as part of a customer retention program.

The new facility was opened in July with assistance from a $1 million federal Community Development Block Grant through the Michigan Economic Development Corp.

Greg Robinson, assistant city manager of Holland, said at the time that $500,000 of the block grant will be used to help pay for machinery, furniture, fixtures, computers and other related equipment. The other $500,000 will be used by NOVO 1 in training its new employees.

The city of Holland also granted NOVO 1 a PA 328 abatement on all personal property taxes at the new business, which will be worth an estimated $115,000 over the next nine years.

NOVO 1’s facility is owned by the Robert Grooters Development Company. It was last used temporarily by Haworth.

According to county documents related to the grant, most of the NOVO 1 employees will be customer service representatives earning a starting wage of $9 per hour. About 15 percent will be in technical, supervisory and management positions with salaries ranging from $40,000 to $70,000.

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.