John Meyer, CEO for Arise discussed the advantages Arise brings in providing a flexible workforce and how organizations can see real cost benefits.
Jason Redlus: Could you set the stage for us with a little background about yourself and Arise as a company?
John Meyer: To put it simply, Arise is a crowd-sourcing company that establishes relationships with some of the biggest Fortune 2000-sized companies with specific needs in areas such as customer service, technical support or cross-sell/up-sell. We go out to the market to source folks seeking to become independent business owners with those specific skills (also known as crowdsourcing). Some of that entails looking for certain kinds of technical expertise on equipment, or people that understand the telecommunications industry and can perform a customer service or support role. We’ll certify those people’s capabilities by having them go through a background screening, voice/personality assessment, and then we use our technology infrastructure/virtual platform to connect that customer’s systems to these skilled independent contractors at home. A good example of that would be the US’s largest telecom company, where we provide mobile phone troubleshooting for their white-glove customers. What they found is that the caliber of the individuals that we can bring to bear through the use of our sourcing approach coupled with our virtual platform is not only more cost-effective, but actually fits perfectly with their white-gloved customers.
Arise has built a network of over 25,000 independent work-at-home customer service, sales and technical support providers in the United States, Canada, the United Kingdom and Ireland currently who have specific skills that meet our client’s need . We then provide them the opportunity to service a client of their choice – based on their specific skill-set. In other words, the provider will look across our portfolio of client opportunities and say, “I want to service that client’s calls”. As such, this aligns their interests with our clients brand and/or type of call. Furthermore, this offers them the flexibility to service 15 or 20 hours a week, whatever hours they want to service which offers unmatched work/life balance- this is not seen very often in the customer service industry.
In addition, if someone is a high performer they get the opportunity to choose their hours first. So, the best providers are servicing the client at the busiest times of the day. This is further enhanced since the Independent Businesses are paid on a per minute basis. So you’ve got the best providers based on the client’s measures picking the busiest times because that’s when they can generate the best earnings results and generate more great results. From a customer perspective, what’s not to like about that?
So it’s a very unique business model, which is what got me excited. I started my business career at EDS back when people used to laugh us out of the c-suites when we talked about outsourcing. “You want me to give you all my people and my data center and telecommunications and then trust that you’ll give all that back better and cheaper? Are you crazy?” It wasn’t until that business model was accepted that all of a sudden those people would say, “You’re right, why am I doing this myself?” At Arise we’re on the cusp of that same thing. We have a client base that is saying, “You’re right. I’m fed up with the Philippines, I’m fed up with India, and I’m fed up with spending money on brick-and-mortar for a call center. If you can save me 25 percent to 30 percent over that onshore brick-and-mortar and you can do it with a better caliber of local individuals and generate better results, I am very interested in that!”
Are there any success stories you would be able to share?
I’ll give you one from our three major disciplines. Concerning technical support, one client was a larger equipment OEM that had a call center where they had tapped almost everybody in the geographical region that would be providing this technical expertise. But the business needs had outstripped that capability. So they had a choice. They could either build another brick-and-mortar center, or they could come to us and ask us to find the people that had that ability. Our advantage is that we’re not geographically constrained; we’re able to go across the United States and create a network of expertise to where now we do almost 50 percent of their work directly. We actually bring the work to the people as opposed to bringing people to the work.
Another example involves the large telecom company. There was that huge tornado that hit Joplin, Missouri, and even though it didn’t hit their call center, many of the people that worked in the call center had their houses damaged. They called us at 9 a.m. that morning and said they were going to have to shut their call center down and could we help them? We picked up 296 full-time equivalents in an hour-and-a-half and kept them for two weeks while the people that were affected were able to get their lives back in order. Who else can do that? Anyone else would have to build a center and then fill it up with equipment and find and train new people. But because the individuals that we have in our network service 15 to 20 hours on average, they are available in emergencies or to deal with service requests like when your business has some big seasonal uptick or things like an iPhone launch. We go to our network and say, “Hey guys can you help us out? Do you want to service more hours?” If we could get them to pick up another 10 hours, that increases the capacity in your call center by 50 percent. So there is a great deal of flexibility around the business continuity.
The third example is around sales skills. We align our incentives from the client directly to the independent business and we’re able to measure performance hourly, daily and weekly. So for Carnival Cruise Line we started approximately eight years ago with 50 seats just to try a pilot for it. The relationship has grown to represent a substantial part of this function. Some of the Independent Businesses earn up to $22 an hour, when they have a base rate and then a commission that ties to their ability to present upgrades such as a balcony room or onshore excursions. These providers choose the client’s brand because they love Carnival and are big cruisers, and can take that enthusiasm and carry it to the client’s customers. That’s proven to be better than hiring typical call center individuals to sit there eight hours a day and try to deliver this type of performance.
“Our advantage is that we’re not geographically constrained; we’re able to go across the United States and create a network of expertise to where now we do almost 50 percent of their work directly. We actually bring the work to the people as opposed to bringing people to the work.”
How long has the business been at this?
We’ve been in business for 17 years. We started as a joint venture between Bell South and the State of Florida to create jobs for disabled people. These individuals really couldn’t travel to get certified to work, so our entire business model started with the idea that everything must be able to be transported through the use of technology right into people’s homes and desktops. So in creating the certification process, we’ll go to a client and take what is typically their brick-and-mortar training program and convert that to an Adobe-based virtual classroom. We’ll have an instructor on video-conferencing where the students will be able to see him, but he won’t be able to see the students. They sit through these classes three to four hours a day and then do one to two hours of self-study. Our virtual certification courses are about the same length as the classes in the brick-and-mortar location, but the people never leave home. In many cases, the certification course is shorter than the clients’ training, given our expertise in transforming large training manuals into virtual immersive certification courses.
One of the unique things about our model is that the independent work-at-home customer service, sales and technical support providers or their Independent Business bears the cost of the certification course. Now that’s important for the client because we’re creating skin in the game. The providers we are attracting would not work in a contact center if they had eight hours a day to go somewhere else. They could be the supervisor in a contact center or they could be running stores, but instead they may be raising a family, have sick parents or they’re retired. They want the work/life flexibility to work when they want to work. The average age of these providers is 42, while over 30 percent of them have college degrees and even more have attended college but may not have finished and/or are in the process of completing their degree.
You’ve touched on the many different ways the call center can be leveraged: inbound, outbound, all the different communication mediums, etc. How much of the work would you say is outbound communication versus inbound, and how much of it is actually over the phone versus over chat or any other medium?
The majority of our business is inbound, but we do certain things that I would call warm leads where the customer is actually expecting us to call them back because the problem couldn’t be solved the first time, or we have some unique issues at play. For instance, we have a client that is a diabetes-consulting company, and our providers may call somebody twice a month and ask them, for example if they are exercising properly, eating well and those types of things. And, by the way, do they need to buy strips and meters? We actually sourced diabetics to provide this service, and therefore have diabetics talking to other diabetics, which creates a large degree of empathy that another employee perhaps could not. Furthermore, with employees you would run the risk of discrimination if you asked these types of questions to prospective employees. How could you say, “I’m sorry you can’t work for us because you aren’t diabetic”? You’d be in court pretty quickly on that.
So about 75 percent of our work is voice, 15 percent is chat-based, with e-mail another 5 to 5 percent, and the difference being outbound calls.
Can you touch a little bit on the security considerations in partnering with Arise or similar groups?
It’s always one of the first questions that Clients bring up, and it actually starts with the individuals that service for us. So let me run you through a little bit of what they have to do to just get into our network.
The first thing they have to do is spend $45 on a background check to make sure that they don’t have any criminal back ground. Then they have to run through a voice assessment to make sure that they can effectively communicate in English or Spanish or French, etc. We also have kind of a psychographic, demographic evaluation to see whether they have the ability to multi-task or handle this type of work. Next they have to go through a class that we call Client Service Professional 101. That takes about 6 hours and only then do they get a chance to choose the client they want to service. They pay for the client certification and although we are not making any money in this certification effort, we’re creating skin in the game. Think about how much a franchise would have to pay to do this and then run out and get clients. Well, we’re basically setting them up in business and bringing them clients. They set up a legal entity, and any of these certification classes runs between five weeks and eleven weeks.
We have a proprietary USB port device that is inserted into their computer that disengages features and turns it into a dumb terminal, so they can’t print screen, they can’t surf the web, etc. That’s how they connect with our technology through our telecommunications and infrastructure. If they remove the USB, their PC returns to normal, but they are not connected with Arise.
Finally, we have the firewalls and other technologies to enhance security. Arise has been PCI compliant for eight years. PCI is the audit that VISA requires for any individuals to do before they take credit card transactions. In addition to PCI, we have a SAS 70 audit and numerous client/industry audits.
If someone decides they want to go through with this, what does the initial experience of your customer service look like and over what time frame? Who are they partnered with on your side, and what does an initial implementation actually look like?
It’s kind of multi-pronged. We’ve ramped up a new client in as little as four weeks and we started up with 400 providers. But the key part is the length of the client “training” (i.e. we call it certification), because we’re taking their brick-and-mortar training program and converting that into virtual, while at the same time we’re sourcing individuals that have the special aptitudes and skills to be successful. Is it sales skills or more specifically, Spanish sales skills or is it customer service empathy? Meanwhile our organization is working with the client’s IT organization to make sure that the phone calls actually are flowing through and that connection occurs. That usually doesn’t take too long and can be done concurrently with the training effort.
After that, if a call comes into your normal 1-(800) number, some of them may route to your own call centers and some of them will route to one of the Arise provider’s homes – where it gets sent right down to somebody’s desktop in their home.
Do you have any advice for a CFO or CIO or contact center person about how to get all the other stakeholders onboard with this idea?
We have a consulting offering that we call a value scan, which shows what it costs for you to provide contact center people, including salaries, benefits, training, supervisors and technology infrastructure. The biggest benefit of Arise is our ability to squeeze wastage out of a typical workday. A typical employee has a utilization rate of 65 percent because you’re paying for their lunch, breaks, and training. When you add the low utilization plus all the other overhead, the typical costs run into the $30-per-hour range per person over which we are substantially more cost effective. What is really unique about the Arise business model is that we schedule our work-at-home service providers in 30 minute intervals, giving us the precise ability to match a client’s supply-and-demand curve throughout the day almost exactly.
In a call center, it is normal to get a lot of call volume at the beginning of the day; and then from 9:30 to 11 a.m. there’s a dead period until lunch; and there is also a dead period in the middle of the afternoon before it goes up again. Unfortunately call centers hire people on fixed schedules; the employee comes in for four hours or eight hours, and you’re hiring for the level of the peak times. When the customers aren’t calling those hours, call center people are sitting around doing nothing, whereas you only pay Arise when people are taking calls. So an Arise agent is more cost effective due to eliminating the down time. The Arise independent work-at-home provider is working intensely for three hours and then they’re done. Somebody sitting in the center couldn’t work at this intensity for eight hours straight and keep up the pace.
The other thing is around seasonality. Retailers have Black Friday, Cyber Monday and then all the way to Christmas, and that’s their whole year. Cruise lines are big in January, while you’ve got AAA roadside assistance during the summer driving season. So you’ve got a number of clients where seasonality responsiveness is very important. We’re able to move our work-at-home customer service, sales and technical support providers from client to client so they always stay fresh. They’ll work Carnival Cruises during the Wave Season and then they’ll jump on to a pest control company for the Swarm season and then they’ll go back to the retailers in the fall.
That keeps them fresh and has the best people servicing the clients when they need them as opposed to bringing in a bunch of temps that aren’t trained and don’t have any experience. Our providers have already been servicing 15 or 20 hours a week and they can flex up to double their capacity during this peak time by increasing their hours. As such, our client ends up with their calls answered by more experienced agents.
What do you think is going to unfold over the next few years in terms of this product category, with issues around virtual workforce, security, dynamic staffing, optimizing the labor force, etc.? How do you see the industry growing and what do you think will be some of the major trends?
We’ve been growing 20-25 percent year over year for the past four years, and this is actually before the idea really has come of age. When you look at our customer base you see a lot of household names/brands you would recognize, so part of you wonders why this hasn’t taken off like crazy. Well some of it is around acceptance of the idea, and there’s a lot of people that don’t want to be the first mover on this. We had to build technology platforms that allow us to virtually source, certify, schedule and watch performance when nobody in the industry was in the work at home space. No one was doing this years ago so when we had particular problems to solve, we could lean on the fact that half our corporate employees are network technologists or development people and their creativity built systems that are bulletproof and scalable.
We have over 25,000 independent work-at-home customer service, sales and technical providers that we’re managing across four countries, and we’re doing it with approximately 250 internal Arise employees. That technology has given us the scalability to attract, certify measure and reward our best performers.
So it’s an idea that’s coming of age. The culture was easy because many people had outsourced originally and it’s a highly measured offering, so it gave us a chance to prove ourselves quickly. It is not a big step to see this business model applicability to other functions like health claims processing or mortgage servicing. We can find nurses that left the workforce to raise a family, who are looking to still leverage their skill in a work at home setting. You get all kinds of licensed people like insurance agents, mortgage servicing or CPAs who are providing tax advice.
So this is just a start. I think with how enterprises and corporate structures are going to change, this gives the CEO the ability to tap a latent workforce that you wouldn’t be able access if you made them come to your brick-and-mortar facility.
Do customers ever get concerned about the possibility of spikes that can’t be fulfilled, or if they have to ramp up, will there be capacity and enough agents if needed?
To handle a full-time equivalent we’ve sourced and certified two to two-and-a-half people, so when a client gives Arise 100 full-time equivalents we bring in and certify 250 people. When you have those unexpected spikes we have a concept called “urgent service” where we can e-mail or chat-blast and say, “Guys we’ve got a giant demand; can you get on a phone.” Since they typically are only scheduled to work 15 to 20 hours a week, there is plenty of flexibility when we ask. On many occasions we are oversubscribed when we ask for additional hours. Our award winning workforce-management scheduling system provides the independent work-at-home providers the ability to schedule themselves right there on their mobile device. So they can be at the soccer field or in the mall, receive an urgent service text and they can then schedule themselves right there- for a few hours- when they return home.
We’re trying to make sure we can reach these people wherever they are in their lives and get them to rush in to help. With unexpected marketing campaigns or weather or product launches all of a sudden the call center’s being overrun with calls that could not be anticipated. Arise has that flexibility in our model and it gives Independent Businesses an opportunity to earn extra revenue combined with work/life balance for the independent work-at-home providers.
Before we conclude is there anything else you want to discuss?
The value proposition for a CEO is that these people are independent business owners and they have a statement of work from Arise. If they deliver to that statement of work we take good care of them and we want to keep them servicing the clients. If they’re not delivering, we just don’t renew their contract. If they’re not delivering then we say goodbye, just like you would treat any other subcontractor. That type of benefit and flexibility helps the CEO.
When you get to the CFO, it’s all about the capital expenditure costs that are eliminated. No brick-and-mortar buildings, no PC infrastructure, no fixed overhead — It is being done utilizing the broadband network and the Arise award winning systems. Did I mention that we are running 25 percent to 30 percent cheaper? With the increases in healthcare costs and benefits, it is only going to get worse.
For the CMO, who’s responsible for the brand, but also responsible for creating a good customer experience –we’re getting a better-caliber person. The notorious part about this business is that all the competitors say they’ve got better people, but we don’t compete with any of our normal competitors for individuals because Arise is not limited to sourcing in any one geographical location. Arise can pick the best people where they reside and bring them the opportunity to satisfy a customer. The Arise independent work-at-home providers choose the client that they have empathy for the brand and that carries right through to the successful customer experience. Arise is really changing the way that business works, with the ability for us to crowd-source people based on certain types of skills and capabilities that the client is looking for and can’t get anywhere else.
John A. Meyer is Co-Chairman and Chief Executive Officer. John joined the company in 2011 to drive the organization’s growth, set the strategic vision and manage the global operations of the business. John has over 28 years of leadership experience with large publicly traded organizations, and building high growth organizations in both the United States and internationally.
Prior to joining Arise in 2011, John served as Chief Executive Officer and President of Acxiom Corporation, a $1.2 billion global interactive marketing services company with more than 6,500 employees. Previously, he served as President of the Global Services group of Alcatel-Lucent for five years, where he was responsible for more than $6 billion in annual revenue and the management of more than 20,000 people. Prior to joining Lucent, he spent almost 20 years in a number of high-profile positions at Electronic Data Systems Corporation (EDS), including Chairman of the Europe, Middle East and Africa (EMEA) Operating Team, President of Diversified Financial Services and Credit Services Divisions, and CIO for the company’s GMAC business. John’s global, multi-industry experience at EDS was marked by numerous successes, including doubling revenue in EMEA from $3.6 billion to $7.2 billion in four years.
Before entering the business world, John served as a flight commander and was selected as a captain in the U.S. Air Force. He holds a MBA from the University of Missouri and a BS in management from Pennsylvania State University.