Imagine an especially stormy winter day on the East Coast of the US. Thousands of people are stranded in their homes, and a raging snowstorm threatens anyone daring to set foot in the streets. Panicky customers calling their cable company service center hear the calm, pleasant voice of a service agent. “How did you ever get to work on a day like this?”, a caller asks. “Don’t worry,” the agent answers, “It’s warm and nice where I am.”
The customer calling the service center from Newark, New Jersey would certainly be very surprised to hear that the warm and nice place to which the agent is referring is a communications building on Har Hahotzvim in Jerusalem a 10-hour flight from the eye of the storm.
Some compensation for the shock would come from the sound of the agent speaking fluent English in a clear American accent. That’s why dozens of companies, mostly from the US, but also from Britain and continental Europe, entrust their customer service management (CSM) to a young Israel company IDT Contact Services.
Founded only 18 months ago, IDT Contact has become the telephone service center for its parent company, IDT - Integrated Device Technology (Nasdaq: IDTI), the fourth largest telecommunications firm in the US. IDT founder and chairman Howard Jonas is a Jew, emotionally committed to Israel, who in July 2002 decided to put a little business into the Holy Land, and provide employment, at least temporarily for a few immigrants. What began as a small scale, 30-person project for soliciting donations has become a large business, operating 24 hour a day, and employing 400 workers in Israel alone. Since its founding, IDT Contact has acquired two companies in the center of the US. From its Jerusalem headquarters, IDT Contact handles all IDT’s call center business, including the original center in Newark, which has now been cut back.
”Our advantage lies in our topflight capabilities, low cost, and quality service values,” says IDT Contact Services VP international business development Ben Wiener. “Labor costs at similar CSM centers in the US amount to 60% of expenses, and the employees are barely at high school graduate level. Our employees are better educated, they know American culture inside out, and they earn Israeli salaries, which are 30-60% lower than those in the US.” IDT Contact employs mainly college-educated English-speaking new immigrants, although it has projects in five other languages. The company is advertising for new employees as if there were no recession. Every few months, it rents more space in its building at 5 Kiryat Hamada St., and tears down another wall.
Indian trouble
IDT Contact’s main competition comes from neither Israel nor the US. In the past decade, many US and British companies have purchased their telephone services from communication centers in India, as a cost-cutting measure. But only two weeks ago, Dell Computer (Nasdaq: DELL) announced that it was bringing its telephone services for business customers back home to the US, after customers complained that they could not understand what was being said to them. Another report in Britain’s “The Financial Times” said that workers in Indian communications centers were no longer being asked to imitate British or American accents when they answered the telephone; everyone already knows they are from India.
”When I call my bank in New York, the clerk answering the phone speaks with a foreign accent, and tells me proudly that he is in Bangalore. He doesn’t always understand what I’m saying, but he knows everything about my bank account. For me, that’s a negative service experience,” Wiener says, speaking from personal experience. “We don’t compete on basic services; those can stay in India. Where a dialogue and personal connection with the customer is needed, however questions and answers, activity sales through agents, customer retention through direct dialing, or technical support we have an advantage.”
”Almost all the employees here were recent customers of the same services,” adds IDT Contact joint CEO Joseph Shmidman. “That’s one of the things we tell the companies hiring our services.” These companies provide telephone and telecommunications services, market newspaper and cable TV subscriptions, sell airtime for radio stations, and provide services to customers of bank and mortgage companies marketing financial products.
Transparency to customers
IDC Contact is careful to be fully transparent to its business customers. Shmidman says, “In trying to market Israel as a site for outsourcing, you have to overcome two obstacles. The first is location; being offshore saves on costs, but involves problems of physical distance, credibility, a poor service reputation, a foreign accent, culture gaps, and negative customer experience. We can overcome all that. English is our native speaker language, we’re a subsidiary of a listed company, and we have reliable infrastructure and high-level information security mechanisms.
”The second obstacle involves Israel. Up until now, we haven’t encountered anti-Semitism, but Israel’s security image is certainly a problem. Concern over the safety of the project is not usually an issue, but there is fear for the personal safety of the people visiting here.” At the same time Shmidman stresses Israel’s positive image for companies objecting to service providers in India or the Phillippines.
Wiener likes to remind potential customers of the big power blackout that paralyzed large areas of the US and Canada a few months ago, as an example of a malfunction that could happen “right next door” to the customer. “We also mention our 24 hours a day, seven days a week service. We have full backup between us and our centers in the US. The customers get full service, and the people hiring service don’t have to pay for work on holidays and Saturdays,” he points out.
While IDT Contact’s customers are completely aware of its Israeli identity and location, the customers calling to get service, or receiving a telemarketing call, are totally unaware of the fact. If the service agents are asked about their locations, they usually answer that they are forbidden to disclose the information for security reasons. One exception to this rule is in soliciting donations for Jewish organizations in Israel and around the world. “When we call Jewish homes in the US and and we introduce ourselves by saying, ‘Hello, I’m speaking from Jerusalem,’ a typical answer is, ‘Do you know what time it is?’,” Shmidman says.
Company workers are divided into teams by type of service and by project, and are trained accordingly. While American accents and service for the US market are dominant, the company also has a Dutch-speaking team marketing subscriptions for a newspaper in the Netherlands. Another team, composed of immigrants from various countries, puts out a multilingual e-mail for the customers of a technology company.
As far as employee turnover is concerned, Wiener and Shmidman say that the global average for communications centers is 40-50%, but that the rate at IDT Contact is less than 20%. They attribute the high degree of employee loyalty to a job usually considered temporary and not particularly pleasant to the rapidly growing company’s fast-track promotion program, as well as the recession, for obvious reasons.
Published by Globes [online] - www.globes.co.il - on January 1, 2004