WorldCity Business Magazine

PRC makes the call

by Santiago Fittipaldi

Fort Lauderdale-based PRC takes call center services to new heights at locations in the U.S., Dominican Republic, Philippines and India.

John G. Hall bristles when people claim his company runs “call centers.” The CEO of Precision Response Corp. says that description falls short of PRC’s high-tech services, which take the call-center concept to the next level.

“Many people associate the term call center’ with an unsolicited sales attempt in your home at a time when you don’t wish to be bothered, typically at the dinner hour,” says Hall, who last year took the helm of the firm, which is part of Barry Diller’s $25 billion corporate empire. He says PRC, by comparison, uses its “contact centers” to open the door to more valuable interaction between companies and consumers. Using sophisticated IT systems, PRC gives its clients detailed feedback so they can adapt to their customers’ needs or wishes.

For example, a food service operation hired the Fort Lauderdale company to sound out consumers on a menu selection slated for a national roll-out. People in test markets for the new item were given a PRC-operated phone number to call with comments. When the feedback proved negative, PRC counseled its client to rethink the glitzy marketing campaign it had planned.

“We told the client: Your test market is telling you don’t roll it out,” says Hall, adding that the food service company had already committed significant time and money to the test item and was on the verge of pumping in even more. Call centers of the past never could have compiled statistical evidence to halt the national launch, he adds.

Samantha Paulino, a senior analyst at IDC in Miami, views companies like PRC in a category apart from call centers. “In some call centers, the core business is to make a phone call. And this is all the service that is required. But a company like [PRC] is moving a step ahead with the concept,” she says. “It’s combining call center functions with consulting.”

Today, with operations in four countries, PRC employs 10,000 employees, half of which are in Miami-Dade County making the company one of South Florida’s top five private sector employers. It is owned by IAC/InterActive Corp., entertainment mogul Diller’s conglomerate that focuses on Internet-linked businesses.

Hall says PRC’s revenues were around $300 million in 2004. “Volumes have increased, but price competition has brought prices down both in the U.S. and abroad,” he says. “This year, we expect growth both on a volume and revenue basis.”

Traditional call centers field over-the-phone questions and complaints from consumers. For PRC, the telephone is just one part of a bigger process of information collection and analysis. The company promises clients usually brand-focused companies that it will help them acquire, care for and grow their customers’ relationships.

PRC employs high-tech voice, Voice-over-Internet Protocol (VoIP) and other telecommunications services through alliances with firms that include Intervoice, Avaya and NICE. These technology partners help PRC link with its clients’ customers via phone, e-mail and Web chat rooms.

New model

“The focus now seems to be not just the ability to handle incoming voice calls, but also to handle e-mails or Web chat,” says Peter Ryan, a call center analyst at independent research firm Datamonitor. “Call centers all over the world are moving in that direction, toward multi-channel capacity. It is something that has become strong just in the last couple years with the uptake in cellular phone usage and more people getting onto the Internet.”

Paulino, who also manages IDC’s year-old call center, sees PRC’s use of Internet chat rooms as one of its most interesting innovations. “Everyone is moving toward VoIP, so PRC may be ahead of other companies, but they aren’t unique. But for me, the Web chat room is the most interesting aspect of the technology that they use.”

Ryan says there’s a competitive advantage for technology-embracing companies like PRC provided they don’t move their systems too far ahead of those used by the consumers with whom they’re interacting.

Hall contends that the physical footprint of PRC’s contact centers has changed little since the company was founded in 1982, but day-today operations have evolved in tandem with technological advances. Telephone switches blossomed into networked computers; the company is now moving forward behind VoIP. The technology that warns callers that “this call may be monitored for quality assurance” also permits PRC to analyze customer inquiries and provide solutions.

Ryan agrees that VoIP is at the front of technology improvements, but warns that companies must be careful to make sure technology never gets in the way of the interaction with the customer. “At the end of the day, the consumer doesn’t care if it’s an outsourcer or in-house service provider. They care about how pleasant the interaction was,” he says.

At the same time technology has changed, the profile of PRC’s clients has also shifted. “The outsourcing industry grew very rapidly in the late 1990s, substantially from technology and telephone companies that were growing rapidly and needed to outsource customer acquisition and customer care,” Hall says. Tech and telephone-sector clients were PRC’s bread and butter in its first years.

Today, the client list includes British Airways, American Express, FedEx, DirecTV and AARP, the non-profit organization that advocates and lobbies on behalf of Americans over 50. Also on the roster are travel reservation website Expedia, Hotels.com,

Internet dating site Match.com and the Home Shopping Network (HSN) all companies owned by parent company IAC/InterActive Corp.

Hall expects PRC’s client base to be increasingly concentrated in the travel industry, a principal driver of the South Florida economy and a sector in which the company has significant expertise.

**Beyond the Bottom Line

Hall says a growing number of companies have outsourced customers services to develop best practices, rather than to save money. “If the organization we’re talking to as a prospective client is primarily concerned with minimizing the cost of customer care, that’s probably not going to be a good prospect going forward,” he explains. “We prefer customers that are focused on adding value and making use of PRC’s intellectual capital.”

PRC helps clients decide whether to take their business to the company’s offshore locations in the Dominican Republic, the Philippines and India or keep it onshore at centers in Florida, Iowa and Pennsylvania. Although costs can be as much as 40 percent lower at offshore centers, PRC tells its clients that they must factor in the expense of the longer travel time to those far-flung locations, the complexities in managing people in other cultures and the difficulties in exporting U.S. business practices.

PRC often recommends U.S. contact centers for complex services or for those offered to high-end customers. Hall uses the industry buzz word “right-shoring” to describe the process by which clients’ needs are matched to the location of the contact centers.

“In general, the opportunity to take advantage of a lower cost solution offshore was used to create inflated expectations among some clients that believed that the experience would be the same as onshore,” says Hall. “That’s simply unrealistic.” However, he says a satisfactory transition offshore often can be made over time, adding that PRC clients may begin with onshore operations and later take them offshore. PRC’s experience shows fast-growing companies often leave a third of their outsourcing in the United States.

US Airways is a case in point. The airline selected PRC to take over some of its reservations functions in April. PRC’s center in Margate now handles calls from the carrier’s frequent fliers. Other reservations will be handled by PRC agents in the Philippines. The outsourcing move is part of a broader restructuring drive at US Airways, which filed a reorganization plan in U.S. Bankruptcy Court at the end of June as part of its plan to emerge from Chapter 11 protection by the fall. The restructuring includes US Airway’s merger with America West to create the fifth largest airline in the United States.

PRC does not operate in a shared environment, which means employees are dedicated to specific clients, business is conducted at different locations and there are protections to ensure that data is not shared. As a result, the company says it can take on multiple clients in the same industry, including competitors. In fact, PRC’s track record with British Airways a client for more than a decade was likely a strong selling point in winning the US Airways account.

Hall says PRC has been able to build on the strengths of metropolitan Miami’s labor force. “In South Florida, we have access to a fantastic bilingual workforce and we certainly take advantage of that,” says Hall. “The same way that many other industries look at South Florida as the gateway to Latin America and the Caribbean Basin, we too represent that type of opportunity for some of our clients that are looking to provide a multi-shore or right-shore solution.”