Nathan Kinsella from KMPG, Inc.

Meet Nathan Kinsella. He runs a $7M call center based in the Philippines. We had a very interesting conversation about how he acquires and works with clients, which is relevant to a large majority of the businesses here. If you’re not working with a call center like the one Nathan runs, you’re likely not selling enough and dramatically limiting the dollar revenue volume your business can do. And yes, call centers CAN work in an ethical manner that don’t burn customers. You just need the right call center to work with.

Fast Track Interview

Adrian: Today I’m talking with Nathan Kinsella, who runs a 700-seat call center in the Philippines. Nathan, thanks for being on this call. We’re really interested to hear about who you are and what you do.

Nathan: I’m certainly glad to be here with you. We count employees not seats, so we are a 700-employee operation. We’ve operated here since early 2004. We service mostly Internet advertising companies.

Since 1997, I had been running call centers in Utah and had worked with Jeremy Johnson, who runs iWorks and Raven Media, and a bunch of other people in Utah.

In the fall of 2003, Jeremy and I had been doing some different deals together and had outsourced some work to India. We decided to as a joint venture go and do some work in India. We wanted to try to figure out what was going on there because there’s tremendous opportunity to make sales, but there’s also a tremendous amount of problems. Call centers over there were making sales, and 30 days later they’d be at a 100 percent attrition rate in those sales. The volume and the size that they could scale out to so quickly were just amazing to us.

For about a month, we contacted every call center we could find online and through trade associations in India, the Philippines, Sri Lanka, and throughout Asia. David Fishman, who at the time was working for iLead Media, and I flew over and started meeting people.

One of the first people we met in the Philippines was Jay Quintos. Later, he became my partner here. After our lengthy trip, we saw that an amazing opportunity in Asia exists with call centers. However, you actually had to be on the ground here if you were really going to establish a very consistent presence to maximize the opportunity that existed.

When I returned that December, my partner at my call center in Utah saw my excitement. A few days later, he asked me if I would accept a buy out. He then bought me out. A couple of months later, I packed my family in Utah and moved to Manila, and we started operations.

Adrian: How big do you think the call center industry is in the Philippines?

Nathan: Every major call center operator in the world has locations in the Philippines. My guess is it will be close to 200,000 call center workers here now. I think there’s going to be a lot of pressure on the industry next year because the Philippine peso has been the best performing currency, maybe worldwide and certainly in Asia, but it’s dropped almost a full 20 percent this year against the dollar. That’s a huge impact to the businesses here.

Adrian: Do you ever do commission-based where you’re just working with DISH Network or one of these major offers? Would you only work with clients such as our mutual friends in Utah?

Nathan: My client base is really centered around Utah, but we do have other clients. All of our stuff right now is performance base and commission based. Whatever the CPAs are online, that’s what we collect The majority of our outbound business is to take abandoned form fills from first page drop out. Most of these clients have two-page sign up processes for their free trial offers from weight loss to biz op or whatever it might be. We take those first pages, and we call them back. It’s a pretty straight forward pitch when we talk to clients about what we do. For people who have that data, most were only doing some mailing to that data, reselling it, or doing e-mail, but no one has really taken the time to call that data.

Adrian: Isn’t that a loss for them if you call them?

Nathan: In theory, it could be that they’re losing some customers they would acquire through their e-mail efforts. We’re only closing 10 percent of the data. There’s still 90 percent of that data going through their normal channels. We’re now setting up systems that basically drop that main out whether it is converted through e-mail or by phone. We don’t step on top of each other’s efforts. They’re not e-mailing people who just bought from me, and I’m not calling somebody who just bought their e-mail yesterday.

Adrian: But why aren’t you doing like other call centers around the world who are fairly small but are running DISH Network. They’re going and getting leads from wherever and working on DISH Network offers and driving commission. You were doing more of a tighter relationship that requires knowing the company, having a relationship with them, getting those leads from the company, then closing the sales, and getting those commissions.

Nathan: It’s the first thing that we did over here, and we had a good reputation for it. Jeremy was very supportive of us and so is Brady Whittingham as well at Think Partnership. As a matter of fact, Think Partnership started a deal called TeleCPA, and we’re the call center for the TeleCPA. Andy Collins of Think Partnership finds clients for us. He manages it like a network, and we do the efforts on our side with the phones. He closes anything, pays us, and works with issues from the stateside with any of those advertisers. It works out really well for everybody. They make a network cut like any network would, and networks are good for everybody.

We have enough of that business right now that we really haven’t looked at doing those other deals. We have so much of what we do right. Quite frankly, we are a little bit behind in meeting all of our advertisers’ needs right now. We really haven’t even tried to look at those other things. We’ve really stuck to what we’ve been good at right now.

Adrian: If you can’t handle the volume, why don’t you grow the call center?

Nathan: At one point, we were growing at a rate that was just unbelievable. We thought that would be sustainable growth. We’ve opened new offices and grabbed every space we could. We really outgrew our management. This last quarter, we settled things down a little bit, and we have started to restructure how we’re managing our projects.

Adrian: How do you find your management team?

Nathan: We like to grow them ourselves where they come up through our system and understand our ways and our culture. However, we’ve learned a lot of lessons this year, and one of the lessons we learned was that we’re going to have to bring in some outside managers. This year, we brought in Inky Manzano who was at one point the head of operations for IBM’s call center operations here in the Philippines. He’s now an operating officer of the company and a fantastic addition to the team.

We’re going to continue to find people of that caliber, bring them into our mix, and allow some of their influences from their corporate backgrounds to bring some of those practices into our business.

I think we have to bring in some more experienced people from outside yet still create opportunities for the people internally.

Adrian: How many actual seats do you have?

Nathan: I’m not sure why everyone talks about seats. I think we are at 350. Some of them are inbound seats. The inbound seats don’t necessarily get worked for a full 16-hour day. Outbound operations total probably 300 agents right now. We run over two different shifts with 150 each shift.

Adrian: If that’s not the best way to discuss the size of the call center, what is the best metric?

Nathan: I think staffing is the best for me. I’ll tell you why the seat thing sort of seems a little bit odd to me. In order to describe your business in the States, you would never count up how many chairs are in the room. Somehow, what happened here was these guys poured a truckload of money into these businesses. Class A, triple A office space, Avaya phone systems, Dell computers, Plantronic headsets, every possible expensive Telco thing you could put in it was there. They had a call center with 400 seats. You go inside, and there are 50 agents on the phone. They keep telling people, “Look, we have 400 seats. We’re a 400-seat operation.” Well, who cares? That would be embarrassing to me.

For me, the people that make you money are really the important thing when discussing the size of a call center and its capabilities.

Adrian: You’re not doing any kind of cold calling are you? You’re only doing partnership-based leads?

Nathan: Yes, we really do, and that’s why we almost spoiled our agents in the center. We’ve been talking a lot in training that these are really great, fantastic, warm prospect buyers.

We’ve also done some other new things this year that we think are going to be representative of the future of our business. We found different products to add to our existing sales.

For example, Jeremy Johnson has this program where he teaches people how to get money for SBA loans. For the last two years, we’ve added a team of people here that has taken some of those clients and wrote business plans for them, done research, and helped them with some of their SBA loan documents.

We built out that team, so now we have a product called Funding Accelerator where for $9.95 a month they have access to that service where they can work with those people through phones, through chat, and through e-mails. They actually do quite a bit of work for these clients for $10 a month. It’s a fantastic deal for the consumer. We probably have close to over 50,000 sign ups in the first six months for that particular product.

We have a very similar product called EasyAuctions123 that we do for Brady Whittingham’s eBay offers and for other people to have eBay offers. We basically take the time to walk people through the launch and entire process of an auction. It’s just $9.95. Next year, we’re launching a fitness product where we’re going to have Filipino trainers and dieticians working live with people.

Adrian: How does that work with the advertiser? Let’s say someone comes to you and they have a $9.95 a month program like this. Is Jeremy selling that to his customers at $19.95 a month or is it $9.95 split between you and Jeremy?

Nathan: We do a 50/50 revenue share with the advertiser. We basically use their leads to market our product, too. We’re responsible for making a sale. We’re responsible for fulfillment and obviously a transactional cost. Then we split the difference.

We’re not just a call center. We’re not just doing these things, but we were able to provide some services that have a real value add to the consumer. We hope to do the same thing with weight loss next year where we built a Web site, and we think that having that live interaction with the real dietician and a real trainer is going to be a real value proposition.

Adrian: It was an interesting call. Nathan, thanks very much.

Nathan: Thanks, Adrian