VIRTUAL CONTACT CENTERS How can Home Based Agents reduce costs and improve the customer experience?

VIRTUAL CONTACT CENTERS How can Home Based Agents reduce costs and improve the customer experience? March 24, 2010 Customer Care Anywhere

Virtual Contact Centers Could Home Based Agents reduce costs and improve your customer experience? Virtual Contact Center Solutions provide companies with sophisticated telecommunications capabilities including Home Based Agents. As an alternative to offshore outsourcing, companies are incorporating Home Agents in the USA to increase sales, reduce costs and improve customer satisfaction. Join us as three experts give their take on Home Agents Topic's include: What is a Virtual Contact Center? How does a Home Agent Model work? Risks & Rewards A look into the future Panel discussion Our Panel: - Cynthia Williams, Area Manager Home Agents, Apple - Kimberly Odom, Sr. Director Marketing, Contactual - Sharon Pettigrew, Principal, Call Center Group (moderator) About: Apple leads the industry in innovation with its award-winning computers, OS X operating system, applications, digital media products - ipod, itunes, iphone and ipad. Contactual is the leading global provider of hosted contact center software with multiple industry awards. Call Center Group designs solutions for customer contact centers to improve performance and customer satisfaction.

VIRTUAL CONTACT CENTERS How can Home Based Agents reduce costs and improve the customer experience? Sharon Pettigrew Call Center Group March 24, 2010 Customer Care Anywhere Call Center Group 2010 Proprietary and Confidential.

Panel Discussion 1. Sharon Pettigrew Call Center Group Home Based Agent Overview & Trends 2. Cynthia Williams Apple Inc. How Home Agents transformed Apple & Marriott 3. Kimberly Odom - Contactual Benefits of Virtual Contact Center Technology Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Virtual Contact Center Definition Agents and managers work from a variety of locations: Branches Home offices 3 rd party outsourcer Key Technology Call Recording /Monitoring Quality Assurance/Training VoIP Voice over Internet Protocol reduced cost, global routin Intelligent Routing route to best available agent Workforce Management schedule on call, training, other Knowledgebase System intelligent answer system Virtualization Same desktop deployed to all agents Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Why Virtual Contact Centers? Virtual Contact Center Corporate Call Center Home Agents Regional Offices Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Why Home Agents? Reduces costs (average annual savings of $25,000/agent on office space, utilities, overhead) Reduces investment in corporate infrastructure Improved agent utilization Attracts top talent and previously untapped talent Disaster Recovery Workforce Continuity (Storms, etc) Improves morale Rewards / retains top customer support reps Saves employees time and money (commute, etc.) Enables more flexible work schedules for employees The green solution Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Typical Motivation for Home Agents If you are using or planning to use Home Agents, what is your primary motivation? 9% 3% 12% 44% 32% Attract/Retain more highly qualified agents Provide Business Continuity Other Save $$ by reducing or eliminating bricks & mortar Reduce environmental impact of commuting Source: Avaya Best Practices for Home Agents Report - 2008 Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

At Home Agent Solution The real motivation for deploying and managing the at-home agent is based on one simple principle: improved agent satisfaction leads to increased customer satisfaction which results in improved customer loyalty. (Ken Landoline, Yankee Group Sr. Analyst) Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Business Drivers Why now? Disaster recovery & business continuity Number of contact centers has increased due to mergers & acquisitions Rapid growth in contact centers reduces qualified local agent pool Rise in teleworking in US Preference for US based operations Improvements in IP telephony and networking deliver Virtual Contact Center Smaller contact centers reduce attrition Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Views on Home Working Views/proportion of respondents Strongly disagree Disagree Neutral Agree Strongly Agree It would be difficult to manage home working agents effectively. 17% 17% 4% 28% 33% Home working would bring us flexibility to add agents and be open longer hours. 10% 7% 12% 40% 31% The risks around home working are too high. 17% 17% 32% 13% 21% Home workers would not be as productive as agents based in a central location. 24% 16% 24% 31% 4% Source: Contact Babel US Contact Center Report 2008 Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Home Agent Facts Experience Matters Average age is 38, vs. on premises agent is 23. More than 80% college educated, vs. 35% of on premises agents. Retention Increased 80%+ per year, vs. less than 25% for on premise agents. Avg. cost to hire/train new agent - $15k Flexibility Staff to peaks (expected contact volume, reduce abandoned calls, expand coverage hours). Productivity 40% more productive (Gartner) Cost Cost Home Agent average $21 per hour, average on premises - $31 per hour vs. (IDC Survey) Real Estate Savings Average $12K/yr. Total Savings Industry average is $25K/yr. Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Impact on Bottom Line How effective is each at home contribution to improving the bottom line? Reason Percent Reduced office space/operational expenses 55% Fewer work distractions 67% Attracting better employees 68% Retention of key employees 68% Having a continuity of operation plan 76% Increased productivity 78% Happier workforce/agent Satisfaction 91% Source: The Telework Coalition Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Positive Results of Home Agents Effect Larger Pool of Skills Available More balanced work across multiple contact centers. Skills may be widely deployed. Forecast and schedule only once. Increase global coverage. Deploy applications in a standardized way. Offer 24/7 availability using flexible scheduling. Dynamic use of outsourcers. Commercial Advantage Better match via skills based routing. Improved 1st call resolution. Optimized routing overflows calls between contact centers, reducing queue times and abandoned calls. Specialized agent skills and capabilities can be deployed with workforce management scheduling. Centralized routing means only one schedule for multiple centers to fully utilize staffing. Global coverage up to 24/7 with follow the sun routing. Virtualization can mean improving and standardizing the functions available to agents. Each agent has same desktop. Flexible schedules are the norm for home agents. Can incorporate new labor pools such as disabled, veterans or seniors. Pay for what you use. Dynamically route to multiple outsourcers based on company priorities. Global routing across multiple virtual centers. Source: Contact Babel US Contact Centers 2008 Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Why not Home Agents? What's Holding People Back? Of those not planning to add home agents, why? 19.0% 31.5% 25.5% 23.9% Personnel Management Issues Technology Constraints Productivity Other - Security/Compliance Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Home Agent Options Why it benefits you Can complement your current model blending home and in office agents Virtual Call Center Solutions reduce costs and increase functionality of Contact Center Solution Better Agents, Improved Customer Experience, Flexible Workforce for Peaks/Valleys Candidate Pool is much larger for home based agents Little initial investment pilot for fit to your business Expand and contract based on products and offerings to meet demand Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Success Stories! Jet Blue: 100% home based since inception. Hotels: Hyatt, Marriott. Airlines: Traditional reservation centers Financial Services: Moving planners home. Kaiser Hospital: Advice Nurses go home! Insurance Companies: Agents and claims. Technology Companies: Making the move! Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Cure for Many Business Challenges Seasonality High Quality Workforce Special Promotions Flexible Work Hours to meet demand Highly Skilled Labor Requirements Part-time schedules Weekend & Evening Shifts Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Issues & Solutions for Success Issues: Solutions: Data Security Broadband Outage Provide Virtual Desktop Revise IT Help Desk Simplify Deployment of Software Complexity Telecom Expertise Use PSTN Establish Standardized Phone/Headset IT Infrastructure Agent Support Standardize Desktop Configuration Specify Approved Broadband Service Providers Define IP Standards Customer Care Anywhere Call Center Group 2010. Proprietary and Confidential.

Thank you Questions? Sharon Pettigrew, Principal Call Center Group 866.425.4992 spettigrew@callcentergroup.com Customer Care Anywhere Call Center Group 2009. Proprietary and Confidential.

Home-Based Agent Programs Cynthia Williams Apple Inc

HBA Experience Marriott Experience Piloted the first Marriott HBA program in early 2005 with direct hire group of 10 In 2006 hired first group of 40 in a completely remote environment - Hired Remotely -Trained remotely Grew to 150 HBA within 1 site by end of 2007 Moved to 250+ HBA across 4 sites by middle of 2008 Apple Experience Hire to Apple to Oversee HBA program Work with first Direct Hire Group in Fall 2008 Expanded College Intern program Hired Remote Managers within the model Piloted remote Training in Spring 2009 Have moved from pilot of 70 in/out to 1200 by Spring of 2010

Agenda Determining Needs Project Goals Will HBA meet these Needs? Do I have resources to actualize Virtual Call Center Path Establish a viable pilot Tracking Overview and Learning Analyze Risk Evaluate Learnings Scalability Evaluation Questions Virtual Culture & Team Building On boarding & Training Integration Misc Lessons Learned

HBA Planning Path Determine Needs Research and pilot program Track to clearly defined business goals Expansion of Program Understand change and set expectations

Determine Needs Will the HBA Model Meet Needs A way to add internal employees and increase our ratio of internal to vendor/contractor Needed a scalable solution to support our growth at a lower cost Costs falls between internal and out-source vendor Reach knowledgeable labor pool Enhance Quality of Life for employees Will Reduce Overhead Are Available Resources Adequate Changes in technology making it feasible and cost effective Recruiting Team can penetrate long distance markets Posses a Company Culture that will tolerate virtual interaction Have identified a potential training solution Necessary Equipment is mobile

Pilot Goals Increased capacity and staffing flexibility Improved attendance and schedule adherence Increased productivity/decrease costs Increased morale and employee satisfaction Improved customer satisfaction

Pilot Overviews Company A Primary Goal: Reach New Labor Market to Allow for Cost Effective Growth Company M Primary Goal: Reduce Brick and Mortar Space to Reduce Costs 3 month timeframe - phased approach ~ 70 agents - phone, email, fax/back-office admin (technical and non-technical) Existing agents near an internal site Set performance criteria for participation Semi-remote model with scheduled onsite visits Hotel cubes, onsite training, onsite technical/equipment support Mixed teams (onsite and HBA) 6 month pilot review All training done at internal site 30 days on phones before move to home Mixed teams On site visit for Team Meetings, etc Hired for Educational experience All equipment returned and issued on site

Pilot Program Learnings Go big enough to demand focus/ small enough to address issues Communicate, Communicate, Communicate Existing employees do not show the truest picture Assign a resource to review all ongoing communication and procedures for HBA compliance Make sure child care expectations are clearly defined Test other Labor Markets Avoid Mixed Teams Weigh Technical savvy high in Manager selection Look for direct hires who have not been out of the workforce for an extended amount of time

Tracking and Measurement Company A Company M Tracked performance in several areas of the business Measured success based on Outlier Management Unable to measure scheduling flexibility Developed separate report card for HBA team Tracked HBA as separate entity Measured ramp up time Confined HBA to one area of business Measured success based on total team performance Measured scheduling flexibility based on percentage of Overtime and Downtime taken in relation to in site Included HBA in total site measurement, not singled out Measured ramp up time against control group

Tracking and Measurement Learnings Tracking HBA against like in-site and vendors is truest picture Make sure to consider tenure Consider all cost components extra travel, anticipated space savings, fully burden cost/minute, occupancy, schedule adherence, etc Measure source and demographic of new hires - adjustments may need to be made Compare management performance among all HBA and previous to HBA

Risk Assessment Company A Reevaluated Recruiting targets Looked to outside resources prior to expansion Leveraged flex site staffing to grow program Looked for Web Solution to reduce travel Remote on boarding, training, technical/equipment support Addressed Documentation gaps Compared cost advantages against all staffing options Company M Compared productivity measures as it related to offline time Set up separate account to track all related travel and shipping Reviewed timeline of termination dates on existing leases Explored ability to package program Could it work for all sites Wage Rate based on closest in site location Reassessed Educational requirements Conducted Employee Survey

Program Development Company A Transitioned to remote model only 3 Tracks - In/Out, Direct Hire, College Program Agents in 8 metro areas, Managers in 4 metro areas (~800) Remote on boarding, training, technical/equipment support Culture, team-building and recognition done virtually Retail partnership and rotation Company M Expanded to 3 sites All direct hire no in/out Did open up HBA for all positions, creating mixed teams Expanded technical support to include Corporate level participation Identified one manager to oversee all HBA frontline management positions

Program Development Continued Company A Company M No separation of HBA technology support Hired within Hub cities to facilitate direct contact meetings Mixture of in-site TMs and new hire TMs Cultural events developed separately for HBA Increased team size from 16 to 25 Project Team assembled representing the Business, HR, Recruiting, Technical laision, and strong PM Strong support at all levels of the operation Individual site given autonomy to develop on own and then present Expectation that there would no direct contact once pilot was revised All cultural events created with HBA consideration Technical support stayed at Call Center level Increased team size from 30 to 50 Management group all on site Strong support at all levels of operation

Virtual Culture & Team Building Use technology - videos/photos, chat rooms, blogs, web conference tools Culture web page and virtual water cooler Make a decision as a team regarding Rewards and recognition events. Are they done both virtually and in-person? Be very clear on in-person involvement up front Provide tools to create company environment in home office Encourage and promote communication (within program and across business models) Keep an eye out for isolation related issues - be inclusive Avoid onsite to remote comparisons - HBA is its own site Train Managers on HBA communication tools Benchmark against each other Be prepared for shipping issues Delegate resources to coordinate events

On boarding & Training In/Out - Specific HBA orientation (program overview, HBA policies, set expectations) Direct Hire - 3 day orientation held locally (includes new employee and HBA overview) Home environment requirements Conduct Information Sessions Distance learning tool - combination of leader led and self-guided modules Re-developed content for remote learning 2 Trainers per class Shorter training days (~6 versus 8 hours)

Integration As group increases restructure might be needed Include ALL areas of the business in decision making from the start Mail room, Equipment Procurement, Administration, Training, HR, etc In the large arena be careful not to single out HBA ( We re going to roll this out, but don t know how it will work for HBA ) Dedicate resources and training in HBA Technology issues Have a designated manager responsible to represent HBA in all meetings and processes Avoid Mixed Teams if possible

Lessons Learned & Challenges Pilot - Weekly/monthly office visits too frequent Culture and pie-day phenomenon (in/outs to onsite comparisons) VPN related issues (disconnects and remote desktop monitoring) Telephony challenges (low-volume, headsets, phone features, phone provider options) ISP relationship Mass communication for large events Away from Desk guidelines and expectations need to be defined

Current State Company A Continued expansion forecasted Experimenting in staffing flexibility options Overall HBA program continually posts highest metrics Dramatically reduced Turnover Continued focus on expanding virtual training modules Company M Closed 4 Brick and Mortar Sites Run all HBA programs from one main Maintained overall statistical performance Decrease in Turnover Increased in Adherence for HBA teams Still no in site interaction

Q & A For more information contact: Sharon Pettigrew, Call Center Group 650.579.1298 spettigrew@callcntr.com

Taking the Center Out of Call Center Benefits of Virtual Call Center Technology

Contactual at a Glance Pioneered virtual contact center solutions in 2000 Award winning OnDemand Contact Center Delivered 100% via Software as a Service (SaaS) model 41

Select Customers 42 Plus hundreds of SMBs/SMEs

Virtual Call Center Benefits Cost Savings Flexible Staffing Gain Agility 43

Virtual Call Center Benefits Cost Savings Flexible Staffing Gain Agility 44

Continued Pressure on Call Center Budgets Pressure on spending continues 43% reported a decrease in op-ex 40% reported a decrease in cap-ex Exceptions in smaller call centers (less than 50 seats) 43% reported an increase in op-ex 45 Source: The US Contact Center Decision-Maker s Guide 3rd Edition ContactBabel

On-Premises Call Center Technology Complex and burdensome to configure, deploy & integrate Cost prohibitive - $700K to get started; $200K/year to support 46

Virtual Call Center Technology Integrated call center functionality resides in the cloud Pay as you grow subscription-based price model Cost savings 50% with no HW/SW to buy and maintain 47

Customer Spotlight ipass Business Needs Integrate call centers from recent acquisitions U.S. United Kingdom, Australia, Japan and India Desire for single system across 4 remote sites + home-based agents Consolidated reporting Monitoring and call recording Seamless integration with Salesforce CRM Reduced costs by 33% initially; grew to 50% over time 48

Virtual Call Center Benefits Cost Savings Flexible Staffing Gain Agility 49

Growth of the Home-Based Agent Model Higher Agent Quality Home-based agents are 25% more productive 75% have at least 2 years of college education 60% have earned additional certifications Tap into new talent pools Lower Attrition Rates 10% for home-based agents vs. 50% for in-house agents Increased Customer Satisfaction 50 Source: http://www.witness.com/content/solutions/remoteagent_wp.pdf

Keys to Ensure Quality and Control Web-based recording application Remote monitoring Record, retrieve, replay Flexible recording options Chat and broadcast tools Facilitates interaction Push critical information in real-time Real-time monitoring Performance dashboards Accessible to all 51

Customer Spotlight Schneider Electric Business Needs Out-of-date on-premises solution was failing Dropped calls Cost prohibitive to upgrade Unable to expand beyond current location Moving to home-based agents Lacked key functionality Limited reporting and recording No remote monitoring capability Gained significant functionality & reduced costs by 40% 52

Virtual Call Center Benefits Cost Savings Flexible Staffing Gain Agility 53

Disaster Recovery Considerations Traditional call center model vulnerable to disasters and pandemics 44% of respondents had centralized call centers 50% of respondents don t have viable disaster recovery plan High cost to replicate and difficult to integrate Virtual call center model includes seamless business continuity All intelligence is in the cloud Built-in redundancy 54 Source: The US Contact Center Decision-Maker s Guide 3rd Edition ContactBabel

Rapid Response to Changes in Business Seasonal business growth Product launches & promotions Economic cycles New customer interaction methods 55

Customer Spotlight Boston Market Business Needs Difficult to scale current solution for peak seasons (Catering call center) Stranded investment in licenses and equipment Reduce dependency on IT for changes IT spending cuts and reduced staff Catering business not as high priority as retail locations Needed an easy to use system to drive down training costs Can double capacity on-the-fly; eliminated IT dependency 56

Questions? Kimberly Odom, Senior Director of Marketing kimberly.odom@contactual.com 650-292-8611 http://www.contactual.com 57

Thank You