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Dow Jones International News

Se Habla Espanol: US Firms Send Customer Calls To Mexico; Its Advantage, Instead Of Say, Puerto Rico, Is That Agents Speak With What Is Recognized As A "Neutral" Spanish Accent

By Amy Guthrie

December 17, 2002
Copyright © 2002 Dow Jones International News. All rights reserved. 

MEXICO CITY -(Dow Jones)- While living in the U.S. for six years, Alberto Fernandez was astounded by the poor quality of customer service he received over the phone in Spanish.

"I couldn't understand the language. Most of the time I had to ask very politely for them to transfer me to someone who speaks English," said Fernandez, 31, a native of Monterrey, Mexico.

As he wrapped up his M.B.A. studies at Georgetown in 1999, the business niche Fernandez wanted to tackle was clear. He teamed up with classmate Kit Cooper and sold investors at JPMorgan Partners on the idea of setting up remote call centers to attend U.S. Hispanics from Mexico.

By late 2000, the company Fernandez and Cooper had founded, Hispanic Teleservices Corp., had 14 agents assisting customers of U.S. companies.

Citicorp also liked the idea of Hispanic Teleservices, and gave the outfit an undisclosed amount of venture capital to continue growing in 2001. Together JPMorgan Partners and Citicorp Venture Capital own more than half the company.

Unlike many of the startups funded at the height of the Internet bubble, Hispanic Teleservices turned a profit after little more than one year of operations.

Today the call center has 550 agents handling close to 400,000 calls every month. Companies that have outsourced their Spanish-language customer service calls to Hispanic Teleservices include Internet service provider America Online and messaging service Arch Wireless.

By outsourcing customer service calls, U.S. companies can avoid some of the infrastructure costs and hassles of opening remote offices, such as staffing and crash courses on foreign tax and labor laws. Contracting out the service is especially advantageous if a company has a brief campaign to conduct.

Hispanic Teleservices' contracts usually last less than two years. Some callers need technical support or want to solicit a product or service. Others have billing inquiries.

Clients have asked Hispanic Teleservices to assist their English-speaking customers as well. However, the company is not looking to expand into the English-language call center market, or even into the Mexican market, where customer service is often lacking.

A long-standing saying in Mexico is that things can get done "manana," or tomorrow. Manana can sometimes mean weeks. Hispanic Teleservices has beaten that cliche by setting up offices in Monterrey, where the average resident has three more years of schooling and a greater exposure to U.S. culture than in many other parts of Mexico.

All of the agents at Hispanic Teleservices have some college education, and speak both English and Spanish.

"They have been able to instill a culture of quality service which is not very typical in the Mexican services sector, and which is very key if you want to tap into the U.S. market," said Tim Purcell, head of JPMorgan Partners' Latin America private equity group.

The potential market for Hispanic Teleservices is huge. The U.S. boasts close to 40 million Hispanics with $450 billion in annual purchasing power. Around 67% of these Hispanics trace their roots to Mexico.

An advantage of locating in Mexico, instead of say, Puerto Rico, is that agents speak with what is recognized as a "neutral" Spanish accent.

Monterrey is also only a short flight or drive from the U.S. border.

Whenever Hispanic Teleservices starts a project with a new client, the U.S. company typically sends five employees for one month to oversee the set up, Fernandez said. Then a manager usually visits every one or two months for the duration of the project.

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