Colombia , Brazil and Peru

Bots, bytes and BPO: The dilemmas of the contact center industry

Bnamericas Published: Friday, November 04, 2022
Bots, bytes and BPO: The dilemmas of the contact center industry

Luxembourg-based Atento is the largest provider of customer relationship management and business process outsourcing services in Latin America and one of the largest in the world.

The company was created in 1999, initially as Telefónica's call center arm. In 2012, Telefónica sold Atento to Bain Capital for 1.03bn euros (US$1.04bn).

In 2014, Atento went public through an IPO in the US and during the pandemic, in mid-2020, amid margin pressures and financial woes, Bain Capital sold control of Atento to HPS Investment Partners and Singapore’s GIC, among others.

Although this is no longer the core of the group's business, the company is still known as a leading call center services provider and it has been dealing with restrictions from regulators in certain countries, such as Brazil, on what these agencies consider excessive marketing calls.

In this interview, Atento’s South America president, Dimitrius Oliveira, dives into the recent decisions of regulatory bodies in Brazil limiting telemarketing calls, the technological and behavioral changes involving customer engagement in Latin America and the outlook for business in 2023.

BNamericas: How do you see the recent regulatory and legal decisions regarding telemarketing and so-called robocalls in Brazil?

Oliveira: [Telecom regulator] Anatel imposed a resolution according to which all active sales calls had to be identified with the initial prefix 0303. [Editor's note: with this measure, users can identify a call as telemarketing before answering. Anatel now intends to do the same, using a different prefix, with calls from credit companies].

According to Anatel’s understanding, there was a very large number of prospects or customers who were bothered by the number of calls they were receiving.

Soon after, Senacon [the national consumer secretariat, subordinated to the justice ministry] established new rules, such as setting a limit of 100,000 calls per day for active sales marketing, among other measures.

This decree [from Senacon] came relatively quickly, with only a short time for companies in the sector to adjust to the changes. As we're a regulated operation, both by Anatel and Senacon, this has required a series of internal changes in our controls and operations.

BNamericas: How has this impacted Atento?

Oliveira: This isn't our main activity. Today, around 8-10% of our revenue comes from this type of business, active or outbound sales calls. We're mostly an inbound experience company. 

But it has an impact because it reduces our ability to reach the end customer.

On top of these measures, through Procon [a non-governmental consumer protection agency], two states obtained favorable decisions prohibiting any such calls to consumers. 

We had to readjust all our internal processes, all issues related to technology. Because as it's a large-scale operation, it's very difficult to control it manually. We had to make important investments. Both internally and through partners who provide technology services to us.

Consequently, we had a reduction in activity and revenue in this specific line of business.

And then there is a number of clients who are revisiting their strategies and reassessing whether it makes sense to continue with telemarketing calls due to the worsening performance.

BNamericas: The industry is talking about revenue losses and mass layoffs if there are heavy restrictions on active telemarketing activities isn't it?

Oliveira: The Brazilian teleservice association, which we're affiliated to, estimates that if all channels are closed, between 250,000 and 450,000 people could lose their jobs. That's for the general market, not only for us.

We filed and secured an injunction against Senacon’s ruling about two weeks ago. They can still appeal, but our arguments were accepted.

Anatel and Senacon's objective was that it was necessary to place limits on so-called “abusive calls” or “robocalls”. We, however, use very little of these here at Atento. We showed them our controls, we showed them everything we had been doing historically. 

The process continues. But my view is that it was positive for us, as it recognized our professional practices in this specific field.

Furthermore, within the association we have a certification called Probare, which guarantees very clear governance on these aspects. This helped us and helps us a lot to prevent these calls from getting out of control.

But this is a very fragmented market. We're a publicly traded, serious company, with good governance. This isn't the case, however, for the entire market.

These other companies aren't financially healthy. There are 16 companies in the [Brazilian teleservice] association, which represent 70-75% of the market in terms of size, revenues. The others are in the hundreds or thousands, and all of this discussion ends up putting everyone in the same negative boat.

BNamericas: You said that at most 10% of Atento’s revenue comes from active telemarketing. How about the rest?

Oliveira: We also carry out the collection process, which is also “active”, but not marketing or sales and it doesn't fit into 0303 [Anatel's call prefix rule]. This represents another 10% of revenues.

Another 15% come from back-office services and another 60% from the so-called “receptive” services.

When the customer is the one who makes the call to make a complaint, ask questions related to bills, technical support, service upgrades, etc, either by a non-voice channel, such as WhatsApp, or by phone, this is receptive.

BNamericas: You also said that many companies are rethinking active telemarketing. But what about your business? Doesn’t the same company generally contract both active and receptive services?

Oliveira: Yes, although not necessarily 100% of our customers have both. Besides, there are a number of ways to attract customers, for them to interact with the brand. And there's the payment and billing/collection part of the relationship with customers that we do, in addition to sales.

So all companies have this cycle [of service]: the so-called capture of the client, the usage part and collection.

What differentiates one from another is the adopted strategies. Some companies are more intensive in remote capture, others less so. Others are more intensive in digital billing, others less so. And so on.

Our contracts are all governed by business cycles. Customers who want to review something go on to discuss that specific contract, or service. And, together, we seek alternatives. Like doing cross-selling in the inbound call and taking advantage of customer contact, to name one example.

BNamericas: How are these regulatory discussions in other markets in the region where you operate?

Oliveira: Some discussions have started to take place in countries like Colombia and Peru. These are two I would single out.

What we've been doing in these markets is being one step ahead, including in terms of the best practices, technologies and automatic controls that we’ve started to adopt in Brazil.

Brazil has great economic weight in the region, in the industry, and in many cases it also ends up influencing the regulatory sphere, generating a ripple effect in other markets.

Colombia has now started a debate on regulation for these telemarketing services. But it's an incipient discussion, and these things take time. The same in Peru. 

We have tried to anticipate, and we have also tried to work with sectoral associations in these countries.

BNamericas: What do you believe is the future of the business? There’s a perception that the customer no longer wants to be contacted by companies, although this same customer continues to want to contact companies, especially to solve a problem. How can this dilemma be solved?

Oliveira: Excellent question. I see a more hybrid environment than at present, with a greater role for technology.

There’s a lot of debate about artificial intelligence, how it’s still imperfect in automated service [chatbots], and if it can and will replace human agents.

I believe the human-technology mix will be more pronounced. What does that mean? It means that engines related to AI and neural networks will favor our people, our agents, in contact with consumers – in having more assertiveness in the information provided, more resolution in the first contact, which is what the consumer seeks, more direct answers, and better knowledge of the customer.

With regard to active services, we’ve made an intense change, always observing the legislation on personal data, to obtain more data and information about the user so that we can make the best decisions with consumers and together with the brands we represent. We never act alone. The consumer relates to the brand. We’re the intermediaries.

We've been improving analytics tools, machine learning, and heavily employing a concept called hyperpersonalization. Both for active and receptive services.

With that I can better understand the moment when I can reach out to the consumer, through where, with the most accurate information possible and with the most appropriate service. 

In short: correct message, correct channel and at the correct time. This is only possible through technology. And this is better for us, because there we have less operational and conversion costs; better for the brand, because we’re able to sell the right things; and better for the consumer, who is approached with what they actually need.

BNamericas: Do you see a future for marketing and sales calls?

Oliveira: I think so, but on a smaller scale. The trend is for a decrease in voice contacts, and migration to non-voice formats in an omnichannel model.

BNamericas: Who are your main customers?

Oliveira: We have over 100 customers in Brazil alone. About 25% of the country's revenues come from telecom companies, 35% from the financial segment and the rest from what we call multi-sector, which includes retail, e-commerce, airlines, etc.

At Atento global, telecom has a greater weight – more or less 36% of revenue. 

This is because Telefónica, specifically, which is our biggest single customer, has a very large weight for us outside Brazil.

Latin America as a whole represents around 75% of our business. About 15% is in Spain and Morocco, and another 15% is in the US and nearshore operations in Guatemala, Central America.

BNamericas: And who are your main technology providers?

Oliveira: We have lots. We work with Microsoft in general for Azure and office tools in general. For the call center part, we have three important brands: Genesys, Five9 and Avaya. And we have a few more omnichannel platforms developed in-house.

We use data and networks from Cisco, Juniper, among others. We also have important partners in VMware and in Salesforce, the latter mainly in CRM and sales solutions. Google is another important partner. And we’ve started working with AWS as well.

BNamericas: Finally, how is Atento expected to conclude 2022 and what is the outlook for 2023?

Oliveira: Our forecast is to continue in line with the guidance already given, which is to grow in the mid-single digits. Profitability should be in the range of 11.5-12.5%. This brings us a level of debt (net debt over Ebitda) of 3, 3.5 times.

In 2023, we expect to grow more than in 2022. The pandemic affected us a lot, the cyberattack cost us a lot too [Editor's note: in 2021, the company suffered a cyberattack on its datacenter in Brazil that cost Atento US$46mn and also affected results up to the first quarter of this year].

In my region, South America, we expect important growth in 2023 in Colombia and Peru, in addition to defending our share in Brazil. 

Colombia is growing a lot in nearshoring to the US. We recently opened an operation for that there. And now we're doing the same in Peru, betting on nearshoring to the US.

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