Profile: Ken Tuchman - The call to greatness

The boss of Teletech is a near-billionaire and he's done it by answering other people's phones. Richard Halstead reports

Ken Tuchman does not look like the near-billionaire boss of one of America's fastest-growing companies. Sure, he appears energetic, friendly even, and gives a good sales presentation, but his dress (sober suit, unmemorable shirt and tie) and demeanour give the impression of someone in middle management - perhaps a marketing or customer service executive. You would not blink twice if you saw him in the queue at the supermarket.

Which is the way he prefers it. For Ken Tuchman is involved in customer service, and he does go to the supermarket (in his case, the discount superstore Costco) regularly. As president of Teletech, a "provider of customer care solutions" - call centres to you and me - he feels it is important to keep his feet on the ground and concentrate on answering telephones for some of America's best-known companies.

Tuchman is also, as a consequence, one of America's richest people under the age of 40. At 37 he holds around 65 per cent of Teletech's stock, which at the end of last week traded on New York's Nasdaq market at $14 per share, valuing his holding at $550m (pounds 346m). A year ago the company's share price was flying much higher, touching $40 a share and temporarily putting Tuchman into the billionaire bracket - on paper at least.

Quite how this company came to be a wonder stock - rated on the same forward price-earnings ratio as some of the more glamorous technology stocks - is hard to fathom. If you call parcel carriers UPS in the US to check on the status of a package, or Compuserve to get help with an Internet query, the call will be answered by one of Tuchman's 7,500 employees, around a third of whom work in a converted shopping mall on the outskirts of Denver, Colorado, not far from the company's headquarters.

It does not sound as whiz-bang as, say, an Internet explorer program, but analysts believe Tuchman is on to a good thing. Research by US brokerage Alex Brown & Sons Inc estimates that US business spends $80bn on telephone sales and service, of which just $6bn is outsourced, mostly to companies doing cold-call telesales work. What little "inbound" traffic (customers phoning companies) that is outsourced at the moment is dominated by Tuchman's organisation.

According to the Gartner Group, a US-based technology and strategic consultancy, nearly 70 per cent of all customer interactions will take place over the phone in 2000. They argue that organisations which do not pay attention to the way they deal with incoming telephone-based business will fail.

In the UK, a call to PPP to talk about health insurance is likely to be answered by Teletech's 400-person call centre facility in Reigate, Surrey, which it runs as a joint venture with PPP.

A number of other companies in the UK are served by Teletech, but they would rather their customers didn't know that a Teletech employee is answering the phone.

The company is close to signing a deal to build and operate a call centre near Glasgow, which will employ around 800 people initially but will have room to expand as new contracts are won. Tuchman is reluctant to name the exact location, but says the UK will figure prominently in the company's expansion plans.

Teletech prefers to take on customers slowly, and aims for a few large corporates rather than a lot of smaller businesses. It has 40 customers in the US, the biggest of which is UPS, accounting for around a quarter of total revenues last year of $165m.

The one flaw in this strategy was exposed earlier this summer when UPS workers went on strike for a week, paralysing the parcel carrier and affecting Teletech's revenues for 1997. The company initially put out signals that the strike would not harm its prospects, but last week it told investors that third and fourth-quarter revenues would suffer from the UPS strike and from the changing marketing focus at AT&T, another large customer. The company anticipates full-year revenues of around $260m, a significant improvement on 1996 but less than analysts were expecting.

At a purely pragmatic level, Tuchman attempts to meet the needs of large corporations to deliver promises about "getting close to their customers" quickly. Senior management at large companies can monitor quality of response much more closely than they would within their own organisation, and vary the way calls are dealt with at short notice. Tuchman says that when he approaches a prospective client, "I go straight to the chief executive officer. I don't deal with middle management because they view my organisation as a threat to their power and their jobs."

Tuchman says staying in touch with the basics of his business is vital - ensuring a customer does not get bad service. It is on his trips to the discount warehouse that he comes up with some of his ideas for Teletech. Like his plan to install video-phone consoles in every large consumer electronics shop in the US, so that shoppers are connected with someone who can demonstrate exactly what the computer can do for them.

The idea stems from Tuchman's continuing obsession with businesses that deliver bad customer service. It was this experience during his time working for his father's luxury-home construction business in California in the early 1980s that originally drove him to set up Teletech.

"I was seeing products advertised in magazines that could be useful to a house we were designing and I would send off a reply card for information. I wouldn't hear anything for two months, and then a salesman might show up to see me. By then the house was under construction and it was too late."

Tuchman founded Teletech in a disused nursery school near Los Angeles in 1982. He is the first to admit that the first seven years of the business were hard work, particularly as he was trying to expand without taking in money from outside investors. "Our cash-flow situation was bad, and we were robbing Peter to pay Paul," recalls Tuchman.

Nowadays he still works hard - though he has cut down his working day to between 12 and 14 hours.

Having a video link in a store, generating instant response from customers, is the most advanced manifestation of this obsession with customer service. Eventually, the idea is to use video links for technical support for computer software and consumer electronics, so that Teletech employees will be able to show customers how to operate their purchases after they have taken them home.

But all that is still some way off. With new clients in the US being picked up at a rate of between three and six a year, and a self-imposed target of raising revenues to $1bn by the year 2000 hanging over his head, Tuchman is looking to further Teletech's reach in the international market, starting with the UK facility.

"The companies of tomorrow will not be the same," says Tuchman. "The guard is changing like never before - who would have thought that AOL [an Internet service provider] could go from a standing start a few years ago to having 12 million customers today?

"The rule of business is how fast you can get your idea to market. Those whose systems do not allow them to move quickly are doomed."

Voices
Hunted: A stag lies dead on Jura, where David Cameron holidays and has himself stalked deer
voicesThe Scotland I know is becoming a playground for the rich
News
people'When I see people who look totally different, it brings me back to that time in my life'
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
News
Russell Brand has written a book of political analysis called Revolution
peopleFilm star says he is 'not interested in making money anymore'
PROMOTED VIDEO
Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
filmBenedict Cumberbatch reignites those Star Wars rumours
Sport
footballAccording to revelations from Sergio Aguero's new biography
News
news
News
people

Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'

Life and Style
Meow! ... Again, Kim Kardashian goes for a sexy Halloween costume, wrapping her body with a latex catsuit and high heeled knee boots
fashionFrom Heidi Klum to Kim Kardashian
News
news

Emergency call 'started off dumb, but got pretty serious'

News
ebooksAn unforgettable anthology of contemporary reportage
Extras
indybest
News
i100
Arts and Entertainment
JK Rowling is releasing a new Harry Potter story about Dolores Umbridge
booksChristmas comes early for wizard fans
Arts and Entertainment
filmsOculus Rift offers breathtakingly realistic simulation of zero gravity
Life and Style
tech

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker