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."

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Richard Norris in GQ
mediaGQ features photo shoot with man who underwent full face transplant
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Your picture is everything in the shallow world of online dating
i100
News
The Swiss Re tower or 'Gherkin' was at one time the UK’s most expensive office when German bank IVG and private equity firm Evans Randall bought it
news
Life and Style
Attractive women on the Internet: not a myth
techOkCupid boasts about Facebook-style experiments on users
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

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on