Call center operator Alorica Inc. expects to double the size of its customer-service operations after its acquisition of several subsidiaries of Omaha-based West Corp. closed last week.
Irvine-based Alorica completed a $275 million acquisition that will carry it into several new markets geographically and in terms of services—and nearly double its companywide employee count to 48,000.
“Before this acquisition, we had 70 million interactions a year,” said founder and Chief Executive Andy Lee. “Now we’ll be at 140 million a year.”
An “interaction” is when an Alorica employee encounters a client’s customer through back-office call centers, order fulfillment, tech support, inbound and outbound sales, and social media.
“A lot of what we do involves ‘soft skills,’ ” Lee said. “Listening, comprehension, empathy.”
Alorica provides “customer contact” services for government agencies and companies in several areas: retail, travel, healthcare, communications, banking, utilities, financial services, consumer products and government services.
For client Costco Wholesale Corp. in Kirkland, Wash., it developed a “concierge” program that, among other results, reduced product returns by 20%.
Alorica had 36 call centers in the U.S. and overseas before the acquisition. The deal grows its total 68, with additions in the U.S. and overseas, including Mexico and Jamaica, which are new markets for the company.
One call center location typically has 400 to 1,000 employees, Lee said.
The West acquisition brings about 5,000 “work-at-home” employees, who represent a new wrinkle in customer service.
“That’s one of the [most important] things West has,” Lee said.
He said Alorica clients want U.S.-based services, and the work-at-home model expands the company’s ability to offer domestic-based staff.
Lee said Alorica is the largest privately held company serving its clients’ North American consumers.
“The companies could be anywhere, but the consumers we support are here.”
Doubling Down
Alorica’s annual revenue will be about $1.2 billion after the acquisition closes—about double its total a year ago.
Lee said the company also doubled in size in 2010, also with acquisitions, including deals for Plantation, Fla.-based Precision Response Corp. and Ryla Inc. in Kennesaw, Ga.
The trend of ongoing growth has landed Alorica among the 25 largest privately held companies based in Orange County, according to Business Journal data.
And the company’s revenue, Lee’s 100% ownership, and his Asian-American heritage combine to give it the No. 5 spot on this week’s list of minority-owned businesses based here (see related story, page 5; list, starting on page 12).
It’s deal for assets of West Corp., announced earlier this year, would have made the top 10 list of acquisitions by OC-based companies in this week’s Special Report (starts on page 17; ranking on 18) if it had been announced a few weeks earlier.
The businesses acquired from publicly traded West Corp. have about $580 million in revenue and $48 million in gross earnings, according to a news report.
Lee declined to disclose his preacquisition earnings but suggested they’re comparable or slightly higher.
“We do things a little better,” he said.
History
Alorica moved to Irvine from Chino in 2012 and now has about 75 employees in 20,000 square feet at 5 Park Plaza.
He founded the company in 1999 with about $10,000 after “a bad experience” buying a computer, and “nobody wanted to take ownership of that,” Lee said.
Alorica first got involved in repairing computer products, then expanded into Internet marketing.
“I’m not a programmer, but I’ve always loved business,” he said.
He said a unit of Alorica still fixes 250,000 computers a year.
Lee was born in Illinois and lived in several states, then attended high school in San Diego and stayed around. He’s married to his high school sweetheart, with whom he has two sons.
Brand
When Lee started, he wanted to buy the “service.com” website, but “they wanted $1 million for it.”
So he went with “alorica,” which comes from a Latin word Lee said means “service provided by a knight.”
He said the company has “a clear vision of what we want to do”—namely, be “No. 1 in our market.”
Lee said that, along with assimilating the acquisition, Alorica is branding itself.
“In our industry, nobody has a brand, but we all work for branded companies.”
The effort includes building what Lee calls a “center of excellence” in Irvine to do research in customer satisfaction and best practices that will be used to train its employees—and train the trainers.
“The vast majority of that is through personal interactions,” he said.
Lee tabs as targets “clients, colleagues and communities” in an industry that he—ironically—said hasn’t been known for its commitment to customer service.
“I spent a long time thinking why our company exists,” Lee said. “We can make lives better. We take a lot of phone calls. If we create a great experience for people, it makes them happy, and they have a good day.”
