In November 2017, founder and chief executive of Telstra PhoneWords Gavin Scholes led a consortium to acquire Telstra’s 85% stake in the business. Jonathan Jackson speaks with Scholes and CIO Shashi Mathew about life after Telstra, the acquisition of complementary business CallN and the company’s current growth phase.
When a business breaks away from its largest shareholder and a crucial partner, it can often spell disaster. For 1300 Australia, which re- adopted its original name following the cessation of Telstra’s majority ownership, the breakaway has enabled the company to accelerate its growth.
The Telstra partnership was formed in 2004; a long standing arrangement that set the trend for new age marketing and a way for businesses to increase sales, customer response and branding recognition. In fact, D&M Research statistics show PhoneWords such as 1300 FASHION for example are 5.5 times more memorable than regular numbers.
The partnership between 1300 Australia and Telstra was, for many years, a win-win situation. However, as Telstra look to other telecommunications solutions particularly with the advent of the NBN, Telstra PhoneWords as it was known under the partnership, was deemed a too small a business in the context of the much larger Telstra businesses and the areas that they were focusing on so an opportunity to buy it out emerged.
The good news for Scholes is 1300 Australia remains Telstra’s exclusive provider of PhoneWords, but importantly the breakaway enables the company to seek out other distribution partners as it looks to expand the business model.
Scholes said at the time: “This is a significant milestone for the business and we are excited for what lies ahead. There is a significant runway of growth in the PhoneWords market as more businesses seek simplicity and cut through in their marketing campaigns.
“The business would not be where it is today without the support it has received from Telstra. Together we have invested over $50 million to create a product that is now seen as an increasingly important marketing and advertising tool for businesses of any size.”
The business strategy behind PhoneWords is to increase distribution through other telcos and link them with advertising agencies and businesses that have a considerable marketing and advertising focus, particularly the large number of small to medium enterprises (SMEs).
‘The business strategy behind PhoneWords is to increase distribution through other telcos and link them with advertising agencies and businesses that have a considerable marketing and advertising focus’
“The products are growing in the sense that we can now provide customers with telco services, which is something we couldn’t do in the past with Telstra,” Scholes says.
“Now, when we lease a customer a phone word, we can also provide the communications to go along with that phone word. Whether it is a 1300, 1800 or 13 number, we can bundle the whole thing up to clients now where we haven’t been able to do that in the past. So, rather than just provide them with a phone word and send them to get the Telco from somewhere else, we can do the whole thing.”
The company has also adopted an acquisition focus and this is where the blue sky outlook really gains relevance.
‘CALLN’ ALL BUSINESSES
With its core foundations set and growing rapidly, the next phase of the business is to expand its offering.
The first step on the expansion trail was to acquire the CALLN. com platform, an AI-based speech analytics tool that uses business analytics to help companies understand what their customers are saying when they call. The platform can be used to analyse sales, debt collection and customer service.
CallN is billed as the most intuitive speech analytic tool on the market, one that can create quick R.O.I and deep insight into the voice of the customer.
The acquisition came about following 1300 Australia’s inability to get call reporting for its Voice over Internet Protocol (VoIP) phone system.
“We are big believers that call recording improves every part of the business,” Scholes said.
1300 Australia trialled the CallN product for 12 months before acquiring the company. If you’ve ever seen the old Victor Kiam ad where he says of his acquisition of Remington ‘I liked it so much I bought the company’, you’ll get the picture.
Scholes and 1300 CIO Shashi Mathew, who also happens to be COO of CallN, have since built the company into something much bigger.
Mathew has held roles as CTO and Director of New Media Business Development for Global Traffic Network (GTN) a NASDAQ listed company with offices in Australia,
UK, Canada, Brazil and the US and prior to joining GTN, worked in various technology positions including professional services manager for Australia and New Zealand for ATG based out of Cambridge, Massachusetts. He has also been a senior consulting architect with ATG for various Fortune 500 companies in the US including Hewlett-Packard, General Electric, Telstra, SONY-Australia and Johnson & Johnson to name a few.
He is steering the CallN ship and building technology of the future.
“Since buying the company we’ve invested millions of dollars into expanding the CallN’s call recorded capabilities, so we are not just a call recording company. The foundation is call recording, but what we’ve done is built a business now that delivers artificial intelligence and business analytics,” Mathew says.
That helps when you have 7000 calls a month that you can’t get any meaningful information from.
“What we can do now is mind blowingly powerful,” Mathew says. “We have created the ability to actually analyse calls and treat all of those calls as big data.
“What we provide customers is a way to improve the performance of their employees and at the same time gain a really deep insight into the voice of the customer. What is the customer thinking? Is the customer unhappy? Are they talking about competitors? All of this rich analysis can be done automatically without a lot of set up and a lot of effort.”
CallN allows customers to extract key triggers, highlighting the key messages in a call and vital points of reference. It dives down into the detail of a call to find the important data which might only be 30 words.
1300 Australia trialled the product first.
“We took the key messages out and used those analytics to prove whether it was our debt collection, sales process, or our customer care process that required attention. All those parts of the business have different key words and different phrases. Once we got it to a point where it was a really good product, we launched commercially,” Scholes says.
The product now operates in 13 different countries and where PhoneWords remains a local domestic product, CallN has the potential to be truly global.
“We’ve now signed up 86 companies in Australia. We’ve got users in the United States, Canada and the UK.”
Whilst the products are developed in Melbourne Australia, the company partners with the likes of IBM, VoiceBase and Amazon for storage. It has also just finished a roadshow in the US where the reception from the likes of telco giants such as AT&T was promising.
One of the selling points for CallN is price.
“The price point we’re coming in at is very, very reasonable. So we’re getting a lot of attention in Australia just because if you wanted voice analytics previously, you’re talking about very expensive products. CallN is a game changer in that sense,” Mathew says.
How it works
CallN is about to close out a deal with Transurban, a top 20 company on the Australian Stock Exchange that manages and develops urban toll road networks in Australia and North America. It is a huge promotional deal for CallN, with all 234 licenses that Transurban have undertaken working purely on CalIN’s enterprise product.
Shashi believes Transurban is using the product “to be able to get a deep understanding of how their agents are performing, but also to get insights in their customers.
“They’re just at the start of their journey. But the other thing we offer is a consulting package to really make sure customers are not left with a very valuable white elephant which they’re using only 5% of the features.”
It is all part of CallN’s customer care, which has been refined through its own business. The product has changed from someone sitting in an office and playing phone calls to go through customer complaints and sales strategies for instance. There could be a dozen people sitting in a meeting for two hours, which adds up to a total waste of productivity when trying to analyse the calls.
With CallN, calls coming in are pre-scripted. KPIs are then built in that sales people are expected to use when they’re talking to a customer. These are defined by key customer words. At the end of the day, a report is generated so somebody looking after a call centre with 300 people can get a report on their desktop which can tell them in a couple of minutes what operators are following company guidelines and what operators aren’t.
As it is based around AI machine learning, businesses can pick up certain trends and put in key phrases and words that determine the nature of the complaint, who is at fault and whether team members are following correct protocols.
By implementing this system CallN improved Telstra PhoneWords debt collection by 22% and also its phone sales performance.
As discussed earlier, CallIN will now focus on larger scale global distribution. Through JV funding the company will look to expand the distribution through reseller networks, which was the purpose of their recent trip to the US. A further goal is to increase sales presence and support in the US.
“We already have sales support and sales people in Australia, but we want to mirror that in the US and then Asia and Europe,” Mathew says.
“The product has no boundaries and will work with any VoIP or signal tracking.”
Interestingly the take up has been a mix of targeted expansion and organic growth.
Of the 13 countries already involved, the US, Malaysia and the UK were targeted. The others have found CallN online, installed the software and done everything themselves.
CallN will soon undertake a capital raising, which will occur shortly after it spins out of 1300 Australia on June 30. The money will go towards the global roll out.
And as the product continues to evolve, as AI does, CallN will evolve with it and Scholes will no doubt have another business critical organisation on his hands.