SmallCapNews | Hanging on the telephone: interview with Henrik Bang, CEO of Netcall plc

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Hanging on the telephone: interview with Henrik Bang, CEO of Netcall plc

06 March 2009

Not many people can claim to raise a smile at the prospect of ringing up a call centre – but Henrik Bang can. As the chief executive of AIM listed Netcall plc, Bang has focused on fixing a perennial consumer gripe and turned the experience of contacting call centres into a much more relaxed affair.

But while the boom in call centres in recent years has proved a boon for Netcall, recent market instability – particularly in financial services – has led to a rethink on how the company sells its systems and who it sells them too.

Since joining the company in 2004, Bang has been selling the advantages of Netcall’s flagship QueueBuster service, which allows consumers the chance to hang up the phone and wait for an automatic call back from the call centre they are trying to get hold of.

While it sounds straightforward, Bang is clear that the system can deliver huge advantages to companies that have traditionally battled to improve their potentially brand-damaging customer relations centres.

The message from Netcall is that these symbols of consumer frustration are dogged by inefficiencies; staffed by demoralised, stressed-out call centre agents, and contacted by fraught and frustrated customers.

It all adds up, the company claims, to high costs, high churn rates (customers leaving) and unhappy staff.

First contact

Netcall kicked off life on AIM back in 1996, initially toying with business models that tried to find a connection between its telephony services and the emerging internet – indeed, one of its earlier initiatives was in handling the responses to classified advertisements in newspapers.

It wasn’t until 2001 that the company finally shifted its emphasis towards QueueBuster and began trying to tap in to the rash of call centres that had appeared in the market.

It has been posting sub-£1m (but growing) pre-tax profits since 2005 but saw that slow-but-steady growth rate take a hit in 2008 as the economic downturn made its presence felt.

In response Bang, who says the company saw the problems coming, called for a change of focus during 2008 and by doing so looks to have arrested the slowdown in growth.

With the year to June 30, 2007, being its best year yet, the recent interims for 2009 show revenues and profits both ahead of the same period in 2007 and well ahead of 2008. Interim revenues were up 19% on the 2008 figures to £2.01m, with PBT up 91% to £0.54m.

“The key thing about our improvement over last year is that we reprioritised our sales efforts towards the non-financial services sector,” Bang says. “Financial services were flat year-on-year, which in its own right is very, very positive, but we really did invest a lot more in non financial services opportunities, and I think that has paid off.

“It wasn’t a strategy change, but we did have a specific change in focus about a year ago and it did pay off in the second half of 2008 and into this year as well.”

According to Bang, in the days prior to 2007 the booming financial services market had been the main event as far as Netcall was concerned. And while it remains by far the largest call centre vertical, the dislocation of the market and the economic downturn forced the company to look again at where it was selling its products.

“There is a lot of upside in our existing customers as well as a lot of upside in broadening our customer base both in the UK and some selected international markets, mainly Continental Europe,” he says.

“If you look at most of the business cases we are working on with customers, they are focused around reducing costs while maintaining or even improving customer service.

“In the current environment cost reduction is a lot higher up the agenda than it was, and the nature of the product means we do save headcount, or we can put more calls through the same number of staff. That has never changed, but I think compared to a year or eighteen months ago the business cases today are much more focused on cost reduction.”

While the key drivers for QueueBuster involve cost-cutting and improving the customer experience, Netcall’s systems also defuse the tension built up by frustrated and over-pressurised call centre agents and the calling customer who might have been waiting 10, 20, 30 minutes in a queue. “In some cases it has had a demonstrable impact on churn rates in call centres, which are notoriously high”, Bang says.

First response

While Bang and his team have been keen to flag up the cost saving benefits of QueueBuster to its cost-conscious clients, the company has also moved to adapt the way it supplies its systems to make them more attractive in tough times.

This has predominantly meant diversifying away from simply selling software licences to actually hosting the systems and delivering the software as a service. With it has come a wide range of option for customers to buy and use QueueBuster.

For Bang, the decision to switch to a hosted approach back in 2004 was spurred largely by a belief that it would help the company grow faster – which it did. But he says it was important that the company remained open to customers that still wanted to buy licences.

“We are selling the benefit of QueueBuster and whichever way you want it delivered is really your choice,” he says. “There are a number of different ways to package the same fundamental benefits and it is up to the individual customers how they want it. We now have the flexibility to adapt the deals and the structures to what customers need in difficult economic circumstances.”

But while Netcall is happy to adapt its markets and product packages for customers facing tough times, the mood at the company is far more bullish and positive, according to Bang.

“We believe we are very focused on what we do and how we do it. For us to maintain momentum we need to continue to be focused and understand what our customers are looking for, and what benefits they are looking for. We then position our products accordingly. Right now the focus is very much on cost reduction but fundamentally the benefits of our product work both in good times and bad times.

Ben Hobson, SmallCapNews.co.uk