Fort Worth's invisible success story

It sounds like a riddle: What comes into contact with hundreds of thousands of consumers annually, but is invisible?

Strangely enough, it's a firm called 20/20 Cos., a privately held, fast-growing sales outsourcing agency whose headquarters is perched on the third floor of the Lone Star Tower overlooking Texas Motor Speedway in far north Fort Worth.

20/20 employees, working on behalf of major companies like Verizon, Direct Energy and Time Warner, sell wireless phones, electric plans, cable subscriptions and even office supplies. They use multiple venues -- retail kiosks, door-to-door, special events or business-to-business.

But you won't know they're 20/20 employees. At a bright orange Vonage kiosk at Grapevine Mills mall last week, Andrea Monge was with Vonage -- as far as customers knew. Dressed in her Vonage polo shirt, Monge was selling voice-over-Internet phone plans.

"I introduce the product. People buy," said Monge, who is bilingual. She noted that Hispanics like Vonage because its new Vonage World plan offers unlimited international calling.

20/20 has carved out a niche as a national outsourcing firm in a heavily fragmented industry dominated by smaller, local firms. Since 2008, it has been majority-owned by Golden Gate Capital, a California private equity firm that has also led buyouts of Eddie Bauer, On the Border and Romano's Macaroni Grill in recent years.

The firm generates over $100 million in revenue annually from more than $2 billion in sales on behalf of clients, said President Steve Peters, 39, who has been at 20/20 since 2006. The firm's revenue is 10 times what it was five years ago, Peters said.

20/20, started nearly 20 years ago by a group that Golden Gate bought out in 2008, now does business in 42 states, Peters said.

While 20/20's roots are in door-to-door sales, most of the growth has come from the retail business: mall kiosks such as Vonage's, and others inside big-box stores. Peters estimates that 40 percent of 20/20's business comes from door-to-door sales, another 40 percent from retail, and the remainder from product demonstrations at events and business to business.

20/20 expects 5 to 10 percent revenue growth next year, Peters said.

He says the company's pitch -- its ability to quickly recruit, hire, train and manage employees in sales of high-profile, brand-name products that require face-to-face selling -- has taken hold. Much of its business is in helping clients launch products.

It's all about keeping clients ahead of competitors, and at a lower cost than if they had to maintain their own sales staffs, Peters said.

"We can help them provide that speed to market," he said.

Few competitors in the sales outsourcing space have anything close to a national presence. Cydcor, also owned by Golden Gate Capital, is another larger competitor.

Dylan Bolden, a partner in Dallas for the Boston Consulting Group, which extensively follows marketing and sales trends, says sales outsourcing is such a fragmented segment that there are no reliable market numbers for it. (Peters says 20/20 estimates the market at "a few billion dollars" annually.)

New world of marketing

Various factors have combined to keep sales outsourcing a small market, Bolden says.

Marketing has undergone significant shifts from traditional methods to new ones that don't require face-to-face sales. "Organizations are trying to adapt their model to the new world of marketing," he said.

Major corporations often lack the in-house capability to quickly marshal and manage new sales staffs but are reluctant to turn control of their brands over to outside firms, he said. Turnover among sales employees is extremely high.

Outsourcing "can be expensive to execute," Bolden said. "You typically need to have a product that has strong profit margins. There has to be some dollars there to support the costs."

Outsourcing firms are often most effective in their home markets, he added.

"The expertise a lot of these companies have is very local," he said. "It's local knowledge on how to recruit, get out on the street and drive sales."

Effective sales outsourcing firms "are good at hiring people, training, on-boarding, and motivating people," Bolden said. The most successful outsourcing arrangements are in companies "that have worked hard to partner with the outsource provider," he said.

What's the upside?

"The sales from this channel are still relatively small, but it is a pretty good boost," Bolden said. "There's value in it, but not enough to keep [the sales staff] internally."

A revitalizing presence

Paul Walker, vice president of sales at Vonage, based in Holmdel, N.J., said 20/20 has helped "revitalize" the company's kiosk business since taking over from a previous outsourcing partner more than four months ago. 20/20 manages 16 Vonage kiosks in Dallas-Fort Worth, Washington, D.C., Tampa, Fla., and Miami, hiring 50 sales agents plus managers.

"They can scale more effectively than I can, they can give me a national presence more quickly than I can," Walker said. "They're an experienced face-to-face organization that gives geographic skills I don't have internally, and they have an infrastructure in place that gives me an ability to grow faster."

20/20 is also helping recruit Spanish-speaking employees like Monge, the Grapevine Mills staffer, to sell the Vonage World plan, which offers unlimited landline calls to 60 countries.

"We believe it's a very disruptive offer" in the marketplace, Walker said.

Looking ahead, Peters says 20/20 feels that its largest growth opportunities are in retail.

"You can staff a kiosk, or a store within a store," he said. "There's a lot more retail opportunities than consumer door to door."

'We're not pushy'

Electric deregulation, fiber-optic service to homes and wireless products have brought waves of new consumer plans that 20/20 can sell, Peters said. Its business-to-business push focuses on office supplies.

New employees train with clients, initially team up in the field with experienced salespeople and are coached by managers from 20/20 and clients. With new clients, 20/20 typically hires new field support personnel, and each client has its own dedicated managers, with no managers serving more than one client, Peters said. Mystery shoppers from 20/20 and the client constantly monitor operations, he said.

Compensation can vary from 100 percent commission to base pay plus commission, depending on the situation. Clients pay the company under the same model, he said. Employees receive health benefits.

The company's acquisition by Golden Gate helped speed 20/20's growth, Peters said. "It's not a capital-intensive business," he said. "But there are opportunities where you need to invest in new technology and getting new clients. Other companies in our space aren't as well-capitalized."

The company is constantly recruiting new salespeople, with an eye toward filling churn and meeting demand from new clients. 20/20 has 140 employees at its headquarters and 1,500-1,700 nationally, including its sales reps.

The recession has brought new candidates from other sales trades, including the mortgage industry, Peters said.

"With the economy where it's at, we're upgrading our staffs," he said.

The company has a code of ethics for its reps, and managers coach the salespeople in their approaches, said Peters, adding that he lives close to a client's kiosk and finds himself mystery shopping at nights and on weekends.

"We want to put somebody out there who likes to talk to people and likes to try to meet the consumer's needs and marry the consumer's needs up with the product," said Peters, who characterizes the 20/20 sales approach as "pleasantly assertive."

"We're not pushy sales guys," he said.

Scott Nishimura, 817-390-7808