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November 11, 2013

Q&A: Inside Argo Marketing's $2.6M Lewiston expansion

Jason Levesque, Argo Marketing founder and CEO, in the former McCrory's department store his company is renovating in a $2.6 million projectPHOTo / Amber Waterman
PHOTo / Amber Waterman
Jason Levesque is undertaking a $2.6 million renovation of the former McCrory’s department store on Lisbon Street in Lewiston and will move his business, Argo Marketing Group, there by year’s end.

Argo Marketing Group

Address: 64 Lisbon St., Lewiston

CEO/founder: Jason Levesque

Founded: 2003

Employees: 310; 120 in Pittsfield, 120 in Lewiston, 70 in Portland

Services: Customer care via phone and electronic media, social media, marketing, outreach

Revenue, fiscal year 2012: $4.5 million

Revenue, fiscal year-to-date 2013: $8 million

Contact: 482-3887

www.argomarketinggroup.com

Jason Levesque is trying to redefine an industry better known for its mass hirings and layoffs than as a growing economic driver.

Levesque, CEO of Argo Marketing Group, is investing $2.6 million in the renovation of what had been a downtown Lewiston eyesore into the new headquarters of his marketing and customer service company. The rehab of the former McCrory's department store on Lisbon Street will create a hub for 160 customer service agents, Argo's administrative personnel and its training center. When it opens in December, it is intended to give the 10-year-old company a permanent home and present a model for what a modern-day customer service/call center operation should look like.

"Expanding is good, moving not so much," jokes Levesque. "But when we open, we'll have space to grow the customer contact portion of the business. We'll have cutting-edge technology combined with a dedicated work force where everything we do is about customer engagement."

Levesque, an Auburn native who returned to the area to launch his company in 2003, knows what he's up against. The boom-bust hiring cycles of call centers affiliated with MBNA, Global Contact Services, ACS, Sykes Enterprises and others have created uncertainty about the stability of those jobs.

But Levesque points to the grand-daddy of them all — the L.L.Bean call center just a block away — and others such as NotifyMD, Barclays, athenahealth, Carbonite, TD Bank and others that make customer service a significant and growing industry in Maine. (A 2012 Tax Foundation report listed Maine No. 6 nationally in call center jobs because of the state's low sales tax and low income tax.)

What makes Argo different, he says, is the diversity of clients for whom the company performs "customer engagement" services, which span handling in-bound customer service requests and orders round-the-clock to engaging in electronic chats and creating marketing and social media campaigns.

"Clients hire us to engage customers post acquisition," he says. Among Argo's 40 to 50 clients are Nature's Bounty, a multi-billion dollar nutritional supplements firm; OneCare, which owns the brands Dreft and Dryel consumer products; and Allu, a cosmetics company with products sold by retailers such as Sephora. Levesque is negotiating with a new client; if he lands that contract he expects to hire 60 more people.

Amid the clatter of contractors framing office space and rebuilding floor joists, Mainebiz talked with Levesque. The following is an edited transcript.

Mainebiz: How extensive is this renovation?

Jason Levesque: (Laughing) Well, when the structural engineer took a look at this building he said it shouldn't be standing. So the renovations are pretty extensive. But when we're done, we'll have 15,000 square feet in use as our work area and about 175 work places. In addition, we are creating first-floor retail space [to lease].

MB: Why this location?

JL: When I formed the company in 2003, it was just me. Then we moved into our first office space in a grange hall. Then we moved into the Engine House on Court Street [in Auburn] and went up to about 15 people — that's where we started the call center. We moved to 415 Lisbon St. just as call center work was picking up as e-commerce was gaining in popularity. We had 35 seats and 65 or 70 people. Then GCS, a call center in Pittsfield, closed down in 2011. Within 60 days, we had it back up and the 65 people who were out of work [were rehired] and now there are 120 employed there. We were reaching capacity in our Pittsfield location and growing. I wanted to do something more here in L-A and talked to a lot of national marketing consultants. We saw a trend of a lot of call centers going into malls and not having high visibility. I didn't want to look like that — we're more than that.

I saw this building every time I ate at Fuel [restaurant] and thought, 'Maybe we should go downtown,' and started exploring that in August 2012. It took a long time, talking about the price, insurance and lining up financing. We had a lot of help, for which I'm extremely grateful. We got an SBA 504 loan. Mechanics Savings is our primary lender. The city of Lewiston helped with some grants and a TIF project. And [I'm grateful to] Ted West, who sold me the building [for $175,000.] We ended up closing in August of 2013. Hebert Construction is our general contractor, and since then, we've been going gangbusters.

MB: You're converting what had been a two-story department store into a customer service center. What special design accommodations did you make?

JL: The whole thing is designed for work flow. So you have the area for the cubicles with direct access from the parking garage. Then there's a section where we're building our training center with stadium seating and a saltwater aquarium. On the top floor, we'll have administrative offices and an in-house pub.

MB: One of the stereotypes of call center or customer service jobs is that they are low-wage and without benefits. How do your jobs stack up?

JL: Ninety-five percent of our employees are full time with a starting average wage — not including administrative staff — of $13.46 per hour. That's growing and doesn't include any incentives or bonuses. I expect that will be higher, but we just doubled our work force in the last 12 months, so we need a little time to train and move people up. You know, there's a growing critical mass of call centers, especially in Lewiston, and that's driving up wages and really helping the entire industry as we compete for the best workers.

MB: Are you eyeing new markets?

JL: Yes, we're looking at government contract work, much of which is gobbled up by the nine largest call centers in the country at the federal level. We believe as a small business, we can be competitive as a customer service call center [for those contracts] or as a subcontractor to other main contractors.

MB: Do you have any special classifications for federal contract work?

JL: We're a veteran-owned small business. I ended up eight years in the Army in the infantry. I was a drill sergeant for the last three years. [Veterans remain] important to me. I offer a $1,000 signing bonus to any veteran or the dependent of a veteran if they come to work for Argo. About 15% of my work force is made up of veterans or their dependents.

MB: What's different about your model that has allowed you to grow for the past 10 years?

JL: My company is a third party; it has a very diverse clientele. There will always be ups and downs in this business [as one contract ends and another begins] — it's like an accordion. We'll be expanding again in January. The key is to diversify that client list — it's a primary reason we are seeking governmental work.

MB: And so the call centers that failed, it was primarily because they failed to diversify?

JL: Partially, but they have a different model. In my observations of the past 10 years, call centers are relatively inexpensive to set up. Not a huge job multiplier, but significant. Depending on the value of the dollar and a corporate need to outsource customer service, [the market] changes rapidly. There's a huge difference between the L.L.Beans, Carbonite and TD Banks of the world — large corporations that have their own support services — and third-party vendors, such as myself, which aren't that prevalent anymore. The models are different.

Take, for instance, GCS in Pittsfield. They had 15 call centers around the country and a couple in the Philippines and had one major contract in Pittsfield, I believe it was for Bank of America. When it went away, rather than back fill work at its Pittsfield call center [with other clients] they just closed the facility. That was their business decision. This happens a lot with out-of-state facilities — it's like they are looking at these facilities as chess pieces. Instead of laying off 10 people [to ride out a slowdown], they close a facility.

MB: What are your revenue expectations for 2014?

JL: We hope to book $14 million in 2014. [Smiling] We'll see how that contract negotiation goes.

Read more

Argo opens Lewiston call center

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