More companies are adopting digital communication software as the coronavirus pandemic puts more pressure on call center operations around the world, LivePerson CEO Rob Locascio told CNBC Monday.
“What we ushered in is, really, the death of the call center,” he said in a “Mad Money” interview with Jim Cramer. “I’ve been talking about this for two years and now it’s come and that’s why we saw all this demand, you know, come to us and we’re just doing great with it.”
As scores of businesses closed worksites in March and instructed eligible employees to work remotely in efforts to slow the spread of the coronavirus, call center operators at firms deemed essential are one of many categories of workers that continue going in the office to handle work duties. The effect was witnessed around the world as governments placed their countries on monthslong lockdowns.
JPMorgan, for instance, said it would provide “front line employees,” including call center and branch staff, with a $1,000 bonus to aid staff in challenging times. Some legacy call centers have shut down altogether.
“What we need now is to go to automation. [What] we need now is to really change the game and do what we’re talking about: changing these conversations, making them digital, bringing them to messaging and that’s what we’re doing,” explained Locascio, who founded the New York firm in 1995.
LivePerson outfits companies with artificial intelligence-powered mobile and online messaging tools for customer service representatives, which intends to cut back on the notoriously long wait times consumers face in call center queues. The company, which offers a cloud-based messaging system called LiveEngage, projects that traditional call centers will disappear within a decade.
The conversational commerce company, who counts T-Mobile, Delta Air Lines and Home Depot among its clients, saw sales rise 17.6% in the quarter ending March 31. Nearly all of the United States was placed under stay-at-home orders earlier that month.
LivePerson inked 130 deals in the first quarter, which was a 10% increase from the year prior. Nearly 60 of those deals were new client sign ups. LivePerson’s March volume increased tenfold as call loads shifted to messaging, Locascio said.
“I’ve never seen it before in my 20 years running this company as a public company,” he said. “I have never seen that shift in our business at that rate.”
LivePerson did, however, lose more than Wall Street was expecting in the quarter. The company lost 28 cents per share, compared to FactSet estimates of 21 cents. The company has yet to turn a profit since the December 2018 quarter, according to FactSet.
When asked by Cramer when he expected LivePerson would be profitable again, Locascio instead said that the company’s cash flow would improve 50% this year than it recorded in 2019.
“We’re out there taking advantage and really capturing the market that’s there today,” he said.
Shares of LivePerson rose 4.7% to $34.67 a share in Monday’s session. The stock is down more than 6% this year.