UPDATED 16:28 EDT / FEBRUARY 03 2019

POLICY

Orange is the new gold: Telemarketing firm molds inmates into sales stars

Like many telemarketing professionals, Teresa Peterson works a nine-hour day, supporting a team of professionals working phones, building heat maps for her client’s account-based marketing program and staying on top of sales leads until deals are closed.

But unlike most telemarketing professionals, at the end of the day Peterson returns home to a bed at the Arizona State Prison Complex — Perryville, where she’s serving a six-year sentence for driving under the influence of marijuana. It’s her second time at Perryville, located in the Phoenix suburb of Goodyear – she served a four-year-sentence for alcohol DUI ending in 2012 – but thanks to an unusual work program that’s teaching her technology marketing skills, she’s optimistic there won’t be a three-peat.

“I’m a completely different person,” said the 34-year-old former stay-at-home mom. “I have options for careers when I get out, and I never thought that was a possibility.”

Peterson, and hundreds of other female inmates like her, are getting a new lease on life from Televerde, a unit of Phoenix-based Pegasus Research Group LLC that provides telemarketing, lead generation and lead management for mostly high-tech companies. Televerde employs 425 inmates in contact centers inside the Arizona and Indiana departments of correction, with plans to expand into Argentina, Australia and Scotland. Nearly all of its lead generation operations are staffed by prison inmates, and the company has ambitious goals to train and employ 10,000 ex-offenders over the next decade.

Prison labor is a polarizing subject. Google the term and you’ll find numerous references to “modern-day slavery,” along with lists of big-name firms that quietly take advantage of inmate labor rates that can run as low as 10 cents an hour. While politically sensitive, prison labor is legal in every state. In fact, most state and federal correctional departments require inmates to offset expenses associated with their incarceration through work.

In most cases, those jobs are rote or menial, but Televerde takes a different approach. Its virtual employees (inmates are employed by the state, which contracts with Televerde) spend the day on the phone selling complex products to customers in business-to-business markets such as storage, marketing intelligence and cybersecurity.

Televerde said it has completed more than 2,100 marketing campaigns over the last three years and delivered more than $8 billion in client revenue. In the process, it has trained thousands of inmates in skills that they can use to land good-paying jobs once they’re released. The result: Recidivism rates among its former employees are just 6 percent, compared with 50 percent nationally.

Orange pride

Most businesses prefer not to talk about their use of prison labor, but Televerde is proud of it. The company’s website features large photos of telemarketers clad in orange prison jumpsuits, and the color orange features prominently in its corporate color palette. Purchased from its founders in 1995 by maverick entrepreneur James Hooker, the company has used phone banks staffed primarily by inmates since day one, growing from five employees in a trailer 23 years ago to five locations globally today.

For Teresa Peterson, the experience has been transformative. Her two-and-a-half years as an account rep working most recently for security software maker Pulse Secure LLC has taught her the ins and outs of qualifying prospects using BANT (budget, authority, need and timing) tactics, how to create personalized marketing emails using Basho techniques and tricks for conducting effective business conversations with technology executives.

Peterson has earned college credits, banked more than $15,000 and gained a head start on a marketing career. In the process, she has also built a $2 million sales pipeline for the client and boosted her self-respect. “When I walk into the call center, I’m not an inmate anymore,” she said. “I’m a valued part of the team.”

Pulse Secure Chief Executive Sudhakar Ramakrishna said the results he gets from the Televerde team are as good as he has ever seen. “They are effectively part of my go-to-market team,” he said. “I think of them as Pulse Secure employees.” He estimated that the inmate marketers deliver between 20 and 30 percent of total sales.

Televerde executives say businesses underestimate the potential of the many inmates who are the victims of poor point-in-time decisions in a country in which harsh drug sentencing laws have swelled the prison population to 2.3 million. The company hires only female inmates, since males “are typically more violent and less supportive of one another,” said Vince Barsolo, senior vice president of operations. It focuses on those who show intelligence and the greatest desire to turn their lives around.

“When you meet the ladies, you find all kinds of highly educated people, many who worked in white-collar jobs,” said Morag Lucey, a former chief marketing officer who took over as Televerde CEO from Hooker last month. “Then there are those who have had no education but are the smartest people you’ll ever reach.”

Crash course

The hiring process is competitive, with as many as 40 candidates vying for a single job. New hires are given between three and six weeks of intensive training in sales techniques and the technology they’ll sell. They start on the phone but can work their way up to managing teams, overseeing customer accounts and even learning data science.

“They are as inquisitive as anybody I’ve seen in terms of their ability to learn,” said Ramakrishna. “They are the biggest consumers of our training.”

Under a wage structure administered by the state, employees start at minimum wage, which is well above the average for prison labor but below market rates. Those cost savings are offset, however, by “the amount of infrastructure we have to put into place,” Lucey said. That includes secured offices, constant call monitoring and software that monitors every keystroke.

Televerde doesn’t promote itself as a low-cost provider. “The truth is that our secret sauce is the business model,” Lucey said. And part of that secret is high employee retention.

Turnover in U.S. call centers averages about 30 percent, according to the 2017 US Contact Center Decision-Makers’ Guide, but Televerde’s representatives are literally a captive audience, with the average employee staying for four years. “They’re not going anywhere, and they don’t have a lot of distractions,” Lucey said. “They spend a lot of time understanding our solution.”

New start

Once inmates’ terms are up, many stay with the company. More than 100 of Televerde’s 600 employees are ex-offenders, including half of the people at the company’s Phoenix headquarters. Many others have gone on to work for the clients they represented as telemarketers.

Not everything about working with the prison population is simple. It has taken time for the company to build relationships with corrections officials, who are laser-focused on security.

“Early on we were viewed as outsiders that presented a risk,” Lucey said. “We realized that security has to be part of our value system.” Potential candidates have to be screened for signs of violent or antisocial behavior. Recent forays into social selling have been slowed by the need for tight rules on what employees can say in online channels.

But the business model is also an advantage in appealing to the growing number of companies that are stressing corporate social responsibility or simply want to lend a helping hand. On his quarterly visits to Perryville, Pulse Secure’s Ramakrishna typically brings books for his inside sales team to read and discuss during his next visit. “How often do you get to support a social cause and not compromise your business needs?” he asks. “Very few times in your career.”

Not least, meeting with appreciative clients contributes to self-esteem that is all-too-often lacking in inmates’ personal lives. “Being in prison all day long really breaks you down,” Peterson said. “Televerde mends us together.”

Photo: Televerde

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