How to Start Virtual Call Center: From Idea to 7-Figure Exit

From personal pain point to a 7-figure payday!

That’s what Donald Spann did when he started — and eventually sold — his virtual receptionist company, Vicky Virtual.

Donald took a personal pain point of his — handling incoming phone calls in his cleaning business — and built out a fully remote virtual call center.

Tune in to hear how he found his first clients, what worked in terms of marketing and sales, and how you can apply some of the same strategies to a business of your own.

Start a Virtual Call Center

Donald had started a cleaning company in late 2013. Towards the end of 2014, he was talking with another cleaning company owner and they both agreed they shared the same pain point.

Donald said they were both “sick of answering their own phones.”

It was taking up too much of his time while he was running his business, so he started looking at his options.

He discovered there were virtual receptionist companies that could handle calls on his behalf. This way, he wouldn’t have to employ someone himself, and he’d only pay for the time they were on the phone.

Unfortunately, the top companies in the space didn’t impress Donald.

“After 3-4 hours of market research, I got excited,” he told me. He looked at Ruby Receptionists and Gabbyville, two of the main US-based competitors, and saw areas where he could improve on the service.

He called a friend to see if he wanted to partner up and start a virtual receptionist company with him. A couple months later, in January 2015, they launched VickyVirtual.com.

Call Center Software and Startup Costs

“I tried to be as lean as possible,” Donald explained.

The two agents he hired agreed to be paid at the end of the first month, at a rate of $1,600 each.

The phone system he was using cost $150 per/month per agent. He was also paying for some other software like Solve360, a CRM software that integrated with his phone system.

After a couple of months, he started testing other phone software systems. Donald said he went through 6 vendors before finally setting on Five9, which has been the best system to-date.

Donald said at the launch he was about $1,500 in the hole, and by the end of the first month, that figure had grown to $2,800.

He needed 20 clients to cover his costs in that first month. Donald said he would have only taken on 20 clients as that was the limit for two agents. Although, he was prepared to hire more agents and scale up as his client base grew.

Finding Customers for Your Virtual Call Center

Donald was active in two online communities for entrepreneurs and business owners:

1. EntrepreneurRideAlong – This is a subreddit that has more than 100k members. It had a lot of information about starting and operating cleaning companies and helped him tap into a wider audience of business owners.
2. Launch27 Domination Facebook Group – This Facebook group had around 5k members. Donald noticed a lot of cleaning company owners were voicing how they couldn’t find a good solution for answering their calls too.

Donald said he decided to market the launch of Vicky Virtual as a phone answering service for cleaning companies. He knew this would resonate with the communities in these groups and hit on a pain point business owners had.

From these groups, 7 customers signed up on the first day, and Donald had 10 clients by the end of the week.

Pricing a Virtual Receptionist Service

“I simply went based off of the most competitive companies in the space,” Donald said, adding “actually I copied Gabbyville’s initial pricing.”

Gabbyville went on to raise their pricing shortly after, and Donald was able to keep his the same as he had lower overhead.

Donald also picked up information about another competitor’s pricing, margins, and profits by listening to interviews their owner was doing.

She said they had 5,000 clients and 250 receptionists, a ratio of 20:1. So, with lower overheads, Donald knew he could aim for a ratio of 15:1.

He also heard her say their average customer was paying $300 per month. So, he aimed for an average spend of $250.

These figures would allow him to undercut his competitors, and bring in revenue of $3,750 per agent per month.

Today, Vicky Virtual’s pricing plans range from $99-349 per month and up:

Marketing a Virtual Call Center

Vicky Virtual launched as a telephone answering service for cleaning companies, but Donald knew he needed to break that mold to grow his business.

SEO and Paid Search

One of the ways he did so was a little unintentional, but it worked out well.

Donald posted a job for a new phone agent and made a post on the For Hire subreddit to increase awareness.

This post was picked up by Rat Race Rebellion; a popular work from home blog. This was then syndicated by lots of other work from home blogs, resulting in a lot of exposure, backlinks, and more than 60,000 applicants over the next year!

All those backlinks had a positive impact on Vicky Virtual’s SEO, and the site started to rank well for search terms like “Virtual Receptionist” in Google. This resulted in organic leads and customers contacting Donald.

He has also used some paid ads to drive more leads through search.

Cold Calling for Clients

Aiming for 20 clients in their first month of business, Donald decided to make cold calls to cleaning companies.

The first company he called was already deliberating using virtual receptionist services, so they decided to give Vicky Virtual a try. That client went on to be one of Donald’s best clients, spending more than $15,000 to date.

Not all his cold calling efforts were that successful. Donald said he would typically get one new client per 80 calls. However, with an average retention span of 2 years, it was worth making that many calls.

Managing Multiple Call Center Clients and Booking Systems

As their client base grew, Donald admitted it became a logistical nightmare trying to train his agents to manage multiple customers and their individual back-end systems.

He found a way to simplify how his agents could book services on behalf of their clients. Rather than try to integrate their CRM software with their clients, his agents would go directly to the client’s site and book services for the customer the same way customers could.

In some cases, the client didn’t have a public booking form so they made one especially for Donald’s agents.

Retaining Receptionists

Generally speaking, call centers are one of the highest turnover industries and retaining staff can be a challenge

“In our case, [turnover] was very low,” Donald told me.

During his time running the business, he hired more than 100 agents, and only 3 quit on him. (He said he let plenty go for other reasons, but only 3 quit.)

Donald puts this down primarily to giving his agents the freedom to work from home, and still have some of the camaraderie of working on a small team.

How Much Time Does it Take to Manage a Virtual Call Center?

In the first year, Donald described spending a solid 40-60 hours working on growing the business.

By 2017, two years into running Vicky Virtual, Donald was putting in just 5-10 hours per week. This was mostly spent on employee management and manually calculating the miscellaneous client costs that weren’t automated by the systems in place.

Selling the Business

Donald didn’t have any plans to sell, that is, not until he got an unsolicited offer from a former business partner.

They worked out a deal, and Donald sold Vicky Virtual in 2019 for a 7-figure sum.

What’s Next?

Before selling Vicky Virtual, Donald was already working on a course called Call Center Cash.

In this course, he teaches all the steps you’ll need to take to build and launch a virtual receptionist business in 30-60 days.

Donald is excited about the businesses he starts in the future. Looking back at Vicky Virtual, however, he said, “Out of all the companies I’ve done, it ended up being the best business I’ve ever run.”

Donald’s #1 Tip for Side Hustle Nation

“Look at pain points.”

Links and Resources from this Episode

• DonaldSpann.com
• Call Center Cash – Donald has put together something special for Side Hustle Show listeners
• Vicky Virtual
• Ruby Receptionists
• Gabbyville
• EntrepreneurRideAlong Subreddit
• Launch27 Domination Facebook Group
• Solve360
• Five9
• Rat Race Rebellion
• For Hire subreddit

Sponsors

• Freshbooks.com – Start your 30-day free trial today!

• Gusto – Get 3 months free when you run your first payroll!

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