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Dear Reader,
Welcome to Issue 16 of Outbound Focus, an
email publication
of Sytel
Limited.
Predictive dialing has been under some scrutiny in the
US recently by two regulatory bodies:
In this issue, as promised, we comment on this legislative
process, and make some predictions of our own.
Jamie Stewart
editor@outboundfocus.com
P.S. You have received this email either because
you have subscribed with us, or because we believe that
you, as a call center professional, will find it an invaluable
resource.
Predictive Dialing Started to Grow Up in the US in June
2002
In the first week of June, the FTC signaled its
intention to have a closer look at the way dialers are being
used in the US by including a session on the subject in
its review of the
Telemarketing Sales Rule (TSR). Then at the end of the
month, we had the decision by the CPUC on how to
implement the outbound legislation passed by the California
legislature earlier in the year.
Let's have a look in more detail, starting with California.
The CPUC Ruling
The agenda item which the CPUC commissioners voted unanimously
to approve on 28 June 02 was this:
"Effective July 1, 2002, the allowable 'error rate'
will be 3% of all predictive dialer calls answered
by a live person. An "error" is defined as a
call answered by a live person in which (1) the predictive
dialer disconnects the call after the called party has
answered, or (2) the called party does not receive a response
from the calling agent or telemarketer within two seconds
of the called party's completed greeting, or, alternatively,
no agent or telemarketer is available within four seconds
of the called party's telephone going off-hook. The four-second
off-hook standard is a transitional one that will be phased
out in six months. The "acceptable error rate"
will be reduced to 1% on January 1, 2003, although
this standard is subject to further review in an industry
workshop that will be conducted by the Telecommunications
Division within 90 days."
At first sight this decision looks pretty swingeing from
an industry viewpoint. Dialing at a 1% 'error rate' is a
Holy Grail that most dialers will probably struggle to reach
in any productive way. But there is some (at least temporary)
relief given in two ways:
-
Early Hang-ups
There is no mention of what should be done in respect
of early hang-ups. This is the notion, supported by some
dialer vendors, that it is reasonable to hang up on calls
that have been ringing for just a few seconds, without
recording such calls as abandoned calls. The US
Direct Marketing Association (DMA) explicitly rules
against this practice in its Guidelines
for Users of Predictive Auto Dialing Equipment.
This is an issue we think was probably overlooked by the
Californian legislators. The CPUC may have been aware
of this practice but were powerless to rule against it,
since their role is to interpret rather than fashion legislation.
We think it likely that this practice will now increase
substantially in California.
-
'Dead Air' Calls
The CPUC has decided to legitimize 'dead air' calls, with
up to two seconds holdup on calls, following the called
party's greeting. The main reason for the original bill
was consumer concern over 'dead air' calls. Now, two seconds
is not a lot, but will it tip the balance with a lot of
consumers and send them scurrying for the Californian
'do not call' list (going live on 1 January 2003)? This
is/will become a key issue in the FTC deliberations, too.
The FTC Telemarketing Sales Rule (TSR) Review
The right way to view the progress on predictive dialing
that was made at the TSR Review in Washington was
as a preliminary skirmish. The interested parties eyed each
other up, showed a bit of fire, but kept most of their powder
dry - while the judges(!) kept their own counsel.
Given the time allocated for discussion, it was probably
unrealistic to expect a lot more. Here's our reading on
some of the key issues raised, and what we think you can
anticipate from the FTC:
-
As some parties rightly pointed out in their
submissions, some areas of activity, for example political
campaigning, fall outside its remit. We are not sure
that this matters. What does matter is that some body,
probably Federal, comes up with a template for how predictive
dialing should be done in the future, before all the States
come up with their own rules, all different and in some
cases (as in Kansas)
likely to exacerbate rather than reduce the extent of
non-agent calls. So if the FTC wants to take this mantle
on and set a standard for other regulatory bodies to follow,
our view is all strength to their arm.
-
In its initial review paper the FTC noted that
technically the TSR prohibited any abandoned calls.
Despite this, we absolutely do not believe that the FTC
will seek to ban predictive dialing. Rather, as has happened
in California, we expect them to seek a balance which
recognizes consumer concerns, whilst allowing industry
to still reap the gains that predictive dialing can bring.
This could be by allowing some abandoned calls to be made,
or could possibly follow the Californian model of allowing
some calls, for which no agent is available, to be kept
open rather than abandoned.
-
If abandoned calls are allowed, then expect
them to be measured as a percentage of 'live calls'
and not 'all calls'. Even though the 'all calls' measure
is still widely used in the US, this should surprise no
one.
-
Unlike California, we also think it highly
likely that the FTC will follow the lead of the DMA
and place a restriction on the minimum ring time
for calls.
-
We also think it likely that anyone doing predictive
dialing will be obliged to provide Calling Line Identity
(CLI) information to called parties, with perhaps
a discretionary period to allow call centers to choose
carrier links that will pass this information through.
-
The issue that we think is likely to take up
most time in the FTC's deliberations is the use of 'dead
air' and answering machine detection (AMD) by dialers.
'Dead Air' Calls and Answering Machine Detection (AMD)
The heart of this issue is whether it is reasonable to
use technology to decide whether the call that has been
answered is a machine or a person. There are two distinct
camps on the issue:
-
In California, there was a strong push in a
number of submissions to the CPUC that AMD was/is essential
if any gains in agent productivity are to be realized
from predictive dialing. Hence, the 'dead air' period
of first four seconds, then two (from 01 Jan 2003), at
the end of the greeting to allow AMD to do its stuff and
then route live calls to a waiting agent.
-
Then there is the view, widely held outside
the US but less so within it, that the important thing
is to have an agent respond to a called party at the time
they say 'hello', effectively ruling out 'dead air' and
the use of AMD.
We think that there is a lot of sympathy for this second
view in the US, but there is a reluctance among many people
to break ranks, and go against what has been seen as best
industry practice.
One heavyweight did break ranks at the FTC Hearing: Art
Conway, the President of Dial America, whose
company is one of the top outbound bureaux in the US. For
the full text of his views, see pp 19-22 of the Dial
America paper (PDF format).
Dial America are suggesting that the right (only?) way
to treat consumers is to have agents available to talk to
them when they answer the phone. If they are right, but
AMD gets legitimized by the FTC, as in California, then
as we noted earlier, we may see a wholesale flight of consumers
to 'do not call' lists, and once gone they may be difficult
to win back.
We very much hope that all parties in this debate will
be given an opportunity to argue their case in more detail
with the FTC than happened at the June Hearing. And we hope
that the proponents of AMD will make their case on how use
of AMD, and the 'dead air' this involves, improves the quality
and productivity of their outbound campaigns, whilst being
kind to consumers and not sending them off in droves to
'do not call' lists.
The Case Against Answering Machine Detection (AMD)
Right now our sympathies, in the absence of reasoned arguments
from the AMD lobby, are with Dial America. These are the
issues stacking up against AMD:
-
Many consumers in the US are clearly aware
that any 'dead air' on their phone is usually a sign that
they are being predictively called, and they hang up before
there is a chance to connect an agent to them. Our estimate
is that this could amount to as much as 25% of all live
calls on some campaigns. It could be argued that this
is a good thing, since such people are unlikely to be
receptive to being called and sold to, even if an agent
is immediately available to talk to them, but we cannot
think that anyone would condone this as good practice.
-
The argument that AMD is essential to predictive
dialing productivity looks like sixth grade math gone
wrong!
An Example
Let's say that you are getting 45 minutes talk time
on a campaign using AMD but you have two problems:
-
some consumers hang up before you get to them
-
as noted by Dial America in their paper, some
consumers are dropped by the AMD, in mistake for being
answering machines.
And you want to know what will happen if you get the agents
to do the detection:
-
No more 'dead air' for anyone, and no one hanging
up before an agent talks to them
-
No live calls lost, being mistaken for answering
machines
-
If your agents are properly trained and monitored
(it's not hard!), then they should be able to drop an
answering machine in no more than around 3-4 seconds.
Multiply the number of answering machines each agent will
get in an hour by this time in seconds, and subtract it
from the talk time per agent hour you get with dialer
detection - and that's the talk time you can expect when
agents are doing the detection. We will let you do the
math. If you get it right(!) then with agent detection,
you should see a reduction of around a couple of percentage
points only in talk time per hour.
If we believe the arguments made by companies such as
Dial America who eschew AMD, then the improvement in the
quality of the calls made, more than compensates for the
reduction in agent talk time. And there is an added advantage
for call centers seeking to maximize their reach; because
they are not subjected to 'dead air', consumers dialed
in this way are less likely to sign up to 'do not call'
lists.
Someone told us recently that the above figure of 3-4 seconds
should be more like 15 seconds. Just not so. The only figure
that should matter for the calculation is the time spent
by the agent detecting the call. If...
-
your system involves long latency times in
transferring calls to agents
-
you are forcing agents to go into a drop down
menu to select a disposition code to stop the call
-
you don't monitor the agents to make sure that
they aren't going to sleep listening to answering machine
messages
...then you have room for improvement! And don't make the
mistake of adding in call setup time and ring time too,
(as well as the agent detection time), as one call center
manager suggested to us a few weeks ago!
Non-Agent Calls in the US
Some research that we did of US-based readers of our newsletter
earlier in the year, suggested that the real levels of non-agent
calls are far higher than those talked about - anywhere.
For example, a casual glance through some of the submissions
to the FTC and the CPUC might suggest that levels of non-agent
calls are running at a maximum of say 5%. Simply
not so, as any beleaguered consumer in the US who can do
the math will tell you. True levels of non-agent calls are
many, many times this.
Our view is that if independent research is forthcoming
about the real levels of non-agent calls (c.f. Art Conway
at the FTC hearing when he suggested that abandoned calls
were running at around 40% of live calls in the US
[probably on the low side - Ed.]) then the FTC might be
more inclined to go for a higher rate than the 1% 'error
rate' California is currently going for - allowing better
predictive dialing productivity than will otherwise be the
case.
Will The Patient Recover?
Outbound (and especially predictive) dialing is in a state
of transition at the moment in the US, but actual and prospective
legislation on fronts such as CLI, 'do not call' and control
of predictive dialing should go a long way to restore the
patient back to life, albeit in a form that may be quite
different from the market we see today.
Some of our actual and potential contributors have been
scared off by the battering that outbound has been getting
in the US. As the patient recovers - and we expect him to
- we hope some of these commentators may get active again,
in defense of responsible dialing.
We would welcome contributions from US-based people in
particular who would like to give us their crystal ball
view. All/any well-argued views welcome, especially on
the AMD issue.
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If you would like to see particular outbound issues aired on these pages, just send an email to editor@outboundfocus.com.
If you know of other outbound professionals who might like to receive this newsletter, please forward this e-mail.
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Copyright 2002, Sytel Limited.
All rights reserved.
The editor reserves the right not to publish submitted material.
Outbound Focus is a free publication of:
Sytel Limited
2, High St
Chesham
Bucks HP5 1EP
United Kingdom
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