Welcome to Issue 19 of Outbound Focus, a free email publication of Sytel Limited.
This issue, we take another look at outbound issues in the US after the latest round of federal actions. We also hear from Brian M. McCutcheon with his vision of a way forward for telemarketing in the US.
In This Issue
- INDUSTRY UPDATE
The Changing Landscape of Outbound in the US
- TIP OF THE MONTH
A Time of Adjustment by Brian M. McCutcheon
The Changing Landscape of Outbound in the US.
We have been quiet for a while waiting for the US Feds to give their final ruling(s) on predictive dialers and national ‘Do Not Call’ lists. Now that they have, we will survey the new landscape in the US and have a look at Europe, too
i) The US
Last week the Federal Communications Commission (FCC) came out with its own rulings for business to consumer calls and predictably fell into line with earlier Federal Trade Commission (FTC) rulings on both dialers and a national ‘Do Not Call’ list.
For full text of these rulings see:
- Federal Trade Commission (FTC)
- Federal Communications Commission (FCC)
(especially this PDF)
There is a lot of detail to get to grips with. You will find it on these sites, but also look to
to provide good and detailed interpretations of the new legislation.
With the US DMA now backing the federal ‘Do Not Call’ list, to be administered by the FTC, any outstanding challenges to it seem unlikely to succeed. Indications are that a substantial proportion of US consumers will sign up. Some companies may be tempted offshore as a way of avoiding the regulations (on both ‘Do Not Call’ and dialer rules). We sought clarification on this last week to be told that the new rules will apply equally to US companies exporting their lists. Investors in developing countries who are ploughing their money into call centers in the hope of attracting lots of business from the US should take note.
There has been no respite for dialers. The FCC has gone along with the rule changes made by the FTC which come into force on 1 Oct 2003. But their reach is both intrastate and interstate and no state may set rules less restrictive. On the other hand there is nothing to stop them being more restrictive. But with California now coming into line with the federal rules, we expect other states to do so as well, giving a common standard across the US.
The maximum limit on dialers for ‘abandoned calls’ of 3% (measured as a percentage of calls answered by a person) is as tough as anyone might have expected. Many call centers, especially smaller ones, will find themselves ill-prepared to dial at this level.
And assuming general compliance from 1 Oct, the outbound industry in the US will experience a major regrouping as companies outsourcing their lists react to what, in some cases, will be a significant drop in ‘talk time per hour’ performance, as dialer vendors fail to adapt to the new rules.
The new rules on dialing could do with some further thought being given to them. Here’s why.
I Am Not An Answering Machine!
Readers of this column will know that for some years we have questioned the usefulness of answering machine detection done by dialers. Not because it’s not an option with the dialer provided by our Sytel parent in some countries; it is!
It’s because we doubt strongly whether the extra talk time gained by deploying it offsets the negative impact of ‘dead air’ on consumers. Or to put it bluntly, if someone keeps you waiting for say 2-3 secs (yes, we are aware of the claims saying it takes just one second!), or more, while they figure out whether or not you are a machine, are you going to be well-disposed to their pitch when an agent comes on the phone? The writer of this column has often asked this question of professionals in the outbound industry, and to a man (sorry, woman too) they have insisted either that they hang up when they are kept waiting in this way, or give the agent a torrid time.
So why is it that the FTC, and now the FCC, are effectively endorsing the use of answering machine detection by allowing all calls to consumers to be held up for a maximum of 2 secs after the greeting (i.e. “Hello…”) from the consumer? And does it matter?
Well before the days of ‘Do Not Call’ lists, even if you upset people with ‘dead air’ calls, in one sense it didn’t matter because they were always there to be called again.
But many consumers just hate ‘dead air’ calls, and it is sometimes the main reason given for them joining ‘Do Not Call’ lists, for example in California and also in the UK. Here’s what Dial America, one of the largest call center companies in the US, said in a submission to the FCC in December 2002:
“If the specific problems inherent in outbound telemarketing today are not satisfactorily addressed, practically every consumer could eventually be on the national ‘Do Not Call’ list. Presumably only those consumers who like to be hung up upon and like to hear ‘dead air’ when they answer the phone will not be on the list.”
Well, if the 3% limit is extended to all outbound calls, then the effect on consumers of hang-ups will be minimal, but given current practices, most calls answered by consumers are likely to be preceded by a burst of ‘dead air’. And it may not just be 2 secs after the greeting. The science involved here is not exact. Who is to say when a greeting finishes? So the two seconds could easily stretch to three seconds, and maybe more, as consumers say “Hello… Hello?… Hello!…”
Apparently, the US DMA thinks that the use of ‘dead air’ is OK. In fact, in a recent submission to the FCC they asked for the 2 secs holdup after the greeting to be extended to 5 secs! A far cry from when they issued their dialer guidelines over 4 years ago and stipulated that calls should not be held up for more than 2 secs after a call goes offhook before hanging up!
So what do the FTC, the FCC and the DMA know about consumer behavior that makes them take this stance? The DMA have presumably carried out their own studies, and must be convinced that consumers won’t enroll with the national ‘Do Not Call’ list when confronted with what can only be described as endemic ‘dead air’.
What about the FTC and the FCC? Well it is part of their mandate to care about consumers. The main reason for all the Federal activity on dialing and ‘Do Not Call’ legislation, is the raw deal that US consumers that have had in recent years. So should these bodies care if consumers, fed up because of the ‘dead air’ stemming from the new Federal rules, were thus encouraged to join the national ‘Do Not Call’ list!? Probably not. We are not accusing the FTC and the FCC of being Machiavellian; we just think that, in the rush to legislate, they have perhaps not thought it through enough.
We hope that there is a rethink. There clearly needs to be a maximum time interval set for delay, related to some event. We respectfully suggest that the event or basis for doing this should be the fact that the phone has gone offhook. Determination of this is much clearer than pinpointing where a greeting ends. As to the time interval – well the shorter it is, the more likely people are to be receptive to an outbound call, and the less likely they will be to rush for the ‘Do Not Call’ list.
Phew, that was a mouthful wasn’t it? But isn’t it odd that legislation especially aimed at discouraging the proliferation of ‘dead air’ calls may well have quite the opposite effect, and be a potent force in encouraging consumers to join the national ‘Do Not Call’ list?
Europe is well ahead of the US in terms of ‘Do Not Call’ legislation. For example, half the countries in the EC run opt in systems, meaning that you can only call consumers if you have their specific permission. And the leading opt out country, the UK, has had a national ‘Do Not Call’ list in place for several years.
Call volumes are generally a lot less than the US, but dialing habits leave a lot to be desired. We recently did a survey of UK recipients of Outbound Focus asking them about their experience of nuisance calls, with the expectation of publishing the results for you. The indicated rates of nuisance calls are so high that we won’t publish them but we are very happy to make the results available, minus respondent details, to any responsible body interested in doing further research in this area.
The UK in particular is beginning to look like a rerun of the US. There is an excellent DMA code of practice in place, and a lot of lip service from companies to this, but in practice the temptation to dial without restraint is proving too much for some companies. Now that predictive dialing vendors are being obliged to restrain what their products do in their home territory, it will be interesting to see if this leads to a more responsible approach from them in the UK marketplace. If it doesn’t, then it’s a dead cert in our view that the new regulator, OFCOM, will act. And maybe this would be a good thing if it prevented an exodus to the national ‘Do Not Call’ list similar to that expected in the US.
TIP OF THE MONTH
This time around we welcome Brian M. McCutcheon to the stand. Brian provides consulting and project management services for sophisticated computer and telephony solutions through his consulting practice, SoftReach Services. In an earlier life, Brian managed Aspect Communications’ Outbound Software Practice and helped drive the introduction of their predictive dialing product.
A Time of Adjustment
by Brian M. McCutcheon
The U.S. landscape for outbound dialing campaigns is dramatically different from that of the 1990s. With dramatic changes in federal regulations, outbound dialing campaigns are now required to operate within a more narrow definition of acceptable behavior, with serious monetary consequences for those found to violate this definition when dialing U.S. consumers..
As businesses adapt to the latest U.S. regulations, they can anticipate changes in the economics associated with telemarketing campaigns. Telemarketing activities will be subject to costs associated with implementation of the new regulations, such as access fees for the national ‘Do Not Call’ list. Other costs may come in the form of changes to agent productivity as measured by talk time, in particular for those operations which need to adapt their dialing practices to conform to the 3% abandoned call restriction. In some cases, the existing technology may need to be upgrade or replaced. On the positive side, eliminating numbers from the ‘Do Not Call’ list is likely to eliminate many calls to consumers who are predisposed to decline any offer from a Telemarketer.
Faced with a likely increase in the cost of Telemarketing campaigns, businesses will likely consider alternative ways to directly market goods and services to consumers. This could include traditional approaches like direct marketing, as well as newer trends like email campaigns. However, the ubiquitous telephone, with the potential for interactive dialogue, will still remain a compelling means to reach consumers. As such, Telemarketing is destined to remain a powerful means of reaching consumers, leaving businesses to seek increased business benefit per call to offset the increased costs.
As businesses seek to increase the value of their Telemarketing calls, they may look for improvements by better leveraging the available information on consumers. Information can be used not only to improve targeting of the appropriate audience for a given offering, but may also be used to personalize the agent’s dialogue with the called individuals. These techniques call for an increased interoperability of the dialer with information kept in other business systems, and place a premium on accurate detailed lists when prospecting for new customers.
Telemarketing may be viewed increasingly as a high-value element in broader marketing programs. For example, Telemarketing campaigns may be used to make targeted offerings to participants in permission-based marketing programs. A business may create a ‘community of common interest’, providing information and insight to the participants through communications to which they have subscribed, such as newsletters and online discussion groups. These programs focus on building credibility and mindshare, fostering a view of the sponsor as a trusted advisor. Such programs enable the participants to select their level of participation, often allowing each participant to select whether the sponsor may contact them with promotional offerings.
As businesses work through this challenging time, they will find creative ways to thrive in the changed U.S. landscape for outbound dialing campaigns.
Many thanks to Brian for his insight.
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