Newsletter Three

Dear Reader,

Welcome to Issue 03 of Outbound Focus, a free email publication of Sytel Limited.

This month we step away from our usual format to bring you a Special Edition, focusing on predictive dialing issues in the US, in particular the promotion of a bill in the California Legislature, banning predictive dialing.

We are not opposing the bill per se, but in this edition, we want to focus on the issues as we see them, suggest possible solutions and hopefully bring some light to this debate, which is ongoing not just in the US, but elsewhere in the world.

Jamie Stewart

Predictive dialing is at a crossroads at the moment in the US. No doubts about the productivity that can be achieved, but over zealous use of pacing algorithms and some darned bad practices, have produced a backlash.

A bill currently before the California Legislature seeks to ban predictive dialing. There are exceptions, for example in the case of public service information and in respect of prior business relationships. The full text of the bill, which is in its second reading, can be found by going to:

Click on ‘Bill Information’,
type in ‘2721’ under ‘Bill number’,
and click on ‘Search’.

One of the main rationales for the bill is quoted in Section 1(c) as being:

‘Many consumers are outraged over the proliferation of intrusive nuisance calls to their homes from telemarketers, including, but not limited to, pre-recorded messages and abandoned calls.’

As a supplier of predictive dialing solutions ourselves, we could be accused of having a vested interest in opposing such bills. And we will happily admit to that. But we are not interested in predictive dialing at any price, and as some as our readers know, we have campaigned for some years, and will continue to campaign for restrictions on what predictive dialers do.

Nuisance Calls

The bill, as worded, sees outbound calls as potentially intrusive and therefore liable to cause a nuisance. If folk don’t want to get called, then they shouldn’t be called, and it’s surprising that the US has lagged behind other countries, especially those in the EC, in making this happen. We’ll come back to this in a moment. But first let’s look at the ‘nuisance’ calls being caused by predictive dialers. Normally this word is applied to those outbound calls made by a dialer, other than when a called party is able to answer the phone and be put in immediate contact with an agent. Let’s stick with this definition for the moment.

Types of Nuisance Calls

  1. The phone rings a few times and then stops before you have a chance to hang up.
  2. You answer the phone, and there is no one there to respond to you, so you wait for seconds, often many, and may hang up before an agent comes on the line.
  3. You answer the phone and the call is immediately terminated.

For detailed descriptions, see the article our CEO wrote in C@ll Center Solutions in April 1999, or click here to download the PDF version (Sytel Paper 8).

These are practices that predictive dialers have used historically in order to reduce agent wait times between calls, and thus boost talk time per hour. The one most familiar to readers in the US is probably number(ii).

The incidence of all these nuisance calls in the US is very high. A limited survey we have carried out suggests that for every 100 live calls (an agent is put in contact immediately with someone who has just answered the phone in response to an outbound call), there may be as many as between 50 and 100 nuisance calls. We’d love to be proved wrong on this, but even the most generous assessment is pretty certain to conclude that the percentage of nuisance calls measured in this way is very high, and unsustainable.

What are the solutions?

One solution, as proposed in the California Legislature, is to ban predictive dialing. Such a law, properly enforced, should have the desired result, but the benefits that predictive dialing brings would be foregone, and it doesn’t solve the problem (see Section 1(c) of the bill as quoted above) of those folk who simply don’t want to receive calls.

Let’s see what the alternatives might be.

What about if the significant volume of nuisance calls (sticking to our definition above) could be reduced to just a few, with predictive dialing still being allowed to do its thing? Well, that was exactly the intent behind the guidelines issued by the Direct Marketing Association in the US in January 1998. These guidelines (described in detail in Sytel Paper 8) represent a major blast at runaway predictive dialing practices. If call centers and predictive vendors adhere to these guidelines, then complaints about overdialing by predictive dialers will largely go away.

Many commentators have questioned this, on the basis that the guidelines allow a maximum of 5% abandoned calls. Sounds high to some. But put it in context. If we are right in thinking that the real rate for nuisance calls is at least 50%, then a ban on all kinds of nuisance calls, except measured abandoned calls at the rate of 5%, would represent a huge reduction in nuisance calls.

So are the US DMA rules biting? Those who expect a set of guidelines to be issued by a trade organisation, and then look to find that both members and non-members immediately comply will be disappointed. To be fair to the DMA, the guidelines were a major and a very bold step forward. The next step for both them and other responsible marketing organisations is to go for general compliance, amongst their members.

If the trade organisations, such as the DMA, gear themselves up for this, then, our own view is that there is a pretty good chance of widespread compliance being achieved.

If they don’t or can’t, then we can expect more bills to be proposed in the US, like that before the Californian Legislature.

What about if compliance with a rigorous set of guidelines such as the DMA’s had the rule of law behind it? If so, who would the law be aimed at? Call centers, the vendors supplying their systems, or both? Food for thought, and no prizes for guessing which would be easier to administer.

This debate in the US has got quite a way to run, and all that can be said with reasonable certainty at this stage, is that the days of runaway nuisance calls are definitely numbered. As Bob van Voorhis said in Outbound Focus Issue 02, let’s all put our houses in order, or the Feds and the States Legislatures are going to move in.

“But you are tarring us all with the same brush!”, some may say.

That’s not our intention, and here’s a way to avoid that happening, especially if you are a call center operator. Just declare your compliance with say the DMA rules, and make sure that your operations do just that. It strikes us as a pretty savvy thing to do commercially.

“A disproportionate amount of the nuisance calls occur at the low end of the market, where gains from predictive dialing are hard to come by.”

There may well be some truth in this, and such operators are more likely not to belong to major trade organisations and are thus outside the influence of their codes of practice.

If nuisance calls can be decimated in the US, by whatever means, then predictive dialing can not just make a very strong case for legitimacy, but has something to be proud of, namely that if consumers are willing to tolerate a small incidence of abandoned calls then call centers can achieve higher talk time per hour, making them more efficient and allowing them to deliver their goods and services at lower prices to those consumers willing to receive outbound calls.

Those people who don’t like this tradeoff are very likely the same people (see the quote from the Californian bill above) who regard any unprompted outbound call an intrusion. The way to respond to such people is not to ban predictive dialing, but to enable them to place their names on effective ‘don’t call’ lists. Absolute anathema to many telemarketers, but if we could persuade someone to open a betting book on this issue, we’ll put our money on the line.

The UK has gone down this road, with a national system and forced compliance, and outbound activities have never been healthier there. Just as the US DMA followed behind the UK in coming up with a (better) set of guidelines for predictive dialers, then perhaps the US legislators could come up with a better national ‘don’t call’ scheme.

Nothing like a bit of healthy competition

All newsletters >>