Telemarketing – The Industry That Killed Itself?

Telemarketing – The Industry That Killed Itself?

31st January 2016

Ofcom’s review

These are challenging times for organisations which make large-scale outbound calls using predictive dialler technology. The UK communications regulator, Ofcom, is undertaking a ‘Review of how we use our persistent misuse powers: Focus on silent and abandoned calls’ http://stakeholders.ofcom.org.uk/binaries/consultations/silentcalls/JAP_Update_Dec2015.pdf.

In its initial discussion paper http://stakeholders.ofcom.org.uk/binaries/consultations/review-of-how-we-use-persistent-misuse-powers/summary/Persistent_misuse.pdf Ofcom has provided some suggested changes to their regulations to help address the problem of – what their research claims are – 4.8 billion nuisance calls made annually. Amongst other changes, Ofcom appear to be proposing that the number of ‘abandoned calls’ (that is, calls which are made but are then automatically terminated by the contact centre because no-one’s available at the contact centre end to handle the call – typically because the predictive dialler’s been set to slightly ‘over-dial’ or its algorithms have got it wrong) from 3% to 3.

I’m not entirely clear whether that’s 3 per month, or what, and there are various questions and ambiguities about exactly what is meant by Ofcom in the review. No doubt because of this, the DMA has successfully lobbied Ofcom to extend the original consultation period by two weeks to Wednesday 24th February. A team from the DMA are meeting with Ofcom this coming Tuesday (2nd February 2016).

Ofcom’s review

The industry’s response

The legitimate telemarketing ‘industry’ – if indeed, it is an industry; we’ll come back to that – is understandably opposed to what Ofcom appear to be proposing. Representatives and key players are (quite rightly) both arguing that

* The real culprits – be they based in the UK or offshore – disregard existing legislation about both telemarketing and the correct treatment of consumer data and contact preferences. Those contact centres are the ones that will generate the majority of public frustration, dissatisfaction and distrust.

And

* Reducing abandoned calls to near-zero effectively bans the use of predictive dialling, as with such a small margin of error there could be no confidence that they could dial predictively

Unfortunately, though, it’s the legitimate organisations that obey the rules and which – if Ofcom really means what it seems to be saying – are facing the prospect of most of their current telemarketing activities becoming commercially unsustainable.

I’ve spent a fair proportion of the past 20 years working on outbound calling, aiming to square positive customer experiences, aligned to brand values and wider marketing communications with hard commercial targets. I can’t claim to have always succeeded, but I must acknowledge that I’ve ‘got form’ – and some degree of insight. So, I instinctively find myself defensive of legitimate contact centres and their concerns about the impact of Ofcom’s suggestions. But, as I sat with a group of industry experts discussing the Ofcom proposals the other day, I found myself wondering what I really thought about the whole subject. So, I took a step back and considered.

Means to an end or a dead end?

Is it ok that most contact centres conducting large-scale outbound programmes (be that calling existing customers or prospects) do so using technology which will inevitably and consciously result in some call recipients receiving an abandoned call? If tomorrow I invented a more efficient direct mail printer or email campaign management tool that resulted in sending up to 3% of communications branded but with blank content (or worse) would that be considered ok? I doubt it.

It is undeniable that legitimate contact centres are vastly better informed about and mindful of their dialling technologies than they were years ago (I should know). This means that they operate at very low silent and abandoned call rates, they accurately record and respect both ‘do not call’ and call-back requests. Whether this is mainly due to increased customer dissatisfaction with silent and abandoned calls and the linked media coverage of the issue, or rather due to the increasingly large fines imposed by Ofcom is open to debate.

But, is a much-improved situation acceptable if it still results in a lousy customer experience? It’s not that I think telemarketing is unique in making a minority of customers suffer in order to deliver operational efficiencies. No, of course not:

Airport queues

Travellers get ‘bounced’ from the airline seats they’ve booked and paid for in good faith because ‘efficient yield management’ leads to over-booking in anticipation of cancellation and no-shows
Online users have to re-create usernames and passwords when companies change their systems and can’t justify the expense of migrating users automatically
When Sky upgrade their software, consumers are often left without service and need to manually re-boot their Sky boxes to catch up

Are these examples of poor corporate behaviour acceptable? No, but consumers tend to tolerate them. Perhaps the part-justification in each of these examples is that there’s an unspoken trade-off between the brand and the consumer:

crying computer user

We enjoy affordable air travel and maybe the occasional frustration and disappointment is accepted as the price to pay (and – dependent on the airline – you may get attractive compensation)
Likewise, if my favourite online retailer improves their functionality then – if I have sufficient innate brand loyalty – I will take the effort to re-register
Re-booting a Sky box is irritating, but if you want to watch the Premiership or Game of Thrones you’ll do it

Telemarketing is different; it’s a means to an end. Not really an industry, rather an activity or function that can support other industries and sectors. I may be delighted with the offer I have been made on an outbound call, but it’s the proposition and transaction that I value, not the getting a call from a stranger.

Is predictive dialling’s time up?

skybox

Google tells me that predictive diallers were invented by Douglas A. Samuelson in the US during the late 1980s, when mass telemarketing (and collections calling) was getting underway. The efficiency savings diallers created were substantial then and will be even greater now, with the growth of mobiles and ubiquitous answer-machines and voicemail services.

However, the late 1980s was a long time ago. That was the era of mass, ‘broadcast’ marketing in which telemarketing offered a new, direct channel to make vanilla sales presentations and convey proactive customer service messages to consumers. The age of one-size-fits-all marketing is meant to be over, now, isn’t it?

Predictive diallers don’t preclude running campaigns based on personalised and segmented data, offers and messages – indeed, their functionality often actively supports the management of complex, multiple campaigns – but they are rarely deployed to support contemporary, best-practice marketing. If an organisation has invested in a targeted, bespoke offer or message for a customer or prospect, then is it really effective or sensible for the contact centre agent – the most critical and probably most expensive part of the process – to be given no time to even review who they’re about to speak to?

Douglas A Samuelson

The Industry That Killed Itself?

Industries do not always act in their own best interests; short-term gains can be more appealing than long-term sustainability.

It’s been widely observed that financial services is an example of an industry which came close to killing itself in 2008 with its own dangerous, clever creativity. Similarly, some clever people at Volkswagen couldn’t resist out-smarting the competition by using engine management systems creatively and illegally.

Too clever by half – but we need banks and VW make good cars. There’s a very strong case that we need marketing at least as much as we need banks, but I think the proportion of people who would spontaneously agree is a lot lower. Telemarketing? What proportion of the population think that telemarketing has any intrinsic value?

Maybe the damage has already been done. Through a combination of legitimate players not choosing to do the right things in the past and the consciously less scrupulous contact centres disregarding all best practices and regulations today, can volume telemarketing now be defended? If you like, has the telemarketing well already been poisoned?

As the DMA Telemarketing Guide http://www.dma.org.uk/uploads/Telemarketing%20Mar%206_54feb463d30ae.pdf has it, “The sign of a great telemarketing call is that your customer would not describe it as telemarketing – but would instead describe it as a great service call!”. Quite right (NB I sit on the DMA’s Contact Centre & Telemarketing Council, but the hard work that went into producing this guide was all before my time, so I can’t claim any credit), but it plainly illustrates the problem; if telemarketing is an industry, then it’s a discredited and friendless one.

Discuss!

Am I right, or am I making a harsh judgement on my own trade?

Are a few silent call a significant issue when Ofcom and the other regulators have so many other important concerns to address – like rogue marketers randomly sending millions of automated recorded messages; disregarding data preferences and opt-ins, not referring to the Telephone Preference Service; presenting dubious and fraudulent offers?

Maybe ‘the industry’ should go with the regulatory flow and instead focus squarely on how to identify and stop the rogues. They are the real threat to the future of the outbound phone channel.

If you have your own thoughts do please let us know via hello@channeldoctors.co.uk

If you want to express an opinion on the Ofcom review you can contact them via consult@ofcom.org.uk before 24th February.

*predictive diallers are the clever gizmos that use algorithms to calculate when a contact centre agent is next due to become available and therefore automatically make calls in anticipation of someone being there to answer the call once connected. At the point that the call is answered by a ‘real’ human saying “hello” the call should be connected to an agent. Predictive diallers can save contact centre operators vast amounts of time which would otherwise be spent manually dialling numbers, listening to numbers ringing without answer or going to voice mail. The downside is that they don’t always work

(More technically accurate and involved descriptions are available)