Has the industry dug its own grave with cold calling?

The history of predictive diallers started with debt collectors in the United States. Very gradually they started to make their way across to other countries. As technology costs have fallen and as more companies have outsourced their telesales – particularly to countries such as India – the past few years have seen an explosion in the use of predictive diallers.

Because labour has been cheap and predictive diallers can make an awful lot of outbound calls, companies have been making inappropriate calls to prospective customers.

Traditionally telephone sales required an extremely well-crafted proposition, presented by a very good sales person at the end of the line and a customer list populated with data that was extremely well targeted. This in turn led to good conversion rates. However, in the past few years many companies have just blasted out calls irrespective of the impact that they might be having.

“With some call centres, it’s as if they’ve dragged some people off the street, cranked up the dialler and let them see what happens,” comments Rufus Grig of Callmedia. “Effectively, they feel it’s costing them so little that it doesn’t matter if the conversion rate is bad. There has been a very parochial approach because people have not thought about the future. They have just thought, ‘I’m going to fish the river dry and to hell with it, whether my son will have any fish to catch or not because I want fish now’”.

This has now led to bad practice, too many silent calls and many very poor quality calls being generated. This has driven the record numbers of people who have registered with the Telephone Preference Service (TPS). So many people have registered with the TPS that customers not on the TPS lists have become even more scarce. This has caused the cold callers to pound people not on the TPS list even harder - causing more badly targeted calls, and more silent calls.

“The difficulty is there are a lot of good outbound call centres doing good creative jobs, winning good customers and they’ve been worn down by the, ‘pull the guy off the street stick a script in front of him merchants’ who have brought the price down in the marketplace so that the good guys simply can’t compete on a price per hour per agency as most outbound is outsourced”.

In the future you will soon require permission based telemarketing to call your customers,. To do this will require an utterly different approach. “You will have to target your calls very well, and you’ve got to find propositions your customers are going to want to hear about. It will not be good enough to use somebody at the end of the line who has a very crackly phone with a poor grasp of English,” continues Rufus Grig.

In a permission marketing environment you are much more likely to use customer service staff to do outbound calls. You’ve got that ability to use people who already know your business inside out, know your customers inside out and have a good relationship with your customers at your existing call centre rather than constantly putting your work to outsourcers.

In the UK, Ofcom have recently published their consultation paper – expected to come into force early in 2006. Using the Communications Act 2003, Ofcom have the power to take action against persons or companies who ‘persistently misuse electronic communications networks or services in any way that causes or is likely to cause unnecessary annoyance, inconvenience or anxiety’.

What will be the implications of people calling from India?

There has been some debate as to what the regulatory implications will be. It looks like it’s pretty clear that the responsibility for cold calling will be with the company providing the product that is being offered. For example, if an Indian call centre is making calls on behalf of a UK bank then the information commissioner can go after the UK Bank even if they use an Indian Outsourcer to abuse TPS or make silent calls. What we really need is a test case to prove the whole thing.

“I hope that Ofcom will significantly fine people who are guilty. They have several investigations going on at the moment into different companies. I hope they fine them significantly and publicly and that will be a bit of a boot up the industry’s backside,” adds Rufus Grig.

Is it too late?

The industry is now starting to think about how they smarten up outbound calls. This will be great for the companies with the good database and analysis tools, but is it just a little too late?