The call and contact centre industry is facing its biggest dilemma yet. Predictive dialler technology, designed to increase speed, productivity and efficiency for outbound telemarketers, is now threatening to destroy the very business it was developed for.
The equipment is at the centre of the silent calls storm and is being blamed for the alarming increase in Telephone Preference Service (TPS) registrations, with call centres facing mounting criticism over the way the technology is being deployed.
According to Paul Miller, contact centre director at Prolog, the technology is now doing more harm than good. "The outcome will be a decline in outbound telemarketing. Predictive diallers are inappropriate to use unless you have sufficient agents to make the maths work. But there is a natural barrier to this because of the costs involved," he explains.
Certainly, the commercial reality is adding pressure, with businesses trying to reach as many customers as possible from a rapidly shrinking consumer base. And if return on investment figures are to be believed, where companies can recoup their predictive dialler technology spend in as little as a year or even months, it is little wonder that the market for, and usage of, predictive diallers is growing. According to Robin Goad, analyst at research firm Datamonitor, the past six months have seen growth in the market, particularly in offshore locations - and this is set to continue.
Blinded by technology
So why has the situation escalated? Some observers claim companies are all too often seduced by the economics of investing in such technology, as predictive dialler manufacturers give the impression that the systems are more powerful than they are.
"Some people make wild claims about the capabilities of the technology," says John Price, MD of telemarketing agency Price Direct and chairman of the Direct Marketing Association's (DMA) contact centre council.
"Those who install them are way down the food chain, and those in the company who are responsible for their use only see it as a cost base and not from an ethical point of view."
Others agree that clarification is needed on what is and is not acceptable use. The DMA's current code of practice stipulates a five per cent tolerance of silent calls in any 24-hour campaign period (although it is considering adopting the US level of three per cent), but there appears to be an urgent need to better educate and train call centre operators on exactly what this level means.
"The equipment we have is quite capable of meeting the five per cent level, but we need to clarify exactly what that stands for," says Belinda Haden, specialist consultant on outbound telemarketing at consultancy CM Insight. "Telemarketing companies can set their diallers to match certain levels, but these can be changed several times in one campaign, confusing the issue."
The fact that margins in the industry have been steadily eroding is also a contributing factor, as companies invest in technology at the expense of people. In the past, most companies that have predictive diallers would have employed a specialist whose only job was to load and monitor data, but this is often the first person they let go.
Silent calls
Ironically, client expectations also have a part to play. Some in the industry fear that demands for unrealistic call numbers are forcing telemarketers to, in the words of one insider, "squeeze the pips out of the equipment".
There is a concern that the blame for silent calls is being all too readily apportioned to the telemarketing industry. According to a DMA report released last year looking at the threat of silent calls, predictive dialling equipment manufacturers say that more than 60 per cent of such calls are made from debt collection and credit agencies. Datamonitor's Goad agrees that debt collection agencies have been partly behind the technology's growth.
So what can be done to help ease the problem? Many in the industry believe that the root of the matter lies in poor management of the technology and the way it is deployed - but they also acknowledge that it makes the situation harder to legislate against.
"In the UK, DMA members are compliant with the five per cent threshold for silent calls," says Maggie Evans, head of marketing at customer contact outsourcing partner iSky Europe. "But outside DMA membership and the UK, there is little or no effective way of ensuring responsible use of the technology. One way forward is to legislate programming at supply level, so a company cannot set aggressive levels but international legislation would have to come into play."
Calls for training users in how best to use the equipment and proposals to license it are welcomed by the industry.
"Experience has made us realise not all firms are fully knowledgeable about the software they are using," says Ruth Booth, sales development manager at Centrica. "Training or best practice forums could be offered by the regulators, and we could look to license predictive diallers, so companies can only receive them after going through an industry audit. This would need to be reviewed periodically."
Controls
An outright ban on the software is not an idea anyone is prepared to entertain, but there are appeals for the technology to be enhanced. Informative messaging, where a recorded message is played identifying the caller to the recipient, is another option that some believe would be better than being on the receiving end of a silent call.
"There are ways to improve the algorithms," says Hamza Whitmore, managing director of telecommunications firm Encoded. "Because there is no legislation, there is no encouragement for this to be done. We need to go back to predictive dialler manufacturers and encourage them to use data collected on calls to make the process more dynamic and intelligent, measuring areas such as the average length of a call per contract, per session."
Others believe that a back-to-basics approach is one way forward and that companies need to re-invest in their people. Broadsystem recently achieved the Standard for Best Practice from the Call Centre Association, and the company keeps detailed records of call rates and employs a dialler manager.
Data management
There have been calls for better management of telemarketing data too. "There will still be good outbound telemarketing business to be had," says Gareth Smith, marketing director at call centre provider 2touch. "Real long-term success and reward will be based around the quality of the information the agent has to hand. And the real issue will be how effectively that data is being used."
Many in the industry now believe the situation has reached crisis point. "Consumers care passionately about the silent calls issue, and as an industry we have to clean up our act," says David Groves, product manager at contact centre software company Call Media.
As DMA's Price says, companies are now realising that "they are not going to keep customers if they continue to implement bad practice and make silent calls". This is now prompting those who can make a difference to sit up and take notice. Telecoms regulator Ofcom has had in excess of 300 complaints thus far, and in June it opened an investigation into seven companies in relation to silent calls, following both complaints from consumers and the receipt of information from BT's Nuisance Calls Bureau. BT is now offering its customers the option to register for the TPS when they sign up for new products.
Predicted problems
But there are further concerns looming on the horizon. Predictive dialler technology is constantly evolving, which means that ever-more sophisticated systems will be available at increasingly affordable prices. A new wave of on-demand systems could also mean that call centres have less control over the way the system is deployed.
"The market is heading towards network-based applications operating off web interfaces, the implications of which will mean less control. Dialling will be managed by whoever is hosting the network. This on-demand model could exacerbate the problem, as it's mainly owing to lack of control," says Prolog's Miller.
The reality is that predictive diallers are here to stay and look set to divide opinion for some time. On the one hand, the technology has improved calling times and agent productivity, but on the other such benefits have been diluted by badly managed systems. The industry appears to be fighting a fierce battle between best practice and economics, and the more it continues to deploy the equipment badly, the greater the risk of alienating consumers.
As the debate on silent calls and use of predictive dialler technology continues to rage and the number of TPS registrations swells, it could prove to be an increasingly fraught business to be involved in.
PREDICTIVE DIALLERS: THE US VIEW
The US code of practice on silent calls stipulates a three per cent tolerance of silent calls, compared with the five per cent in the UK. The Do Not Call Register, the US version of the TPS, came into effect two years ago. Since implementation, the Federal Communications Commission (FCC) in the US has received nearly 10,000 complaints, although figures show that these have decreased over time. In October 2003, nearly 4,500 complaints were logged, whereas in February 2004, just 900 were registered.
Dudley Larus, vice-president, global marketing at call centre software provider Amcat, says that telemarketers in the US have learnt to work with the technology and the three per cent guidelines to ensure compliance.
"Alongside the Do Not Call list, we also have the Telemarketing Sales Rule, which dictates how a predictive dialler must be operated, including how many times the phone must ring. The situation in the US is much more regulated than in the UK. The DMA needs guidelines backed up by some legislation," says Larus.
The FCC has also toughened up rules for the Do Not Call Register. A decision effective from January this year means that telemarketers have to check their contact lists against the Register every 31 days, as opposed to every three months as before. The FCC estimates that the lag time between a consumer putting a number on the do-not-call list and cessation of telemarketing calls to that consumer's number has been cut by two-thirds.
Larus also believes that the UK could benefit from forming a version of the American Teleservices Association, a body that represents the call centres, trainers, consultants and equipment suppliers that generate telephone, internet and email sales, service and support.
PREDICTIVE DIALLERS: THE FACTS
- Predictive diallers speed up the process of making outbound telemarketing calls by automatically calling several numbers and, once each is answered, connecting them to an agent. But often no agent is available, giving rise to a silent call.
- Diallers use a range of sophisticated mathematical equations and algorithms to determine the pace at which to dial out. These are based on projections as to when a person or machine will answer, and the time of day and area it is calling.
- Predictive diallers currently cost from £1,000 per seat to £2,500 per seat depending on what is included.
- Advances in technology mean that on-demand predictive dialling could be available from as little as £250 per seat.
- Around 20 per cent of all outbound marketing calls in the UK are made using predictive dialling technology.
- Typical talk time per hour is from 40 to 45 minutes.
- The equipment can be rented, hosted or bought.
SOURCE: Prolog, CM Insight, Gartner Group, Noetica
CONTROLLING THE USE OF PREDICTIVE DIALLERS
Tony Novissimo, managing director of Whistle Telemarketing, feels that the use of predictive diallers is intrusive.
"As a company, we have chosen to work without such equipment. We believe that the human element is what's important. We recruit people carefully rather than relying on the number of calls made in any one time. The problem has been created by the very nature of the business. Call centres are hungry to get the maximum out of callers and prefer to over - rather than underload the system," says Novissimo.
He believes that use of predictive diallers can, for the most part, be fully controlled, but he is calling for technology developments to enhance the customer experience.
"If a number is dialled and no one is there, predictive diallers should decrease the speed at which they call. Some companies have a mechanism in their diallers that can help deduce the profile of the person being called, and the dialler then matches it with a similarly profiled agent. It can help if you've been waiting or experienced a silent call to have someone along your wavelength taking the call," adds Novissimo.
Ultimately, though, Novissimo believes that anyone who is using a predictive dialler should have a licence in order to do so, and they should also complete quarterly reports to demonstrate proper use of the equipment.
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