New name reflects a changing business

The extent to which the telemarketing industry has evolved over the past couple of years is perhaps best reflected in its adoption of the term 'call centre' to describe its activities.The reason for the change, which came into vogue a little...

The extent to which the telemarketing industry has evolved over the past couple of years is perhaps best reflected in its adoption of the term ‘call centre’ to describe its activities.

The reason for the change, which came into vogue a little over a year ago, according to industry experts, was partly semantics.

For many people, the term ‘telemarketing’ conjured up images of boiler room operations run by disreputable companies that called consumers at inconvenient times offering them the chance to buy products they did not want.

Professional ring

The term ‘call centre,’ it was thought by the companies who managed reputable business-to-business or business-to-consumer operations, had a more professional ring to it.

As well, the new name more accurately reflected the fact the telephone was used for more varied applications than could be described by the term ‘telemarketing.’

A 1990 study, for example, found the phone was used to handle inquiries, take orders and reservations, qualify leads, provide technical assistance and conduct market research, as well as initiate sales.

But, most importantly, the term ‘call centre,’ because it is broader than the term ‘telemarketing,’ takes into account the integration of the telephone system with a customer database to more accurately reflect the highly sophisticated way the telephone is now being used in marketing and customer service.

Sandy Freeman, associate director of communications at Phone Power, the call centre consulting division of Stentor, an organization which represents Canada’s major phone companies, puts it this way:

‘The whole concept of telemarketing began with people on the phone. The industry has evolved so much since then, that the term `call centre’ provides people with an image that is much more than just the telephone.’

Gail Young, senior manager of enhanced services marketing at Northern Telecom, a manufacturer of telecommunications equipment and a leading supplier of call centre systems around the world, says although the technology to run call centres has been around since the 1970s, it is only recently that companies outside of the travel, finance and catalogue categories have started to realize the potential of integrating their telephone and database systems.

‘Most organizations have records of second- or third-generation purchases,’ Young says. ‘What better way to harvest the information in that database than by linking it to the phone?’

While the boom in call centre start-ups can be traced to the desire by business to operate faster, cheaper and more efficiently, the evolution of the call centre can be attributed, in part, to technological developments in three areas – interactive voice response, automatic call distribution and predictive dialling – and, more significantly, their integration with customer databases.

Interactive voice response:

Just about anyone who has used a phone in the past three years is familiar with the concept of interactive voice response (ivr) or interactive voice processing.

Callers are greeted with a recorded message and presented a menu of options ‘press 1 for sales, press 2 for customer service’ that allow them to proceed by selecting numbers on their touchtone telephone key pads.

Businesses use these systems to handle routine incoming calls, such as inquiries about operating hours, company locations, and so on, without the customer having to connect to a live operator.

‘This allows you to offload the more mundane calls, and allows your software support people, for example, to handle the calls that really need software support,’ says Steve Langford, director of sales and marketing at Norlite Technology, a company based in the Ottawa suburb of Kanata, which markets a turnkey call centre system.

By taking the ivr concept one step further – through the integration of interactive voice response with the host’s computer database – the system can handle sophisticated transactions.

While banks were the first to link their telephone systems and computer databases in this way (The Toronto-Dominion Bank and cibc, for example, have, for some time, offered customers the chance to glean account information and do banking transactions by phone), other types of businesses are starting to follow suit.

Periphonics, a maker and designer of interactive voice response systems based in Bohemia, n.y., has supplied a half-dozen Canadian colleges and universities, including McGill University in Montreal, the University of Western Ontario in London, Ont., and Carleton University in Ottawa, with such a system.

By keying in their student identification numbers, students can register for classes, find out about the status of their student loans, request forms be sent to them, and so on, without having to line up in person.

Employment and Immigration Canada, another Periphonics client, is using the technology to give unemployed individuals access to job postings.

Karen Ferraro, marketing manager for Periphonics, says the principal benefit of such a system is enhanced service to customers.

‘They can get information 24 hours a day,’ Ferraro says. ‘Customers have access to information immediately and at their convenience.’

As well, the system saves money.

‘Instead of having a big customer service department, companies can reduce labor costs, although that is not something we like to emphasize,’ Ferraro says.

Automatic call distribution, or acd, is a telephone call sequencing system that ensures every call to a designated telephone number is answered.

The system works by assigning a single number to a group of agents. Telephone calls are then distributed equitably among them.

If all the agents are busy, calls are placed in sequence for the first available operator.

Young says one of the advantages of such a system is that it allows companies to operate call centres in one or more locations without that being apparent to the caller.

A call to a 1-800 line from Toronto, for example, may be answered locally or redirected immediately to call centres in another city, another province, or even another country.

‘When you make that telephone call, our technology is smart enough to actually look ahead and never send the call anywhere until there is someone available to take your call,’ Young says.

She says companies with an acd system are better able to handle peak calling periods by redistributing calls to less busy locations, or even agents’ homes.

The availability of acd technology has spawned the growth of call centres in job-hungry locations such as New Brunswick, which, at last count, had convinced 15 major corporations, including Canada Trust, Purolator Courier and Federal Express, to locate their call centres there on the basis of a state-of-the-art telephone system, lower costs and a bilingual workforce.

Linked to database

While the call distribution technology increases the efficiency of companies by allowing them to answer more calls with fewer agents, its potential can be truly realized when it is linked to a company’s database.

At its most sophisticated level, the system can treat callers differently, depending on the information a company has about those callers in its database.

High volume customers, for example, could be given priority in the answering sequence over low volume buyers; customers whose accounts are overdue could automatically have their calls redirected to accounts payable from sales.

The system’s ability to distinguish one caller from another hinges on its recognition of the caller’s telephone number – using calling line identification or call display – and its attachment of that number to the caller’s file in the database.

Provided the caller has already established a relationship with the company, the customer’s file will automatically be displayed on an agent’s terminal when he or she answers the call.

While this technology has been available to companies with mainframe computers for several years (customers calling Pizza Pizza in Toronto, for example, are greeted by agents who know their name, their address and their pizza preferences) it is only recently that this technology has been available to small- and medium-sized businesses.

Markham, Ont.-based DSG Communications received a patent on the process of decoding the call display information transmitted in the period between the first and second ring of a telephone call and attaching that data to a personal computer-based customer file.

Denys Lewis, dsg’s district manager, central region, says while it is true the company’s CallLink process does not work if the caller is blocking his or her number from being displayed, the privacy issue is limited, for the most part, to the residential market.

Even then, says Katherine Matheson, dsg’s marketing manager, most customers are pleased they do not have to waste time repeating personal information each time they call in order that an operator can pull up their files.

Predictive dialling

Predictive dialling, also known as power dialling or automated outbound dialling, is much like automatic call distribution, only in reverse.

When an agent logs on, the system starts making calls to prospects in the company’s database. It automatically filters out ‘no answers’ and busy signals to present only live contacts to the agent.

As soon as it hears ‘Hello,’ the system alerts the agent by beeping in his or her ear while simultaneously passing through the record associated with that call.

‘The employee delivers a pitch, wraps up the call by setting an appointment, recording a sale or whatever, and then 10 to 15 seconds later, bang – there’s the next call,’ Langford says.

While estimates vary, Langford says an agent’s productivity can be dramatically enhanced by such a system.

‘In a manual environment, it’s not unusual to talk only 20 to 30 minutes out of an hour,’ he says. ‘Our experience shows that you can increase that to 40 to 50 minutes out of an hour.’

‘You’re a happier employee, because you are more productive, and if you are paid on commission, you love that. And your manager is happier because they are increasing their contacts by 50%.’

While there is no doubt that increasing the number of calls can increase a company’s chances of making a sale (a 1990 Price Waterhouse survey conducted on behalf of Telecom Canada found that 59% of inbound calls and 30% of outbound calls result in a sale), the power of predictive dialling can really be leveraged by those companies that mine their databases for marketing opportunities.

Young says an airline faced with the prospect of flying a half-empty plane from Toronto to Vancouver might search its database for frequent flyers whose flying patterns dictate they like to spend a weekend in Vancouver several times a year.

The system could generate calls to these individuals and have the agents offer them a discount to fly on short notice.

Young says the payback on a system of this nature, which runs between $5,000 and $15,000 per agent, can literally be hours.

Asked to speculate on the next step in the evolution of call centres, Joe McCaig, manager of market development at Phone Power, says there will always be refinements in the technology, but the big steps will be in finding ways to take advantage of the resources already available.

His colleague Sandy Freeman agrees.

‘Along with tqm, or total quality management, is evolving another concept – that in order to really satisfy your clients and keep your market share, you have to anticipate their needs,’ Freeman says.

‘And I believe that we are going to have systems in place that can take the information we currently have on a customer and come up with a proposal as to where they should be going from here,’ he says.

‘We can then go out and delight our customers, rather than just fill their needs.’