January 1999

The Future Of The Teleservices Industry:
Are You Aware

BY GENE GRAY, AMERICAN TELESERVICES ASSOCIATION

Today, business professionals are increasingly realizing the power of the telephone channel as a marketing tool. As a result, the teleservices industry has been experiencing tremendous growth: This year, inbound and outbound telemarketing is expected to grow an average of greater than 10 percent! This is great news for the industry as we head into the new millennium.

As we all know, telephone marketing is big business. Last year, telephone marketing accounted for an estimated $460 billion in business-to-business and consumer outbound sales. When we consider that each dollar spent on outbound telemarketing in 1997 resulted in an estimated $7.15 return on investment, it is not difficult to understand why the teleservices industry is achieving such growth.

Inbound telemarketing is also expanding at a rapid rate. One quarter of all catalog and mail order businesses now offer 24-hour order lines. Why? For one, Americans like using the telephone to order products, secure services or receive customer support. In fact, one in three Americans purchases goods and services over the phone each year, and last year alone, Americans dialed toll-free numbers almost 30 billion times.

As our industry continues its rapid growth, a number of key issues will continue to shape the competitive environment facing telemarketers. New technologies, legal compliance, public image, growth and education, as well as the influx of legislative issues, will provide new challenges to our industry. How telemarketers and all users of the telephone channel meet these challenges will determine the level of success the industry as a whole will enjoy in the future. While our growth potential is seemingly limitless, we must monitor our growing pains very carefully to ensure our continued success.

New Technologies
Staying ahead of the technological curve is probably the greatest challenge we face. It seems that every day there are new and better ways of doing things we just upgraded.

Think of the changes we have seen in the teleservices industry in this decade alone. Technology has defined the field of service and sales via the telephone. Customer service has made vast improvements thanks to rapid adoption of technologies such as interactive voice response (IVR) and computer-telephony integration (CTI). Productivity has increased with the onset of predictive dialing and call routing as best-practice approaches to telephone sales and service. We have seen diversified use of the telephone lines with the onset of fax and e-mail commerce. Perhaps most amazing is that we have made these changes, trained our staffs, made new changes and retrained staffs while keeping telecommerce moving forward.

Consider what lies ahead in the next decade. We have already had flashes of brilliance from the promise of integrating the telephone with the computer. Soon it will be commonplace for consumers to access customer service centers using their computers. By all accounts, we are ready for that transition. We are facing the reality of customers who are interacting on the Web with sales/service agents in real-time. During such a transaction, we can count on the customer moving effortlessly from a Web-page catalog to an e-mail order desk, to a real-time sales agent dialog, with the customer and agent working together on the same screen, resulting in an Internet-based network purchase.

It is clear that technology is continuing to shape our trade. It may well be that technology is in the process of not only redefining the use of the telephone, but the call center itself to more accurately address the unique ways individuals communicate.

Reading trade publications is a great way to stay on top of new technologies, as most of them contain editorial sections devoted to the subject. Another way to keep informed is to attend industry educational conferences and trade shows. There you'll be able to put your hands on the latest and greatest technology has to offer. Relationship building with key vendors and industry peers is another surefire way to stay ahead of the game.

Legislation
Telephone marketing has always attracted considerable attention from American lawmakers. This is especially true at the state level, where the majority of recent and pending legislative activity now occurs. Since state legislation can be passed relatively quickly, sometimes in a matter of weeks, it requires extensive research just to keep up with the many laws and their requirements. This is creating a complex working environment for telemarketers and it will take a concerted effort by the teleservices industry to overcome this burdensome challenge.

At both the state and federal levels of government, privacy is the number one legislative issue. At the state level it is manifesting itself in the forms of state-run Do Not Call (DNC) lists, laws prohibiting the affirmative blocking of caller I.D. and laws aimed at reducing call abandonment rates. Registration is another major initiative at the state level. There is a trend developing for limiting exemptions and tightening terms of registration. Currently (as of November 1998), registration exists in 25 states with another 8 expected to follow within the next cycle of legislative sessions. Another growing state trend is the proliferation of No Rebuttal laws. While these laws are well-intended and in some cases protect consumers, they often infringe on the right of legitimate businesspeople to conduct commerce.

On June 23, 1998, the Telephone Fraud Prevention Act was signed into public law. The new federal law contains provisions requiring the forfeiture of real property and assets related to fraud and increases federal authority to go after cross-border and offshore fraud. Also at the federal level, anti-slamming legislation has picked up much interest.

There are a number of ways for telemarketers to get involved at the federal and grassroots level. For one, introduce yourself to federal and state legislators. In fact, invite them for a tour of your call center. The more they know about your business, the more knowledgeable they will be when making decisions that affect us all. Make it a point to attend industry-sponsored legislative conferences. Volunteering is another great way to get involved. For example, through its lobbying efforts, ATA's volunteer network of State Legislative Coordinators represents the telemarketing industry in nearly every state.

Compliance
The growing number of new laws being passed at the state level is not only difficult to track and keep up with, in some cases the penalties for noncompliance can be unreasonably harsh. Some states consider noncompliance a felony, and issue fines upwards of $5,000 per violation and/or jail time. Legitimate telemarketers who do not have the resources to keep on top of the myriad of new laws which are proposed and passed at the state level are at risk of being severely penalized. As discussed previously, the ATA, through its legislative counsel and dedicated volunteers, is working to minimize unreasonable legislation. ATA also offers a number of special courses and conferences designed to keep telemarketers abreast of new and proposed legislation, and publishes the "Compendium of State Laws and Regulations" as well as its "Connections" newsletter to provide detailed legislative updates. In the meantime, it's up to each individual to keep abreast of current laws and regulations and comply with them.

Public Image
It is no secret that the media usually targets the teleservices industry as a consumer foe. Unfortunately, the media is interested more often in isolated events of fraudulent activity than the larger picture of the industry as an economic success story both nationally and regionally. We need to get the word out that teleservices is good for America. For example, telephone marketing is the leader of the direct marketing labor force with outbound sales accounting for more than 1 million employees each year and creating 8.3 million jobs nationwide every year. We are a people-based industry. Teleservices providers and in-house call centers are dedicated to recruiting, training and maintaining the best and the brightest in the workforce. We provide employment opportunities for a broad spectrum of Americans, such as college graduates at the start of their careers, retired persons starting a second career to supplement fixed incomes, students working their way through school and parents who require flexible work schedules as they bring up their children.

Future Success
Telemarketers as individuals are greatly responsible for the future success of the teleservices industry as a whole. If telemarketers everywhere commit themselves to improving the way they conduct their business, by keeping abreast of new technologies and legislative issues, ensuring compliance is met at all costs, partnering with the community and focusing on ongoing education, the industry will continue to flourish.

The more the industry prospers and grows, the more bargaining power it will have on Capitol Hill and on Wall Street. More bargaining power leads to less duplicative legislation, resulting in a fair and reasonable competitive environment for the industry.

Gene Gray is the president of the board of directors of the American Teleservices Association. He is currently a client management vice president at APAC Teleservices in Cedar Rapids, Iowa.