March 2003

BY NADJI TEHRANI

TMC pioneered the call center, telemarketing and CRM industries with its flagship publication Telemarketing magazine in 1982. 

The industry has changed in the last 21 years and as the leading and most respected publication in the industry, we have not only led the change, but we also have changed the name of our publication to be more in line with where the industry is going.

To us, the multibillion-dollar CRM, call center, contact center industry, which we pioneered, is like a member of our family. No one cares about it more than we do! And it should be that way. After all, we own the registered trademark to Telemarketing. Having said that, it should be crystal clear or, as Richard Nixon used to say, it should be perfectly clear, why the FTCs unfortunate and unjust ruling hurts us more than anyone else! Having read some of the unbelievable provisions of the Telemarketing Sales Rule described in Fact 3, I cannot help but think that the FTC unintentionally and without having access to ALL THE FACTS about our industry has made this ruling, perhaps with the intention of consumer protection.

Id Love To Meet With You To Set The Record Straight!
While waiting for that opportunity, Mr. Muris, here is some food for thought:

Fact 1: Every Company Is A Contact Center 
No company can exist without the business transactions, customer service and customer relationship management opportunities provided by contact centers. With the new FTC regulations, you are stifling, prohibiting and in fact, killing the vital function of every business. In short, with the new FTC ruling, ALL trades, including stock market TRADES, which are the lifeblood of American (or any) business, will also die! Mr. Muris, with all due respect, I dont think the objective of the Federal TRADE Commission should be to KILL TRADE!

Fact 2: Telemarketing Is A Job-Producing Industry
As the cover story of the February issue of this magazine pointed out, the contact center industry is a JOB-PRODUCING and JOB-PROTECTING industry. I am sure you have heard, Nothing happens until somebody sells something. Conducted properly, telemarketing (or phone transactions going on in every company) is by far THE most powerful selling tool known to mankind. When you stop or restrict this great selling tool, sales will decline and millions more Americans will be laid off! I am sure thats not what you want, Mr. Muris! For what its worth, three to five million U.S. jobs are supported and protected by the telemarketing industry!

Fact 3: Outsourced Teleservices Agencies Will Be Severely Hurt
The total estimated number of permanent jobs created and/or protected by service agencies in the United States is 1,392,597 (see Chart 1). Many of these jobs will be shipped offshore if the revisions to the Telemarketing Sales Rule go into effect, severely damaging a vital part of the U.S. economy. 

Chart 1

In our February issue, Gary Taylor, President and CEO of InfoCision Management Corporation, one of the most respected teleservices agencies in the industry and one that provides services to many of the leading charities in the U.S., made these comments about the impact the new legislation will have on his company:

When the Federal Trade Commission announced plans to create a national do-not-call (DNC) registry, it immediately brought to mind three major problems. 

First, the proposed $11,000 fine per (call) violation is ridiculous. They propose an alleged safe harbor provision, which is of course subject to the FTCs interpretation. This could bankrupt a legitimate company that merely makes an (ultimately inevitable) mistake. Not only will we be forced to comply with national FTC restrictions, but we also must register in 43 different states, and simultaneously comply with 27 different individual statewide regulations and restrictions. Mistakes are inevitable, and they could literally bankrupt us. 

Second, the sign-up procedure must ensure the integrity of the DNC list. The consumer should pay some nominal amount (e.g., $1.00 per year) to register, so they scrutinize and understand what they are signing up for. A prominent disclaimer should explain to consumers exactly what they are signing up for. Consumers should know, for example, that it will now be illegal for Ford to call them 18 months after they bought a car, to offer them an extended warranty package. 

Finally, a daily abandon rate maximum of 3 percent for each individual client program is unreasonable. We comply with the Direct Marketing Association guideline of a 5 percent overall daily abandon rate. When we dropped from 7 percent to the 5 percent guideline, it cost us 17 percent in decreased productivity. If we have to meet the 3 percent threshold, we might as well blow up our $10 million investment in workstations and revert to manual dialing.

Long-term, outbound providers will need to shift to more inbound applications, as continued regulations eliminate outbound opportunities. Over $120 million of our business [at InfoCision], and well over 2,000 jobs, are at risk to disappear overnight if the FTC regulations are implemented as currently proposed. We will have no chance of building our inbound business fast enough to compensate for our outbound losses if we cannot successfully lobby for more reasonable restrictions.

Fact 4: Telemarketing Is The Victim Of A Double Standard! 
When a criminal picks up a scalpel (or a surgical knife) and stabs someone, the next day the headlines will read, A Criminal Stabbed Someone. Now if the same criminal picks up the telephone and commits fraud, the headline would read, A telemarketer committed fraud. Mr. Muris, I am sure you can see how our great industry that supports and protects millions of jobs has been a victim of a double standard! The criminal who stabs someone is not a surgeon and by the same token, when the same criminal commits fraud by using the phone, he is NOT a telemarketer. 

We understand and admit that like any other industry, we have our own bad apples. In other words, just as there are those who commit mail fraud using direct mail, there are those who commit fraud using a telephone. However, the number of people who do commit fraud using telemarketing is very small and we would like to see these people prosecuted to the fullest extent of the law. Its not fair to judge the 99 percent of law-abiding companies by the 1 percent of the bad apples.

Fact 5: Too Much Government Intervention Will Only Send Jobs Offshore! 
Mr. Muris, business people are not stupid. If you put too many restrictions on them, they will take their telemarketing business offshore (where the labor rates are cheaper) and continue to call U.S. businesses and consumers. Prosecuting these offshore companies will be difficult and how much effort will the FTC put into chasing down the foreign companies that violate U.S. laws? So, Mr. Muris, the net result is that with too many restrictions, you have sent three to five million U.S. jobs offshore! I am sure, Mr. Muris, that is NOT what you intended to do.

A side effect of this legislation, as proposed, will be the crippling of the economic development of many small towns in America. I find it ironic that President Bush called for an additional $14 million to be added to the fiscal year 2004 budget of the Commerce Departments Economic Development Administration to help rural and urban communities grow their economies and create higher-paying jobs when many of those communities will be losing the largest if not only major employer in town due to the new provisions of the Telemarketing Sales Rule: namely call centers.

Fact 6: The Bottom Line
The bottom line, Mr. Muris, is that our industry cannot exist with the NEW FTC ruling. For the sake of 3 to 5 million U.S. workers and their families and on behalf of our entire industry, I urge you, Mr. Muris, to reconsider your positions and open the meeting to those who TRULY represent the industry.

Fact 7: Lack Of True Industry Representation
Mr. Muris, it is my personal feeling that during the rule-making sessions at the FTC, our industry did NOT have proper representation. May I suggest that you open the case to hear from TRUE INDUSTRY PROFESSIONALS AND PRACTITIONERS who know what they are doing!

I will be happy to be your ambassador and get together the right people from our industry and together lets develop a proper set of rules by which everyone can live and prosper.

A Call To Action
The future of the call center/CRM industry has never been in such jeopardy as now. Completely unfair and devastating rules are being imposed on us by those who do not have a clue about our industry. It is unfortunate that several ill-advised rules were decided upon without a full understanding of their economic impact. It is vitally important that all of our readers and the management and agents of all teleservices agencies write letters in opposition to this ruling to your Senators, House Members, the FTC, the FCC, the Department of Commerce and all media outlets on a daily, if not hourly, basis and send this editorial along with your comments.

It is up to all of us to protect our industry by working together to eliminate unnecessary and counterproductive government interference, which is about to send another three to five million jobs offshore, crippling the U.S. economy! Please send your mass e-mails with this editorial TODAY.

To contact your Congressional representatives, or read more information about the TSR, visit the DMAs resource page at http://congress.nw.dc.us/aim/home/.

As usual, I welcome your comments regarding this letter.

Sincerely,
Nadji Tehrani
TMC Chairman, CEO and
Executive Group Publisher
ntehrani@tmcnet.com

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