Pre-requisite: Please read the August 2001 Publishers Outlook, Go
Inbound Young Man, before reading this editorial.
In spite of the extremely severe recession, which led to more than 1
million American workers losing their jobs and bankruptcy afflicting
countless major corporations, we are pleased and proud to see that inbound
teleservices outsourcing continues to grow at a phenomenal rate. In fact,
growth of 29.1 percent is a record for the last five years in this sector.
In my August 2001 Publishers Outlook, while explaining the factors that
contributed to the rapid growth of inbound teleservices, I made the
I believe these factors will multiply and therefore the growth of
inbound will continue aggressively at about 28 to 32 percent, if not
faster, for the foreseeable future.
In all humility, I cannot help but admit that this type of accurate
growth forecast comes from more than 20 years of experience in the
industry. As you know, in 1982, in a pioneering effort, this publication,
which began by the name of Telemarketing magazine, laid the
foundation for the growth of this industry and we are pleased that we have
played an instrumental role in what has become the multibillion-dollar
call center, CRM and customer interaction industry. What makes me even
more pleased is the fact that you can practically call this sector of our
industry recession-proof in spite of the fact that practically all major
bellwether corporations in America have suffered significant losses and
little, if any, growth in the year 2001. Please note that the numbers
indicated here refer to industry growth that took place in 2001, as the
2002 Top 50 rankings are based on billable long-distance transport minutes
performed by the teleservices agencies from November 2000 to October 2001.
Inbound Outsourcing Can Grow Even Faster If
I am a firm believer that inbound outsourcing can grow substantially
faster if the industry actually takes time to do a better job of promotion
and marketing. Unfortunately, the current rapid growth of the industry
occupies most of senior managements time to plan for growth as opposed
to accelerating the growth. In retrospect, that may not be such a bad idea
because of the great lesson we learned from the outbound sector when Wall
Street began its love affair with our industry. The companies that went
public were literally forced to grow faster and faster, which eventually
led to overcapacity and subsequent price cutting, which later led to a
drastic drop in quality. That initiated the disaster our industry has
tried to get out of for the last five years. So, perhaps conventional
wisdom dictates that we should be satisfied with 29.1 percent growth per
year. There is nothing wrong with it and we should be content because
practically every other industry envies our growth!
Lost Opportunities Leave Dollars On The Table
One thing that has always bothered me about our industry is the fact
that there has never been true teamwork between inbound and outbound
management. By that I mean that if cooperation existed between inbound and
outbound departments, the outbound department could be the number-one
beneficiary of the inbound sector, namely by feeding outbound with true
prospect lists from inbound. When and if companies actually begin to use
this phenomenal power of inbound feeding outbound, sales and profits must
Given the factors explained in the August 2001 Publishers Outlook
(please read this Outlook, which may be found at www.tmcnet.com/cis/0801/0801po.htm),
as well as ever-growing new applications for inbound and a lack of any
anti-inbound legislation, there should be clear sailing for many years of
growth and profitability in the inbound sector. I therefore continue to
forecast a minimum growth rate of 28 to 32 percent in the inbound sector
for the foreseeable future.
To Meet The Above Forecast, Wall Street Must Remain Hands-Off
If you follow what has happened in the teleservices sector over the
last six years, it becomes extremely obvious that the Wall Street growth
pressures and infusion of inexperienced management at teleservice agencies
at the expense of the founders and original entrepreneurs led to
disastrous consequences. As I have indicated previously, this kind of
ill-advised and unfortunate intrusion of our industry by people who are
clueless about the complexity of teleservices spelled disaster in the form
of millions of dollars lost and the elimination of some companies that
annually ranked in the Top 10 in our magazines Top 50 rankings. I hope
we have all learned a lesson from that and hopefully Wall Street will not
try again to fix something that is not broken. Therefore, the 28 to 32
percent growth forecasted above is based on the condition that Wall Street
will not interfere; otherwise, all bets are off.
Super Growth For Interactive
Growth of 152.2 percent in the interactive sector is truly phenomenal
and admirable. Although this section is dominated by West Corporation, one
of the most respected and reputable names in the industry, growth of this
magnitude should not be surprising since our society and lifestyles are
gravitating toward automated communications and transactions, not to
mention the great performance of the outsourcing companies; therefore,
this type of phenomenal growth should not be surprising.
Global Top 100 Grows 58 Percent
It is extremely gratifying to learn that the cumulative total billable
minutes of the domestic and international inbound, outbound and
interactive top 100 companies in our Top 50 rankings has shown a
phenomenal growth rate of 58 percent. To be sure, one can rest assured the
inbound sector will continue to grow and outbound, if professionally done,
will also continue to maintain at least its current level and maybe even
enjoy modest growth, barring adverse legislation.
To the extent that our industry is responsible for protecting millions
of jobs and creating additional millions of jobs on an annual basis, we
are hoping that lawmakers in Washington come out of their residence in
cloud nine and pay attention to the fact that more than three percent of
Americans are employed by call centers, CRM centers and customer
interactions centers, which, of course, includes the Top 50 inbound and
What To Look For When Selecting A Teleservices Agency
As the growth rates from our Top 50 rankings clearly demonstrate, more
and more companies are turning to teleservices agencies for their
marketing and CRM needs. If you, too, realize that teleservices
outsourcing is a key to your future success, you need to know how to go
about selecting a teleservices agency and how to best work with an agency.
I posed these questions to Bill Rieke, Director, Industry Solutions,
Convergys Corporation. Here are Bills responses.
What are the guidelines for judicious selection of inbound
When evaluating teleservices outsourcers, it is important to find a
- Understands the needs of the client and the specific needs of the
- Has the capability to craft solutions to those needs,
- Has the ongoing people and processes in place to effectively manage
the day-to-day operations,
- Has vision that can be used by the client to help the client be more
effective in their marketplace, and
- Has the financial strength to deliver results.
What are the keys to effective inbound outsourcing?
- The purpose of the inbound program should be supported by a clear
- All the execution elements should be planned and complete, including
advertising, fulfillment, etc.,
- Share and partner with an outsourcer forecasted call volumes and
other key program elements,
- Plan together with the outsourcer all key changes in program design,
fulfillment, advertising, etc., in order to achieve maximum results,
- Look for an outsourcing partner who can implement and effectively
manage even last-minute changes.
Join Us At Communications Solutions Expo
Executives from the Top 50 inbound and outbound teleservices agencies
will be joining us this May 14-16 in Boston at the Boston World Trade
Center for Communications
Solutions Expo. So should you. Not only will the exhibit hall
feature the latest technologies and services to upgrade your contact
center, you can also register for cutting-edge, educational conferences
that we will be offering attendees. Tracks at the conference will include
Call Center Human Resources; CRM: Revenue-Generating Applications;
Business Development Strategies (which will feature a session on Outsourcing
to the Top 50 Teleservices Agencies, as well as two given by myself,
How to Avoid Costly Marketing Blunders and How to Expand Market
Share in a Slow Economy); Customers Speak, e-Commerce Listens;
Collaborative Enterprise; Mission-Critical Communications Infrastruture;
Wireless Enterprise; Cost-Effective Operations; and IP Telephony
Collaborative Enterprise. Please go to the Web at www.tmcnet.com/comsolexpo/s02/conf.htm
for a full description of all the conference sessions.
While at the Communications Solutions Expo, you will also have the
chance to find out what is going on in mobile communications at Planet
PDA, The Global Summit On Enterprise & Custom Volume Handheld
Computing Solutions, which we are also putting on at the same time in the
Boston World Trade Center. So, you get two for one: the latest in
communications technologies for the contact center at Communications
Solutions Expo and the latest in handheld computing devices at Planet
PDA, all in the same location. I look forward to seeing you there.
TMC Chairman, CEO and
Executive Group Publisher
To April 2002 Table Of Contents ]
Inbound Industry Trends
Perhaps the best way to provide our readers with an accurate crystal ball is to consult with industry practitioners at the highest level who have proven to be true industry experts and visionaries. I have therefore worked with our editorial department to conduct the research in this sidebar. (Due to space limitations we could not run the responses from all of the companies here. In total, we posed eight critical questions the complete answers graciously provided by these industry experts can be found in the
online version of this Outlook
and I will draw upon them for future editorials). Here are the contributions from some of these companies on the following question:
Q: In your opinion, what is the trend in inbound teleservices?
Dominic Dato, President and CEO of Teleperformance USA, representing the SR.Teleperformance Group and its Contact Center division, Teleperformance: Companies outsource functions so they can leverage cost, technology and customer management expertise while focusing resources on what differentiates them from the competition (core competency).
Whether they are looking to provide consistent service on a global basis (follow-the-sun service) or they view each contact as a chance to enhance the value of that customer, more companies than ever are looking to free themselves of the many management issues that are inherent with operating an internal customer care operation.
Alicia Miyares, Vice-President of Marketing, Precision Response
Corporation: E-learning is a very hot trend in this business. PRC is so confident of this, we purchased an e-learning company in 2001 to help us grow this as an internal solution. The success of any customer care program is highly dependent on the knowledge of the consumer care representative. By integrating sophisticated e-learning technology with our already robust CRM system, we are able to push modules to the agent desktop as necessary and create a constant loop of learning in order to improve the quality of our CCRs performance.
Rob Apel, Vice President of Sales, Advanced Data-Comm, Inc.: Traditional outbound marketers are looking to inbound as federal regulations make outbound telemarketing more difficult. More marketers will look to inbound, with a continued focus on pursuing relationships with existing customers rather than jumping from customer to customer. Thus, the transition to CRM services will be imperative.
William McKinney, Executive Director of Marketing, TeleTech: Three major trends are surfacing in the inbound customer care market. First, companies seek to maximize the value of interactions at every point of the customer lifecycle; outside of traditional retention and upsell/cross-sell activities, firms are now demanding a demonstrable increase in the lifetime value of each customer touched. Second, the global firms that make up such a large percentage of the high-end customer care marketplace are demanding that their global customers be serviced globally in a fully integrated, centralized environment, with common execution and quality standards around the world. Finally, companies are increasingly desiring a consultative solution partner for the customer care process, not just an arms-length vendor relationship. The increasing complexity of multichannel customer interaction mandates a parallel increase in the consulting skill sets of successful outsourced customer care firms.
Clark Sisson, Senior Vice President of Business Relationships, APAC Customer Services: Due to the weakened economy, more clients are looking towards offshore placement of inbound teleservicing business. The one flaw in this is that consumers are demanding greater value and a higher quality service interaction which often is not equated with an offshore solution. Clients are now realizing that to survive and retain their consumers, they must focus on maximizing the revenue generated from each customer interaction and resolve a customers problem effectively and efficiently. Simply, the latest trend is on effective customer contacts.
John Duffy Campbell, President, ICT Sales, ICT Group: ICT has noticed a marked increase in the number of clients choosing to outsource their customer care. More and more companies are beginning to realize the complexity and time/resource commitment necessary to develop and maintain an up-to-date in-house contact center. Additionally, these same companies are responding to increased pressure to reduce costs, eliminate expenses and maximize their profitability pressures intensified by operating in a weakened economy.
John Bartholomew, Executive Vice President, LiveBridge: The trend is for further outsourcing of noncritical functions, with the definition of what is critical being more challenged by organizations as they seek to optimize share holder value. This trend is also driving the requirement that outsourcing services look, act and behave similar to, and in conjunction with, existing client inbound activities.