Incredible as it may sound, our industry's unprecedented growth will not only continue,
it will almost certainly accelerate. The combustibles fueling this growth include
corporate downsizing (and outsourcing); provisions of the new Telecommunications Law;
government action; and the rise of the Internet. All together, these elements make for an
explosive mix. As it threatens to ignite, we must keep our composure, and remember to
concentrate on those things that have laid the foundation for our industry's success.
Specifically, let us never forget that our success is built on our laboriously earned
know-how, our unsurpassed performance, and our unstinting dedication to quality.
Our industry's history is a story of how we have developed these strengths, and how
these strengths in turn have allowed us to take advantage of opportunities such as those
presented by corporate America's growing preference for variable as opposed to fixed
costs. Indeed, our industry has thrived even as other segments of the economy have
stagnated. Our quality is what has made all our success possible.
And it is our quality that will guarantee the industry's future. Telemarketing will
always thrive if we can demonstrate that it outperforms all other marketing techniques.
The key is to accept only that business which we can handle with our customary
professionalism. We have worked too hard to lose the good will our industry enjoys. For
example, communities welcome telemarketing operations, and the government has grown to
recognize our contributions to the economy. But all this could change if we forget to
maintain quality. I, for one, reject the notion that telemarketing is a "flash in the
pan" industry. Yet I am concerned that all our hard work could be swept away if we
get distracted by "gold rush" mentality.
Can We Maintain Quality As Growth Accelerates?
It seems to me we have no choice: We must maintain quality at all costs! Consider, for
example, what could happen if the current craze for downsizing were to end. Would
outsourcing continue? It would, but only if corporations perceived a qualitative
difference between what they could do for themselves and what service agencies could
deliver.
At present, such a scenario seems a remote possibility. Downsizing continues apace, and
Wall Street reflexively rewards those who announce layoffs with higher stock assessments.
The downsizing trend, however, may yet reach a point where it becomes unsustainable. You
will get a sense of this, I think, if you consider the euphemisms commonly used to make
the distasteful truth more palatable. Layoffs are referred to as downsizing or
reengineering or - even more ignominiously - as "rightsizing." Now, is anyone
really fooled? I doubt it.
Even those who escape layoffs grow cynical. Insecurity is eroding morale in corporate
America, and politicians across the spectrum are making hay by drawing parallels between
corporate profits and socially destructive corporate practices. So how long will it be
before business gurus make the startling discovery that corporations benefit from employee
and community loyalty and - more to the point - that loyalty is a two-way street?
The main idea is that service agencies cannot grow complacent, notwithstanding how
current trends seem to be favoring their portion of the industry.
And they shouldn't look to Wall Street for clues as to which way the wind is blowing.
By the time Wall Street signals the change, it will be too late.
All the same, downsizing and outsourcing will continue -- at least in near term -- and
will thus contribute to the growth of the telemarketing industry. As outsourcing is joined
by other growth- promoting trends, we must make sure growth doesn't get out of control and
undermine our ability to deliver high-quality service.
Impact Of The Telecommunications Law
Now that we have a new Telecommunications Law, demand for service agencies as well as
in-house call centers will increase. In fact, current growth rates may be exceeded by more
than 300 percent.
The new law has removed restrictions barring competition between cable entertainment
networks, Bell Operating companies, and traditional long-distance providers (AT&T,
MCI, Sprint, LCI, LDDS). All will be able to enter each other's markets. All will be after
each other's business without restrictions.
Given the deep pockets of all these companies, competition will soon become fierce.
Millions, if not billions, will be poured into the marketplace by these giant competitors
to build new business and/or take someone else's marketshare. Given that the most
effective way, by far, to gain marketshare in the long- distance market is through
telemarketing, our industry stands to be, far and away, the number one beneficiary of all
these changes.
We can expect some newcomers to spend lots of money on television advertising, even
though they should know it's wasteful. The mass market has been saturated by pleas for
marketshare over the last ten years, and it is already turning a deaf ear to such ads. To
effectively communicate the benefits of particular product/service packages and price
arrangements, companies will eventually have to turn to telemarketing. Thus, our industry
will benefit like no other from the impending war between the telecommunications giants.
Government Turns To Telemarketing
Not long ago, critics of our industry seemed hopeful that the government would regulate
our industry out of business. Fortunately, our government officials have demonstrated they
are too wise to do any such thing (for more detail on this topic, see my editorials in the
August 1995 and February 1996 issues).
And now, the government is seriously considering taking advantage of telemarketing itself.
Several government functions may soon be enhanced by telemarketing activities. The most
prominent example? Tax collection. Since everyone pays taxes (or should), you can imagine
the potential for the industry here. The staggering statistics on unpaid taxes, which are
profoundly demoralizing to those of us who do pay, will soon signal a unique opportunity
to those who can use telemarketing as an effective tool for telecollecting, and thus
encourage people to perform their civic duty.
The Internet
Slowly but surely, people are beginning to make purchases via the Internet. Thus far, most
of the activity involves small, low-cost items. It may be that Internet sales will be
limited to such purchases for the time being. A customer isn't likely to demand human
intervention when buying a bar of soap, for example. But when customers look at more
costly products and services, and as transactions become more complex, customers usually
ask for additional information before committing themselves. Consequently, the Internet
may serve to guide customers to inbound call centers.
Customers like to talk to a human for sophisticated items such as computers or stereos.
When considering such items, customers will always have more questions. Thus, at present,
the Internet is shaping up as a kind of low-maintenance, low-cost electronic catalog. Its
reason for being, despite all the hype about the "brave new world" of
cyberspace, is something more prosaic: 800 calling. Will the Internet evolve into
something more? Time will tell. Nonetheless, it seems clear that the Internet will, at the
very least, serve to augment traditional telemarketing. Hence, the Internet represents
another development spurring the growth of our industry.
The Perils Of Success: The Temptation To Forsake Quality
With so many factors pointing in one direction - unprecedented growth - I grow concerned
about our ability to maintain quality. When annual growth reaches 80 to 90 percent, it
seems only prudent to say that something has to give. But when annual growth reaches 300
percent, I hesitate to even think of the consequences.
It is vitally important for all responsible managers to ask themselves how they will
respond when all the growth-promoting forces begin to act on our industry. The
Telecommunications Law, for example, seems to inspire euphoria. However, I choose to
council caution. I worry that the temptation to accept more and more business will lead
some to neglect quality. This could be disastrous. Even a one percent drop could have a
domino effect, and destroy everything for everyone.
Any one of the factors reviewed in this editorial - outsourcing, the Telecommunications
Law, the government's growing appreciation of telemarketing, the Internet - would
ordinarily be cause for celebration. But taken together, they may represent too much of a
good thing. Growth can do more harm than good. What will our future be like if our
outstanding reputation for quality service suffers? We are now known as job-creating,
job-protecting, community-supporting business people. What will happen if we become known
as money-chasing opportunists?
If telemarketing becomes a kind of gold rush, we risk becoming a has-been industry.
Remember that the gold rush was brief, indeed. And what did it leave behind? A few dusty
ghost towns, and a lesson in how greed can make people take leave of their senses. We have
worked too hard to let that happen to our industry. I urge all in-house call center
executives and all service agency executives to proceed with extreme caution. Put quality
above everything else. If necessary, turn down business if you cannot deliver truly
first-class, high-quality service. You never get a second chance to impress customers if
you betray their confidence even once. Undisciplined growth can backfire and destroy your
business.
Sincerely,
Nadji Tehrani
Publisher & Editor-in-Chief
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