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October 08, 2008

The Best Regulation is Self Regulation

By Nadji Tehrani, Chairman and CEO


(This article originally appeared in the November 2007 issue of Customer Interaction Solutions.)
 
As the industry’s first and pioneering magazine since 1982, which laid the foundation for today’s trillion-dollar call/contact and CRM center industries, it has always been our paramount responsibility to provide not only outstanding quality editorial, but also to protect the industry and advocate what is in its best interest.
 
Over the last 15 years, in many of these editorials, industry keynotes and conventions, I have always stated that, “The best regulation is self-regulation.”
 
In the early 1990s, when our industry was growing at a phenomenal rate, the b-to-c sector of the telemarketing/contact center industry got out of hand and, in particular, the inexperienced “Johnny Come Latelys” irritated many consumers, resulting in Congressional considerations to restrict the so-called “abusers.”
 
Back then, the relevant associations of our industry were too weak, too political, or simply unwilling to endorse my idea of self-regulation and, therefore, nothing was done. As a result, many harmful regulations, including DNC legislation, were passed.
 
As I had predicted in many of my editorials, “If the legislators get involved, they could potentially destroy our great industry.” Unfortunately, my advice fell on deaf ears and the associations, whose job it is to guide and protect the industry, had NO foresight to see what was coming from the legislators. Therefore, the damage was done!!
 
Fortunately, The Glass Is Half Full!
In the past years, I never wrote about the associations because I felt they didn’t seem to care or anticipate the future needs of the industry.
 
But today, I am very happy to share with you that ATA (American Teleservices Association), under the capable leadership of my esteemed colleague, Tim Searcy, and his outstanding staff and board of directors (most of whom I have known for many years), has cleaned house, and the association is currently working on extremely vital initiatives such as SRO (self-regulatory organizations). I say, it is about time our association started to focus on REAL issues.
 
I must also say that I like very much ATA’s three criteria for self-regulation, but I would like to suggest a fourth; that is: Teleservices companies must agree and sign an agreement that guarantees self-regulation in full compliance with the ATA guidelines, that random checking must be done to verify compliance, and violators MUST face the consequences.
 
Having said that, as good as the concept of self-regulation is, I continue to believe that the implementation and enforcement will be extremely challenging. In a worst-case scenario, it could be nearly impossible.
 
ATA’s Position on SRO
I asked Tim to comment on his initiatives in the area of self-regulation. Here are his comments:

(An excerpt from Tim Searcy’s State of the ATA, presented at the 2007 ATA Convention & Expo in Scottsdale, Arizona)
 
There once was a little boy and his mother, who lived at the edge of a great canyon. One day, the little boy and his mother were in their kitchen baking cookies when they began to argue. The boy grew frustrated and fled from the home to the ridge of the canyon and yelled at the top of his lungs, “I hate you! I hate you! I hate you!” And then the canyon echoed back, “I hate you! I hate you! I hate you!” The boy became very upset, and ran back into his home to his mother.

“Mother! There’s a boy outside who hates me!”
 
“Tell him you love him,” the boy’s mother replied.
 
The boy returned to the ridge of the mountain and yelled, “I love you! I love you! I love you!” And the echo replied, “I love you! I love you! I love you!”
 
For too many years, teleservices has been treating its marketplace much like the boy yelling into the canyon by not providing what it wants — and without respect, and as if it had little value. And, in turn, the marketplace has responded with the same treatment it has received from the industry.
 
Although the example is a hyperbole, and many partners in the industry are strong advocates for the consumer, the truth remains. Consumers are justifiably frustrated with the way they are treated and have responded with equally painful treatment to us.
The American Teleservices Association (ATA) holds the same role and purpose as the boy’s mother: to help the teleservices industry communicate more positively and effectively and to deliver what it wants to receive in return from all of the constituents in the canyon. Our canyon includes consumers, legislators, regulators, teleservices users and clients. We have already had one case of the marketplace demanding change, and that came in the form of the do-not-call registry.
 
Four years have passed since DNC became commonplace in teleservices’ culture. Currently, there are over 140 million phone numbers on the do-not-call registry. There have been numerous actions and reactions from regulators in the form of fines, compliance and operational change.
 
So, the voice of consumer — the media — what are “they” asking today and how are we responding?
 
The first question typically asked is pretty standard: How big is the ATA?
ATA currently represents more than 4,000 contact centers employing over 1.8 million professionals in the U.S. and over 50 foreign countries.
 
How Has DNC Changed the Industry? 
In a DNC world, there is, quite naturally, significantly more money spent on compliance solutions. In addition, the industry, as a whole, must now focus more carefully on their market and better target their audience: those consumers who have not registered their phone numbers on the DNC registry. The positive outcome from this is an increase in the response rate for outbound calling to the remaining households.
 
Outsourcing has seen an incredible increase, though the number of in-house operations has declined. Today, the total number of contact center employees in the U.S. is 5.2 million. That is a decrease of 1.3 million from the 6.5 million employed within the industry before DNC.
 
Where Are The Regulators Going Next?
It is interesting that this question gets asked about the regulators, when in fact, the regulators aren’t going anywhere — state legislators are going everywhere! Since DNC, the states have proposed legislation on “do not solicit,” “do not mail,” mandatory queue time announcements, eliminating the “established business relationship” exception, “0 for live operator” and more. It’s the states we need to direct our attention to now.
 
What Is Your Political Action Committee (ATA-PAC) Up To?
Over the last few years, the ATA-PAC generated between $20,000 and $30,000 per year and supported those individuals friendly to teleservices. These efforts provided ATA unprecedented access to Congress and gave us a strong voice on Capitol Hill.
 
This year, the ATA-PAC stands to raise nearly $100,000, and the goal for 2008 is twice that. The focus and determination of the ATA-PAC during this growth period is to gain additional recognition of our Petition which clarifies that the FCC (News - Alert) has exclusive regulatory jurisdiction over interstate commerce by phone, and the states’ authority regulates only intrastate calling.
 
The ATA-PAC is also focusing diligently on creating a strong dialog with the states and regulators about self-regulation. ATA wants a more prominent seat at the big table where decisions about our industry are contemplated.
 
Are You Engaging in Self-regulation Just to Avoid New Regulation?
The ATA’s interest is in a balanced, symbiotic relationship between businesses and consumers. Self-regulation creates an ideal means for businesses to properly address consumers’ needs while still satisfying their own goals.
 
Regulators, specifically the FTC (News - Alert), support cooperative, self-regulatory efforts. However, in order for self-regulation to succeed and serve as the “I love you” echo from the canyon, it has to master the following criteria:
 
  • The Standards must be independent of any apparent bias overriding consumer interest.
  • The Standards must be strong and have teeth.
  • The Standards have to go above and beyond federal and state law. Why? The standards have to be preventative of increased regulation and should raise the bar for expected quality of service or sales delivery.
 
Our Self-Regulatory Standards represent the culmination of the collective efforts of a cross-section of ATA’s membership (this group makes up the ATA-SRO, or “Self-Regulatory Organization”) selected specifically for the purpose of generating an all-encompassing Standard for our industry. We are taking control of our industry — setting the bar higher to meet customer expectations and avoid future, harmful regulations.

The groundwork has been laid to accomplish all three criteria with our Contact Center Self-Regulatory Standards. The ATA-SRO has released the Standards, and is currently developing a “seal” program to award and validate those companies that truly and passionately deliver on the customer’s expectations by adhering to these Standards.
 
Why Will an SRO Work for Teleservices?
Think back to the boy at the canyon ridge. It’s time to communicate and deliver what the consumer wants and needs in order to get what business wants in return. The consumer has spoken, and the decision makers (on the consumer and corporate sides) will demand it and regulators will accept it.
 
There is no simple solution. The success of self-regulation within other industries has been measured in years...sometimes in decades.
 
My point? Be positive, get excited and be conducive to growth for teleservices. Other industries succeeded when the professionals within their industry stood together, took back their industry, and delivered above and beyond the consumers’ expectations. Better yet? The ATA has created an army within the ATA-SRO to help.

Nadji Tehrani is Chairman and CEO of Technology Marketing Corporation.

Edited by Erik Linask



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