This article originally appeared in the January 2011 issue of INTERNET TELEPHONY
With the growth of broadband e-commerce, mobile data, and flat-rate VoIP calling plans, many have expected that the toll-free voice industry simply would fade away into the sunset. Nothing could be further from the truth.
The toll-free voice and vanity number business is alive and growing, with new advertising models, personal enhanced services, and unified messaging helping to drive renewed growth in the industry. Popular toll-free numbers such as 1-800-FLOWERS, 1-800-THE-CARD, and the popular jingle from 1-877-KARS-FOR-KIDS have proven to be both effective, and even wildly viral. Using the right combination of technology and best practices, toll-free services providers today can provision, route, and manage their numbers more effectively, and offer their customers more competitive and innovative services.
When first introduced in 1967, toll-free voice services, commonly called 800 services by our parents, were an instant hit with businesses using catchy vanity phrases and “free” calling to attract new and existing customers. As a successful business, providing an easy to remember toll-free number for sales and support was good practice, and many landmark businesses through the years have made these numbers the center of their branding, and advertizing strategies.
With toll free firmly established and de-regulation a strong motivator, the FCC (News - Alert) made toll-free numbers portable in 1993. This change established the SMS/800 national toll-free database, and enabled customers to switch service providers while retaining ownership of their toll-free numbers. Between 1993 and 2000, the quantity of working toll-free numbers grew rapidly, from 3.2 million in 1993 to more than 20 million in 2000. New toll-free codes were opened to meet this demand, including the 888 code in 1996, the 877 code in 1998, and the 866 code in 2000.
Toll free is still growing today, and in the past four years the number of working toll-free numbers has grown more than 26 percent from 22.7 million in December of 2006 to over 28.8 million in November of 2010. With the pool of available toll-free numbers dangerously low, the FCC recently opened the new 855 code in October of 2010, further energizing the toll-free industry by making new numbers available.
Why the accelerated growth? Throughout the past 40 years the toll-free industry has evolved, and with the convergence of wireline, wireless, and enhanced VoIP services, additional technologies now complement each other to drive additional growth. As an example, new web-based e-commerce sites often use toll-free vanity numbers for customer care and as an alternate ordering process for those who desire the live interaction of an attendant. Unified messaging, conference bridging, automatic attendant and find-me/follow-me services also use toll-free numbers, and with reduced toll-free carrier costs have made it possible for individuals to have their own personal toll-free numbers in a cost effective manner. For a carrier, having a competitive toll-free voice offering complements their VoIP, broadband data, unified messaging, wireless, and hosted services portfolios. End customers need this capability, and providers that have bundled toll free effectively with other services enjoy outstanding competitive differentiation.
With this growth in toll-free numbers, the number of responsible organizations, or resp orgs, that are licensed to acquire and manage toll-free numbers through the SMS/800 national database also has increased from 377 in September of 2007 to 409 in November of 2010. Resp orgs can be carriers, enhanced services providers, call centers, those in the vanity number business, or even large enterprise customers. Resp orgs must acquire and manage toll-free numbers in an effective manner, provision services through the SMS/800 national database, and route those numbers through the dedicated toll-free SCP network to long-distance carriers that carry their toll-free traffic.
Being an effective resp org requires having the ability and technology to acquire, manage, and route toll-free numbers with confidence. Integrating and automating these processes with existing carrier billing and operations support systems, providing end customer portal control for searching and reserving numbers, having the ability to provision rapidly during an emergency, being able to analyze and select routes intelligently to optimize costs, and having the tools for mining business intelligence from the SMS/800 national database are all important capabilities needed to be competitive. Resp orgs that implement best practices by adding automation and technology to their operations typically are able to reduce their toll-free provisioning costs by 20 percent to 50 percent, increase their toll-free revenues 5 percent to 10 percent, and decrease their external carrier costs using least-cost routing by 10 percent to 30 percent. Such results translate directly to market leadership and increased profitability.
Today’s toll-free carriers and resp orgs enjoy favorable toll-free industry trends through a combination of existing and new business models that help drive growth. Toll free is alive and evolving, and with a combination of technology and best practices can be made into a very profitable and growing business for any carrier or industry player.
Frank Lauria is vice president of CSF Corp., a provider of toll-free number management, provisioning and least-cost routing solutions.
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Edited by Stefania Viscusi