October 2003

Over the last six months, we have been the only industry publication to continuously and exclusively cover the vital legislative issues confronting our industry, namely the FTC regulations pertaining to do-not-call lists, and the Telemarketing Sales Rule (TSR), predictive dialer restrictions, etc. Even though we have covered this matter extensively, the very nature of the regulations passed is extremely confusing and difficult to interpret, to say the least. Industry experts with legal education tell us that if three attorneys read the regulations, they will probably have three different interpretations! And therein lies the major dilemma for the users of the telephone for sales purposes, which in my humble opinion, like the computer, is a vital tool for every business to remain in business.

We fully understand why the FTC would like to minimize or eliminate the unwanted calls and we fully sympathize with that. However, in our judgment, that could have been done a lot simpler and more effectively had they consulted with true industry practitioners. But, be that as it may, the regulation is here and now we need to comply with it.

Those of you who have attended the many Telemarketing and Business Telecommunications (TBT) conventions, which TMC' sponsored in the 80s and 90s, fully remember me saying at each keynote that, 'The best regulation is self-regulation.' Indeed, a long-time subscriber of our magazine called me on September 8, 2003 and reminded me about a comment I made during a keynote presentation at one of the former TBT conventions in the mid 80s. I strongly appealed to the CEOs and other decision makers of our industry by saying: 'Don't keep your eyes on Wall Street, but rather keep your eyes on Main Street.' The caller reminded me of the above statements and he added, 'Looks like we did not heed your warnings and that is why we have this legislation.' I am glad this caller reminded me of those comments because otherwise I might have forgotten that we actually had such vision some seven or eight years ago!

There Are Plenty Of Opportunities In Every Adversity

The more I remain in business, the more I realize there are plenty of opportunities in every adversity. While the new FTC regulations may have discouraged some managers and led them to fully abandon outbound calling, the positive-thinking managers have welcomed these regulations and are now looking at several new innovative applications to even expand their current operations and make them more profitable.

You don't need to abandon outbound and convert your call centers strictly to inbound. Rather, you need to become thoroughly knowledgeable of the new rules and follow them to the letter. Our 'Compliance & Technologies Solutions' advertorial sections in our September issue as well as in this issue and our forthcoming November issue, plus our previous editorial coverage of the topic should be a great help in steering you in the right direction. In addition, if your product or service is not completely consumer-focused, or if your business is a teleservices agency, you should consider shifting your focus from outbound business-to-consumer calling to outbound business-to-business calling. The FTC legislation does not govern most outbound business-to-business transactions and more important, effectively conducted and priced, outbound business-to-business carries a much higher fee and, therefore, much greater profitability.

Offshore Failures Will Bring Back Some Customers To Outbound Callers If you read my column in the August 2003 issue of this publication, you are, no doubt, aware that offshore is really not what it was cracked up to be.

Offshore Disaster

My trusted industry colleagues have told me of a certain publisher who outsourced his BPA verification of his subscribers to an offshore company. In the publishing industry, respected publications are audited by the 'Business Publication Audit' (BPA) to verify their circulation accuracy and develop a demographic breakdown of their subscribers. For the publication in question, after having spent $500,000 for this project, the resulting verifications failed to meet BPA audit standards! In other words, the publisher in question not only lost $500,000 by going offshore to save a few dollars, but also the company lost millions of dollars in potential advertising revenue, which now will not be earned. Another sad part of this story is that if the publisher should decide to spend another $500,000 to re-verify thousands of names, the process will take so long that the publication will miss most of 2004's advertising budget. In plain English, the publisher learned the hard way that you cannot be pennywise and pound-foolish, or, you get what you pay for!

This case is only one of several examples we first introduced in the August issue regarding the pitfalls of offshore outsourcing. Now, numerous other failure cases pertaining to offshore outsourcing have appeared all around the Internet. The bottom line is that before too long, you'll find many companies that use offshore outsourcers will come back home. I strongly urge all readers to refer to my Publisher's Outlook in the August 2003 issue so you will fully understand the nature of the problems faced in some offshore countries. As predicted, in recent weeks there have been major explosions aimed at U.S. properties by terrorists in some of the most popular offshore countries.

Compliance Is The Key To Future Success

Given the astronomical fine of $11,000 to be levied by the FTC per violation, every call center must comply with the regulations or they will vanish. On the other hand, we must realize that the telephone remains the heart and soul of every business and, as such, no amount of regulation will force any company to do away with the telephone as a sales-generating business tool, period. No company can exist even one week without the use of the telephone because cash flow will die if salespeople do not use the phone to sell or collection people do not call to collect debt. This is the basic need for the vitality of every single business. Consequently, as savvy business-people, it should be our objective to find a way to comply with the regulations and continue to prosper with an industry that will continue to grow because it is an inseparable part of every business and the vitality of every single business depends on it. There is no way this industry will shrink. Indeed, many industry colleagues have advised me since the passage of this legislation, their business is about to expand several fold and they are unable, in some cases, to meet the demand! Yes, we will lose a few weak companies, but companies with vision and innovation will survive and prosper better than ever.

Going To CRM Is Not The Complete Answer

In light of the current regulations, some people might say let's get out of outbound and concentrate solely on customer relationship management (CRM). That doesn't cut it, because if you have read my previous editorials on this topic, you already know that a substantial portion of the current CRM systems are simply not functional and off-the-shelf type. Indeed, in a recent editorial on CRM, I indicated that TMC research has clearly demonstrated that custom CRM is preferred by the users and anything else short of that will not do. In other words, if you are going to expand your CRM operations, make sure you focus on functional CRM, which is custom-built and customer-focused.

Sincerely,

Nadji Tehrani
TMC Chairman, CEO and Executive Group Publisher
[email protected]

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[Return To The October 2003 Table Of Contents]