The Jig Is Up

As we all know by now, the jig is up, folks. The latest round of federal regulation has forever changed the environment in which we can contact customers and prospects by telephone. The national do-not-call registry has significantly reduced the callable universe. The 3% limit in the percentage of abandoned calls has decreased the number of contacts we can make and has increased the amount of wait time between calls.

These events and other federal and state legislation now prevent telephone marketing operations from doing what we never should have done in the first place:

• Call any number on any list without carefully targeting those individuals who might have the highest propensity to purchase.

• Turn up predictive dialer settings to artificially increase the number of contacts and sales per hour.

• Depend heavily on on-screen scripting to compensate for a lack of sales skills and product knowledge among poorly selected, trained and supervised representatives.

What do we do now?

So far, despite dire warnings from the industry, these regulations have not yet brought about our death knell. While some operations and programs will shake out, life — if not “business as usual” — goes on for most of the major players. Those who see this as an opportunity to clean house and get back to best practices will not only survive, they will thrive. The most effective survival strategies incorporate back-to-basics proven techniques with a few new twists:

• More careful selection and testing of targeted calling lists to make every contact count.

• Closer partnerships with both internal phone centers and external teleservice vendors.

• Better recruitment of both telephone representatives and the supervisors critical to their development and success.

• Realignment of representative rewards and recognition to drive more solid sales from fewer contacts.

• Creative adaptation of external teleservice vendor contracts toward pay-for-performance and away from flat fees that tend to reward vendors for simply driving up billable hours.

Let's look at how companies can thrive in this challenging environment.

Selection and testing of targeted calling lists. Far too often, lists are selected with a “throw it against the wall and pray” attitude. While you can never be 100% certain how any particular list (or script, or rep) will perform until the calls start, you can gather the key players together to make some educated guesses based on current and past experience.

Here's a real-life example: The number-two objection for a print publication calling program was “I prefer to get information online.” Not surprisingly, a test to subscribers of an online news service was a failure. In hindsight, this seems obvious. But often, calling-list selection focuses almost exclusively on trying to match the demographic profile of current buyers. What is not always taken into consideration is that there are many more non-buyers of your product or service out there who also seem to fit the profile. Analyzing why prospects do not buy is just as important, if not more so, when it comes to targeting appropriate lists.

Closer partnerships with internal/external teleservice providers. As bizarre as it may seem in light of the significant legal and financial liabilities for failing to execute an outbound calling campaign appropriately, many marketers still believe that what they don't know won't hurt them. That's not true. It's important to stay as involved and as close to your campaign as possible.

Follow these steps:

• Keep the lines of communication open. Hold regular status meetings by phone and face-to-face.

• Wherever possible include members of both teams, at every level, in these discussions. Front-line call floor staff can't implement your expectations when they're kept in the dark. And over time, you gain productivity when everyone hears the same message, is updated on results and priorities and can offer feedback at the same time.

• Keep the focus and take action on critical issues that have the highest potential to improve the program significantly.

• Whether it's testing a new list, setting up a new program or finding answers to questions from the marketplace, be there for the team representing you on calls. Don't just dump a half-baked program in the call center and run off to address “higher priority” issues.

• Be responsive. Measure how long it takes to answer a question from the call center or get a decision on a pending program and take whatever steps are needed to reduce that turnaround time.

• Conquer your fears or dislike for monitoring and prioritize listening to live or taped calls at least two or three times a week.

Better recruitment of reps and “sups.” Higher quality, better-paid staff outperform and are more cost-effective in the long run than their lower quality, poorly paid counterparts.

Another real-life case in point:

• On a complex calling project Rep A attained 0.18 sales per hour, sold only 1.6% of the people she talked with and had failing quality scores averaging 52.11%.

• Rep B achieved 0.27 sales per hour, converted 3.56% of prospects to sales and had satisfactory quality scores of 80.03%.

Let's say the per-hour cost for poorly performing Rep A is $27 with a cost per order of $150. Let's also say the cost per hour for the well-performing Rep B is $33 with a cost per order of $122 — about 19% less costly, even though Rep B costs over 20% more on the front end.

There are other hard costs for using underperforming Rep A: The lost opportunities from selling less than half the leads she talks with. Less quantifiable but no less real are the lost future opportunities. Rep A's poor call quality can do considerable damage, reducing the future receptivity of your audience to your sales messages and tarnishing your brand name.

The impact of a poorly chosen, poorly trained supervisor can be tenfold or twentyfold, with far-reaching effects on results, morale and turnover.

Alignment of rep rewards with quality and productivity. To make the most of fewer leads, keep reps focused on the number of sales needed per hour or per day and help them use longer wait times productively by reviewing product information, scripts and rebuttals or practicing skills in the areas where they need the most work.

Determine which of your quality criteria directly align with higher sales, and weight them accordingly. Consider a lower weight or eliminating entirely less critical quality criteria. Then make sure that the rep who achieves the desired quality requirements is rewarded with meaningful, if not monetary, rewards — praise and recognition that are important to that particular rep. On the monetary end, make sure the bonus structure for each sale the rep secures is realistic and attainable.

Consider the before and after results at one center. With the previous bonus structure, only a third of reps typically achieved any bonus. Once the plan was revamped and rewarded reps for every single sale, almost all the reps became eligible for bonuses, and those who received bonuses under the old plan pulled in higher ones with the new arrangement. The team as a whole went from consistently missing the client's sales goals to consistently meeting or beating those goals.

Restructuring of vendor contracts toward pay-for-performance. Like phone reps, vendors will do what benefits them financially. They can't stay in business otherwise! So if you want a balance of both sales and quality calls, that's exactly what you need to pay for.

Share the risk in pay-for-performance plans by covering fixed costs (normally labor and telephony) by paying a set, but reduced, hourly fee with the potential to earn unlimited incentives based on achieving a combination of goals for the program: sales per hour, paid (vs. billed) sales, sales conversion, quality scores and the like.

For ongoing programs, use proven lists and construct the plan so vendors reaching your overall goals will earn more fees than they could under conventional flat hourly fee structures. Test new lists carefully before making them part of a pay-for-performance plan. But don't hesitate to include them — pay-for-performance vendors will have a vested interest in identifying lists that can perform well and will work harder to make them successful.

Mary Ann Falzone is president of Falzone & Associates of Sellersville, PA, consultants on sales, marketing and call center issues.

Quick Tips

• Higher quality — and well-paid — staffers outperform and are more cost-effective than their lower paid, lower quality counterparts.
• Hold status meetings with team members at all levels to keep the lines of communication open.
• Make it a priority to monitor live or taped calls at least twice a week.
• Analyze not only why prospects buy, but why they don't buy.
• When working with vendors, consider pay-for-performance plans.