Speakers: Teleservices Agencies Face Rising Pressures

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PALM BEACH, FL -- Growing pressure from regulators and price competition are making the future tougher for telemarketing service agencies, speakers at the opening session of the DMA 2002 Teleservices Conference here said yesterday.


A three-member panel, speaking at a session titled "The Future of Outbound Telemarketing," cited competition from overseas service agencies and new legal restrictions on the state and federal levels as near-term challenges.


Jon Hamilton, a 30-year veteran of the teleservices industry, has owned a service agency and been a senior executive at two others. Now president of JHA Telemanagement, his own consulting agency, Hamilton said that the challenges facing service agencies are daunting.


"It's not a business I'd want to be in today," he said. "The pressures are enormous."


With overseas service agencies offering better prices to telemarketing clients, domestic service agencies are forced to cut costs yet maintain quality, Hamilton said.


Meanwhile, newly proposed regulations such as the national do-not-call list are combining to make cost and compliance pressures even stronger, said Joan Mullen, vice president of industry relations for Ron Weber and Associates.


Efforts by federal and state authorities to scale back or ban the use of predictive dialers are also cause for worry, speakers said. Without the efficiencies gained through the use of predictive dialers, many teleservices agencies will have to abandon commodity telemarketing because their costs per sale will be too high to make such campaigns worthwhile.


The use of predictive dialers leads to abandoned calls, which cause consternation among consumers. They also can lead to "dead air" -- a small delay between the time a consumer answers a call and the time an agent becomes available to speak -- because they use detectors that weed out answering machines.


Too often, this sort of technology is used to increase call volume in an effort to chase marginal prospects, Hamilton said. He advised telemarketing providers to turn off their answering-machine detectors.


"The efficiency gained is not worth the nuisance it causes in the marketplace," he said.


The pressure on agencies ultimately will be passed on to teleservices clients, said Sandy Pernick, president of S. Pernick & Associates. As smaller teleservices agencies fall and get folded into the larger players, clients will have to work harder and be more vocal to ensure they get quality service.


Though the pressure is on, panel members said they thought the future would witness the birth of an improved teleservices industry.


"The landscape is shifting," Hamilton said. "Everybody is trying to move toward inbound [teleservices] and toward the whole concept of CRM. Because of that, the industry is growing."


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