Outlook 2006: Call Centers: Dial G for Growth

As 2006 unfolds, there are fresh call center developments as well as evolution to a new equilibrium. What was new is nearly status quo, including the do-not-call registry, globalization, speech recognition and Voice over Internet Protocol. Last year set the stage, with more businesses adjusting to this changed landscape.

Many large marketers, requiring full U.S. penetration, shifted lead and order generation dollars to the Web, television and mail, all of which generate inbound calls. In 2005, some formerly outbound shops, such as The Charlton Group, completed the transition to 50-50 inbound-outbound. Giant U.S. firm APAC Teleservices announced it would abandon consumer outbound entirely to focus on its inbound business.

Regulators upped the ante last year. Canada approved DNC legislation. The Federal Trade Commission raised DNC fees, abandoned inclusion of state lists – states want fees, too – and delivered a $5.34 million fine to DirecTV just in time for the holidays. Five states now have DNC laws more restrictive than the FTC and Federal Communications Commission. Among them, Indiana allows no existing business relationship exemptions. In 2005, several direct marketing business lobbies petitioned the FCC to preempt such state laws, but a decision will take time.

In any event, compliance activities are a part of daily business operations for responsible marketers.

Staffing issues. Overseas outsourcing is maturing as Dell, Capital One, Conseco and other companies have placed some call centers offshore and others in North America, offering a U.S. agent in certain situations. Smaller countries with sizable native English-speaking populations such as South Africa, or with a significant labor pool of U.S. expatriates like Israel, are getting attention. India, the Philippines and the Caribbean remain mainstays. Last year’s trends regarding offshore outsourcing, VoIP technology and self-service via voice recognition and the Web will continue.

The largest challenge is staffing, thanks to the improved U.S. economy and reduced unemployment. Qualified staff is in shorter supply than a year ago and tougher to retain. Reps who staffed call centers after being laid off elsewhere are back to their main careers, and the economy has increased demand for sales and service staff in all sectors. We will pay more for advertising, compensation and perks this year. Turnover rates will rise for many, increasing hiring and training costs. Also, results decrease a bit when turnover rises, especially on programs with steeper learning curves. Companies that treat staff like valued family members will do best.

From pay-per-click to pay-per-call. Click-to-call will unite the Web and telephone and is being tested by Google and others. With this technology, a call is initiated by clicking an icon next to a Web ad and entering one’s telephone number. Then, the phone rings and when answered is ringing the advertiser’s call center. The call is free, and Google encrypts the consumer’s phone number so as not to disclose it to the advertiser.

This moves the Web per-inquiry payment model from pay-per-click to pay-per-call, which is identical to TV and radio PI models. Kelsey Group predicts that the pay-per-call market will grow to $1.4 billion to $4 billion by 2009. In addition to Google’s test, click-to-call companies include Ingenio, eStara, VoiceStar, CallSource, thinkingVoice and Jambo. Another area with revenue potential is saving abandoned shopping carts with instant live chat or click-to-call. Stalled or abandoned carts automatically initiate a chat session or click-to-call box so the shopper can be helped and more sales closed.

With the adjustments of 2005 under their belts, many marketers and call centers are poised for progress in the phone channel this year.

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