Telemarketing can be one of the most cost-effective tools for customer relationship management (CRM), yet many organisations fail to use it effectively – and fail so dramatically that customers are annoyed, confused or lost altogether.
According to research from database and marketing specialists Data Vantage, only one in ten organisations put telemarketing to fully profitable use – in that they use it to deliver a segmented view of the customer at the point of purchase, explains chairman John Orsmond. He adds that the other nine out of ten have the wrong people behind the phones, have a tendency to treat regular customers as if they are strangers and fail to use their computer systems effectively.
In the worst industries, such as utilities, local authorities and particularly travel, Orsmond says: “It can take up to seven attempts to get a person on the phone and the waiting time can be up to seven minutes. And in most cases the consumer may be picking up the cost of the call. The agent’s system may crash, which further delays things and they often fail to call the customer back”.
Part of the problem is that the industry is growing so fast. According to research from Data Vantage and call centre staffing specialist SHL, the number of call centres rose by 30 per cent last year, and the number of people working in telemarketing rose by 230 per cent.
With growth rates like this, there is always going to be a shortage of skilled staff, but call centres don’t help themselves by then allowing staff turnover rates to hit 30 per cent or more, leaving them with constant, serious and expensive recruitment problems.
There are several reasons for this, suggests Roy Davis, an expert in call centre skills at SHL. He says: “Every job is a mix of hard skills – keyboard and systems – and soft skills – interpersonal skills, creativity, resilience and so on. One of the most common errors is that those recruiting do not understand the mix of skills they are seeking, and concentrate only on the hard skills.
Ignoring the soft skills means that anything up to 70 per cent of the job content is not being assessed. In addition, it is widely accepted that people leave their managers not their job. Many managers have risen through the ranks because they are good agents and not necessarily good managers.”
Many companies suggest that a failure to invest in training is part of the problem, and news that 75 per cent of companies plan to invest more in CRM over the next year (Data Vantage) may help to alleviate this.
However, Davis at SHL suggests that simply throwing money at training may not be the answer. “The key question is: is the training relevant? If we don’t understand what the job wants in hard and soft terms then understand the strengths and limitations of the individuals against those demands, the training is destined to fail,” he says.
Another problem is that call centres over-promise in their recruitment advertising, which can swiftly send demotivated staff to scan the job pages again.
Davis says: “Picture a recruitment ad with the words ‘we want a person who is dynamic, innovative, with a desire to succeed and help us drive our organisation forward’, when the opposite is true: ‘we want someone happy with routine, who is resilient and good at receiving and processing data’. If you recruit people into the first scenario, then put them in the second, is it any wonder that they leave? Realistic job previews are essential to manage expectations.”
Asking the right questions
Making the job more interesting for call-centre agents will improve staff retention as well as offering a better service to customers, suggests e-solutions Mike Fitzgerald, CRM practice director at computer services company EDS.
He says: “Ten minutes of very structured and repetitive questions, where the interviewer is one of a huge number of battery hens keyboarding away, is insulting to the respondent. If the answers don’t fit into a tick box they are lost, which is a shame, as they may be valuable.
“Much more useful is the longer telephone conversation, where the interviewer is sufficiently literate to understand some of what he or she is being told, listens and notes the context and nuances of the respondent. The experienced interviewer can steer the conversation, skip elements that are shown to be irrelevant and interact more productively with the interviewee to the benefit of both.”
This approach requires exceptional skill and training, acknowledges Fitzgerald, and brings certain risks, for instance if the interviewer’s educated guess about the customer’s marital status turns out to be wrong.
However, other telemarketing experts do not share Fitzgerald’s faith in the skills of operators. Michael Kelly, managing director of TSL, a provider of sales leads to technology companies, says: “One mistake businesses often make is relying on their salesforce to input the data in the CRM system. These representatives are remunerated based on closing sales, so they do not consider data management a priority and do not have the time to do it. I would advise anyone planning to implement CRM to set up either a dedicated in-house team or an external third-party to sort out their data.”
Opinion differs on whether it is better to use an in-house call centre or an external bureau. Telemarketing expertise is easier to find outside, but in-house staff are likely to have a more thorough knowledge of a company’s product or service.
Data Vantage’s research concluded that UK in-house call centres tend to lag behind external telemarketing bureaux in terms of versatility (to cover peaks and troughs in demand), productivity and systems support. Yet a study by business machines manufacturer DMC found the opposite.
DMC sales director Rob Simcock set up a trial to see which was more efficient; the in-house telemarketing team working on long-term relationship building, or a telemarketing agency working on delivering lots of leads. It found that, of the appointments generated by the two means, the sales executives closed half of the sales generated in house, but a mere ten per cent of those generated by the external agency.
Simcock says: “Appointments generated in-house are expecting a consultative approach to the sale, including audits and discussions around return on investment. Whereas appointments generated by the external agency are expecting a quick discussion around the product brochure.”
He adds: “If telemarketers are rewarded for maintaining and nurturing a relationship then they will do so. It is also vital for the management to live and breathe best practice and lead by example.”
Simcock also believes that the right software is key to success. DMC uses GoldMine contact management software, which ensures that the full history of a customer relationship is available to sales staff when dealing with customers.
Martin Clark, sales and marketing director at software supplier Swetenhams, points out more of the advantages of having adequate software to support the agents on the phone. He says: “Marketing automation offers the marketer direct access to the resources required to perform their job. So, for instance, they are able to carry out simple analyses themselves. The other major gap to address is closing the telemarketing loop. This requires getting responses back into the marketing database, to further support campaign analysis, resulting in better segmentation and targeting. Many marketing campaigns fall down at this point. A key requirement to support the campaign process is a customer data integration tool, to ensure the maintenance of a single and accurate view of a customer or prospect over time.”
Knowledge Management Software senior vice-president of marketing Simon Kent, goes further. He says: “The core technologies needed are natural language processing and neural networking. The telemarketing agent just keys in exactly what they hear; the system copes with spelling errors, understands synonyms and is case independent. The neural engine then searches the knowledge base for the most appropriate answer. The agent, in dialogue with the customer, decides which is the best answer and the system learns from the experience.”
Kent suggests that over time, the use of this sort of software should reduce call times, and thus waiting times, and increase customer satisfaction, without the need for extra staff or greater investment in training.
Gathering data is one important way that telemarketing can improve CRM and the proper analysis of that data is also vital, suggests head of marketing Maggie Evans of customer communications specialist iSKY Europe. She says the data can be used to increase the value of customers, manage customer satisfaction (as opposed to merely measuring it) and identify a customer’s propensity to defect so that appropriate measures can be taken to prevent this.
And Martin Williams, marketing director of call centre operator The Listening Company, also sounds a note of caution about over-reliance on software to cure telemarketing’s ills. He says: “Mention CRM and there traditionally follows a dissertation on the latest software. How many companies have been lured into heavy investment in technology and not seen an improvement in their customer loyalty?”
To take full advantage of everything that telemarketing can offer to CRM, you need the right staff – properly trained and asking the right questions – as well as the right software to analyse that data. Until all these factors are tackled simultaneously, research will continue to unearth dismal figures on wasted opportunities, such as those cited at the start of this report. “Few marketing departments appreciate the potential of the call centre in customer management”, concludes Williams. “It is difficult to know whether this is a fault of the client, who may not appreciate the scope of the medium, or the telemarketing companies themselves, who remain focused on operations rather than marketing context.”