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Article : Taking The Myths Out Of The FCC/FTC Mandates

With the recent creation of the National Do Not Call (DNC) registry, the teleservices industry has been the target of a full out assault by doomsayers predicting the end of the industry. From the New York Times to CNN, nearly every media outlet or industry authority has opined that first-day statistics of those who enrolled with the DNC registry – signaling loss of jobs en masse and financial devastation to the economies of rural towns where many contact centers are located.

And that's just the most well-publicized of the Federal Communications Commission (FCC) / Federal Trade Commission (FTC) mandates that also include the transmission of caller ID, abandon call restrictions, message announcement and compliance reports!

This feeding frenzy has created an atmosphere of fear, uncertainty and doubt that has caused even the most seasoned contact center executive to lose sleep.


Lawrence Mark
Chief Technology Officer
SER


The sum of which can only be categorized as "myths," which Webster's defines as "a person or thing having only an imaginary or unverifiable existence." In other words, a hyperbole, or an exaggeration of the truth. Changes are coming, but they are not the end of the world if you prepare yourself properly.

So before you hit the speed dial to your therapist, let's consider the validity of some other myths – the Bermuda Triangle, the Fountain of Youth, and the Tooth Fairy. Still not convinced? Then read on as we tackle some of the greatest myths related to the FCC/FTC's amendment to the 1995 Telemarketing Sales Rule.

 

Myth #1: The FCC/FTC mandates mean the end of the teleservices industry
Despite the recent negative publicity, our industry will continue to thrive, thank you very much. According to the Direct Marketing Association (DMA), the teleservices industry was responsible for more than $274 billion worth of sales, and employed nearly 6 million people in 2001. As our past experience has shown, the teleservices industry has had, and will continue to have, a significant positive impact on the overall national economy.

Furthermore, consider these two things. First, that Darwin's theory of natural selection applies to business – the strongest do, in fact, survive. And secondly, industry historically makes its greatest advances in the face of adversity.

We believe that not only can savvy contact centers survive, they can increase market share by leveraging technology to regain efficiencies lost by complying with the mandate, or by identifying and providing new, value-added services, thus differentiating themselves in the market place.

 

Myth #2: Contact centers will go out of business
Now that we can all breath a sigh of relief that the industry is not going away, we need to face the fact that in order to survive, there must be a fundamental change in the way we do business.

As a result of growth and acquisitions over the past decade, many large contact centers have already decentralized operations with multiple, distributed call centers typically supporting between 20-100 agents each. But with the recent FCC/FTC mandates, contact center operators need to seek additional ways to increase productivity and scale back ongoing operational costs.

We have already begun to see a paradigm shift in business strategy in which companies are starting to consolidate their operations centers in order to lower overhead expenses. This strategy enables companies to significantly reduce costs including facilities, IT equipment and redundant headcount.

Similarly, we are seeing many contact centers leverage emerging technology in creative ways to reduce overhead costs. Some centers are using remote agents who are connected back to the predictive dialer switch using voice-over-IP (VoIP) technology. Others are relocating their centers outside the U.S. through VoIP to support agents located in countries such as India and the Philippines. Alas, while the ability to leverage overseas or at-home agents through VoIP technology is a sound business strategy, it is one that requires an investment in sophisticated telephony infrastructure.

According to the META Group, an alarmingly high number of dialers in the industry are at risk of poor performance when having to operate in compliance with the FCC/FTC mandates. It is critical that contact centers invest in technology that can address not only the FCC/FTC regulations, but more importantly, the business challenges that their enactment has created.

 

Myth #3: Network signaling is the best solution to ensure regulatory compliance
There has been recent discussion in our industry regarding the advantages of using telephone network signaling to ensure regulatory compliance. Relying on networking signaling is a return to pre-1989 technology and a very costly solution.

Outbound dialing systems that rely only on network signaling from the telephone carrier cannot perform answering machine detection. As a result, agents are forced to handle answering machines, fax machines, pagers, voice mail, and operator intercepts. These are estimated to make up between 30% - 40% of all outbound calls. And as you can imagine, the cost to contact centers is significant with the drop in agent productivity.

Outbound dialers that use a combination of network signaling and Digital Signal Processing (DSP), or voice detection technology, provide contact center operators with the most accurate answer detection system on the market today. This translates directly to maximizing agent productivity, reduced costs and overall campaign success.

 

Myth #4: Compliance with abandoned call regulations will severely hamper campaign productivity metrics
The abandoned call regulations will certainly test the technological mettle of contact centers. The challenge for contact center operators is to adopt solutions that increase productivity while providing the capability to effectively address these crucial regulatory mandates. The key is to maximize talk time per hour while keeping the abandon rate low. Additionally, the predictive dialer solution must be properly configured and managed so as to conform to calling requirements on a per-campaign-basis.

In accordance with the "3 percent abandon call rate" mandate, leading vendors who utilize sophisticated dialing algorithms will be able to comply with this requirement, as well as with stricter California legislation. These solutions are also configurable to ensure that the telephone will ring for at least 15 seconds or 4 rings before disconnecting an unanswered call.

To comply with the "2-second transfer to agent" requirement, vendors have drawn a line in the sand. Some vendors position network signaling (i.e., predictive dialing without answering machine detection) as a method to guarantee the 2-second transfer requirement. While effective at meeting FCC/FTC compliance, this less sophisticated solution fails to maximize agent productivity.

Conversely, those solutions that leverage voice detection technology adhere to the mandate while ensuring a high talk time per hour. This technology automatically detects the end of a person's greeting and transfers the call to an agent within the 2-second requirement. Coupled with an automated message delivery system, in the unlikely event that an agent is not available to answer a call within the 2-second requirement, a pre-recorded message can be played to the individual as mandated by the legislation.

 

Myth #5: Transmission of Caller ID will dramatically lower results
At first blush, the mandate that contact centers must transmit the telephone number and name sounds like a productivity killer. How many times have we personally NOT picked up a call from a friend or family member with whom we have a relationship? One would logically conclude then that we would let any telephone solicitation go to the answering machine abyss. And that is precisely why this mandate can actually be leveraged to improve contact center results.

Our industry is a numbers game — dials per hour; leads or sales per hour; conversion ratio; etc. So let's face it, productivity and profits are maximized when agents make contact with individuals who want to hear from a certain business or organization. For example, as an American Express® card member, the likelihood that I will answer their call and listen to their pitch is higher than if I received a call from Citibank®, with whom I do not have a relationship.

To achieve compliance, a contact center can simply rely upon its carrier to transmit Caller ID. Of course, this means that the contact center's telephone number will be transmitted for all calls across all campaigns. Savvy contact centers, however, recognize that the specific information they transmit impacts their bottom line with respect to the DNC registry. Suppose teleservices agency ABC transmits its caller ID when calling the Jones' residence on behalf of American Express. Under the mandate, should the Jones' request that the center remove their name from the calling list, the ABC contact center may not make any calls to that telephone number, regardless of whether another client, such as Citibank, seeks to target the Jones'. Conversely, by transmitting the client's name – in our example, American Express – the ABC contact center may continue to place calls to the Jones' on behalf of other clients, provided the Jones' have not requested that particular client to remove their name from the list.

 

Myth #6: Proving compliance through archiving detailed call records will be difficult
Contact center supervisors are pulling out their hair in an effort to get their arms around record keeping requirements. It is apparent what information is required – scripts, ad copy, promotional offers and other campaign materials, not to mention the nitty-gritty call log specifics – but many simply do not know what they need to implement in order to comply.

To facilitate compliance with the mandate, leading contact center solution providers are building into their offerings the capability to timestamp and log all compliance-related events including: off-hook, detect live voice, transfer/connect to agent, play a message, disconnect call, and abandon rate by campaign. Not only do these offerings enable contact center operators to capture detailed campaign information, but also to store the information in an easily accessed and retrieved database.

 

Conclusion
With the recent media focus on the FCC/FTC mandate regulations, particularly the DNC, it is easy to get discouraged based upon the doom and gloom coverage our industry has received. Even some within our own industry have bought into this fear, uncertainty and doubt, and are allowing numerous myths to not only surface, but to have a serious negative impact on the industry. My advice is to avoid being misled. Changes are coming, but they are not the end of the world if you prepare yourself properly by investing in the right technology. In the end, these myths will take their place with other myths, just like the Bermuda Triangle, the Fountain of Youth, and the Tooth Fairy.


About the Author
Lawrence P. Mark brings more than 20 years of technical development and managerial experience to his position at SER Solutions, Inc. As Chief Technology Officer, Mark leads the company's strategic planning and technology direction initiatives.  Mark holds an M.S. in Computer Science from New York Polytechnic Institute and a B.A. in Computer Science from Queens College.

About the Company
SER Solutions, Inc. provides innovative software solutions to help companies achieve unprecedented efficiencies, maximize workplace productivity and enhance customer service.

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Published: Monday, September 1, 2003

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