A reality check

Call centers, IVR platforms, blended live agent/IVR solutions, and dynamic call routing platforms are expensive. With the high cost of media and persistent downward pressure on profit margins, picking the “right” telemarketing solution can be the difference between having a direct marketing hit and a case study miss.

In the realm of direct to consumer marketing, telemarketing costs can be higher than the cost of the product being sold, and are typically the 2^nd or 3^rd biggest expense behind the cost of media. Sales commissions, talk time fees, set up fees, script development, custom reporting and programming charges all conspire to drive up the cost of doing business “direct” for marketers.

Some good news

We can expect more and get more from our investment.

With some informed selection, a collaborative and accountable work style and an uncompromising focus on results (vs. activity), direct marketers can expect (and achieve) truly great results from their telemarketing partner(s).

So, looking to change call centers? Test a new one or link two or more together? Want to test that automated attendant, intuitive speech recognition / IVR solution? Think a blended approach makes sense? Here are some considerations for choosing the “right” type of solution and getting the most out of your investment:

1. Offer type - soft offer or hard offer? If price is not mentioned in the ad (i.e. “soft offer”) for a “risk free trial” or “call now to find out how…” or “call now for your free…” offer, live agent call centers are the best. So-called soft offer call centers are in essence your commissioned sales force, and they are skilled at the art of selling – they’ll inform and persuade the curious callers to take your offer. When price is mentioned in the ad (i.e. “hard offer”), callers are typically more ready to “buy” (they already know what they’re going to get and how much it should cost them), and therefore do not require as much “selling” (when compared with soft offer callers)…the key for this type of offer (and caller type) is efficient order taking, which means less art and more science is required at the point of sale. Live agents can get the job done, but consider the automated attendant options – test both and compare results. The benefits of automated attendant platforms (i.e. 0% abandonment, 100% script adherence) can be compelling, and can be a nice complement to the live agent strategy.

2. Medium (and media plan), messaging - TV short form (“spots”), TV long form (infomercials or “shows”), print, radio or direct mail? Broadcast or cable? Local newspaper or national magazine? First class mail or bulk rate? You get the jist – the point is: the combination of messaging and medium drives various caller (and potential “buyer”) profiles as well as the “call curve” for a specific ad impression.

An understanding of caller profiles (i.e. their demographic, psychographic, geographic info) is important input to selecting (and optimizing) a telemarketing solution.

As an example, if you’ve got a mature (i.e. baby boomer and older) and evenly skewed male/female caller profile responding to a soft offer, long form radio show for a relatively high ticket (i.e. north of $150) dietary supplement, it is likely that a purely automated attendant telemarketing solution would yield unacceptably low conversion rates; in contrast, the same caller profile directed to a boutique (i.e. small, few clients, highly trained and well-compensated agents) soft offer call center is likely to be converted at least twice as frequently.

An understanding of the “call curve” (i.e. call volume and timing relative to ad impression – low to high, impulse or delayed; call density – number of calls over a time interval, say, per half hour) is also important when considering telemarketing solutions. As a for instance, direct mail and print advertisements typically generate a fairly smooth and predictable call curve, with a large percentage of those calls generated during the daylight hours of Monday to Friday – good to know if you’re the call center manager in charge of scheduling and staffing, and great to know if you’re a call center owner because you know that overnights and weekends are (generally) more difficult and more expensive to service.

In terms of handling high call volume as well as high call density (or “spiky”) call curves, the larger call center companies (with more “in house” capacity, typically across multiple physical centers, and even continents/time zones, but sharing the same “in house” telecom and technology backbone) and automated platforms are typically best at (consistently) delivering the service levels marketers require (and that media buyers love). That said, call management technologies that provide call routing options (whether third party, stand alone like Intellimedia’s www.intellimedia.com or those offered by a combination of call center and their telecom carrier) can be employed to daisy-chain (or hub-and-spoke) multiple small call centers together to create a larger ‘virtual’ call center and thus absorb more calls.

3. Initial media budget, spending growth plans – both affect call forecasting (read: demand for your telemarketing partner’s capacity, including live agent scheduling) and call service levels (read: your telemarketing partner’s capacity, including live agent scheduling). Over communicate the growth plans (and changes in plans) with your telemarketing partners – consider developing a collaborative planning model where media buyers and telemarketing work together and interact directly. Track forecast accuracy, call service levels (read: call answer rate, or one minus the abandonment rate) and make updates to call projections and staffing models regularly.

4. Outcomes and results – define success with your telemarketing partners. Calculate, articulate and then communicate the “success metrics” and “service level” expectations you have for the marketing campaign as well as for the telemarketing partner. Develop a scorecard with specific KPI’s – metrics along with their calculations – and their targets (i.e. revenue per unique call in; minimum performance as measured weekly needs to be $45 excluding third party cross sells). Consider tying compensation to performance. Expect call centers to record all calls, provide compliance reporting – monitor and spot check the process to your satisfaction. Ensure 100% call dispositioning – know where every call that hit the switch ended up…have programs in place for recovering all of the “leakages” (i.e. every call that hit the switch that didn’t result in an order is a leakage). Lastly, expect full transparency and accountability of the call reporting, order management, payment processing and data movement (i.e. data file transmission of media results to media buyers) processes.

5. Recommendations - good sources for referral of leading telemarketing solution providers include trusted business partners and other marketers, colleagues in your industry peer group and “ecosystem”, as well as trade associations such as the Electronic Retail Association (www.retailing.org), Direct Marketing Association (www.the-dma.org). In particular, we’ve found that media buyers and production companies (whether for print, TV or radio) are typically in the know about “what’s hot and what’s working”; “telemarketing consultants” and “campaign management companies” generally have fact-based and empirically supported recommendations as well.

In general, my suggestion to those shopping around for telemarketing solutions is to do three things: first, do your homework – be ready to articulate your business objectives and then translate these into measurable success metrics / service level expectations for your prospective telemarketing partner. Second, when considering recommendations for telemarketing solutions, perform your own due diligence or work with someone who’s independent and objective – be critical of unconditional and unqualified recommendations and be clear about the motivation (financial, personal, other) for the referral. Lastly, test and learn – set up a controlled test (or set of tests) and learn firsthand what works with your combination of marketing variables and the chosen telemarketing solution.

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I recently read and got a few good laughs about the drama with Video Professor from a few months back.  The basic gist is that Video Professor is suing more than 100 anonymous Internet posters over derogatory comments that they made about Video Professor’s business.  That’s right, suing anonymous internet posters on the site infomercialscams.com.   From arstechnica:

The company’s federal complaint is a strange read, since it does not identify even a single false and defamatory statement; it simply asserts the existence of such statements somewhere on The Interwebs. Despite that, the company was able to obtain a subpoena to obtain the information it is seeking.

Unfortunately it is instances like these that can certainly propagate the image of infomercials (and the products behind them) as non-legitimate business.  It certainly signals a problem when a company gets a lot of negative feedback on the web (and 615 complaints with the BBB, albeit most of them resolved) and can often hurt other marketers using the same medium.

So what ARE marketers to do about anonymous web feedback?  For starters you can play defense - respond to every complaint, constantly monitor via search engines what boards are messaging about your product, and actively seek to make the wrongs right.  For long term success though you have to play offense - that means having a great product, building a great brand that meets a consumer need, and empowering your employees to build lifetime customers.  It’s easier said then done but probably better than finding yourself in the position of the founder of Video Professor:

“I personally do not believe that you can be anonymous and bash people and get away with it under the First Amendment. I will stay with this case, and I will get the names that I am requesting. I will pursue this until the Supreme Court tells me I can’t get them.”

Personally I think heading all the way to the Supreme Court to “get them” is not quite the ideal customer relationship dynamic I’d be hoping for.

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There’s a decent amount of discussion around what Seth Godin and others have termed interruption media.  For those new to the term:

Interruption media advertising is advertising based on the idea that a consumer is given entertainment, information, etc. and that is then interrupted to serve an ad to the audience, whether it’s a print ad in the middle of your Cat Fancy magazine article, a banner ad along the top of a CNN.com story or a TV spot during Grey’s Anatomy.

I’ve been thinking about this in the context of direct response TV advertising. Part of the beauty behind the half hour TV infomercial is that it is NOT interruption advertising in my opinion.  Yes you could argue that the “interruption” occurs as you’re flipping from one thing you’re watching to another but by and large if you watch a half hour infomercial you are very clearly choosing to do so.  So why do people choose to watch these often ridiculous selling pitches?  Entertainment and Education.  Who doesn’t get a kick out of the shows like the Magic Bullet or watching Billy Mays hawking another cleaning product or appliance?

So can long-form infomercials continue to be viable as viewers move more and more to on-demand entertainment?  It certainly poses an interesting question and certainly raises the bar for the marketer to both entertain and educate.  Heck, I’d love to see Comcast offer me on-demand infomercials and tell me which ones are highest ranked by viewers.  What if they could not only rate the show but also the product (if they’ve rec’d it).  The good shows would certainly rise to the top and the people with the biggest budgets but crappy products may not always be the winners.  Could be quite interesting.

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