Market Watch: Contact Center Update

The outbound call center industry is swimming in legislation issues these days. In addition to the national Do Not Call registry, telemarketers are facing some heavy scrutiny from state public utility commissions (PUCs) and legislators for dead air and abandoned calls when calling consumers on the phone. If your organization is pestering consumers with unwanted sales or telemarketing calls, be prepared to receive some harassing calls in turn from Uncle Sam if Federal Trade Commission (FTC) Chairman Timothy Muris gets his way. In January Muris requested approval from members of the House Committee on Energy and Commerce to fund the operation of the national "Do Not Call" registry. Prompted by letters from some 64,000 fed-up consumers, the Commission concluded that a national "Do Not Call" registry was necessary to protect consumers' privacy from an abusive pattern of calls from sellers or telemarketers. So on December 18, 2002, the Commission announced its adoption of the "Do Not Call" amendment to the Telemarketing Sales Rule (TSR), which was adopted by the Commission in August 1995 to prohibit deceptive telemarketing practices, prevent calls by telemarketers to consumers who had requested not to be called by a specific vendor, and prohibit calls to consumers before 8 a.m. or after 9 p.m. local time for the consumer. Already states have taken matters into their own hands. At least 27 states have enacted "Do Not Call" laws, 25 of which have established registries, Muris told the Congressional committee. Some states will fine telemarketers as much as $350 for calling someone on the "Do Not Call" registry, says Esteban Kolsky, senior research analyst covering call centers at Gartner Inc. "The national registry will provide efficiency benefits to consumers," Muris says. "It will give them an easy, no-cost way to sign up under both state and federal "Do Not Call" laws, and to file complaints if telemarketers call them in violation of state or federal laws." While the national "Do Not Call" amendment benefits consumers, companies that telemarket stand to benefit as well. Telemarketers will save on the time and expense associated with calling people who do not want to be called, Kolsky says. Additionally, companies will save on current compliance costs. To comply with the current state "Do Not Call" laws, telemarketing firms calling into participating states are required to pay an estimated $10,139 in annual fees to obtain each state registry, Muris say. "With more than half of the states requiring telemarketers to buy their no-call lists, and more states considering legislation to do the same, telemarketers ultimately will have to purchase dozens of separate lists at an ever-increasing cost. A national system that also provides free access to the states is a more efficient approach," Muris says. Muris noted that the amended TSR does not preempt state "Do Not Call" laws. "The Commission is hopeful, however, that over the next twelve to eighteen months the FTC and the states will harmonize their 'Do Not Call' requirements and procedures," an FTC source says. Start-up costs for the national "Do Not Call" registry are estimated to be about $16 million, Muris says, and, if granted by the end of this past January, consumers can sign up by June 2003. (Editor's note: At press time it was not yet determined whether funding for the registry would be approved by the Congressional committee.) Real Hang-Ups Calls are often abandoned when predictive dialers send out phone blasts to targeted individuals and a high percentage of answered calls (live customers) pick up the phone simultaneously. When this happens, customers are routed to agents to facilitate the call, but if there are not enough agents to grab the outgoing calls, they are abandoned. The experience for customers is not unlike an unnerving prank call where the phone rings and nothing is heard on the other end. State PUCs have set in place abandonment parameters for predictive dialers. For example, California's PUC has stated that call telemarketer abandonment rates cannot exceed 3 percent in any one-month period. That percentage is expected to drop to 1 percent next month. The FTC is also taking action and has formally announced its support for specific restrictions on the use of predictive dialer software. In response, vendors are already announcing compliance efforts. Data-Tel Info Solutions, a provider of contact center software and technology, announced the addition of xSELLerator 6.0, a California Compliance/Overflow Agent module, to its inbound, outbound, and Web-bound contact center management software. The module provides an option for calls to be rerouted to designated overflow agents, preventing calls from being abandoned, scheduling the call for a follow up, and ending the conversation. "The Direct Marketing Association is supposedly acting as a watchdog, but you need legislation to enforce it," Gartner's Kolsky says. He does not expect any predictive dialer legislation to take effect for at least 18 to 24 months. Positive Earnings Even with so much legislation hanging over the industry, the contact center market is still showing signs of strength. RightNow Technologies Inc., a privately held provider of hosted customer service and support solutions, in January announced its 16th consecutive quarter of revenue growth. Additionally, SupportSoft Inc., a provider of service and support automation software, reported its sixth consecutive quarter of revenue growth in January.