The Great Debate

Although annoying to many, telemarketing does work. So companies are continually looking for ways to improve results--and vendors are continually working to help businesses make those improvements. Predictive dialer manufacturer Castel Inc. introduced a product last month called DirectQuest that has the industry buzzing. The product is designed to help its customers shave seconds off calls, but the way DirectQuest works has led to both benefits and controversy. Before routing calls to a live agent many predictive dialers listen for noise energy, such as the word Hello, followed by two seconds of silence to identify that as a live contact. Other dialers listen for a break in the telephone ring cycle (six seconds between rings) before it considers the call a contact. The problem with these methods is the lag time incurred once the caller says "Hello," which is often greeted with dead air. Consumers have caught on to this; if they don't get a response after one Hello, they hang up. "The industry has done an astonishingly good job of training consumers to hang up when they hear dead air, because they know it's a telemarketer," says Geoff Burr, Castel's president and CEO. "We've done studies that suggest 60 percent of telephone calls get hung up before the agent is on the line. We have totally different technology that enables the agent to hear the first Hello all the time. As a result there is no dead air and no abandonment rate." However, this technology also has industry pundits charging Castel with attempting to violate consumer privacy. The reason is that the way the dialer works allows it to bypass such call blockers as the TeleZapper, a device designed to protect consumers from unwanted telemarketing calls. The TeleZapper, by Royal Appliance Manufacturing Co., blocks unwanted calls by faking the three beeps of a disconnected number, which are recognized by commonly used high-volume predictive dialers. Once recognized, the dialer drops the call and eventually removes the supposed disconnected number from its customer database, a win-win for disinterested consumers. Roughly one million consumers have paid about $40 each for a TeleZapper. And despite their investments, those consumers, and others who use similar products, are now once again vulnerable to unwanted telemarketing calls, pundits claim. This situation escalates the privacy battle--and frustrates consumers. "If I'm a consumer who made the effort to buy a TeleZapper and you bypassed it to sell to me, I'd be upset," says Art Schoeller, senior analyst at Yankee Group. Burr agrees, but says that getting around call blockers was never Castel's intention. "We came up with the DirectQuest technology [in the third quarter of 2001], before the TeleZapper was even available," he says. What makes DirectQuest unique is that it uses a peer-to-peer messaging approach. Unlike other predictive dialers the Castel system receives a connect message from the telephone company's central office when the called party takes the phone off the hook. (This obviates the need for conventional listening methods.) Once the phone is lifted off the hook the call is immediately routed to an agent in time to hear the called party say Hello the first time, which happens in less than one second, Castel executives claim. Most predictive dialers, Burr says, create what he calls nuisance calls. "If you're selling to someone, the worst thing you could possibly do is guarantee everyone you call will be annoyed before you start talking. We want to eliminate the nuisance factor in outbound calling," Burr says. While tools like the TeleZapper are designed to block calls that don't provide a telephone number for caller identification purposes, DirectQuest enables telemarketers and sales organizations to enter a company phone number into the predictive dialer. To those who say this is yet another way Castel attempts to bypass the TeleZapper and other devices, Burr says that by providing the company number consumers can read their caller ID screens and then decide if they want to take the call. For TeleZapper customers that still wish to protect themselves from unwanted sales calls, Burr says, "There is a more effective way of dealing with the problem: Calling the [Direct Marketing Association] and say, 'Put me on the Do Not Call list.'" Just 1 Question CRM magazine: What are the key analytics trends in CRM? James Goodnight, Ph.D., CEO, chairman, cofounder, SAS Institute: The first is bringing together silos of data to a single customer warehouse, where it's all recorded and stored. That is the real key to CRM. Using predictive modeling for segmentation is the second. It offers a much higher level of sophisticated segmentation, and companies can get quite a lift out of their campaigns by using it. An interesting third trend is channel optimization: what products sold best by what channel and how to use channels to drive sales to other channels.