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Progressive or Predictive Dialers – They Both Have Their Place
Progressive or Predictive Dialers – They Both Have Their Place
Progressive or Predictive Dialers – They Both Have Their Place
Progressive or Predictive Dialers – They Both Have Their Place
Progressive or Predictive Dialers – They Both Have Their Place
Progressive or Predictive Dialers – They Both Have Their Place
Progressive or Predictive Dialers – They Both Have Their Place
Progressive or Predictive Dialers – They Both Have Their Place
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Progressive or Predictive Dialers – They Both Have Their Place

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  • 1. Progressive or Predictive Dialers – They Both Have Their Place ® 1173 Pittsford-Victor Rd Suite 110 Pittsford, NY 14534 USA 1.877.897.2962 1.585.278.1940 Fax: 1.585.486.1082 info@callfinity.com www.callfinity.com ©2009 Callfinity, Inc. ® All Rights Reserved. | www.callfinity.com | Progressive or Predictive Dialers 1
  • 2. About the Author Dick Bucci is Senior Consultant for The PELORUS Group (www.pelorus-group.com) where he specializes in contact center technologies. He has authored eight in- depth reports on workforce optimization applications and numerous articles and white papers. Dick is also manag- ing director of Technology Marketing Associates, a mar- keting consulting firm. He has over 30 years of experience in the telecommunications industry About Callfinity® Callfinity provides the easiest to use telecommunications software, systems, and services to contact centers, service providers, and enterprises. Since 1999, over 270 custom- ers in six countries around the world have selected Callfin- ity’s on-premise equipment and hosted services. For more information about Callfinity, please visit Callfinity’s web site, www.callfinity.com. Copyright 2009 Callfinity, Inc. All rights reserved. The contents of this document are Confidential Information. By receiving this document, you agree to be bound by the terms of a signed and executed non-disclosure agreement between you and Callfinity, Inc, or by the remaining terms in this paragraph if such an agree- ment has not been executed. Confidential Information shall remain the exclusive property of Callfinity, Inc., and you may not disclose any Confidential Information to any third party for any reason without the prior written consent of Callfinity, Inc. You agree to use commer- cially reasonable efforts to prevent the use or disclosure of the Confidential Information in contravention of this Agreement. In furtherance of such obligation, you agree to require your employees and third party contractors and consultants, as well as any affiliates, to agree in writing to keep confidential all received Confidential Information. This product or document is protected by copyright and distributed under licenses restricting its use, copying, distribution, and decompilation. No part of this product or document may be reproduced in any form by any means without the prior written authorization of Callfinity, Inc. and its licensors, if any. Third party software, including font technology, is copyrighted and licensed from Callfinity, Inc. suppliers. Callfinity, the Callfinity stylized logo, the Callfinity infinity logo, C3S, CR2, and our product names are trademarks, registered trademarks, or service marks of Callfinity, Inc. in the U.S.A and other countries. RESTRICTED RIGHTS: Use, duplication, or disclosure by the U.S. Government is subject to restrictions of FAR52.227-14(g)(2)(6/87) and FAR52.227-19(6/87), or DFAR252.227-7015(b)(6/95) and DFAR227.7202-3(a). DOCUMENTATION IS PROVIDED “AS IS” AND ALL EXPRESSED OR IMPLIED CONDITIONS, REPRESENTATIONS AND WAR- RANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-IN- FRINGEMENT, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE HELD TO BE LEGALLY INVALID.
  • 3. “This is James Smith. Sorry I can’t take your call at this time but if you will leave your name and number, I’ll Preview dialers – Agents initiate the call by clicking on get back with you as soon as possible.” That scenario a phone number that has been programmed into the probably sounds all too familiar. There’s a good reason dialer. This method assures that an agent will be avail- for that and the odds are definitely not in your favor. able if a connection is made. Unless your business call has been pre-scheduled, the odds are only about one out of ten that you will con- Progressive dialers – The dialer monitors agent nect with the right party on your first attempt. The status then initiates outbound calls only when an agent probability improves to one out of four when calling a is available to take the call. Like preview dialers, this residence number, but that still means that 75% of the method also assures that an agent will be available time you reach voicemail, an answering machine, a busy when a connection is made, but the timing of the call signal, or no answer at all. For employees that do a lot of attempt is determined by the device, not the agent. outbound calling, this inability to connect wastes a lot of time. Employees may spend hours shuffling through Predictive dialers – These systems use sophisticated phone numbers, placing calls, and leaving messages that algorithms to match agent availability to live connec- don’t get returned. tions. Most systems “learn” from actual experience and adjust the call pacing to match agent availability. Since Over the years, several innovations were developed to help agent availability depends on the algorithm there will deal with this problem. In the 70s we saw the first auto unavoidably be many instances when a live contact is dialers. These devices called pre-programmed numbers ready to accept the call but an agent is not. by touching a single key. Auto dialers and speed dial were for individual use. In the late 80s and early 90s, a new generation of dialing devices emerged that were designed for contact centers. There are currently three classes of large scale automated dialers. Table 1: Productivity of Alternative Dialing Modes As illustrated in Table 1, all three types of Dialer Type Attempts Live contacts Ratio of dialers greatly increase the number of live per hour per hour per contacts contacts per hour. The effect is to cut labor per agent agent to attempts costs by 50% or more and achieve higher sales rates. Predictive 48 14.5 30% Applications for dialers Progressive 35 10.5 30% There are four primary applications for invest- ing in automated dialing devices: Preview 31 11.1 36% #1 Sales calls to new customers – There are No dialer 20 5.2 26% two types of outbound sales generation Source: The U.S. Contact Center Operational Review – 2008, ContactBabel calls; traditional telemarketing and lead generation. Telemarketing companies and individuals earn revenue by closing sales over the telephone. These are typically outbound agents but may include inbound agents as well, #2 which take calls generated by advertising. Cold Pro-active customer care - Progressive organizations are using dialers calling for appointments is a necessary though not to thank customers for their recent purchases or to advise of important always welcome task of all successful field sales rep- information such as a delivery delay or a new software fix. The intent resentatives. If the sales rep is trying to set appoint- is to help retain customers and maintain accurate call lists. If the call is ments with business owners or professionals he or answered the dialer transfers the call to a live agent. If unanswered, the she may spend an entire day on the phone to gener- dialer leaves a message on the called party’s answering system or repeats ate a half-dozen appointments. the call attempt at predetermined intervals. ©2009 Callfinity, Inc. ® All Rights Reserved. | www.callfinity.com | Progressive or Predictive Dialers 3
  • 4. #3 Table 2: Call Type as a Proportion of Outbound Activity Cross-selling or up-selling to existing customers - Increas- ingly, outbound calls to existing customers for up-sells, cross- Calls to 27% sells and renewals are replacing cold calls. There are fewer re- customers strictions on contacts with existing customers. Other 19% #4 Collections - Third-party collection agencies are usually paid a Pro-active percentage of the debt collected. Obviously, the more time agents 17% customer care are talking to consumers rather than dialing telephone numbers or listening to busy tones, the more money earned by the agency and the collector. Cross-selling 14% or up-selling In addition, dialing devices are used for fund raising, political campaigns, market research surveys, and emergency notifications. Renewals Table 2 illustrates the type of calls as a proportion of outbound (existing 12% activity. customers) Progressive dialers vs. Collection 5% predictive dialers calls Predictive dialers are the most sophisticated solution. They au- tomatically place calls from call lists, detect a live answer, and Customer then direct the call to an available agent. Predictive dialers use satisfaction 5% advanced heuristic algorithms to predict when an agent is avail- surveys able to take a call. The object is to consistently get an answered call to an available agent, thus maximizing agent productivity 0% 5% 10% 15% 20% 25% 30% and cutting costs by as much as 300% by reducing headcount Source: The U.S. Contact Center Operational Review – 2008, and achieving better utilization of network services. ContactBabel The key difference between predictive dialers and progressive dialers is the level of certainty that a live call will actually be connected to an available agent. Predictive dialers rely on past Table 3: Applications for Progressive and Predictive Dialing history and data inputs like the number of agents on staff and average time to process each call. In collections environments, Progressive dialer Predictive dialer handle time is notoriously variable. The calls may be very short “Sorry, I don’t have any money now. Call me next month High cost, high skill Low cost, low skill agent (slam)”. Or they can be very lengthy as the consumer attempts agent to negotiate a repayment plan which then involves consulta- tions with supervisors and the collection of highly detailed per- Existing account New account sonal financial information. Further, agent availability is highly variable. Unless some program- High value outcome Low value outcome ming action is taken or the dialer is tightly integrated with an ad- vanced workforce management system, the device does not know Business-to-business Business-to-consumer if some agents called in sick that day, were late getting to work, or are off on vacation. The predictive dialer will continue to place calls at the same pace it did the day before until it “learns” that agent availability is significantly lower and adjusts the calling pattern. In With progressive dialers, the device does not originate call the meantime mistakes are made and there is little room for error. placement until it knows that a line and an agent are available. The Federal Trade Commission requires that no more than 3% of Before the call is placed, the agent is presented background in- outbound telemarketing calls can take longer than two seconds to formation on the called party. The advantages are that the agent connect an agent to a consumer that has answered the call. will be available and prepared when the call is connected. ©2009 Callfinity, Inc. ® All Rights Reserved. | www.callfinity.com | Progressive or Predictive Dialers 4
  • 5. In business-to-business telemarketing or sales lead generation Table 4: Outbound Job Classifications predictive dialers are often not practicable. The call list will likely have only the main number of a business, not the direct line of Job Title Annual Salary the desired party. With a progressive dialer, the sales rep can in- tercept the call at the auto attendant and enter the correct exten- Telemarketer $24,770 sion number. If the sales rep reaches voicemail then he or she can leave a personalized message. The downside of progressive dialers is that the likelihood of connecting to the desired party has not Collection agent $32,180 changed. There will still be time spent listening to call progress tones and failing to connect with the right party. Table 3 shows Sales rep - Advertising $53,170 the situations where each technology is most appropriate. Sales rep - Insurance $60,440 In general, the higher the cost of the agent and the higher the op- portunity cost from failing to connect, the more advantageous it is Sales rep - Securities $92,050 to use a progressive dialer. For example, newly recruited life insur- ance sales agents may be required to come to a regional office once Source: U.S. Department of Labor Statistics, May 2008 a week to make cold calls for setting appointments. The cost of the agent is high, as is the sales value and commission from each sale. The extra time it takes to use a progressive dialer is not worth the potential loss of a sales opportunity. Table 5: Best Practices to Improve Outbound Performance Similarly, a collector for a credit card company is not highly com- List management pensated and the potential value of a missed opportunity is small. The main goal is to maximize call productivity. In that case, the Call blending predictive dialer is the preferable solution. Segmenting and prioritizing accounts Table 4 shows the annual salary for employees that are heavily engaged in outbound calling. Compliance Getting the most out of your automated dialing system Table 5 lists effective actions companies can take to get the same database. Advanced predictive dialers have list management most out their outbound dialing system. features that automatically update all records when new informa- tion is entered into the CRM or collections management system. List management Americans are mobile. According to the U.S. Census Bureau, be- Maintaining accurate and up-to-date call lists increases produc- tween 16% and 21% of us change addresses each year. If you have tivity by reducing the number of unsuccessful contact attempts. 1000 addresses on your call list, then every year as many as 250 It’s important to contact all accounts periodically – even if sales could be incorrect unless you have been proactive in maintain- are consistent and payment patterns are improving. This pro- ing the list. Phone numbers change even more frequently than active customer care not only helps keep your mailing lists up addresses. People add or drop additional lines, change numbers to date but strengthens client relations. as they move, or even discontinue home telephone service alto- gether in favor of wireless phones. Additionally, over 30 percent Call blending of American consumers have unlisted telephone numbers. During periods of slow inbound traffic, agents can be tasked with originating outbound calls. If the calls are to existing customers One simple step is to always request “Address Service Request- there are no do-not-call restrictions. Automated dialing software ed” on all outgoing mail. The post office will then research the such as the ContextDialer from Callfinity can be integrated with new address and return the envelope with the new address. the workforce management software to help assure that agents There is a small fee for the service. can make outbound calls without unduly jeopardizing inbound service levels. When paired with Callfinity ContextACD, in- Very importantly, new information should be entered into the da- bound calls can be routed to the available agent best qualified to tabase as soon as it’s available. All agents should have access to the handle the call, based on business rules. ©2009 Callfinity, Inc. ® All Rights Reserved. | www.callfinity.com | Progressive or Predictive Dialers 5
  • 6. Segmenting and prioritizing accounts Table 6: Prominent U.S. Federal Law and Regulations Best-in-class outbound contact centers develop and implement that Impact Outbound Calling specific strategies designed to maximize results. In collection envi- ronments, the starting point is organizing the collections list by at- Fraud Abuse Privacy tributes such as number of days delinquent, debt amount, amount past due, credit score, number of debts in collections, debtor in- Telemarketing    come, payment history, and any special knowledge you may have Sales Rule about the debtor. A simple but effective way to categorize the con- tacts is by risk level. Higher risk accounts obviously require differ- Truth in Lending   ent treatment than low risk accounts. For example, junior agents Act may be assigned to the low-risk, low-value accounts while more senior personnel concentrate on the more challenging accounts. The next step is to develop a collections strategy and tactics. These Fair Debt    include who will handle each contact, how they will be handled, Collections and how frequently. Loans with a high probability of payment and Practices Act modest balances can be handled through low-cost methods such as self-service, mailings, or assigned to junior collectors. Consent to  Record Compliance Telemarketing and collections are regulated by numerous Health Insurance  state and federal statutes. The general intent of these laws is to Portability and help prevent fraud and abuse and to respect individual privacy. Protection Act Table 6 summarizes the most pertinent federal laws. The Telemarketing Sales Rule (TSR) is the most comprehensive legislation governing telemarketing practices. There are many T provisions for mandatory disclosures. Outbound call centers should invest in call recording technology for training purposes here is a safe harbor provision and to establish compliance. The Do-Not-Call registry is includ- for users of automated dialing ed in the amended TSR. There are now over 150 million names equipment which requires that 97% and phone numbers on this list. Telemarketers are subject to a civil penalty of $11,000 per violation for calling names on the of all answered calls must be connected registry. Call lists should be periodically cleansed to assure that to an agent within two seconds. registrants are not called. Users of automated dialing devices must understand the time of day restrictions (no calls to individual homes before 8:00 a.m. or after 9:00 p.m.) and the call abandonment rules. Under the Rule’s definition, a call is “abandoned” if a person answers the call and the call is not connected to an agent within two seconds. There is a safe harbor provision for users of automated dialing equipment which requires that 97% of all answered calls must be connected to an agent within two seconds. Further, the phone must be allowed to ring at least four times or for 15 seconds to provide sufficient time for the called party to answer. While predictive dialers can be pro- grammed to help meet these requirements, ultimately compliance depends on staffing levels. Both the collections and telemarketing businesses are noted for high turnover and absenteeism, which can adversely effect compliance with the two-second rule. The only fail-safe method is progressive dialing – which assures that an agent is always there to immediately connect with the called party. ©2009 Callfinity, Inc. ® All Rights Reserved. | www.callfinity.com | Progressive or Predictive Dialers 6
  • 7. Conclusion it is to connect to the called party, the more advantageous it is Automated dialing systems are highly cost-effective investment to go the progressive dialing route. decisions for environments that involve large volumes of out- bound calling. Relieved of the need to look up phone numbers, Fortunately, organizations do not have to make a choice. The place calls, then reach the right party only 10% – 25% of the ContextDialer from Callfinity is available in three modes, and time, predictive dialing can double or triple agent occupation the difference between those modes is important. with live callers. This saves labor costs by reducing the number of • Preview mode allows an agent to see the record first agents required to complete the same number of calls. Paybacks then dial when the agent clicks a button. of less than a year are not uncommon. • Predictive mode dials automatically and predicts both However, predictive dialers are not ideal for every environment. agent availability and optionally does answering ma- Despite sophisticated algorithms there is always the possibility chine detection. This results in a delay between the time of call abandonments because the agent was not promptly con- the called party answers the call and when it’s transferred nected to the called party. Few business practices are more annoy- to an available agent. ing to consumers than being called by someone you don’t know for reasons you don’t understand and then placed on hold for an • Progressive mode is a happy medium between preview extended period until the agent is ready to talk to you. This is not mode and predictive dialing. Calls are placed automati- good business etiquette and in some cases it’s against the law. Pro- cally, but only after an agent is “reserved” for the call (the gressive dialing differs from predictive dialing in that calls are agent is shown who is being called while the dial occurs) not dialed until an agent is known to be immediately available and the agent determines if the person answering is a to take the call. For business-to-business calls, progressive dial- human or not. There is no delay. Both parties are im- ing is the only practical option. In general, the more important mediately connected. ©2009 Callfinity, Inc. ® All Rights Reserved. | www.callfinity.com | Progressive or Predictive Dialers 7
  • 8. Summary There are four primary applications for investing in auto- mated dialing devices: sales calls to new customers, pro- active customer care, cross-selling or up-selling to existing customers, and collections. There are three types of dialers: Preview dialers, progressive dialers, and predictive dialers. Progressive dialers moni- tor agent status then initiates outbound calls only when an agent is available to take the call. With a preview dialer, an agent initiates the call by clicking on a phone number that has been programmed into the dialer. Predictive dialers use sophisticated algorithms to match agent availability to live connections. The key difference between predictive dialers and progres- sive dialers is the level of certainty that a live call will actually be connected to an available agent. Predictive dialers are the most sophisticated solution. They automatically place calls from call lists, detect a live answer, and then direct the call to an available agent. However, predictive dialers are not ideal for every environment. For business-to-business calls, pro- gressive dialing is the only practical option. In general, the more important it is to connect to the called party, the more advantageous it is to go the progressive dialing route.  ©2009 Callfinity, Inc. ® All Rights Reserved. | www.callfinity.com | Progressive or Predictive Dialers 8

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