In the future, when people examine important social and business
trends at the turn of the millennium, it’s quite likely that the
explosion of teleculture will be on the list. The telephone has
transformed the way companies communicate and trade, and radically
altered the way people work.
Call centres are now one of the biggest employers in the country and
more are opening all the time; only the other week Barclays Bank and the
Northern Rock building society announced the closure of high street
branches in favour of call centre-based operations. There are now nearly
5000 call centres in the UK, with up to 243,000 call staff; by 2002, the
number of positions will have reached 274,000 (Datamonitor).
Four key issues now face the telemarketing industry: how to sustain
growth; how to harness and defend against new technology; how to balance
global growth with the demands of local service; and, the biggest issue
of all, how to get the best from the people who form the foundation of
the industry itself, the staff.
In terms of the impact of new technology, there can be no better example
than the internet and how it could affect the telemarketing
The internet has been about the only communication medium to have
outgrown the telephone in the past few years, so it is understandable
that some people see it ripping the heart out of the telemarketing
industry. However, others see it merely as a complementary technology
that call centres are well positioned to exploit.
Globalisation, too, is high on the agenda for most large companies, so
it is not surprising that ever more are seeking to serve multiple
foreign markets from centralised call centres, as IBM, Dell and British
Airways are doing at the moment. But as these global activities get
bigger and more difficult to keep track of remotely, companies will have
to ask themselves whether it might not be better to decentralise and
serve markets locally.
The industry must also face up to the fact that although telemarketing
is universally recognised as the lynchpin of customer relationship
management, few of the large communication networks have invested in the
Are we going to see more integration of call centres into larger
networks, or is there no need for physical integration as long as
teleservice is used in an integrated way?
The common thread running through these issues is people: how to make
the job fulfilling as call centres get larger; how to train them to make
the best of technology; how to recruit foreign language speakers; and
how to maximise their involvement and interest in the client’s
The internet has both positive and negative implications for the
telemarketing industry. On the negative side, customers communicating
with companies via e-mail could drastically cut the volume of phone
traffic. Banking has been one of the first sectors to see the net take
significant amounts of transactions away from the phone, and, with banks
such as Egg and Smile offering attractive deals for net-only customers,
this trend can only increase.
But on the plus side, the future points to the rise of the web-enabled
call centre, a multi-channel customer contact centre. Whether it is in
actually hosting web sites, or in offering online support for customers
using a client’s site, there are plenty of roles for the call centre to
fill. According to Datamonitor, the demand will be so great that
web-enabled call centres in the UK will grow at a rate of 105% a year,
leaping from the 30 in operation now to more than 900 in 2003.
But experience shows that many companies are simply not geared up to
handle customer contact via the web. Separate research by the Direct
Marketing Association (DMA) and Hewson Consulting reveals that between
30% and 40% of customer e-mails are never answered by companies, with
the remainder waiting up to three weeks for a reply. The problem is even
greater with foreign language e-mails. Research by telemarketing and e-
service specialist, International Marketing Solutions, found that 59% of
non-English e-mails were ignored by European companies, rising to 89% in
It is also thought that between 70% and 90% of consumers never complete
transactions on the web, abandoning their visit out of confusion,
impatience, or lack of additional information. The scope for telephone
support to address this and, in the process, to boost sales, is
The only way to improve this situation is for call centres to invest in
web-enabled facilities. Top-ten telemarketing bureau, 7C, is a good
example of a call centre doing just that. The ex-AT&T customer care
operation recently secured pounds 10m in venture capital to invest in
web-enabled customer contact centres, allowing agents to deal with
customers in a fully integrated multi-media environment.
7C managing director, Juan Sotolongo, says: ’E-commerce in Europe is set
to grow from pounds 3.5bn to pounds 273.8bn by 2003, but many companies
are missing the boat by developing transactional web sites in isolation
from existing distribution channels.
’They must bridge the gap between telephone-based and web-based customer
interactions, and the natural place for this is in a multi-channel
Sotolongo adds that 7C is providing full multi-channel support for
clients such as Virgin, Dun & Bradstreet and the RAC.
Kieran Moulden, call centre director of Telecom Express, says:
’Operators need to bite the bullet and invest. The telephone line is a
means of communication, so whether it’s voice or e-mail, we should be
able to deal with it.’
Ultimately, the smart approach is to have systems in place so that
customers can contact you via whichever channel they choose.
But it would be dangerous to overestimate just how much traffic will
migrate to the web; research by Brann Contact shows that 86% of people
still prefer to telephone a company than contact it via the web.
The human dimension
Another significant issue for telemarketers was highlighted last week
when BT became the first major company to suffer a call centre strike.
Up to 4000 staff from 37 BT call centres stopped work, with further
industrial action planned for December 10.
It is still unclear whether BT will agree to the union’s demands
(Marketing, November 25), but working conditions is an issue which BT -
as well as other major call centre operators - will have to address.
As the telemarketing industry has grown to become a major national
employer, the media have become interested in it. One of the favourite
angles of attack is to look at the warehouses full of operators and call
them modern-day ’Satanic mills’, drawing comparison with the worst
excesses of the industrial revolution.
Tales of mundane work and staff surveillance to maximise call
productivity abound, leaving the call centre business with a serious
There is evidence to suggest that poor working conditions, lack of
personal fulfilment, training or motivation has resulted in more than a
few negative press articles.
Brann Contact’s survey of 1000 UK consumers via BMRB revealed that 25%
of callers have had bad experiences with call centres, the most common
problem being operators’ inability to solve problems (65% of
respondents) and being passed onto other people (60%). Overall, the
picture is of poorly trained personnel unable to act on their own
Clare Davidson, director of Brann Contact, says: ’This research shows
call centres need to move away from treating people like idiots and
start training them to think on their feet and work to their full
Poor working environments have also resulted in unacceptably high and
expensive staff turnover rates. Chris Halward, director of human
resources and training at The Customer Contact Company, says: ’It’s not
uncommon for a call centre to lose 40% of its staff in one year, and 60%
or 80% turnover rates are not unheard of. When you think that it can
cost pounds 4000 to recruit and train an operator, you begin to realise
how important staff retention is. I think call centres spend so long
worrying over what new technology to implement that they forget the
Some of the more forward-looking people in the industry are addressing
the staffing problem. The DMA has joined forces with six of its European
counterparts to develop a professional qualification standard for call
Robert Dirskovski, policy adviser on telecommerce at the DMA, says: ’We
want to raise the status of call centre staff and establish it as a
proper profession. People need better training to feel they have a
legitimate career path in telemarketing. We’re concerned about churn and
7C, which has employed 1000 people since its creation 16 months ago, is
an example of a big agency realising it has to be proactive in its staff
strategy. It has put an emphasis on promoting from within and introduced
’Witness’ software, which allows people to assess and improve their own
performance. Director of corporate affairs, Sarah Barclay Hudson, says:
’It’s sad that some people in this industry still don’t recognise that
the way they treat people is some years behind where they should be. The
sweatshop label would be refuted by many, but is quite deserved in some
As the telemarketing industry grows, it is being pulled in two
On the one hand, it makes sense for companies to take advantage of
economies of scale and build ever-larger call centres, serving
ever-larger markets. On the other hand, this increases the risk of the
staff problems mentioned above and, with networking and database
technology now cheaper and more sophisticated, may not even be
Some anticipate that the future lies more with smaller, localised
customer contact centres - perhaps even with agents linked up to work
from their homes. If this model can work efficiently, it could do away
with many of the problems that come with large-scale operations,
especially for those conducting in-bound or out-bound work across
Neil Perring, joint managing director of BPS Teleperformance, which
conducts international work for clients such as Book Club Associates and
Alcatel, says: ’Five or so years ago everyone wanted to centralise, as
Dell did in Ireland. But now I think there is a trend toward
decentralisation. Many companies seem to have realised that cost is not
the only issue - centralisation can create practical and political
For example, it may be easy to find a team of Italian, French and German
nationals to man a pan-European helpdesk run from London, but is it so
easy to find staff willing elsewhere in the country? Dell is reported to
have had such difficulties that it has tried to recruit foreign
nationals at the airport as they arrived in Ireland.
As a centralised business, it is also difficult to manage and monitor an
international team and predict call volumes from each country.
Telecom Express’ Moulden believes centralised multilingual telemarketing
’can be heavy going and raises all sorts of problems. It’s great in
theory, but in practice a lot of the supposed economies just aren’t
there. If we were going to do it, we would open up in the specific
As well as helping in international markets, localisation can also
benefit the domestic scene. CAP Gemini and BT Syncordia Solutions
(owners of BT CiB) are both investigating how remote tele-working can
Simon Daisley, head of marketing at BT Syncordia, says: ’Technology
allows us to consider things such as virtual networks, with agents
working at home, linked to a central database. The important thing is to
centralise your data, though not necessarily your human resources. I
find it doubtful that the future lies with big warehouse-like facilities
- the underlying need is for customers to get information, and it
doesn’t matter where it comes from.’
Daisley adds that the technology exists to monitor productivity across a
virtual network. The concept could boost the calibre of agents, as it
will appeal more to highly able people who, for reasons of geography,
family or disability, cannot travel to a central facility. Daisley says
BT is developing such a system for Cellnet.
CAP Gemini, meanwhile, is currently investigating ’telecentres’ -
mini-call centres manned by between ten and 15 people, with the feel of
a local community centre. The centres could potentially be used for work
with one of its biggest clients, Virgin Trains, for which it operates
two Scottish call centres, selling tickets.
Alan Meekings, vice-president of Gemini Consulting, says the company
’wants to fit in with people’s lifestyles’. He further explains that
some regionally based call centres eventually soak up all the skilled
people in the area. The small telecentre approach would allow the
company to set up cost effectively wherever there are people willing to
work. ’We want to be smarter in how we find better quality people,’ he
Integration of services
Perhaps one of the more surprising aspects of the growth in
telemarketing has been that the world’s big communication networks have
not invested more in the industry.
There has been no lack of enthusiasm in design, sales promotion and
direct marketing agencies, but there has been a relative reluctance to
buy into the pounds 1bn UK telemarketing sector.
A look at Marketing’s April 1999 league reveals that only three of the
UK’s top 50 telemarketing operations are directly owned by marcomms
Brann Contact, at number eight, is a subsidiary of the US Snyder
Communications Group and part of the Brann Worldwide network. Telecom
Express, at 22, is owned by Abbott Mead Vickers, part of the Omnicom
group. InTelMark, at nine, is a division of the Omnicom-owned Alcone
group, and has recently been merged with CPM International, Omnicom’s
field marketing agency.
Apart from a handful of others, such as Wunderman Cato Johnson’s
teleservices division - owned by Young & Rubicam - and WPP’s ownership
of OgilvyOne subsidiary, Teleconsult, there is no real evidence of
substantial network investment in the industry.
But the merger of InTelMark and CPM and some investment in call centres
in the US by WPP suggest that more integration is on the agenda. The
turning point could be the influence of the internet.
Customer relationship management is the Holy Grail of all
self-respecting communication networks, so they want to deliver customer
satisfaction through whichever channel the customer chooses. Being able
to offer a fully integrated CRM service has to include the phone and the
One of the biggest factors putting networks off call-handling operations
is that it is capital-intensive, low-margin, high-volume work. But as it
captures more of the CRM high ground, there is surely potential for
margins in telemarketing to increase, not least by bolting consultancy
onto the core call-handling operations.
Perhaps the networks are waiting for the UK call centre market to settle
down. As shown by the rollercoaster ride of Sitel, which saw a 16.5%
fall in income last year and a plummeting share price, some operators
built too much capacity, too quickly.
As the market matures and volumes become more predictable, the sector
may prove irresistible to networks seeking to put CRM at the core of