TELEMARKETING: Call centres aim to encourage loyalty - Sophisticated telemarketing services can boost customer retention

When most consumers think of telemarketing, they think of jumping

out of the bath to answer the phone - only to hear a double-glazing

salesman at the end of the line; or being held in a phone queue for 20

minutes just to give their bank a change of address.

But despite its image as an irritating time waster, telemarketing is

becoming a sophisticated tool for encouraging customer loyalty.

According to David Seccombe, principal consultant for Ogilvy One, it's a

source of vital human interaction. "The telephone can engender more

loyalty because it provides a two-way open dialogue. It means a higher

expense, but that doesn't mean it won't make you money," he says.

Martin Williams, marketing director of The Listening Company, agrees:

"There isn't any substitute for talking to someone over the phone -

questions will arise and the conversation takes a turn that wouldn't

happen via e-mail."

Aside from the human aspect, behind-the-scenes technology also has an

important role to play. Companies have greater access to detailed

customer information than in the days of 80s cold-calling. This can be

put to use in skilful forms of soft-sell, where dissatisfied or confused

callers have products specifically tailored to their needs.

"Organisations have more data on their customers," says Glenn Hurley,

chairman of port@l. "The trick is to turn this data into real business


Reliable data systems

Hurley advises using well-established hardware brands such as Avaya,

Cisco, SUN and Compaq. "Established brands will be around in the future

ensuring systems can be safely upgraded and updated." As far as software

goes, automated services, freephone numbers and call back options are

designed to shorten the time and money customers spend on the phone.

However, it's vital both phone agents and callers can use them easily,

warns Stewart Oxley, associate director of, whose clients

include Early Learning Centre and Bass Brewers. "Routed calls are ideal

for banks or companies that offer many services, but should provide

'opt-outs' so callers can speak to a live operator. Clients should also

agree a time limit with call centres for callback options to ensure

customers aren't waiting too long," he advises.

Interactive voice response is another tool. It's a necessary evil that

can work well, according to Seccombe. "Make sure it's navigable and

logical - companies fail when systems have loops that trap callers.

There's some evidence to suggest call-back options produce increased

sales, but consistent research through Forrester and Jupiter shows

people want voice support." He adds that the voice and tone of automated

speakers should fit the brand.

4D Telecom offers freephone numbers and automated call handling. It has

an on-site recording facility so recordings get the right voiceovers,

jingles and tone. It recently provided an automated service for Npower

linked to ITV programme The Bill. Winning numbers to a competition

appeared on-screen. Callers then checked them against their bills - if

they won they rang and had their details recorded. "We can fit the

service to brands, including music from TV ads or even the voice of the

chairman," says marketing manager Giselle Owen.

But for many callers, although automation can help speed up call

processing and cut down on queuing time, the most important factor in

telemarketing is contact with a live phone agent. "Companies have to

decide what tactics to use and what is going to give them a strategic

advantage," says Una McLoughlin, managing director of Performance

Insight. "People are becoming used to self-serve facilities, but you

need to choose services relevant to them. For a major utility it may be

fine to use automated calls for meter readings, but for more complex

ones such as buying a new product, a live operator is preferable. If the

service is too complicated the customer will become irate and is more

likely to hang up," she says.

Elke Anderson, managing director of call centre trainer and consultant

Blue Sky, says care calls - where the customer has lost a credit card or

had a car crash - provide the best loyalty hook. " The caller is often

in a very vulnerable position and if the phone agent handles them right,

one call can generate incredible loyalty - you've got a customer for


Outbound calls are dependent on the quality of the data available and

how phone agents use it. "There should be a good reason for calling and

nothing spurious," says Anderson. She cites the example of a national

supermarket chain whose loyalty card was failing to retain high levels

of custom. It began to use customer information gathered from the cards

to target selected customers via the phone with tailored promotions -

such as a baby club offering 25% off baby products to women whose

shopping lists included folic acid.

The best operations offer a combination of top-level technology and

highly informed staff, according to The Listening Company's Williams.

"Training is vital, especially in understanding the product, how it

works and its subtle nuances. It is also necessary that telephone agents

have the power to put any problems right - either with a clear route to

channel calls to an expert or to put together a tailored package to

encourage customers to stay," he says.

Importance of the follow-up

He points to the example of one client, PlanetRecruit, an online

recruitment service that provides candidates for recruitment agencies.

"Many customers were leaving after three or four months because they did

not understand how the service worked. We called every customer a few

weeks after they signed up to make sure they were getting its full

benefits and followed it up with a call every month afterward.

The subject of the follow-up calls varied each time to include news of

product changes and upgrades or research and questionnaires," explains


So far the programme has succeeded in staunching the flow of departing

customers and has increased sales through cross-selling or


"If someone's taken the decision to leave late in the process, it may

not be too late to persuade them to stay. But it's better to target them

earlier," he adds.

Telecom Service Centre uses predictive marketing software Quadzone to

analyse customer status. "It's best for outbound calls," says Elaine

Booth, customer value management analyst. "We can retain customers by

building up profiles and tailoring programmes to them. Once we've

decided on a strategy we target people who fall into particular


Making opportunities

Ogilvy One's Seccombe says customer service lines are also good for

retaining customers: "We're doing work for a major UK utility and have a

lot of people ringing with a change of address. We use the opportunity

to persuade them to pay via direct debit and by doing so have doubled

our client's selling rates and made its annual costs much cheaper."

For Performance Insight client Russ Hewitt, head of residential sales at

Powergen, modern call centres are an essential part of the marketing

mix. "I'd place them alongside delivery, pricing, brand value and image

in terms of importance. The speed of technological advances at the

centres is breathtaking and has made it more convenient for our

customers. Phonelines open for 24 hours, standard software call-back

packages and skilled operators generate good will in a way that e-mail


But although it's imperative to Hewitt that both operator skill sets and

technology are up to standard, it's not an equal partnership:

"Organisations can't get around bad people by using good systems, but

they may get around bad systems by using good people."


Three years ago the Reader's Digest Association (RDA) devised a call

centre care programme with Hoseasons Marketing Services (HMS), in an

attempt to halt high numbers of returns on a series of books sent to

customers on a home-approval basis. The resulting value-added service

(VAS) was so successful it was rolled out to encompass the firm's 1.5

million UK customer calls each year.

"We worked together to change the culture - three years ago the emphasis

was on processing cancellation calls quickly. Now we take the time to

under-stand why a loyal customer wants to cancel and work to encourage

them to stay," says Helen Tomes, customer service manager for RDA.

VAS persuades around 150,000 of callers ringing to cancel subscriptions

or return home-approval products to stay on board or buy another


Richard Overy, director at HMS, says: "It's not a heavy sell, but

classic customer relationship management." HMS staff tap into RDA's head

office computers in New York to access its client database when they

receive a call. "They can tell their needs and their attributes. The

agents then tailor the products to the client - if they're moving house

they may be interested in books on DIY and if they're elderly, they're

unlikely to be interested in modern dance music. Also, they know the

company culture and its aims and aspirations," he adds.

Regular customer surveys by RDA have shown that customers are happier

with service received over the phone. "We've hit 100% customer

satisfaction for the politeness of our phone agents. The telephone is

also the best way to get feedback on how we can improve products," adds


"When you say telemarketing, people think of salesmen calling at 9pm.

But selling via inbound calls is much softer and an added service," says




- Make sure phone agents know your brand and what you're seeking to


- Opt for centres that have flexible technology so updating and

upgrading it are a simple process.

- Look for a wide technology base including reliable hardware, reporting

and predictive dialling.

- Maximise opportunities - ensure operators are trained and aware enough

to turn complaint calls into sales.

- Make sure your automated call handling has no loops and is simple to


- Give the caller the chance to talk to a live operator at any time.

- Use a medium that's relevant to both customers and products, and give

customers immediate service.

- Ensure your callers receive a service that matches your brand in tone

and handling.


- Be tempted by cutting-edge technology that may prove difficult to


- Waste your time and resources: customers are more likely to accept

outbound calls from companies that have a good reputation, which sell

products relevant to them and with which they have an existing


- Keep valued customers waiting on the line for too long: try to give

them an honest estimated waiting time.


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