Dialers have become the latest way for organizations to leverage the work of their sales, marketing and support teams. Lowered costs and on-demand hosted models have made expenditures in telephony technology a strong return on investment for even small and mid-size businesses (SMBs). Dialers are now used in nearly every aspect of lead generation, qualification, close, as well as customer retention. Dialer software allows organizations to increase revenue while lowering costs by compressing the amount of time it takes for work to be done.
But there are as many mistakes make when choose a dialer as there are successes. Choosing the right dialer technology and the right dialer vendor can make the difference a business model that works and one that fails. There are very different kinds of dialers for different kinds of business, target audiences, lead sources, and product types. Mixing them can be disastrous. Finding the right solution and process can double, triple, or even quadruple the overall effect. Once you have ‘dialed’ in the right technology, it is just as important to find the right vendor and negotiate the best overall deal.
The underlying purpose of this paper is to help you understand the questions you should be asking your team before you begin shopping for a dialer technology. After you have narrowed down the specific characteristics your solution requires, we will discuss the different strengths and weaknesses of the dialers that are available, with pros and cons of each. After we have helped you choose the right dialer for your specific organizational needs, we will provide additional tips and recommendations to help you negotiate the best overall deal that will meet your needs over time.
Enterprise organizations have long invested in telephony technologies to leverage their business, but with lowering cost structures and hosted solutions these technologies are now very accessible to small and mid-sized business (SMB) owners. Market trends show that SMB are making every increasing investment in technology to find new customers, exploit the internet, and lower costs. At the same time, more and more vendors are providing dialer solutions, requiring more research. Included below are tips and suggestions to navigate the options for the most successful outcome.
“Wisdom begins with the definition of terms.” – Socrates
In order to communicate effectively, let’s define the variations in technologies that we are talking about when we talk about dialers. Basic dialer technology consists of the ability to have a phone number dialed automatically. This is often called ‘click-to-call’ or an automatic dialer.
More powerful dialing technologies include the ability to determine a pace of calls and to allow for loading and dialing from a list of leads in a sequential order. These are called Predictive Dialers and Power Dialers. Predictive Dialers dial multiple lines at a time to increase the chance that an agent will find someone to talk to. They use a computer algorithm to continually adjust the ratio of lines to agents to achieve specific results with time on the phone, etc. The agent does not hear dialing, instead the Predictive Dialer tries to route an answered call in a split second to a live agent. Power Dialers have actually been developed and refined more recently than Predictive Dialers and allow the agent to listen throughout the entire dialing process. We will compare and contrast these two powerful technologies.
Premise dialers are those that are purchased and installed in a physical location, along with the phone lines and data connections that are required. This typically requires internal resources for maintenance and support. They require an up-front capital expenditure and the labor cost to maintain but are still very popular for companies who already have a significant investment in IT and telecommunications support staff.
A newer option is the on-demand or hosted dialer solution, similar to the Software-as-a-Service (SaaS) solutions that are becoming so popular with solutions like the hosted CRM offered by Salesforce.com. This is gaining rapid popularity because of the payment model as well as the benefits of outsourcing to the provider all maintenance, upgrades, and professional services. This requires very little if any staff to maintain and allows sales and marketing teams to be more self sufficient.
Lastly is the need to manage the lists or leads and the process associated with lead and customer management that typically go hand in hand with a dialer application. Most dialer applications end up requiring some form of CRM integration or lead database management solution to optimize efficiency and effectiveness.
There are typically two kinds of dialers that are both classed as an auto dialer: the click-to-call, and a voice message broadcasting dialer. The click-to-call dialer is often a simple modem in a computer, or a simple link from a phone number in a hosted Web application to a remote dialer. The pace is set by the agent, the functionality is minimal, and there is typically only one line available. This dialer provides very little leverage in that all it does is save the time to just dialer the phone number, and often takes longer with inherent pauses, etc.
The newer form of auto dialer is one that automatically dials a list people and detects a live answer or answering machine and plays a pre-recorded voice message at the appropriate time. Some even then offer the ability to transfer the person who answers to a live agent. This is often called a voice messaging dialer, or voice message broadcasting and is gaining great popularity because it completely automates the dialing process and is able to play a pre-recorded message to hundreds or thousands of people in a short period of time. This is applicable in communications to groups like school children, sports teams or in prospecting to large groups of people with similar needs like homeowners who want lower mortgage rates. It is also used during political campaigns to play the candidates message to thousands of people quickly. It is not overly effective in business to business unless direct dial phone numbers are available since it does not navigate auto attendants or receptionists.
Predictive Dialers versus Power Dialers
Predictive Dialers have been available for nearly thirty years and are the ultimate dialer when volume of dials and overall time on the phone is the main requirement. Their computer algorithm requires a group of agents large enough to be able to effectively leverage the ‘dial-ahead’ effect with multiple lines. The group of agents concurrently logged must be at least 8 to 10 with an optimal minimum in the 20 to 30 range. If this is the case there are documented case studies where predictive dialers are able to keep agents productively talking on the phone from 47 to 52 minutes of an hour. And number of calls in a full time day in the 500 to 600 range or more.
Predictive Dialers are specifically optimized for Business-to-Consumer applications because they require short and consistent lengths of calls and direct dial phone numbers. They are best when used in a one-call-close type of telemarketing, short surveys, or pre-qualification of consumers. They are not designed to navigate the phone systems, auto attendants, or receptionists of a business environment. All of the leverage gained with a predictive algorithm is lost waiting to be connected in a B2B environment. It is also not wise to use a predictive dialer to call expensive or valuable leads.
Predictive Dialers specifically optimize talk time by using a computer to dial several lines ahead of when an agent is ready to answer them. The goal is to have a phone answer at the split second when an agent is ready. This doesn’t always happen and the computer either hangs up the phone or plays a message asking the person who answers to wait a moment for the next available representative. If the person hangs up before the call is answered, this is called an ‘abandoned call’. The telemarketing industry harassed consumers for so long that legislation has been put in place by the FCC that puts limits on their use. We have included a summary and link to current FCC Legislation for review.
Current FCC Legislation
The following is an excerpt about limits put on Predictive Dialers from the FCC Press Release Dated June 26th, 2003:
“Hang Up” and “Dead Air” Calls and Caller ID
- Telemarketers must ensure that predictive dialers abandon no more than three percent of all calls placed and answered by a person. A call will be considered “abandoned” if it is not transferred to a live sales agent within two seconds of the recipient’s greeting, although prerecorded messages sent under the “established business relationship” exemption are permitted.
- When a call is abandoned within the permissible three percent range, the telemarketer must deliver a prerecorded identification message.
- Telemarketers must allow the phone to ring for 15 seconds or four rings before disconnecting any unanswered call.
- Telemarketers must transmit caller ID information and are prohibited from blocking caller ID information.
- Call abandonment rules and caller ID requirements will not apply to tax exempt, nonprofit organizations.”
Predictive Dialers are best when rapidly dialing through a large list of people with very few repeat attempts. The primary concern with Predictive Dialers is the effect they can have on a specific list of people that they are calling. If you are trying several times to reach a valuable lead, you will find a negative effect occurring even with an abandonment rate of 3%. For example if the average contact ratio is 10%, that means you need to make 10 attempts to ensure contact. Then this abandonment rate of 3% multiplies by 10 and you have a 30% chance that your target lead have an abandoned calls and they most definitely will become familiar with your caller ID and have a negative experience.
Predictive Dialers should not be used with valuable or expensive leads that require multiple attempts to ensure contact. They are best for single-script telemarketing operations and are rarely effective in telesales or inside sales organizations that require a multiple-call or complex sale. Responsible organizations that use Predictive Dialers are able to gain significant leverage and find them to be the optimal B2C and telemarketing technology.
Power Dialers are optimized in business to business (B2B) applications where more intelligence from the sales agent is required to navigate receptionists, auto attendants, and voicemails systems. No current dialer technology is able to navigate the multiple options of an auto attendant in a business environment without the guidance of a live representative. Rather than dialing ahead of the Agent with multiple lines, a Power Dialer automates all of the dialing functions with a single line. The Agent hears the phone ring and is available to guide the process the entire time. These technologies have become increasingly popular by avoiding the pause upon answer and the subsequent abandoned calls of a Predictive Dialer.
Talk time and total call attempts are not quite as high as a Predictive Dialer in a head-to-head shootout in a single-call B2C environment. But place a Power Dialer in a B2B or multiple-call B2C environment, and couple it with guided voice messaging technology and a CRM or lead management database and the Power Dialer really comes into its own.
Talk times in the 40 minute range are possible, but couple a Power Dialer with guided voice messaging, which is the ability for an Agent to pre-record voice messages to leave with the click of a button and net talk times (live and pre-recorded) can equal more than 60 minutes of talk time in 60 minutes of work time.
Since Power Dialers do not use multiple lines dialing ahead of an Agent, they do not require larger groups concurrently logged in to gain the dial-ahead leverage of a Predictive Dialer. Power Dialers can be used by a single agent with a single phone line.
Power Dialers are best used for telesales, inside sales, or outside sales organizations where the sales process is more complex and requires multiple calls for closure. It is also optimized for organizations that invest heavily in their lead sources and can’t afford to abandon a single call with the resultant negative perception from the person at the other end. This translates to all B2B environments and specific B2C call centers that invest in Web-based leads or leads purchased through other media.
Call Output versus Agent Control
Premise versus Hosted
Premise based solutions are the traditional model where you purchase the equipment, install the software, hook up phone and internet lines, and maintain all of it on premise. Hosted solutions are solutions that you access through an internet connection and you ‘rent’ access for a monthly or annual fee. They are rapidly gaining ground, especially for SMB companies who want to outsource their infrastructure and focus their IT resources on their core business.
The most recent publicly available industry size and speculation from analyst firm Gartner suggested that the SAAS industry growth will increase to $19.3 billion in 2011. Gartner went on to say that 25 percent of all new business software will be deployed as a service by 2011. A primary reason cited for for SaaS growth was the dysfunction of the client/server era which is now driving alternative approaches to IT development, delivery and management.
The primary question to ask here is concerning your business model and resources. If you are able to expend up-front capital and already have sunk costs in IT resources, then the premise model may still be intriguing. If you are growing, seasonal, or want a variable cost structure that grows incrementally then you should investigate the hosted model. Some other benefits that a hosted model offers include stronger hosting infrastructure for security, risk management, and data backup than the typical company invests in for themselves. Hosting solutions also allow internal IT resources to spend less time meeting the needs of the sales and marketing departments and typically gives more control to sales and marketing to chart their own course and executive their plans.
Premise based solutions are still in the majority and offer more flexibility and customization if you have already invested in a sophisticated IT staff.
Small and mid-sized businesses are becoming more attracted to hosting solutions that take care of the full software, hardware, bandwidth connections, maintenance and upgrades. They are also attracted to the remote management capabilities and the ability to deploy multi-site and telecommuting solutions easily. Hosted applications are more of a ‘pay-as-you-go’ solution that charge month-to-month or annually. You typically can choose the exact level of functionality for the current needs of your business with a hosted solution. And when you need to move, add, or change users you can often re-negotiate the monthly rate as you grow. Hosted solutions typically allow for smaller increments of expansion and less commitment and are more flexible if there is a reversal in growth.
Divisions of larger enterprise companies are turning to the Software-as-a-Service or hosted model more and more because marketing or sales wants to have control over delivery dates and execution of internal projects. This tends to make them more self-sufficient and nimble in executing their marketing plan swiftly.
Premise solutions are all paid-up-front with ongoing maintenance agreements. Costs may be lower over time with a premise solution, but hosted solutions are narrowing the gap and in many situations already make more sense financially. Premise solutions typically demonstrate a more favorable cost structure after the third or fourth year and provide more control for sophisticated operations over specific application features, security, and management of data.
If your organization has already invested in a sophisticated IT staff, has very customized business processes, owns multiple systems that require integration together, and has the ability to handle the up-front capital expenditure, then a premise solution may be a better solution. The hosted solution has typically become the decision of choice otherwise.
VoIP versus Long Distance
While hosted solutions are rapidly gaining ground on premise solutions, we are finding that the much-anticipated growth of VoIP solutions against more traditional long distance is not receiving nearly the same reception. A recent article entitled, “Hosted VoIP struggles to take off” in the December 2007 issue of Telecommunications Online says “The expected big bang…hasn’t happened.”
The primary problem with VoIP has been consistent voice quality and service reliability. And the perceived costs savings are almost nullified when the increased cost of bandwidth is taken into account. Many organizations who have sampled VoIP have gone back to TDM or plain dedicated long distance solutions because they can’t afford poor voice quality in their sales or support call centers.
VoIP is becoming a stronger solution where companies can control the quality of their bandwidth, but the cost differential shouldn’t be the decision point.
A dialer is much like a Gatling Gun, and the CRM, lead database, or a basic contact manager is the source of ammunition of leads and lists that is often required to get real value from a dialer. In additional to the management of the lists or leads is the importance of real-time lead capture, lead routing, and lead transfer to make sure that the correct agent is calling the list of names or leads that are most appropriate to their skills or location as fast as possible.
Close behind lead management has become the importance of responding quickly to leads that are generated by the marketing department. Many companies have developed a ‘hot transfer’ capability which transfers a lead while they are still on the phone to the most appropriate sales agent, others can check schedules and set appointments for sales agents while they are on the first call with a lead.
Visibility, lead tracking, reporting, and return-on-investment (ROI) analytics are becoming more and more important to senior marketing management to allow them to justify themselves within their organization and to continually optimize their success ratios. The ultimate solution is one which is able to track closed sales revenue back to the original lead source. This requires a CRM solution. A dialer solution typically is instrumental in increasing contact and qualification rates, but a CRM solution is required to track the results of the lead when it closes into revenue.
Integration between the quantification-heavy data of a telephony dialer solution and the qualification approach of a well designed customer relationship management database offer a new level of sophistication and capability never available before.
Web marketers are continually gaining greater capability for demand generation and lead conversion and are becoming a more important resource to the sales teams. In many organizations the lead generation and conversion processes are moving over to the marketing department.
CRM integration often becomes the very next question after a dialer solution is implemented in an organization and becomes the data management solution that ties sales and marketing together.
Does your organization require the integration of a dialer solution with an existing or future CRM solution? Does the dialer come with a list or lead management database? Does it offer an API or Web services capability to easily move data in and out as required? Does your dialer vendor have existing clients who have integrated their dialer and CRM? These are key questions you must ask your potential dialer vendors when you explore an engagement with them.
Top 20 Articles on www.KenKrogue.com
- What is Inside Sales? Our Definition of Inside Sales – 15,262 Views
- Inside Sales Best Practices – 1,445 Views
- Inside Sales Tips by Ken Krogue – 923 Views
- KPI – Key Performance Indicators – 822 Views
- Inside Sales versus Outside Sales – 489 Views
- Is Leaving a Voicemail Worthwhile? – 408 Views
- 6 Reasons Salesforce Users Need Hosted Dialer Technology – 370 Views
- Behind the Cloud – Ken’s Notes – 305 Views
- Inside Sales Tips – No Vacations Last Week of the Month – 275 Views
- Funny Inside Sales Videos – 247 Views
- Demand Generation Tactics and Strategy – 245 Views
- Inside Sales Tips – Skip to the Beep – 245 Views
- Inside Sales Tips – Interest is The Counterfeit of Need – 220 Views
- Inside Sales is Top Method of Lead Generation – 205 Views
- Inside Sales Tips – How LinkedIn Gives you 3 Free SEO Backlinks – 189 Views
- Inside Sales Training – 179 Views
- Marketing B2B 4 Quick Email Tips – 154 Views
- Inside Sales Tips – Specialize – 140 Views
- Leadscon East Vendors Need to Drink their Own Medicine – 133 Views
- What is Lead Response Management – 127 Views
Author: Ken Krogue | Google+
Summary of Ken Krogue’s Forbes articles