The Recession, Predictions, and
Top Ten Tips for 2009

By Steve Michaels

January/February 2009

Given the huge challenges facing this country and the constant barrage of "bad news," this coming year will be one of the most perilous in modern history.  Anyone hoping for a period of calm after the turbulence of the past year will be disappointed.  For the economy and for business, 2009 promises to be a year of bracing adjustments for the telephone answering service industry (TAS).

Where will this end?  We're regularly watching unsustainable companies and industries fall by the wayside.  Even if the government tries to bail them out, it won't be enough to save them.  We are watching consequences of our choices, which may last for years.  No matter what happens, the Fed cannot save all the banks and all the industries.

Overall, we are in the midst of the most daunting economic and financial challenge since the days of FDR and the Great Depression.  Recession is also hitting Europe, Japan, and other advanced countries.  China risks a hard landing; so do many emerging economies.  A severe global recession and financial crisis is certain.

As more of these economic blows occur, I encourage you to remember that we are "remodeling" the economy.  Instead of calling it a recession or depression, let's just call it an economic adjustment or correction.  Just like when remodeling your home, with the walls open for rewiring and replumbing, it takes time for things to look better.  A tough economy motivates businesses to find new ways to work more efficiently, so let's see what is happening to answering services nationwide and what they are doing to combat this recession.

In a survey conducted by TAS Marketing, it seems that California, Texas, and Georgia have been hit the worst, but in general the telephone answering service client base is down anywhere from 1-10 percent, with call volume dropping as much as 25 percent within the last ninety days.  This can be found mostly in construction and real estate.  Medical seems to be holding its own, although there have been a reported 1.2 million jobs lost affecting the medical coverage of these jobless individuals and causing medical calls to be down.  Wilma Schmerer from Pro-Tel in Walla Walla, WA, reported that even the call volume on "Black Friday," the day after Thanksgiving, was down.

It has been reported that some individual doctor's offices have dropped their answering service and are using an answering machine with an announcement stating that if it is an emergency to call their pager.  This could be because the doctor is always on call anyway.  It does not seem to be affecting offices with two or more doctors.

Former ATSI president Allan Fromm's call center processes a lot of catalog orders.  He states that the business for luxury items is off by a third from last year and gourmet foods are down by 50 percent. 

Given this, how do we make things better?  What the astute TAS owner requires is an acknowledgment of the uncertainty about where the economy is heading, and clear thinking about how to effectively deal with it.  Here are ten tips to consider:

1.  Track Your Numbers And Adjust Your Overhead: Print your nightly statistics and look at your call volume per client.  If a particular client isn't getting any calls, have your third shift staff call their business to see if their calls are forwarded to you.  If not, give them a courtesy call in the morning to see if they forgot or are seeking other options.  Sometimes, businesses will not use their answering service, instead forwarding calls to their home to see if they can do without your services.  This is the first step to losing a client.

2.  Contact Target Businesses: One surveyed TAS owner said that she had gone back to a proven method of adding new clients by honing her target businesses in communities where she has clients for references.  She is also telling her current medical clients that she is able to take appointments, which will help reduce the doctors' staffing. 

3.  Charitable Community Drive: To keep the morale up in your call center, consider starting a charitable drive in your community.  You and your company will portray optimism and a positive attitude when others are touting "doom and gloom."  Remember, people want to be around others who are positive, enthusiastic, and willing to help when times are tough.

4.  Negotiate Fees and Offer Alternatives: One astute owner found out that a couple of her clients were shopping for a discount answering service.  After she contacted them and offered them call screening with operator revert, they were happy - they really didn't want to subscribe to a lower quality service just because of price.  Remember, the discount services are not going to be able to survive long if they are not making a profit.

5.  Offer New Options: A tip from Mike DeMas is to contact your clients if you have the following options available through your service:

• Business-to-business lead generation

• Customer service follow-up calls

• Surveys and consumer market research

• Appointment setting and doctor reminder calls

6.  Email Marketing: This jewel comes to us from Maryann Wetmore of Network One Communications in Tampa, Florida.  She is using the services of a company called Constant Contact to broadcast emails to her clients.  With this service, Maryann is able to provide her clientele with how to tips, success stories, and even invitations for feedback or new client referrals.  Maryann stated, "It is more important today with the financial challenges we all face as business owners to strengthen our relationship with our current clients.  I recognized that the best way to keep business going and to create new business is to communicate regularly with my clients.  We all receive something through Constant Contact on a regular basis; the Ask Mark publication from ATSI's Marketing Committee an example.  Constant Contact is an inexpensive ‘relationship marketing' tool to communicate your message to your current and future client base.  You may think you have one of the best services out there, but that alone won't guarantee success if you haven't built loyal bonds with your clients."

7.  Press Release: Write a snappy press release, suggests Cori Bartlett of Alliance Communications in Orlando.  Unveil a new feature or announce a staff promotion…anything to generate interest.  Make it sales-oriented, giving a reason for your clients to call you with "referral intent" or for a new "service offering."  Use it as an insert to connect with your clients, giving them a reason to think about you, or better yet, call you.

8.  Consider Equipment Options: One industry vendor discontinued support on a particular line on December 31, 2008.  Those who are researching equipment options may opt to outsource accounts to another call center or host accounts on another server, paying only for use.  The hosting option frees up a cash outlay for new equipment, includes 24/7 technical support, and offers the latest features.

9.  Selling Reporting Statistics: Our Canadian friend, Gary Blair from Tele-Page in Montreal, states that he is receiving more requests from clients asking for statistical reporting, such as answer time and number of calls on a daily, weekly, or monthly basis.  This could be another source of revenue for your business. 

10. Join a Group: Whether it is a national group such as ATSI, a vendor group, or your own regional group, become a member so that you have support from others in the industry.  It helps to hear ideas from cohorts and solicit their support on common issues.

Bonus Thought: One extra idea from Bill Smith of Answerone in Brooklyn, NY, is consistency.  "The only problem," he says, "is that if you strive to be the best, you had better be the best all of the time.  I find that we provide excellent service, but if we falter even a little, the client perceives a drop in quality.  I had a boss that would say he valued consistent mediocrity over occasional brilliance.  The client hates change but also hates inconsistency." 

Overall, we need to become proactive rather than reactive.  If you know that something is about to happen, then prepare.  That's what the prudent businessperson does.  By being proactive, you will establish a rapport with your remaining clients as someone who really cares about their problems and their business.

A One-Word Summary: Sustainability, the process of staying in business.  In doing so, change is essential.  To sustain profits, answering services may have to slash costs and cut jobs while being open to merging or sharing their resources with other call centers using comparable equipment or hosting capabilities.  Large multilocation services already do that to consolidate labor.  In these economic conditions, individual answering services may opt to share their resources, labor, and even profitability in order to sustain the long haul.  I believe that future trends of our industry will entail a co-op or hosting type of relationship between small groups of answering services.  These groups will entrust their client lists to members of their co-op and will form small, bonding relationships for the benefit of the group.  I see this as an alternative to bankruptcy or closing your doors.

From my interviews with TAS owners across the country, I found that owners are resetting their priorities and are eager to meet their own make-or-break challenges.  "You have to be resolute and determined all of the time," says Jim Geary of Complete Answering Service in Jackson, TN.  "If your business is suffering, it is just a matter of looking inward at your business and fixing or changing what doesn't work, which ultimately results in one of the upsides of a bad economy - a more productive company," says Jim. 

Sarah Ban Breathnach says in her book Simple Abundance, "The downturn has affected me and my business as well, but what we need to remember is that we are not alone.  The recession has affected everyone, and there is a sort of comfort in that.  However, we need to keep calm and carry on.  You shouldn't dump misery on others.  It's toxic.  We need to watch our words.  Don't say, ‘We're broke.'  Say, ‘I choose not to spend my money that way.'  The power of our words is very important."  She also states that, "All you need is the awareness and willingness to ask for help.  What this crisis is asking of us is to be real and to be authentic.  There is a whole world of people who want to help us, but we have to ask.  Our current dream may have died, but there will always be another dream.  We have never been tested the way our parents or grandparents were tested…but we're about to."

Steve Michaels is a futurist and business broker with TAS Marketing and can be contacted at 800-369-6126 or tas@tasmarketing.com.