By Jim Beuoy
Have you ever calculated the costs of sending a sales rep out on a bad telemarketing lead? First, add up the marketing dollars that you spent on lead generation such as campaign planning, target market selection, list rental(s), creative script writing, training the agents who cold-call and qualify, role-playing, and coaching. Next, add all of the costs associated with the sales rep following up. Don’t forget to include full (hourly) overhead burden, including benefits, office space, and so on of both the sales rep and the lead generation group. Was travel involved? Even if the sales rep only contacts the “qualified” prospect by phone, you’ll find that the total cost of following up on a lead is not insignificant – not to mention opportunity costs. Whatever number you arrive at, it won’t take more than a couple of seconds to recognize that you simply cannot afford to allow bad leads to slip through your lead generation process.
Now, if you conclude that you can’t afford to have bad leads slip through your system, then you really can’t afford to have bad telemarketing sales slip through. With all the renewed state and federal focus on consumer fraud, chances are that too many complaints of unauthorized billing will land you directly in the crosshairs of consumer protection enforcement. Assuming that you prove that “slammed” sales or leads were due to one bad apple on your team or that the unauthorized charges were the result of error and you came out unscathed from an investigation, consider the damage to your brand. That kind of publicity can have a lasting impact. Regardless of the outcome, defending yourself against such claims can be enormously expensive.
One-time sales are risky enough, but if your product or service involves a negative option (whereby product is automatically shipped and billed until the consumer takes some steps to cancel the “subscription”), your exposure to risk is heightened significantly. Throw in a free introductory offer to your product or service, and you have a classic scenario that causes concern on the part of legislators and enforcement authorities alike. Every compliance officer will tell you that free-to-pay-conversion, negative option sales must be verified.
Regardless of whether or not your offer involves a negative option, it should be obvious by now that you need to verify leads and sales. Some may think that the cost is too high, but that thought is often arrived at by not including all of those hidden costs. If you add up all of the previously mentioned costs, you should have a good starting point for a budget. Since there is more risk involved with a bad sale than there is with a bad lead, this article will discuss verification options in terms of sales; however, the same principles apply to verifying leads.
Obviously, we’ll need to find a verification methodology that is both appropriate for the size of the program and ensures that the cost of prevention isn’t more expensive than the cure. Let’s weigh the pros and cons of each of the most commonly deployed approaches.
Immediate Verification: Immediate verification typically involves the agent raising his or her hand for a supervisor or verifier to run over, take over the conversation, and verify the decision. Just to keep things honest, the verifier adds a security or confirmation code to the record. With more recent technology, the verifier can remotely barge in to verify the sale instead of physically taking over the agent’s handset. In other environments, the agent transfers the call to the verifier. Regardless of how the verifier joins in on the call, the agent is still required to signal or find someone to talk with the prospect – in real time. If you’ve ever witnessed this approach, you can attest that it results in the appearance of pandemonium. People are standing up, frantically waving, and verifiers are running all over the call center floor, trying to verify and answer questions at the same time.
Think about this from the consumers’ perspective. They are literally waiting to tell someone else: “Yes, I really do want to give you my money.” This is not the ideal consumer experience.
On the positive side, you get 100 percent verification. Other approaches may dictate that you settle for a statistically valid sample, but immediate verification all but insures contact with each customer. Plus, it saves the expense of sending through a “bad” sale only to spend more time and money on stopping the order from being fulfilled. Think through the logistics of stopping an order after the sale has been submitted: adjusting reports and correcting commissions. Also, with immediate verification, agents know whether they earned a commission and don’t suffer from charge-backs.
Immediate verification allows you to fulfill orders just as fast as your back-office procedures can process them. Faster shipping culminates in improved cash flow. It may also be an appropriate choice when there are relatively few sales per hour, making immediate verification be the cost-effective choice.
Callback verification: Compared to immediate verification, callback verification results in a lower percentage of confirmed sales. As the name implies, this involves a follow-up phone call to the buyer. With today’s hectic lifestyles, a second contact (hopefully fairly quickly) is another challenge to the sales process. Even when you try to establish a specific time for the verification or you try to call back around the same time of day as the original contact, you’ll find that this approach typically takes several attempts to make a contact. Even with a reasonable number of attempts, residential verification contact rates often fall below 85 percent. As if an additional contact isn’t challenge enough, right-party contacts can cause additional drops. Spouses, other family members, or cohabitants occasionally want to know the purpose of the call, raise additional questions or objections, and in some cases make a request for no further contact.
On the plus side, this approach offers another touch point. Consequently, it can be the preferred methodology in situations where you want to cultivate a personal relationship. Recruiting volunteers for a charity may be a good example. That extra touch point helps emphasis the importance of the mission and stimulates the volunteers to fulfill their pledge or assignment.
It may also be appropriate in scenarios where there can be a high level of buyer’s remorse. Verifiers can be trained to reemphasize benefits, offer reassurances of a good decision, or at least protect against sending out undesired shipments. If you implement this approach, just be sure to include a contingency plan for repeat buyers who tell your agent: “Please don’t have them call me to confirm!”
Recorded Verification: Recorded verificationis the least intrusive for the consumer. The other two approaches may be viewed as making your customer prove that they want to buy from you. Plus, things can go wrong during verification. Verifiers generally need as much, if not more, training than the sales agent, which they might not be able to learn from the sales rep training kit. As such, there may need to be an additional investment in a training kit specific to their challenges and objectives. Also, they may be called upon to save cancels.
Assuming that you have volume and continuity, there really is a better way. Most call centers already have recording capabilities in place for quality assurance purposes. Most centers also send the data records somewhere for fulfillment purposes. A simplistic model for recorded verification is to export or post the data and the recordings to a secure FTP site, allow the verifiers to listen to the recordings overnight, and have verified sales back the next morning. A version of this process has been in use since the late ’70s. It’s just that digital recording has speeded up the process and replaced cassette tapes, along with all of the label and library baggage associated with handling physical media.
Recorded verification is less intrusive and less burdensome for the consumer. Furthermore, it can be more objective than the other two approaches. Verifiers can’t help but have some pressure and emotional stake in direct conversation with the buyer. Recorded verification can be set up much like quality assurance scores, where the absence or presence of the criteria, rather than the verifier determines the validity of the sale.
When the verification function takes place in-house, no data export is involved. However, grading your own papers (so to speak) is rarely advisable. Outsourcing to a Third Party Verification (3PV or TPV) will not only add legitimacy, avoiding any appearance of bias, but should provide savings. An experienced outsourcer should be able to provide this service at a cost less than what you can attain in-house, plus you’ll benefit from their experience by avoiding the mistakes that they’ve already overcome.
Jim Beuoy, is director of quality assurance and corporate compliance at Ameridial Inc. For further information, contact Dan Werner at 866-671-0778 or dwerner@oksameridial.com.
[From Connection Magazine – September 2007]