Category Archives: Articles

Creating Success: The Role of the Owner

By Tony Murray

Each year I visit many companies in different industries. I concentrate on the development and growth of my clients and consequently, these companies tend to be small to mid-sized organizations where the owner is the key to the success or failure of micro manage the enterprise.

There is a definite correlation between the owner and whether the operation is struggling or succeeding. But, is not always the ability of the owner that determines the health of the business. Rather it is the way the owner spends their time. I am sure that if will be no surprise when I tell you the owners that micro manage control the less successful operations.

When I point out to people that they need to free up some time, the main objection I hear is that there is no one who can do the job they do. This, of course, is rubbish; none of us are indispensable. When I go into it further, the real reason that comes out in most cases is that they don’t think they can afford someone with all the abilities which are need. And, they can’t afford to add more staff.

My next question; what do your charge for your services? I have to say that almost without exception, this is the problem. In most cases, these owners have no idea of the true costs of providing service to their clients. Therefore, they don’t know what their profit margins are.

This is a vicious circle and once again, it relates directly to the price issue. If you do not know your true costs, then you cannot charge the right price. If you under charge for your services, then you cannot afford good staff. The owner then gets dragged into the operation and this cycle suffocates the growth of the business.

One of the businessman whom I admire is Lee Iacocca. He took a company that was on the edge of extinction and turned it around to one of the most profitable vehicle producers in the country. He did not do this by going to the shop floor and beating panels; rather, he surrounded himself with good people and he orchestrated the recovery.

The owner is the conductor. A good conductor cannot play all the instruments but must understand how they all work and how to blend them to achieve perfect sounds. The owner has the responsibility to blend the team to achieve a perfect business.

So, we come back to the beginning. The owner must allocate their time to looking at the big picture and avoid the nitty-gritty. They must find one or two reliable trustworthy managers who can look after the day-to-day problems and the owner must allow them to manage. These people actually exist in most operations; they are just not given the opportunity to prove themselves. The owner must, and this is the most difficult part, allow the manager the freedom to use their style and to manage their way.

Having delegated the day-to-day, the owner now has time to do some meaningful planning. The first step is to look at all the statistics that are available, both operational and financial, then make an assessment of how the service is perceived by the clients. There is now time to visit some of the more important clients to hear directly what their opinion of the service is and to look more closely at their needs.

The owner should also look very carefully at their financial information and get answers to the following questions:

  • What is the cost per minute to run my operation?
  • What is the ratio of operator expenses to income?
  • How much overtime is being paid per month?
  • What are my true fixed costs?
  • What is the income per minute?
  • What is profit/loss per minute?

The next step is to look at each account. Where possible, calculate the number of minutes used per month. Then calculate income per minute. This is where you will start to see where your problems are. It is my experience you will see that some of these “big accounts” are producing very little.

Now you have to start to make some decisions. There is no point in servicing clients who are not producing a profit, so you must increase their price or ask them to go elsewhere. You see why your visit to your large clients was important, as you should have gained an understanding of their opinion of the operation. With this first hand knowledge, you can plan how to increase their price without losing them.

This is all very time consuming and if you are involved in the day-to-day detail, it will never get done. However, by delegating the day-to-day, you have put yourself into the position where you can truly start creating more income for your company.

Next, have a clear plan as to where you want to be in the next five or so years. You need to know where you are going in order to plan how to get there. Do you want to retire? Double the size of your operation? Have an annual income of $? per year? Sell your business? These are all objectives that I have helped clients to plan for…and there are more.

Understanding where you want to go leads us to the next step creating a financial budget for the next 12 months. This is nothing to be afraid of; all you are doing is mapping your future.

Start by listing all your income by product, i.e., paging, wake-up, etc. Then list all your variable costs operators, telephones, etc. If you subtract income from costs, you now have your gross margin. List all fixed costs rent, leases, etc., and also costs that do not relate directly to the operations room, such as accounting fees and legal fees, stationary, etc. Subtract this total from the gross margin figure and you now have your pre-tax profit.

If you start with the last month’s actual figures, then you know that your base is correct. You now need to look at where to cut costs from last month, and plan what the increase in sales revenues is that you can achieve monthly for the next year. Remember, you are gong to increase some prices and you need to add these in.

Now you have a map. You must bring your managers into the loop and tell them what they have to achieve to ensure that the plan is successful. This is where you start setting objectives for your managers.

Objectives should relate to net growth, operator costs as a percentage of income, telephone costs as a percentage of income, etc. There are many more, which are dependent on your operation.

Having set the objective, you must have objective methods to measure the results. Having measured them, you must take immediate action when a manager fails to meet their objective. This is how you control your manager without having to be involved in the day-to-day problems.

Once you have competed your budget for this year, you need to develop outlined budgets for the next five years. This will show you what has to be achieved during that period to meet your plan. This may well highlight that your plan is over ambitious or that you are going to need extra capital to develop the plan.

The main point is that you can prepare for these problems in advance. You can modify your plan at any time, but by having a plan you will always know where you are going and how close you are to achieving your objectives.

You have a realistic plan. Now you have to orchestrate your success. This does not mean you go back to day-to-day hands-on, But, you start promoting your service by attending local business group meetings and making contacts wherever you can.

You are the most important sales person you have because you understand your operation totally. You should be able to see how potential clients can make use of your services in the ways your sales staff would likely overlook. You are the most important public relations person. You are the best research and development person that you have because by continually meeting with your clients and potential clients, you can find niche markets to fill in your area. You might be out of the day-to-day problems, but you will be kept very busy with the long term ones.

Gone are the days of stagnation. You are now the proud owner of a profitable and professional service. Your job now is to shout this from the rooftops. The amazing thing about this is that you will suddenly be successful and growing.

[From Connection Magazine, July 1997]

Creating Success: Delegating Authority

By Donna West

Before any company can grow, it must have a strong foundation to sustain growth. Every employee should understand the company’s goals and buy into your dream.

Let’s begin at the top and define the role of the owner. If you are the owner of an answering bureau, ask yourself if you are the one that signs all the checks, generates all the revenue, takes problem calls, disciplines the staff, answers sales calls as well as answering the calls for the clients? The problem is, the owner wears too many hats. Here is a way to delegate authority, improve morale and keep your sanity.

Public relations: It is best to give the job over to the second in command. It’s a great perk for them. This job involves more company participation. If the owner does everything, it gives the impression that it’s a one person organization – that it’s a “Ma and Pa” business with no depth.

Customer service/customer care is a difficult job to give up. However if you are with a new client and an angry client gets on the phone and needs to talk with you, that will NOT impress the new client. Likewise, if you have someone tell the angry caller that you are with a new customer, you will give the impression that the current customer is not important. Assign this position to an employee who is level-headed and has lots of patience, care and concern for your customers.

Operations Manager: This job should be given to someone who is responsible, has an overall knowledge of your company and has human resource skills.

Accounts/Bookkeeper: How much of your time is taken in financial planning? It isn’t – it’s bookkeeping. You are NOT learning how to run your company better, you are doing bookkeeping. Give the job to someone else and you, as owner, should then review it.

Sales: This job should never belong to the owner- it belongs to the person who is responsible for the growth of your company. I believe in a sales department, not a salesperson. Salespeople are not expenses. Sales people are self funding revenue generators. Each time we add a new salesperson, the closing ratio goes up from 25% to 50%. Time is the key here. Time gives you numbers. If you are an owner making sales calls, it’s not likely you will have time to make call-backs. A single salesperson will probably make three to five call-backs. A department with a sales manager will make a lot more call-backs. It’s a numbers game. He who has the personnel to make the calls, gets the customers! In our experience, it’s the customers who only need one or two contacts that are the easiest to lose and pay the least. They are NOT the ones you want. The customers with 12 locations, or who have large medical clinics, etc. do not close in one or two contacts. Diligent follow-up is necessary in this industry. In one bureau, it was discovered that the customer who calls for service stays on your bureau less time than the customer you solicit.

To start a sales department, look within your company first. You can teach technique but you can’t teach “nice”. Look for self-starters, your “extra-milers,” the helpful employees. Give them all the back-up and assistance they will need but do not interfere. Develop sales, marketing, and presentation materials. Join organizations like the Chamber of Commerce. Help them establish goals and a time line to accomplish the goals. Let them own their job. We feel that pay should be based on a low hourly wage plus the whole first month’s receivable of the account they sell.

Strong, Cohesive Leadership is a Must: Think about this – If you are so busy putting out fires in your company, then you don’t have time to do the really important things- like reading, and planning your company’s future. If this is the case, then you need to step back and re-group. You need to be the thinker for your organization. You need time, otherwise your company may run away with you. You can’t determine your company’s future if you are down in the trenches.

Consistent Meetings with Focus: As an example, we have what we call a” futures” meeting at our company. Once a month, our key people meet and talk about the future of the company. We ask, are we on track from where we thought we’d be last month? What are we going to do for the next month, the next year and in the next five years? How are we reaching our five year goals by accomplishing this month’s goals? If you don’t have a goal, how are you going to know when you reach it?

If you take only one thing from this article, take away a new mind set and the rest is going to come. Strong cohesive leadership is the first requirement for a strong foundation. This does not just happen. It needs nurturing, it needs constant reinforcement and it needs the wisdom to know when to delegate authority.

Donna West is President of Focus Telecommunications, Inc.

[From Connection Magazine, July 1997]

What’s Happening with 2-Way DIDs?

By Bill Hunter

While other technologies have moved forward at lightning speed, 2-Way DIDs have crawled at a snail’s pace. Probably one of the most exciting telephony developments to come along in years, 2-Way DIDs have just not caught on.

Why? First, I feel that service providers just don’t understand what this technology can do for their business. Second, the arrogant attitude of most RBOCs as to “tariff or not to tariff” has made most service providers gun shy and uncertain as to their availability. Third is the question of present equipment and whether it will work with 2-Way DID.

To understand more about this technology, how it works and what it can do to enhance your business, you’re going to have to do your homework. There have been a number of good articles in Connections Magazine, ATSI’s Answer Magazine, as well as The Communicator and others.

Let’s take a look at the fundamentals of 2-Way DIDs. Simply put, with this service you are in the telephone switching business. You are able to receive incoming calls, identify the call manually or automatically, determine how to process the call, and complete the transaction. One application might be what is referred to as “Follow Me Phoning.” Your customer would have a 2-Way DID number on your automated platform programmed with the ability to locate him automatically or be redirected by the customer to specific phone numbers and be connected with the caller.

With an operator-handled call you can provide your customers with a personalized receptionist service with the ability to redirect and connect the caller to our customer wherever they are. These are just two simple examples of many, many new services you can provide with 2-Way DID such as, Call Connect, Remote Auto Attendant, Audio text, Call Screening, Auto Message Delivery, Operator Revert, Paging enhancements of all types, Alpha Numeric Dispatch, Faxing, and the list goes on and on.

There is money, serious money, to be made with the new services you can provide. The biggest stumbling block that we have encountered with 2-Way DIDs have been the telephone companies. From no tariffs, to in complete tariffs, to tariffs we can’t afford, and poor distribution of facilities, the phone companies don’t have their act together yet! These problems, as well as others, can only be resolved if our industry bands together and demands action!

The Texas Answering Service Association went to their primary telephone company over a year ago with a proposal. They thought they would be provided with service in a timely manner, and still they have nothing. The California service providers have had 2-Way service for some time, but it’s configured and deployed so only the very large service providers can even consider the service.

In the East and Northeast, you can get service on a special assemblage, but it’s restricted to certain types of COs and it is costly. In the Great Lakes area, we have 2-Way DID tariffed, but only from one type of C.O., with no billing information, slightly high priced, with no intention of the RBOC to address any changes.

On the positive side, we have a well-tariffed service in the Southeast and Western Mountain and Northern states. One non-RBOC has the service tariffed in five states, but is only available on T-1. Don’t let the bad news discourage you. Take the battle to our associations and tell the telephone companies that the telemessaging industry wants and demands 2-Way DID service.

The best news of all comes from the equipment manufacturers. Just about a year ago, a small handful could boast that they were 2-Way DID compatible. Today, I don’t know of one manufacturer whose TAS or Voice Platforms are not 2-Way DID ready. Hat’s off to all those companies who realize that the money making potential of what 2-Way DID can do for your business has justified their investment in the future of this exciting technology.

Would you like more information on how 2-Way DIDs work and which applications can enhance your business and make it grow? Call your equipment vendor today! If they don’t know, call their competitors; you’ll get the answers you’re looking for somewhere.

2-Way DIDs are here. There are not going away. And, they will play a significant role in the way you do business for years to come.

Bill Hunter is President and CEO of American Message Centers, a service bureau celebrating their 51st year of service, and American Voice Mail, a manufacturing and industry consulting firm, both in Niles, OH. For comments or questions, he can be reached at 330-544-9777.

[From Connection Magazine, May 1997]

Designing the Telecommunications Center of the Future: Part II

Reported by Christine Michaels

A panel discussion by: Frank D’Ascenzo of Axon Communications; Barb Willis of Comverse/Startel; Jack Baldwin of CadCom; and Donna West of Focus Telecommunications. This discussion was presented at the OPXPO in Dallas, TX Oct 9 -12, 1996.

How can a telephone answering service position themselves so that it can move into the future and take advantage of the opportunities available?

How do we position our business to take advantage of this? Where is the road going to lead us and how are we going to get there? These were some of the questions posed to this panel at the OPXPO, October 1996 in Dallas, TX. Jack Baldwin of CadCom Telesystems will continue the discussion:

Jack Baldwin: I will be talking about wireless communications, video conferencing, and Internet connections which will all be affecting us in the future. A lot of systems currently in use are set up to interface with Open Architecture, as Frank D’Asceno from Axon Communications previously discussed. I agree that the future seems to point toward Open Architecture.

There are two words that start with the same meaning, telephone and television; they both start with tele. What you are going to see in the close future is an interaction between these two industries. How many of you have already read that NYNEX in the New York area has been buying up cable companies? You have read about So. Bell, who are also looking at merging with long distance companies. The reason for that is because a lot of the cable companies who run coaxial right now are installing fiber optics. Fiber optics are now being run into many areas of the country because of the bandwidth.

Televisions will now be available with computers built into them. In the future you will see credit card swipes on the side of your television. And if this occurs, then somebody is going to have to justify and take those orders. This can be done through an Internet provider, which can be us, because somebody has to take it back out, give it back to the company, and run it through the credit card process.

What we are looking at is an integration of video, phones and television, all in the same fiber optic cabling. This will give us the bandwidth to run all of it.

The next thing you will see are phones with video. The next generation of equipment development utilizes both of these. Thus, when your client checks in for messages they will be able to see your operator. Several different companies offer the capability of accessing your client’s email, which can be delivered to your operator and then this email message can be paged, faxed etc. to your client.

Time Warner and TCI Cable are installing in all of their new services É coaxial, phone line, and Ethernet, which are all built into one cable. Thus, when you are at home, you can do everything through your television or through a computer. There will also be wireless keyboards.

Wireless phone systems are already being used in Europe and that is where we are headed. Everything will be transmitted through a satellite. For example, you can download information from a website to your television which will be connected to a PC. This is a one-way communication. However, two-way communication will become available and a lot more affordable in the future.

The definition of today’s answering service will evolve over the next couple of years into a “communications center.” Services must specialize and thus get into a “niche” market, providing a better service than anyone else. That is what we are going to see in the next few years.

Donna West: What I am hearing from these presentations so far is “spending money.” We are going to need to spend some serious money. Are you ready for that? If you’re not, go home and raise your prices. And while you are at it, take a chunk of that money and give it to your operators! Because, we need to bring our service center’s opportunities above where we are now if we are going to bring about the changes that are presented here. And we can do it!

For awhile, I was one of the cheapest services in town. Since, I have no intention of being that, I raised my prices 27% all at once. I don’t think I lost more than twenty customers. The kind of customers that we’re going to be getting don’t care about nickels and dimes, they care about quality! If answering services TRIPLED their prices, that still wouldn’t add up to 1% of your client’s revenue set aside to pay the bill.

Stop undervaluing what we do! LET’S GET IT UP AND OUT. We have operator services that will never go away. The technology presented here today will still be needed and wanted in the future. If we can provide that, and provide it on a professional basis, your services are going to be worth a whole lot more!

Barb Willis: What I hope to do is to give you some ideas of things you can do within your community that are probably going to be the best market bets for the next couple of years. As the technology continues to change, we need to look at the customer base and continue to be able to move and “tweak” the services we provide.

So, let’s talk about some of the services you can provide with the existing operators that you have with excising staff, knowing full well that you will make an investment in some technology, so that you will be able to do it better.

Have you thought about offering a help desk, first level service to corporations and companies in your community? What this means is that you are simply following a set of instructions, asking a set of questions, and passing the information onto the correct expert.

If you look at companies that are selling products, they usually have a service department. Within that service department, someone has to answer the phone. If you can show a company that you can answer the phone, do it consistently better, and save them money, you will win their business. It doesn’t mean you are going to fix the product; it means directing the call to the appropriate person.

Have you thought about working with a sales department within a large organization? Let me give you your messages anywhere in the world, i.e., send them to your lap top, fax, email, pager, etc. If you start to look into corporate America, and you look at the different departments within the corporation, there is a fix between what you currently do today in taking messages and how you can help that corporation get their job done.

Probably one of the biggest words today in large corporations is “outsourcing.” Corporations realize that they can’t do all things and be successful; they are now realizing the value of a message.

Corporations are starting to out source and to look for someone who can take a message consistently, with quality, and at a rate they are willing to pay. Do consider this application. One of the names by which this service is called is “remote receptionist,” and/or “alternative answer.” For example, a service can provide overflow answering for a corporation.

An answering service would provide this when the regular receptionist is on break, out to lunch, sick, on vacation, after hours, etc. Because, when the receptionist is unable to answer the phone, someone else at the corporation must do it. It is usually someone who doesn’t have the time, has other job functions, doesn’t have the desire to do it, and is being paid a lot more than a typical receptionist. Thus, it is possible that the quality of messaging has gone down in that corporation and they are spending more money for that single function. You could also provide assistance in overflow traffic at that corporation. This service is being done today!

On the East coast, we have a customer who has done an extremely good job of marketing this application to Fortune 100 companies! This is not a 55¢ per-message call; not even close to that. This is thousands of dollars a month, to periodically answer and transfer a call, then take a message. Companies are willing to pay it because it saves them money and provides a quality of service which they need.

Another application within a company is alpha numeric transcription. If a company has a number of employees wearing alphanumeric pagers, who is doing that transcription? Is that a service you could provide 24 hours per day, 7 days per week?

Start taking pieces of the messaging business, identifying them, and selling them to a variety of customers. This will, hopefully, let you know where the “niche” market is and where you should be expanding your services. Be in the loop of the “one number, follow meany where” concept, so that the answering service can direct the path of the call for the customer.

As you put together your business plan, think about where you want your business to be and continue to think about services that involve your operators (the best asset that you own today), you will continue, as technology changes, at being successful in what we are currently calling, the “Telephone Answering Service”.

[From Connection Magazine, May 1997]

Rethinking Rates? Charge More – You’re Worth It!

By Donna West

It has been said that we are in the Information Age, the Communications Revolution. I think that is very much true. It has also been said that the TAS industry is dead or dying: I do not agree with that! But I do believe we need to adapt to be what our customers need us to be. And, I believe it will take constant improvement of our equipment and our service to do it.

We badger our vendors for upgrades and complain bitterly about the cost. Our vendors are giving us the tools we need to make more money. Our vendors are not charging too much for their goods. We are charging too little for our services!

Are you using the most top-of-the-line equipment your vendor has to offer? Do you plan to upgrade to the best within the next year to 18 months? Do you want to but can’t afford to? Why not?

Is it because you’ve locked yourself into the low rate cycle? You have convinced yourself that your customers won’t stand for a rate increase. Your area is more depressed than most. What are you going to do when you must have better equipment to be able to compete?

The consultant I hired to help set up our company suggested rates that were too low for our area. Or course, being a start-up, we had few customers and were able to give great service, so we grew quickly. The problem was we couldn’t live on the rates we were charging as we grew.

Eventually, we realized we were one of the cheapest guys in town. We were giving good service, yet we were struggling to make ends meet. We were also losing good employees because we could not afford to pay them well.

We had a meeting at which we agreed: “We are going to raise our rates dramatically.” I felt that I would rather take a chance on losing customers than go broke trying to keep them. One month later, we put a 27% increase into effect. Over a period of 5 months, we lost about 25 customers because of that increase.

We switched some of the ones who stayed to voice mail with operator revert or automated answer, and we found other creative solutions to cut their bills, but only by cutting their operator time. That’s okay. Cutting operator time on an account works out just fine. Often, you will find that you can get more money for the operator time used while you are charging the customer less overall. You will increase the number of accounts each operator can handle by lowering t he time he or she is actively on line with each caller.

One thing that we did was begin billing by the complexity of each account. If a customer needs our most experienced operators to answer their calls, they pay more than the customer who needs a simple, name, number, message with alpha or fax service for every message taken. Those are the two extremes of our service levels. The middle rates went to the customer who took much of the guess workout of handling the account. For instance, if there is a prompt asking, “Do you need a call before the office reopens?” And the instructions are “Page if the caller says ‘Yes'” (regardless of the actual message), that customer gets a lower rate than the one who insists my staff make the decision as to whether or not the call will be dispatched. We stress that we can do anything that our customers need us to do. But, it can’t all be done for the same price.

Actually, when we raised our rates and categorized them we found ourselves selling bigger, more complicated and more lucrative accounts. I call it the L’Oreal Syndrome: “Sure it costs more. But I’m worth it!” When we are buying for our business, don’t we want the best money can buy-within reason?

If most of doubled what we charge, our bills would still fall within the same percentage rate in our customer’s overall budget. By that I mean if a customer is spending 1% of his or her revenue to pay for answering service and we doubled our rates, he or she would probably still only be using 1% of his or her revenue to pay our bill. For many of our customers, our bill is in the “noise level” of what it takes to run their company.

I know this is not always the case. For a small plumber, our bill could be a significant part of his budget. But the bigger the percentage, the more he really needs us and the more willing he is to pay for our services.

Recently, our service suffered some real setbacks. The quality we had been providing these past two years has not be en as good as would have liked. Over the first 6 or 7 years of Focus’ existence, we were excellent, really good. I almost never head, “I’m leaving because your rates are too high.” I only began hearing that when our quality deteriorated. But, there was more to the sentence that was being left unsaid. They weren’t leaving because our rates were too high. They were leaving because our rates were too high for the service we were providing.

If we want to provide good service, than we need to pay well. I have no intention of competing with McDonalds for staff. I don’t want anyone who is willing to work for just above minimum wage. They don’t have the self esteem necessary to handle our calls. My customers want a professional image; it enhances business. They do not want, “just an answering service.” I can’t give them operators who are not serious about their position.

You can bet that the really good clients out there don’t hire $6.50-an-hour employees. A $6.50-an-hour employee makes $13,500 per year gross. If that is what you’re paying, you will have many employees who are working for you while they watch for a better opportunity. And let’s face it, this job is an excellent training ground.

Our doors stopped revolving and we got a much better class of applicants when we upped our wages. Our overall sound improved and we started attracting bigger and better clients who are not as concerned with nickels and dimes. We are talking about a professional message center. If you build it, they will come.

I suggest you decide what pay scale you think will attract and keep good people. Then decide what equipment you need to upgrade to remain competitive. Then increase your rates to accommodate those figures. If you lose some customers, don’t worry. You will make more money on the customer base you have left and then you can begin to grow! If you increase your rates by 10% and lose 10% of your customers, you are still making the same amount of money with less work.

If we don’t upgrade our services, we will lose everything! Look around you. Services are being bought at fire-sale prices because folks haven’t kept up. This causes panic among owners that exacerbates the problem. We hear about companies selling at 3 or 4 times gross. But let’s face it. The big successful services are not selling for that. They are not selling at all.

I’ll bet we all are getting letters from folks who want to buy our services and it probably causes most of us concern. We wonder if we should sell while we are able. Will the climate get worse? Do we have the energy to build our business to fit the very technical age we are entering? Sure we do!

I have a dear friend who knows a good deal about our industry. He says we are some of the most naive business owners he has ever met. We are sitting on gold mines! Properly managed and properly grown, we could take our companies public in a year or two if would learn to be business people!

It is no secret that one of the groups buying answering services plans to take their operation public. But, you don’t need to be a big conglomerate to do it. Many folks have turned from “Ma & Pa” to strong corporations. Where did they start? They started with a strong rate structure!

We started Focus 10 years ago with zero clients and low rates. Now, we have average bills of $180 per billing period. We are a multimillion dollar company. We have had a rate increase every year we’ve been in business except two (and then we only stretched it to 18 months). We even raised our rates when we terrible! Gutsy, huh? I once heard Betty Sweet say, “You should always, always, always raise your rates every year.” That way your customers will expect it. It works.

I attended an NAEO meeting in Florida several years ago and Tom Gelbach told me that everyone in this industry should be charging an average of at least $1 per minute to be able to move into the future. That was in 1990. I’d be willing to bet that more than 50% of our competitors still aren’t averaging $1 per minute! It was true when Tom told me and it’s even more true now.

There is exciting stuff come down the pike. There really is a communications revolution. It has started and it is going to take money to become a viable part of it. Plan for the future now or when it comes you will be just another notch on someone else’s expansion belt.

Donna West is President of Focus Telecommunications, Inc.,

[From Connection Magazine, March 1997]

Designing the Telecommunications Center of the Future: Part I

Reported by Christine Michaels

A panel discussion by Frank D’Ascenzo of Axon Communications, Barb Willis of Comverse/Startel, Jack Baldwin of CadCom, and Donna West of Focus Telecommunications. This discussion was presented at the OPXPO in Dallas, TX Oct 9 -12, 1996.

How can a telephone answering service position themselves so that it can move into the future and take advantage of the opportunities available?

How do we position our business to take advantage of this? Where is the road going to lead us and how are we going to get there? These were some of the questions posed to this panel at the OPXPO last October in Dallas, TX. Barb Willis of Comverse/Startel began the discussion:

Barb Willis: Sometimes the best way to begin to answer these questions is to look at your business’ history, assets and liabilities, build on the assets and reduce the liabilities. Then ask “Why are we successful in the answering service business?”

The answering service business has changed dramatically; technology has changed the business. One weakness in the industry has been in the area of sales and marketing. Years ago, an answering service could put an ad in the yellow pages and wait for customers to call. Today, that is not the case anymore. So, let’s start to analyze today’s business and build a road to the future.

The first step toward making your business move into the future is by attending seminars, workshops and conventions. It is important to attend these as new information is presented and ideas are generated to improve your business as well as networking with other business owners. It is important to take all ideas back to the office and implement them. Then decide the priority of the ideas and implement the most import one first.

Looking back into the history of telephone answering one of the greatest assets have been the operators. Out of all services and technology out there, the one piece that answering services have are the operators who can extract information from a caller and deliver the information to the customer. Your answering service is only as good as your worst operator.

Today in our society of instantaneous information, message delivery has rapidly improved via overnight delivery, fax, voice mail etc. A telephone answering service has operator services and a core base to build on all services available. How do you keep the core customers? Ask “What is it that you do that keeps your customers? “That is what an owner has to look at and analyze then build on. Let’s put together a plan:

  1. Look at what your operators do well.
  2. Ask why your customers stay with you.
  3. Analyze the community you’re in and determine where you can find more business.
  4. Look at your existing customer base and analyze your customers.

Your customers are your best resource for the next application that you want to offer in your community. There are possibly additional services you could provide to your existing customer base if you understood the needs of your customer and how they want to be successful in their business.

It all comes back to operator services. The answering service industry is not going away. The business is changing and each business must prepare for the upcoming changes and needs to take advantage of the presented opportunities. Thus, it is imperative that we look at how to market our services, the need for direct salespeople, the need to talk to customers face-to-face and to determine where and how to spend your money for the best return.

Frank D’Ascenzo: There are two general directions to take when defining the answering service of the future. You can approach the definition from the kinds of possible services a future answering service might provide, or you can approach it from a technical point of view. While these approaches may seem totally different, their end result will be the same.

The kinds of service your future answering service will, in large measure, depend upon the technology you select. The most important decision you can make now for your business is selection of the best basic technological architecture. Choose wisely at the outset, and you’ll be better able to integrate new services, as they emerge, and new features, as they are available, which will, in turn, make your business different, better, and more profitable.

One of the more significant technological changes of the decade has been the acceptance of open architecture systems. We see it in the widespread implementation of local and wide area networks, in the rapid acceptance and growth of the Internet, in the transition to the open control of telephone switches, and in the emergence of computer-telephone integration. The result of these trends has created a new technological paradigm. That is, a shift from the past world of a single manufacturer, proprietary system solutions requiring special hardware, to a new world of multi supplier, open system solutions that use readily available, off-the-shelf hardware like personal computers and telephone switches. This technological shift has affected system design in virtually every modern business application, and now includes the future answering service.

The movement to open architecture systems is especially significant to you, because it means that the days of one-stop system solution shopping is essentially over. Let me explain what I mean. There are so many changes occurring in the communications industry, so many new technologies and services emerging, that it is virtually impossible for any single manufacturer to keep pace with these changes. In fact, from your point-of-view, it’s not even desirable to place your system selection eggs all in one basket, as it were.

Rather than select a single manufacturer to supply your business, you will be better served by contracting for your system through a you the professional systems integrator. Why? Because doing so will allow you the widest freedom to select the best available hardware and software products. For example: A messaging application from Axon Communications; an order entry application from another software supplier; an email integration solution from another; and multi-media compatibility from another. This level of selection freedom is available only in an open architecture world.

For these reasons, the era of the single source manufacturer has become an anachronism. If you wish to build a future-oriented answering service, one positioned to take advantage of emerging new services, then it must be built around a future-oriented, open architecture system.

At Axon Communications we faced the issue of open architecture system design about three years ago when looking into the prospect of starting new product development. Like most answering service system suppliers, we were accustomed to supplying proprietary system solutions. So, when we thought about starting new product development, we first approached the task from that direction. We soon recognized the shortcomings of a closed system approach, stepped back, re-evaluated the product definition, and redefined it from an open architecture direction.

Our decision to depart from a proprietary system architecture was an important one. Doing so meant under taking a significant restructuring of our company. It meant changing our proprietary hardware-oriented mentality to that of an open architecture, software solution provider. It meant designing a software product open enough to allow for the ready integration of new industry services. It meant marketing our products through a distribution network rather than through direct sales personnel. And, it meant altering our relationship with our future product users because they would no longer be totally dependent upon us for the purchase and support of their answering service system. In essence, we were planning to cut the apron strings of single manufacturer dependence. A critical decision for our business future, but a decision we believed would be most beneficial for our future answering service customers.

Changing to an open architecture software approach resulted in the development of our recently released Axon IMAGE Suite, a complete Message Service Call Center software solution. The IMAGE Suite installs on a network, integrates with a Comdial switch, and causes the completed system to function as a world class, message service call center system. We’ve been told that the IMAGE Suite will set new standards for the future answering service, and for other live-answer, inbound call center applications.

In summary, the advantages of an open architecture system are paramount. You have the advantage of using readily available hardware (personal computers and telephone switches) which help control your costs. You can purchase your hardware from companies close to your location, which also means that support is near at hand. You’re free to select the best network-aware software applications to run on your network, and add them anytime. You don’t have to wait for someone to “re-invent” them. You’re able to increase the size of your system easier and less expensively because you’re using standard hardware. You can upgrade your system’s performance by migrating to newer and faster technology as it becomes available, and do so at your own pace. So when planning for your future, consider open architecture and remember the future is now!

[From Connection Magazine, March 1997]

Personalized Pager Information Services: Increase Revenues

By Carol DiGiulio

The wireless industry is among the fastest growing in the United States, with over 34 million pagers currently in use. The American consumer invested $340 million on paging devices in 1995 – a yearly increase of 24%, with the trend continuing through the year 2000.

Telecommunications companies are investing vast amounts in wireless technologies and infrastructure on both a national and worldwide basis. Paging carriers and resellers are scrambling to incorporate services that will differentiate themselves from their competition. These companies realize that survival depends on retaining and expanding their customer base. What does your company offer that differentiates you from your competitors? Personalized pager services not only can differentiate you in the marketplace, but also increase profit margins, and reduce churn.

Information services delivered via pager are designed to take maximum advantage of the explosive growth in the wireless industry and the consumer’s increasing demand for meaningful real-time information.

Personalized Pager Information services are quite another matter. A sampling of personalized information services are:

Personalized stock quote information tailored to an individual’s current portfolio, provide alerts as their stock price moves in real-time. Individuals can specify exactly what information about their stocks they wish to know, and receive discrete pager alerts as the action is happening. This type of information allows the individual to make real-time decisions about investments without having to rely on a broker or the news media for the information.

Sports information personally selected by the individual allow choices that can include their college teams, area team, and can be customized to provide period scores, score-by-score updates, or a combination of both.

Personal schedule reminders provide alerts regarding business appointments, birthdays, anniversaries, medical appointments and more. An individual can submit an annual list of dates they wish to be reminded of, then update their list to include personal appointment schedules as often as needed.

Personalized traffic alerts deliver critical information about the road conditions and accidents in specific traffic zones, allowing the traveler to make alternate arrangements or take other routes before they are caught in traffic. Traffic alerts are delivered before the information is delivered by radio and can be referenced before a subscriber even enters the car.

In addition to customized individual information services, resellers can also offer group alerts tied to specific needs:

School notification programs allow school personnel to make one phone call, and have information regarding school closings due to weather, delayed openings, school bus delays and more delivered to parents on their alpha pagers. No longer is it necessary for parents to fear missing an important call, and schools have fewer phone calls to handle.

The next level of school-linked service is the delivery of customized alerts providing assignment deadlines, scheduled PTA/PTO meetings, call for volunteers, or information to parents about what their child is studying for the week to allow them to take a more active role in their children’s education.

Executive work groups can receive instant notification of company news, meeting announcements, location changes, and more by just one phone call that can be initiated by any group member by simply using a security password  This is an extremely cost effective alternative to business communication needs. This is a  terrific service for a company with an outside sales force as well.

Market Differentiation: Pager resellers who provide personalized real-time pager services experience less churn, and find customers upgrading from digital to alpha pagers. And, of greatest importance, resellers can charge substantially more for personal information customers elect to receive. This means more revenues in a business where profit margins are diminishing as companies compete for market share.

To learn more about how personalized pager services can enhance your business, contact Carol DiGiulio, Vice President of Alert Technologies, LLC. Carol can be reached at 800-316-8932.

[From Connection Magazine, November 1996]

How Individuals Are Making Money Through Group Call Processing

By Tony Murray

I was at the Amtelco user’s group meeting last month in Atlanta and the subject of networking was discussed at a number of sessions. I get many questions from owners who are interested in participating in a Group or network. Like everything else there are pitfalls that need to be avoided.

First of all let me clarify what is meant by networking. I am talking about the sharing of the workload created by high call volume accounts in the enhanced telephone services market place. Centers with limited positions cannot handle the volume of calls expected from a new client but do not want to lose the account. They have the option of handling a proportion of the account and diverting overload calls to another service or services.

Let me make it very clear that networking is not the way to get into the market. It is very unlikely that anyone will succeed in this market if they rely on the overload from others. Networking should only be looked upon as a bonus to your operation and not an end in itself.

Initially, networking started with friends helping each other out in an informal way. It then began to grow and small groups of owners who had the same software worked together. Some of the software suppliers tried to form customer groups to ensure that they would grow and expand their systems. This is where we are today and all in the garden is not rosy.

What are the problems? The price structure. Quality and quality control factors. Payments to the backup. Retention by the client of moneys due because of bad service. How are all of these problems handled?

First, let’s clarify some terms. The seller is the business that originally made the sale and who will manage the project. The seller will be responsible for all the client contact and the collection of the money due to the Group . The seller supplies the set up information to the Group and keeps them updated with all changes. They should also be responsible for checking the data supplied by the Group for accuracy before downloading this to the client.

The backup is the service or services that are going to handle the overcalls. They will have no contact with the client. The entire network Group is made up of the seller and backups.

If you are going to participate with a Group, then you need to be sure that the others involved have the same standards as you do. You need to know, in advance, the price structures that the Group is prepared to accept. In a good operating Group, all members will be playing the part of seller and backup at different times.

In my opinion, based on the structures discussed last week, the prices are weighed too heavily in the favor of the seller. This is not surprising because the seller is usually the one that sets up the deal. There is no doubt that the seller must get a larger share of the revenue. But at the same time, it is not sensible for the backup to dilute their profits because the seller cut the price or is unwilling to cut the cake fairly.

The consensus of opinion at the meetings is that the seller takes the whole setup charge and a percentage of the call charge. It is expected that the seller will be able to download or at least supply the backup with a floppy of the account setup. This is important as the client usually wants all their callers to get the same information from the same script.

In the words of one of the sellers I spoke to, “the backup has basically no work to do and therefore does not need any of the setup money.” This same seller told me his main problem was the terrible quality of service supplied by some of his backups. Surprise. He had not given the backups any money to train their staff about the product. This same seller was undercharging the setup fee by about 75%.

This brings us back to pricing. In my last article, I said setup charges should be charged at $30 to $60 per hour. Let us use the $30 rate for this example. With a major account, it is likely that at least one and one half hours will be required with the client to clarify their complete needs. (This is also an opportunity to up sell your services.)

You will then need to spend anywhere from one to five hours, maybe even more, setting up the account in the computer; preparing the reports; downloading procedures; and most important of all, implementing procedures to examine and edit the downloads received from the backups.

Let’s say, for our example, that this takes three hours.

Finally, and I suspect that this is often overlooked, your staff must be trained on the new client. I do not believe that self-training is good enough; in other words, it is not good enough to put a message in the computer for “all operators to look and understand the new account ID1234.” For best results all operators should go over the account with a trainer/supervisor.

At the same time, they should be shown the product or catalogue, the advertising piece, and all other relevant information supplied by the client.

I do not believe that the client should ever train your operators. Train the trainer or supervisors yes, but never the operators. Let’s say that this takes two hours of the trainer / supervisor’s time and ten minutes of each operator’s time. Twelve operators therefore needs two hours. So far, this example setup will cost the client eight and one half hours or $255.

Now we need to look at the backups costs. Let’s say that there are three backups supplying twelve operators (for simplicity 4 each). There should b e an allowance of one hour for each backup to input the information into their computer system and arranging their administration. This adds an additional three hours.

Finally, there should be 90 minutes per site for training time totaling 41/2 hours. We now have a further 7 1/2 hours at $30 or $225 due to the backups. This gives us a grand total setup price of $480, with $75 for each backup and $255 for the seller. Personally I think that this is fair to everyone including the client, and the price is certainly competitive with your professional competitors.

Now we come to the call costs. The only savings made by the backup are sales and collections costs. In looking at many operations’ financials, the average sales cost is about 10% of revenue and the collections cost is about 1.5% of revenue. Therefore, the reduction to the call cost should be 11.5%. This assumes that the call price is close to the backup’s standard pricing; if not, the backup may need to negotiate with the seller. The price paid to the backup, in my example, should be call charge less 11.5%. It is essential that you know your own figures to ensure that any deal offered to you by the seller is a financially viable proposition for your operation. Additional call volume, badly priced, is no benefit to your business.

Payment terms: the backup should bill the seller on their regular terms and the seller should pay the buyer within these terms irrespective of when the client pays the seller. The backup has passed on all his collection charges to the seller; therefore, the seller has no right to pay late.

Earlier I said that the seller should monitor all the backup’s information before downloading it to the client. If there are any problems, then the seller must discuss them with the errant backup. If the problems continue, the seller should either charge the errant backup a fee to correct the errors or stop passing calls to that backup operation. The problem with one backup should have no impact on the other backups even when the client makes a deduction from their bill for bad service. There is no excuse for the seller to wait until the project is over before warning the backups that there have been problems.

If the client underpays their account for perceived service problems, it the backup’s is the responsibility of the seller and the loss should not be passed on to the backups. I heard recently of a situation where the client paid only half of their bill; the seller then divided this underpayment between the Group. This was unfair, as the backups had carried out their end of the bargain and had not been informed of any problems.

Finally, monthly or project charges: I believe that with these enhanced services there should be a flat rate monthly management fee or service charge. This is important for these networked accounts as the seller has costs directly related to being a project leader. In my opinion, the seller should not share this income. Depending on the size of the project, this fee should be between $50 – $500 per month, based on the hours worked.

As in all cases where money is involved, the seller and the backups should have a written agreement clearly stating the agreed terms and responsibilities. I am presently preparing an outline which will be available in November. It will be included in my Enhanced Services consulting package.

I said at the beginning that networking is an excellent way to enhance your services but it is not an end in itself. I think that once you have had a number of good experiences with your Group, the next step is to look at a joint advertising and sales program for the Group. As I point out at all my presentations, there is an enormous market out there but it must be nurtured with care.

Tony Murray can be reached at Douglas Communications Services, LTD, PO Box 3353, Lisle, IL 60532, 888- 254-1554.

[From Connection Magazine, November 1996]

Call Centers: Enhanced Telephone Services

By Tony Murray

There are many people in the industry who are looking for ways to increase profits and to expand. The quick and glib answer that they are getting these days is “Order Entry.”

Let’s take a serious look at what is referred to as order entry. This is a group of services handled differently from Telephone Answering Services (TAS) and in general need a different software package; more about this later. These new services do not always require an order to be taken, so I would like to start by renaming this group of products/services as Enhanced Telephone Services (ETS). This is a more descriptive name for the services which can be offered.

In broad terms, these services can include order taking, locator services, credit applications, insurance claim forms, customer services, sales lead generation and others. These are in general, information gathering services and are simple in that they only involve getting the caller to respond to scripted questions and saving the information.

If you are going to be involved in these services, then you need to grasp one vital point: you are selling time (actually, time share). When selling time, you need to know when and how much time you have available. In other words, your first step is to look at your operation and decide what time and facilities are under-utilized or could be expanded.

The difference in ETS calls over TAS calls is that ETS calls are generated by some form of advertising. The method of your client’s advertising lets you know if you can handle the project. For example, prime time TV will produce a high volume of calls in a very short period. Radio drive time and newspaper advertising will produce a reasonable response spread over the day. Magazine and direct mail advertising will be spread over weeks or months depending on the magazine.

Why, you may ask, is this important? If you have limited time or positions available. then you need to know how many, and more importantly when the calls will be incoming. There is no profit in having operators available when there are no calls or vice versa.

The next major difference over TAS calls is the length of the call. ETS calls are likely to be far longer. There is more information gathered and more discussion with the caller. You must make allowances for this.

Failure to acknowledge call length has been the downfall of many services. There is no point in landing a good new account that is going to adversely affect the quality of service to your existing accounts. This looks like common sense, but greed seems to over come all of us at some time or other. Sometimes it is just lack of knowledge about the client. I have come across many owners and managers who look at new businesses based on the number of calls and forget to look at the expected call length.

The final major difference between ETS and TAS businesses is that ETS clients may want real statistics regarding their calls. These will often relate to quality of services, or in other words,, ACD information. It may relate to where, or why the calls are coming, called call sourcing. It is important to know what statistics are required up front. Back tracking on statistics can be expensive and time consuming and sometimes you just don’t have the capability to get what the client wants. This bad communication can cause ill will and payment problems if it is not handled before the project starts.

I am continually asked, “How do I sell these products? Where do I advertise ? How do I get into the market place?”

There are many ways, but there is no general simple answer. It depends on your service, the products that you can or want to handle, the area that you are in, and how much money you are prepared to spend on marketing.

First of all you must know your product in detail and you need to understand the niche market that you have chosen to enter. It is also important that you have a good professional brochure that shows you have this knowledge. These services can be sold over the phone, but the potential clients want to get the feeling that you are a professional operation and your brochures and correspondence may be the only way to satisfy their apprehension. Professional brochures do not need to cost an arm and a leg to produce. Clean cut and simple brochures are often more effective than full-color glossies.

I said earlier that you need to know your capabilities and your objectives. If you want to start in a small way, then your marketing approach will be different than if you set up a new department just to handle ETS calls. The geographical area that you are in has a big say on how you are going to market your products. If your operation is in a major city, your approach will be different from an operation in a country town.

There is a wide misconception that small services in rural areas can not promote ETS products. It is my experience that these operations have more opportunities than their big city counter parts. In many cases, the small services offer a better quality of service. Remember with 800 and 888 numbers, the world is your oyster irrespective of where you’re based.

Spend on marketing relates to your expectations of the project. You do not need a large budget if you are not planning for an enormous expansion. I believe that money well spent on advertising always reaps a good return. Some advertising agencies and pseudo-marketers need to learn the meaning of well spent.

For example, an advertising spot on NBC during the Olympics in a major market could have cost in excess of $23,000, with some competing stations being less that $5000 for the same time. Why the difference? The expected size of the audience. During the same Olympic weeks but at a different time of day you could have bought local cable time for $1.50 to $2.50 per 30 second spot. Why the difference? Again, the audience.

Advertise where your users are going to see you. Yellow pages are not as effective in this market as in the TAS market. Depending on your products, your main sources for business may be from advertising agencies and fulfillment houses (companies that store and ship products for their customers). You advertise in magazines read by your potential clients, in this case, Advertising Age or Operations and Fulfillment Magazine. There are many good marketing consultants; use their services. Their costs can easily be justified by improved return on your advertising investment.

Pricing: The next major question that I am asked is, “How do I price these services?” The obvious answer is profitability. Here are some of the factors that you need to take into account.

First and most importantly, you need to get all the details from your client before you put any prices together. Surprisingly, the client is unlikely to have thought through the project. If you don’t ask the right questions, it is you who will be left with an unprofitable and possibly unpaid mess.

I said earlier that you are selling time share, i.e., you are selling your operator’s time. This cost must be covered in total, including all benefits, tax contributions, supervisors and management allocated costs. Then add your equipment, line costs and office expenses; you can easily work all of this out at a cost per hour. Finally, and most importantly, add your profit (75 to 100 percent).

All pricing needs to be based, but not charged, on an hourly/minute rate. The professional quality and large services are charging between $0.80 and $1.10 per minute. Come September, this will rise by about 12% for the Christmas rush; in January it will drop again.

The best way to charge for your service is by operator time (this should not include hold time). If your system does not have this capability, or if this is unacceptable to your clients, then charging by item/transaction is an alternative.

You can charge by transaction but the cost of each transaction must relate to the time of that transaction. For example, if you are taking a full credit card application call, it is likely to be at least a three-minute call. Let’s set your charge at $0.90 per minute so the unit cost for this call would be 3 times $0.90. Your charge would be $2.70 per completed application.

Here is another pitfall. You must understand exactly what type of calls you’re going to receive from any project. For instance, you are approached by a catalogue house to take orders for them. They demand a unit price.

All calls will not be orders. Before you can quote you need answers to the following questions: Are you going to receive request for catalogues, or customer service calls? These calls will be priced differently from the order call. What is the average number of items ordered by each caller? Is this the same throughout the year? (Often rises at Christmas time). Do they allow ship to addresses? If so, what percentages of orders require the gathering of ship to addresses? Do they have an SKU Stock Keeping Unit number for each item in the catalogue? Do you have to ask for size or color or is this included in the SKU? Do they have items that need to be personalized? Do they send out personalized labels? If so, how long a message do they allow?

All of this information will affect your pricing. In short, you need to price each project individually based on the expected length of each type of call within the project. Never allow a flat rate for all calls. I strongly suggest that having set your prices that you test them with a stopwatch.

Finally, set up charges and deposits or up front payments. Set up charges should a ways be charged and should be based on the time taken to set up the account. This includes not only the programming but all of the administrative work that may have to be done. This should be priced at $30 to $60 per hour with a minimum of $75. Deposits or up front payments should be asked for in all cases where you do not know the client. I suggest that you ask the client what their expected response rate is going to be. Then halve that figure and multiply it by your call price. This you hold as a deposit and set against the last payments.

Finally, a monthly minimum charge should be made. This covers you when the client’s campaign is a flop. It happens. I would set this by using 30% of the client’s expected monthly call volume times your quoted call price.

I have not mentioned the transfer of the information to the client and this can be done in many ways: computer transfer, fax, Internet, hard copy mailed, but never, never read over the phone. However you do it, be sure to charge for it profitably.

Written Agreements: You should always have an agreement in writing. This should be updated each time you add to the service for that client. This agreement should clearly define the work that you are going to do, the reports that you are going to produce, the method and regularity of delivery of information, the cost of the service, and the payment terms.

Payment terms are very important. You must not allow yourself to get into a position so that when the project is over the client has gathered all their money and you are sitting with a large receivable. If you have a particularly large account, it is not unreasonable to bill them every 15 days and give them 15 days to pay. Never extend credit longer than seven days beyond your terms. I have had more than one client who has lost thousands of dollars due to sloppy collections.

I mentioned earlier that it is likely you will need a different software package to handle these calls because your TAS software is not designed to me the ETS market. For example, you need to be able to access more databases. You also will need to do the cost calculations on orders to let the line caller know the break down and total cost of the debit as it will appear on their credit card. You need a zip code check to ensure accurate addresses. You need the ability to present scripts to the operator during the call to speed the call and to ensure that the caller gets accurate information. There are many other benefits in the order entry or ETS software packages.

What is available? The best known packages in the TAS related industry are Amtelco’s Call-Scripter, the Doyle Logan system, and Professional Inbound. These three systems stand alone working on a network in conjunction with your TAS system.

If Startel users want to test the waters, they have a very simple package that works within Startel. It does not have the refinements of the others and if you are successful an upgrade will be essential. Amtelco users can test the market with their Infinity system with the same effect.

The revenue for ETS projects will be far greater than for most of your TAS accounts and so more care has to be taken on collections. This is an enormous market and handled correctly can be extremely profitable.


Drive Time (audio) Advertising term related to time that ads run normally between 7am and 9am and 4:30pm and 6:30 pm local time. This is the most expensive time to advertise.

Order Taking: A service where clients’ customers call into an 800 number to place orders normally includes gathering credit card numbers and other information as well as the order.

Locator Services Informing callers where their nearest supplier of specific service or product is located normally promoted by the publication of an 800 number. This can be turned into a customer survey call; while the caller is on the line they are asked a series of marketing questions.

Sale Lead Generation This involves the gathering of name, address, and telephone number from callers who are calling in reply to an advertisement for literature or free products.

Credit Applications This involves the gathering of credit information from callers. This information can vary from a few lines to 15 to 20 questions.

Market Research The caller is normally responding to an advertisement for a free product or information. In return the caller is asked a number of questions to assist the manufacturer to assess their acceptance in the market place or for many other reasons.

Personnel Pre-Screening The call is responding to a situation vacant advertisement. The caller is asked a number of questions to assist the recruiter in assessing the qualifications of an applicant without wading through a large number of written applications.

Customer Service Calls The caller needs help; this can range from, “When will my product be delivered,” to “I have your software and I can’t make it work.” The length of these calls can vary from one minute to infinity. These should be handled on a price-per-minute basis

Source Codes or Sourcing The gathering of specific information related to where the caller saw or heard about an advertisement (the next most important information to the caller’s name and address).

SKU Stock keeping unit

[From Connection Magazine, September 1996]

Answering Service and Paging T1 Applications

By Bill Ranney

In my last article I have discussed how T1 works. This article will illustrate how different businesses have utilized T1 to lower their costs, increase their profit margins and provide better and expanded services to their customers.

TWR Communications (Two Way Radio Service, Inc.), with Jeff Hutter as president, is located in western Maryland. They are an innovator in utilizing new technologies to keep their operating costs low and to provide unmatched service and reliability to their clients. As a paging and mobile telephone company, TWR Communications has equipment housed on remote hill-tops throughout the western part of the state. These unmanned remote equipment sites are the transmission centers through which TWR sends its paging and other broadcasts. Client radios are also housed in these remote site s. In turn, these remote transmitter sites are all linked via radio to a central remote transmitter site, located on a small, in accessible mountain top called Dan’s Rock. TWR’s main office and switch gear is located in Cumberland, about 12 miles from Dan’s Rock.

TWR has two T1 circuits coming into its Cumberland office. One T1 goes to the telco central office and carries all the incoming paging and mobile telephone calls. This digital service gives them crisp digital transmission between their equipment and the central office switch. A new, second T1 goes from the Cumberland office to the top of Dan’s Rock, and carries all of the broadcast traffic. The paging radio, located in Cumberland, can communicate directly with the Dan’s Rock transmitter via a channel bank and this T1 circuit. The T1 also carries data for real time usage, traffic history and configuration. Furthermore, an audio channel piped back from Dan’s Rock via the T1 allows the monitoring of all the transmitter sites throughout the state. No longer does a tech have to run up to Dan’s Rock every time a client gets nervous about their radio transmission; TWR can simply listen to the transmissions at the Cumberland office via the T1 signal to be sure all is well.

And speaking of technicians, TWR has two crack technical people who keep the entire system, along with the computer operations, up and running: Kenny Allman and Toby Preston. Although problems with the T1 and associated equipment are rare, these two are always trying to improve the company’s network, continuing to make it more efficient and more and more reliable.

Kenny and Toby have even designed a back-up UHF link, used to replace the T1 in the event of any transmission circuit failure or when maintenance needs to be performed and they are investigating other wireless networking ideas.

Another application involves an answering service in Houma, Louisiana; Oil Field Communications Services, owned and operated by Harold Carbo. Harold is continually trying to expand the reach of his business while improving service to his clients. He recently expanded his service to a distant city in Louisiana by using a channel bank and a T1 circuit.

Harold had Bell South put 9 DID trunks and 8 loop start trunks (for call out circuits) directly onto an intraLATA T1 at the central office in the remote city he wished to serve. The T1 then transports calls on these 17 channels back to his main office in Houma.

In Houma, Harold uses a channel bank to change the calls from digital T1 format back to an analog format his Axon switch can use. He answers his client calls as if the operators were in the remote city, and the clients can perceive no difference in quality of service. In fact, Harold stated that the quality of the connections has improved on the T1.

Harold doesn’t have the headaches of managing operators in the remote city or the expense of the payroll, either. He also saves on toll charges when he calls the remote city. The loop start trunks allow him to get dial tone directly from the remote central office through the T1, avoiding all long distance toll charges to this area.

He can also use the call-out lines to increase his revenues without increasing his long distance expense The T1 has enough capacity to expand his service to the remote city to any combination of 24 DID or call out channels.

A third application involves an answering service in Michigan. Community Answering Service, owned by Tom Wingo, is founded on top quality service to the client. While his home base is in Michigan, Tom also has built a good client base in the Chicago area, about 120 miles away. He can avoid having operators staffed there by transporting all the incoming DID traffic originating in Chicago to his Michigan office, where the calls are answered. High quality, seamless service is made possible by digital T1 connections.

Tom has a Startel switch in Michigan and uses a point-to-point InterLATA T1 circuit and a channel bank on each end to transport the calls back from Chicago. As compared to the above example of an intraLATA T1, Tom effectively acts as his own telephone company. He has a small office location in Chicago where he uses a channel bank to digitize the incoming DID trunks and puts them on his T1 circuit. At his Michigan office, he has another channel bank to return the calls to an analog format his Startel can use.

He can also make toll free call-outs and marketing calls back to the Chicago area via the T1 circuit. Thus, Tom saves in numerous ways. By not having to pay and manage operators in a far away location, he has better quality control over him.

Another significant advantage arises from having an equipment location in the remote city. Tom’s T1 is reaching full capacity of 24 channels. Instead of getting another T-span, he can compress the voice traffic to give him 48 voice channels on a single T1. By using ADPCM 2:1 voice compression, Tom can achieve double the capacity of his T1 circuit at virtually no degradation in the quality of the voice transmission. Of course he will have to add an additional channel bank at each end, along with the voice compression equipment, but he avoids the monthly re-occurring cost of an additional T1, giving him a relatively quick payback on the compression equipment.

Remember, T1 span pricing is based on mileage, and there are three components to each T1 circuit: 1) a local loop on your HQ end, 2) the long distance or IXC span and 3) the local loop on the far end.

If you want to expand by acquiring an answering service in a distant city and transport the calls back to your main site via T1, draw a circle on a map of the United States that is approximately 500 miles at its furthest point from your office. Generally speaking, IXC T1-spans longer than 500 miles are too expensive for the acquisition to make sense.

This circle gives you an area of more than 750,000 square miles in which to search for an acquisition. The larger the service you want to acquire, the farther away it can be and still support the T1 charge. Smaller services should be closer to your home site.

Once you have acquired that remote service with a remote equipment site, you can draw another 500 mile circle with the center at the new site and piggy back that additional traffic onto your first T1. This leap-frogging method can economically extend your reach around the country.

Local loop charges also can vary greatly. The local loop charge is the cost that your local phone company will charge you to bring the T1 span from your office to the long distance carrier. If you are looking at a service that is quite far from a serving wire center (commonly known as a POP, which is the place where the long distance carrier will pick up the circuit for the long distance span), or if your home service is far from the POP, these local T1 loops can be expensive. Again, they are mileage based and you are usually stuck with the local Bell company to provide this T1.

Carriers are constantly changing their tariffs, also. For an intraLATA T1, depending on the cost, you might want the carrier to put your DID trunks directly onto a T1, or you may prefer a remote equipment site and do it yourself. For an InterLATA (long distance) T1, the local carrier usually will not terminate trunks directly onto a T1 provided by an IXC carrier, but there are exceptions. To my knowledge, no carrier offers compression services, so you must do that yourself. Finally, before renewing a point-to-point T1 contract, shop around with other carriers to be sure you are getting a fair rate.

Bill Ranney is president of Transnet Engineering, Inc. He can be reached in Boulder, CO at 303-413-0665.

[From Connection Magazine, September 1996]