Category Archives: Articles

ISDN: Integrated Services Digital Network

By Rose Anne Hurd

Integrated Services Digital Network are some of those “buzz” words used in out industry for years. An unsuccessful search for ISDN information as it relates to the telemessaging industry has prompted this interpretation of the telephone company’s jargon into a layman’s primer.

ISDN Defined: Southern Bell defines ISDN as “a revolutionary communications architecture that integrates voice, data and video transmission into a single access line. It enables a single telephone line to carry voice, data and video information simultaneously.”

Those of us at the elementary level of digital communications may relate to Gary Kessler’s explanation from his book, ISDN, Second Edition: “ISDN is merely an enhancement to the telephone local loop that will allow both voice and data to be carried over the same twisted pair. It is a fully digital network, where all devices and applications present themselves in a digital form. That is, information from the telephone, personal computer, stereo, television, PBX, main frame and ISDN coffee pot are all seen as bit streams by the network switch. “1

Analog Defined: It might be helpful to review analog (sometimes referred to as broadband) voice transmission and digital transmission (also called base band.) An excellent description of analog is found in an article, “The ABC’s of ISDN” written by Lea Meadows, a staff manager for Bell South Telecommunications: “In the beginning, there was analog. Alexander Graham Bell created a means for transmitting voice signals between separate locations. The three parts of transmitting this voice signal were the transmitter, which converts sound waves to a continuous electrical signal: a transmission path, consisting of a pair of wires (or cable pair) to carry the signal to its destination; and a receiver that turned the electrical signal back into sound. A pair of wires for every telephone and a telephone for every pair of wires.”2

Digital Transmission: To carry human voice in a digital form, the analog wave is transmitted into an equivalent digital mode. PCM measures the amplitude of each voice sample as an 8 bit-byte. If each 8 bit-byte requires 8000 samples per second, then it takes 64,000 bits per second to digitize the human voice. When the digital code reaches its destination, a reverse process produces analog voice sound.

Your PC talks in “bits” and to communicate with another PC, the use of a modem is required for the conversion to an analog signal. ISDN will bring the digital signal to your (digital) equipment including your PC, eliminating the need for a modem.

Telephone central offices have utilized digital switching (both voice and signaling information is transmitted in digital form) between central offices for 25 years and yet the signal between the customer and the C/O has remained analog – until recently. The major motivating factor for the telephone company’s accelerated use of digital transmission is economy but equally important is customer’s demand for higher data a transmission speeds. With ISDN, data is transmitted at 64 kilobits per second, while today’s modems transmit data at much slower speed.

ISDN Deployment: End users might wonder why it has taken so long for this digital technology to be available. Divestiture of the “Bells” and the lack of national and international standards are the major reasons. The Consultative Committee of the International Telephone & Telegraph (CCITT) was developed in 1984 to formulate the standards for ISDN for all telephone providers. Then CPE (Customer Premise Equipment) vendors wanted the telcos to commit to wider deployment and the telcos wanted to see more ISDN products before commitment. TRIP 92 (Transcontinental ISDN Project) launched national ISDN and brought about commitments for ISDN products from big name computer companies. The wide spread usage of PC’s has been a major catalyst for the RBOCs current “push” for ISDN implementation. Tariffs have been filed with the Public Utilities Commission to offer “ISDN anywhere”. This would be achieved in a metro area used FX (foreign exchange) from an ISDN-capable C/O switch to the C/O without ISDN capabilities.

ISDN’S Potential: Mr. Ed Klingman, president of ISDN* tek, was quoted in a “Technology Update” story in Communications Week May 16, 1994: “The public policy push for development of the ‘Information Superhighway’ includes ISDN as an-and in many cases as the – access mechanism. Groups as diverse as AT&T, the Electronic Frontier Foundation and the Consumers Federation of America have all endorsed ISDN as the appropriate technology to provide end-user connectivity to the Superhighway.” 3

In a recent article in America’s Network, Dianne Hammer sited Microsoft and IBM as major factors in the re-newed push for digital services. Microsoft will use ISDN lines for 2000 employees to access their corporate network from remote work-at-home offices. IBM has developed a digital modem with 64 kbps speed.

ISDN was utilized for telecommuting after a major earth quake in California. The RBOC was permitted by the PUC, to install “free” ISDN and to lend terminal adapters and phones to people in the area. Employees who were unable to reach work by the normal highway were able to work via a superhighway.

ISDN Interfaces: There are two ISDN access interfaces to the network: Basic and primary rate. Basic Rate ISDN (BRI), uses a single telephone line, comprises of 2 B-channels with transmission speeds of 64 kbps and D-channel at 16 kbps. Primary rate ISDN (PRI) is generally 23B-channels and a single D-channel with all 24 channels operating at 64 kbps.

The “B” (bearer) channels are used to transmit voice or data and the “D” (delta) channel sends signaling information to control the B channels.

Each ISDN BRI line required a Network Termination Type 1 (NT-1),” ISDN device responsible for the termination of the ISDN transmission facility at the customer’s premise.” 4 NT-1’s can be purchased from vendors or your telephone company for $300-$400.

ISDN vs. DID’s: ISDN can replace DID trunks and numbers! A limited number of hardwire accounts can also be supported using a directory number for dedicated assignment of the customer’s line. In average-sized bureaus, each work station would require one B-channel (primary purpose is for voice and data transmission) with the D-channel (the network and user’s equipment exchange signaling messages necessary to request services on the B-channel) for typical messaging tasks. The second B-channel can be added when needed.

ISDN BRI replaces DID trunks, numbers and in some cases, business or patching lines. ISDN eliminates DID and Hardwire hardware: digital switches, DID trunks and business line cards. Unlike DID incoming-only trunks, ISDN lines are used for incoming calls and out dialing, making ISDN more cost effective than DID services. Conferencing or call transfer (patching) is connected at the central office.

In an ISDN telemessaging system, clients would all forward their line to a main directory number (DN) of the telemessaging service bureau. Then when the client’s phone number (DN) was dialed, the call would forward to the Service’s main DN. Additional information delivered with the call, would be cross-referenced to that client’s account file. This client’s DN identification is called the “redirecting number”. Other call management capabilities, currently available only in the central office, will be brought under the user’s control. The reason for call redirection is a feature of interest to messaging services. At present, there are five possible reasons that can be provided for handling the call: call forward busy, no reply, Data Terminal Equipment (DTE) out of order, call forward unconditional and call forward by the called DTE.

In the Southeast, a comparison of the installation charges for ISDN and DID surprisingly confirms that ISDN costs less to install than DID trunks and numbers! Is this our telephone company’s strategy for steering users away from old technology to the new? Monthly costs are competitive (old technology versus new services and features are not easily compared) and the cost of NT-1’s is expected to decline with the upsurge of new ISDN products.

Future of ISDN: Although the US viewed ISDN with skepticism initially, it has taken a leading role in developing standards, applications, products and services. Many in the telecommunications industry predict that more applications and services will be developed for the use of the ISDN. Will our industry play a role in these predictions? I think so!

Rose Anne Hurd and husband, Clint have been co-owners of a telemessaging service and RCC paging company for 13 years. The Hurd’s are involved with Morgan Comtec in the manufacturing of ISDN telemessaging equipment.

[From Connection Magazine, July 1994]

You Never Get a Second Chance to Make a First Impression

By John W. Weikert

How many clichés have you found that apply to the “live” operator business such as “Your service is only as good as your worst operator?” How would you ever really know what impact your total business is having on your customers if you haven’t surveyed your customers? If you haven’t surveyed your customers, your business operation is based on guesswork. The bottom line is that customers are just about the most important component in any business. If you aren’t keeping them happy, they will find someone else who will.

The bottom line to the successful operation of a live operator business is maintaining a loyal customer base. Present answering service owners must look for new ways to improve their business which can be done by applying corporate management techniques. To apply these techniques, management must have the information to utilize the changes and improvements. Thus in order to improve customer retention and increase profits, management must have continual feedback from its customer base.

Customer surveys can identify factors that are most predictive of customer risk and loyalty. Recent surveys conducted of answering service customers found that between 23% and 28% felt their existing service provided either fair or poor service. This alone indicates that an astounding number of customers might be ready to switch services.

In real business terms, a lost customer is a shocking expense. New customer prospecting is expensive, so good customer care matters! For an example, the cost to purchase new customers from another service can range from $400 to $600 per account. Conversely, a dissatisfied customer can spread the bad news and undermine your business.

Here’s some examples of how management can use the information produced from a survey:

  • establish a company-wide standard for performance and customer satisfaction
  • immediately contact all dissatisfied customers and rectify any misunderstandings
  • reward top performers and initiate additional training on poor performers
  • detect negative trends as they occur – not after
  • identify which strategies should be emphasized in the sales and marketing process.

The following responses are from a recent customer survey taken around the country. The question asked was “Please tell us how (name of TAS company) could become even more important to you?”

  • “This firm is very unprofessional on the phone when/if they answer at all. One of my parishioners asked what time the church service was held and was told they didn’t have the information. I have also had numerous complaints that the phone simply wasn’t being answered.”
  • “Patients who call on weekends with emergencies are cutoff. several times. This is unacceptable in a medical practice and can potentially become a legal issue. It should never happen.”
  • “If they would: answer the phone more politely, give correct information about the office, take messages instead of abruptly getting rid of callers, answer the phone when asked after one ring instead of 15 rings.”
  • “We lost a big contract due to their inability to answer the phone. They let it ring 7 – 10 times then mispronounced the company name. There were also babies crying in the background.”

In all fairness, there are many customers who also have a great many accolades to say about their service.

The only true way to evaluate your client base is to have an independent company perform the survey function. Many times it’s easier for customers to respond candidly to an objective third party. It will cost more than for example, enclosing a survey card to your customer base, but the results and analysis can make a world of difference in the way you conduct your business. It is not uncommon for a research company to achieve a response rate of 35% or more which gives a statistically accurate assessment of your customers’ loyalty factor. A survey can take anywhere from a few days to about 75 days depending on the complexity.

Here are eight things to look for in a survey:

  1. Simplicity of Language: Questions should be clearly and easily understood. Avoid questions such as “do our operators engage you in interactive dialogue”.
  2. No Ambiguity: Avoid words such as “often”, “usually”, or “normally”. These terms mean different things to different people.
  3. High Level of Confidence: Confidence levels are dependent upon the number of people surveyed. Thus aim to survey 95% of your client base or higher.
  4. A Carefully Chosen Sample: Choose the right mix of people from your client list. Samples can be selected at random, by cross section, stratified according to specific criteria etc.
  5. Selecting the Most Appropriate Question Format: Deciding what kind of questions to use is an essential part of the questionnaire design process. Survey developers must avoid making the mistake of asking only what someone thinks are the important questions. Ask the customers what they think the important issues are. Ask what improvements they would like to see; what new services can be offered. People may be asked to rate something according to a certain scale i.e. 1-20 (use a scale that will give a range of response but not too large as it can be overwhelming); to check off their response to choices; to answer simple yes or no; or to answer how they feel about a certain issue.
  6. Survey Administration: One must now decide how to administer the survey; by email, mail, fax, letter, by telephone etc. How will you encourage people to complete the survey and how are they to send it back to you? What is an acceptable rate of response? There are factors to be considered for each of these issues and the best test designers will and should explain the differences.
  7. Scoring and the Turn Around Time: How the survey will be scored (turn around time) can be important factors in your choice of a survey design and provider. Today most, if not all, surveys are scored by computer and should be analyzed by computer. This will give you the fastest turn around time and the greatest degree of complexity and sophistication in data analysis.
  8. The Kind of Report that will be Produced: Survey results are usually reported in the form of tables, graphs and written comments. You must decide how much complexity and detail you want and can use. A good rule of thumb is to strive for simplicity, clarity and brevity. Decisions about the report should be tempered with some thought about who is going to read it, to use it and how the information will be disseminated to other people in the organization.

Surveys are one of the most important tools to use in determining customer loyalty. Contact a market research company for additional information. Your customer’s loyalty factor can either make or break your organization.

John Weikert, of J. Weikert & Company, may be reached  at 203-371-6423.

[From Connection Magazine, May 1994]

2-Way DID’s “Smart Trunks”

By William G. Hunter

It has been a long time since the telemessaging industry has had something to get excited about. As we all know, the telephone facilities we need in order to provide service to our customers have changed very little over the past 15 years. Other than a few customer line features, such as call forwarding if no answer and busy call forwarding, our customer’s phone calls are processed by the telephone company and are basically dead-ended at our answering service or voice mail system. This has greatly limited our ability to do very much with an incoming call other than take a message, or upon occasion, patch the caller to another number.

Whether you offer answering service, voice mail, paging, or cellular communications, the advent of new technologies is vital for the future of our related industries.

For the past 3 years, I have taken a personal interest in seeking out new technologies which would impact and change the way we process incoming calls for our customers.

In late 1991, I started working with the concept of 2-Way DID trunks and what they could do. My first endeavor was to contact the telephone companies to find out what they could provide using existing central office facilities. After talking extensively with all the Bell operating companies (and I mean ALL), and a few independents, it was clear they had no idea nor had they ever heard of what I was talking about. This led to months of research and hundreds of phone calls and meetings which have brought us to today.

On July 14, 1993, I introduced an ONA, Open Network Architecture request before the Information Industry Liaison Committee (IILC), an organization made up of telephone companies, manufacturers, and industry related businesses. Accepted and assigned as Issue 042, “2-Way DID” with Call Transfer,” I am pleased to report that this new capability is now a reality.

The term “2-Way DID” is exactly what it implies; this new trunk configuration can receive and place outgoing calls on the same trunk.

Answering Service

Example: Let’s suppose you have an answering service with equipment compatible with this new technology. You would receive an incoming clients call, probably call forwarded, and answer the call in your customer’s name, “Good morning, ABC Construction.” Your temporary instructions indicated that Mr. Smith is in his car today and all calls for sales should be transferred to him. Now comes the 2-Way DID.

By putting the caller on hold, you are now able to call Mr. Smith in his car on the same trunk, tell him who’s calling and connect the caller on hold to Mr. Smith’s car phone. Your trunk is now free to handle the next call. This function means you will no longer patch a caller, but transfer and reconnect the caller in your telephone company’s central office. You can also use these same trunks for out dial paging or delivery of customer messages. This will allow you to eliminate your regular business trunks and use only 2-Way DID’s.

Voice Mail Service

This application for voice mail service will have the greatest impact by far. Now, your voice mail system can receive calls, play customer recorded information, and at the caller’s selection, Push 1, Push 2, or at the customer’s pre-selection, automatically transfer the caller to any other telephone. The market potential for this capability is almost endless. In reality you are now in the Telephone Switching business. And why not! Who is the second largest processor of phone calls next to the telephone company?

Paging Service

Many Paging Companies offer voice mail as an enhancement to their paging service. But like all services using standard DID trunks, their service offerings have been limited. With 2-Way DID trunks, a simple digital display pager can become part of a service package with double or triple the income potential.

Call Screening

With all the talk about CPNI, it’s good and bad features, Call Screening or knowing who’s calling is possible today using live attendants or voice mail with 2-Way DID trunks.

One Call

Today’s business person has more phone numbers for people to reach them than they can remember or print on a business card. With voicemail and 2-Way DID’s the One Number concept is a reality today.

I have been involved in the communications and telemessaging industry for over 30 years and have never seen anything as exciting, with as much potential, as 2-Way DID. As usual with new technology, deployment always takes time. Local telephone account representatives for the most part will have no idea what you’re talking about should you request this service. I will say, however, that the RBOC’s are scrambling to make 2-Way DID’s available sometime this year with one Telco already on line with a tariffed service. American Voice Mail currently has over a dozen voice mail systems on-line successfully using this 2-Way DID feature and profiting.

As someone once said, “All good things come to those who wait, “unless it’s from the phone company. 2-Way DID’s are here today and the impact they will have on the way we do business will remain with us for many years to come.

William Hunter is President of American Voice Mail, Inc., a voice mail manufacturer, and American Message Centers, Inc., a telephone answering service both in Warren, Ohio. He has been involved as a member and consultant to the telemessaging industry since 1964. If you would like information on the availability of 2-Way DID trunks in your area or a voice mail system compatible with this new technology call 800-DID-SMART.

[From Connection Magazine, March 1994]

Ten Common Marketing Mistakes

By Orvel Ray Wilson

Assuming You Don’t Have to Market

Coca-Cola is by far the most widely recognized brand name in the world, and one of the world’s largest advertisers, investing tens of millions of dollars annually in marketing. Even if you’ve got a better mousetrap, the world will not beat a path to your door. Every business must market itself constantly, aggressively, or fail.

Assuming You Need Big Money to Market

Jay Conrad Levinson, in his best-selling book Guerrilla Marketing Attack*, lists 100 marketing weapons, and 50 of them cost you nothing. Even the smallest one-person business should cultivate good relations with the press. Read Jeffery Lant’s book, The Unabashed Self Promoter’s Guide, to learn how to write dollars worth press releases and articles that will generate thousand of dollars worth of free publicity.

Improper Targeting

Try to say something to somebody or you will be saying nothing to everybody. “Narrow cast” your marketing message to a specific group who want, need, or have to buy your products. Advertise to remind rather that to impress. Repetition is key; mail postcards weekly for a month instead of a single multi-page brochure blitz. Enclose a business card with everything.

Confusing Image and Identity

Guerrillas strive to communicate their identity, not their image. Image implies something contrived or counterfeit. Your identity is who you really are. Customers recognize and appreciate the truth. Put your picture on your business card and your address on your stationary. How else will they know where to send the check?

Undervaluing the Product

Hungry retailers routinely sell their work for a fraction of the fair market value. Be competitive, even aggressive, but don’t give products or services away. Customers will not place a value on your work unless you do.

Incomplete Customer Feedback

Follow up every order after several days to make sure the customer is still satisfied. Ask everyone, “How are we doing?” and “How could we improve?” Take every suggestion seriously. If you really listen to your customers, and do what they tell you to, you can’t fail.

No Specific Marketing Goals

Define exactly the outcome you want your marketing to produce É to inform, to educate, to entertain, or to persuade? Every dollar spent on marketing is an investment, so expect a specific rate of return. Be clear about your goals and track your response rates in registrations per hundred calls, or sales per thousand brochures.

Insufficient Information

The belief that people don’t read long copy is a common marketing myth. Readership falls off dramatically after the first 50 words, but long copy sells to readers interested enough to finish. Put the “5 W’s” up front (who, what, when, where, why), then use enough ink to tell your whole story so your customers can make an informed decision.

Failure to Develop Vendor Relationships

Don’t always go with the lowest quote. Get to know a printer, designer, or agency that understands your needs and will compete for your long-term business. For example, ask them to price the printing of your newsletter on a monthly-for-a-year basis.

Switching Too Soon

Easily the most costly, and certainly the most common mistake, is changing the theme, format, or media used in your marketing campaign. This one is so important that it should be listed as number one. Just about the time you’re sick to death of your marketing, your prospects are just beginning to recognize who you are. Instead of updating your advertising, spend the money repeating your message, again and again and again and again.

Orvel Ray Wilson is an author and speaker on sales, marketing and management, and co-author of Guerrilla Selling: Unconventional Weapons and Tactics for Making the Sale. For a free copy of The Guerrilla Selling Newsletter, call 303-637-1461.

*guerrilla marketer (n) 1: one who deploys irregular marketing weapons that are effective, inexpensive, and productive. 2: one who uses time, energy and imagination, instead of brute marketing force to gain an advantage.

[From Connection Magazine, March 1994]

Buying and Selling Telephone Answering Services

By Thomas G. O’Roark

I find buying and selling Telephone Answering Services (TAS) to be an interesting subject. There are over four thousand TAS in the United States, and most are small, closely-held, family owned and operated businesses. The value of a TAS is almost entirely intangible. Assigning value to an intangible asset is always tricky. In this case, the customer list is the intangible asset which, in my opinion, represents most of the value in a TAS. Buying a TAS is particularly viable because seller financing is usually available as part of the terms, and because significant changes are taking place in the TAS industry which have stimulated buying and selling activity.

As to financing the purchase of a TAS, in my experience, most bankers will not loan money against an intangible asset. The TAS customer list is a recurring revenue base of service bureau subscribers, representing a cash flow stream not unlike an annuity. A future stream of recurring cash flows can be discounted to a net present value, similar to the way that bankers discount loan payments or the way that bonds are valued. Within the financial community, most lenders like to have solid collateral for a loan, such as real estate. They tend to completely ignore the value of intangibles, relying only on the “tangible net worth” a business. Therefore, seller financing is an essential part of any sale or purchase of a TAS.

The first step in buying or selling any business is strategic planning. An individual owner of a TAS should focus on internal factors such as retirement planning, developing exit strategies for becoming liquid, and actually realizing their hard won capital from the business. Often the business represents decades of “sweat equity.” The customers are also friends and neighbors who often have been loyal subscribers since the inception of the business. Providing uninterrupted, high-quality service is of utmost concern. Management succession and training are critical.

Can the Owner/Operator replicate him or herself? Can he or she afford to?

Not every individual owner has an heir who is interested in or capable of running a TAS. As they say, you can lead them to water, but you can’t make them take over the business.

Also, forecasting profitability and cash flow projections are vital to both buyer and seller. It’s often the case that a small TAS can support one family quite nicely, but not two. So both Mom and Jr. can’t both be drawing a full management salary.

How does Mom get her retirement nest egg out of the business, but still pass on the business to Jr.?

Alternatively, how does Mom retire, but continue to own the business, if she has to replace her owner’s draw with a manager’s salary?

Similarly, if an absentee owner/investor buys a TAS, the new owner must pass on all or part of the owner’s compensation to the manager and also service the acquisition debt, which leaves little or no draw for the new owner.

This cash flow dilemma is often the motivation for selling to a competitor who can consolidate two offices into one, or can divide management time between both offices, thereby freeing up enough cash flow to service the acquisition debt. Consolidating offices eliminates duplication in office rent, supervision, night shift operators, etc., and helps leverage existing over heads for support staff, billing, collections, equipment capacity, telephone trunkage, etc. In my experience, a large, reputable competitor is usually the best choice when selecting a buyer.

Selection of a buyer is without a doubt the single most important decision to be made after an owner decides to sell. Unless the price is all cash, consider critical success factors in selecting a buyer.

  • Is the buyer qualified to operate a TAS?
  • Will the customers stay on service after the sale or will there be excessive account loss?
  • Can the new owner make a profit operating the service as-is where-is? Could you?
  • Or, will he/she have to move it or upgrade the equipment?
  • Will the new owner be able to make their debt payments to the seller?
  • Is the new owner dependent upon the cash flows from the business being acquired to service the debt?
  • Or does the new owner have other cash flows from other sources that will enable them to pay for the business?

We all know how quickly a service business can decline, and trying to repossess an answering service is not very practical. Sellers need absolute assurance that they’ll be paid irrespective of what happens to the business after the sale.

Conversely, the prudent buyer wants to be guaranteed of receiving full value for the purchase price, and will normally require the seller to warranty the accounts for some period of time after the closing of the sale. The buyer and seller typically compromise on a mutual sharing of the business risk involved in transferring the accounts to the new owner, with some well defined criteria for qualifying the accounts. Qualification might typically involve an account remaining on service for some period of time following the sale and becoming a paying customer of the new owner.

I suggest both buyers and sellers look closely at the competition. The easiest place to find TAS is in the yellow pages. Shop them.

  • What are their capabilities?
  • How do they price their services?
  • What about new entrants into the market?

Most TAS experience occasional (albeit temporary) loss of customers (usually high volume users) to “flat rate” competitors offering unlimited usage, so consider the pricing trends in the local market, and whether usage is billed per call, per message or per minute. Consider the difference, for example, between day service (only answering between eight am and six pm, Monday through Friday) and full-blown 24- hours a day, 365-days a year, type service. What do most customers demand from an answering service in today’s market?

There are very significant TAS Industry trends which affect the value of a TAS business, such as the contracting TAS market. Every analysis of the TAS industry that I have seen indicates a shrinking market for traditional TAS services. Alternative technologies such as cellular, voice mail, alpha-numeric paging, etc., have severely impacted demand for traditional answering services. The industry is undergoing a rapid consolidation with fewer and fewer competitors, and larger remaining call centers. The level of buying and selling activity within the TAS Industry is good, with fair availability of willing buyers and willing sellers. In order to maintain their revenue levels, TAS owners who do not wish to sell are forced to buy their competitors and/or diversify into new and different value-added types of services. Diversification often demands expensive investment in automated equipment with capabilities that are more flexible, more complicated, and more fully featured than even most automated TAS systems can traditionally provide.

As TAS change their focus away from traditional messaging services and toward other service niches, their appetite for acquiring the customer bases of their competitors may naturally wane. The margins and the prices charged to customers of traditional, take-a-name-and-number type messaging services, are not particularly attractive in light of other niche services that yield higher revenues per minute and that have the potential for exponential growth. Scarce capacity will naturally be allocated to the higher ticket, more profitable service niches.

Timing is everything in life, and TAS owners should carefully consider if and when they might be in a selling mode.

In a declining industry such as telephone answering services, the durability of existing cash flows is in question, which results in lowering of values for the businesses. It may well be that traditional TAS businesses will never again be worth as much as they are right now. Outside investors are typically not attracted to declining industries. The number of competitors keeps steadily dwindling and those that remain have larger shares of a smaller market. Most TAS systems have definite upper limits for capacity in terms of numbers of ports and/or numbers of operators. Competitors may be aggressively buying accounts today, but may satisfy their demand. Once a competitor has maximized the utilization of his/her TAS system, then a second system would be required before any new accounts could be added, the cost of which may be prohibitive. Experts disagree over the optimal size for a call center, but consolidation has definite limits.

The larger a call center becomes, the fewer competitors there are who could consolidate it into another office. Industry consolidation tends to have a self dampening aspect to it that gradually slows the pace of the process.

There are new and emerging customer needs and market driven demands for innovation as well as upgrading of the service. Even if retirement is not a factor to a TAS owner, replacement or upgrading of plant and equipment requires careful cash flow planning. Consider the investment required for technology, service enhancements, productivity tools, opportunities to reduce costs, obsolescence of old equipment. TAS veterans well remember the advent of answering machines and the resulting reduction in the size of the TAS market, and the transition from hardwired secretarial lines, cordboards and concentrators to DID’s and call forwarding. Today’s customers are demanding their TAS offer fax, paging, fully integrated voicemail, modem access, remote printing, order-taking, credit card verification, scripting, label printing, and Interactive Voice Response (IVR).

  • How comfortable are you with new technology?
  • Do you understand computerization, data base management, networking, data file manipulation and transfer?
  • Most importantly, how will you finance the new hardware and software?
  • It isn’t cheap, and it won’t always work as well as or easily as advertised. After it’s installed, how will you maintain it, and at what ongoing cost?

New buyers should consider the skills and commitment required by a 24-hour per day, 365-day per year business, that never closes for holidays, Sundays, blizzards, storms, volcanoes, earthquakes, riots, or anything else. In fact, the more disastrous the local situation, the more customers need you, with zero fault tolerance. Also, any failure to answer the phones can have significant consequential damages to a customers business, as in the case of doctors or other emergency service providers. It can be oppressive. One reason I consistently hear for selling is a yearning for freedom to travel and to enjoy the well deserved fruits of hard earned success.

The labor intensity of answering service is sometimes overlooked by new entrants into the industry. Recruiting, training, supervising skills are essential. I am occasionally contacted by a bleary-eyed seller who is motivated to sell sooner rather that later due to recent turnover in key people. If a new buyer is not from a labor intensive background, then managing a call center could be quite a challenge. It’s the nature of a service business that even your lowest paid employee will interact with your most valuable customers. There is a demand for a uniform, consistent level of service that requires constant monitoring, observation, training and retraining. These service businesses cannot stand to be neglected at all. It’s amazing how quickly an answering service can decline due to poor service.

Finally, before buying or selling, one must consider such external factors as recession, inflation, global economy, U.S. economy, and most importantly for a local service bureau, the local economy. It’s hard to collect when your customers are going out of business, or when your competition is desperate for new business. Also, there are issues of inflation, new governmental regulations which add cost, and office lease escalation clauses to consider and plan for. Be sensitive to labor force changes and to legal and regulatory issues .

In closing, it is my opinion, that the TAS industry is undergoing important changes. As the industry declines, rapid consolidation is occurring resulting in fewer, larger call centers. Owner/operators are diversifying into new value-added services and are transitioning away from traditional message taking. Therefore, the availability of willing buyers and sellers is presently good, but timing is critical, and capacity is limited. Strategic planning by owner/operators is very important to determine when and if they might become a buyer or a seller, and what their strategy will be with regards to diversification into new service niches.

[From Connection Magazine, March 1994]

Ten Characteristics of Great Sales People

By Orvel Ray Wilson

It’s a jungle out there. You are not paranoid; they really are out to get you. Doing business in the highly competitive environment of the 90’s requires the boldness and ingenuity of a veteran commercial mercenary.

Today’s winners in business are the renegades, the rebels who break all the rules, who use information and surprise to gain a tactical advantage. There are ten characteristics that set the sales people apart. Study them. Sell by them.

1. Investment

The average business in America invests only 3% of gross sales in marketing. The “Great Sales Person” averages 10%.

Great Sales People believe that the difference between winning and loosing, more often than not, is a very slim margin. So they invest heavily in technology, in people, and in themselves. They are constantly expanding their horizons, constantly training, and constantly on the lookout for anything that will give them a slight advantage.

2. Consistent

Poor selling done consistently will be more effective than great selling done sporadically. In the mind of your customers, consistency is interpreted as credibility, longevity and success. Great Sales People earn this confidence by communicating their identity, not their image. They are very resistant to changing their name, their logo, their color scheme. Be consistent and you will out sell the better armed, better equipped, better organized corporate regulars.

3. Confident

Great Sales People believe in their products, their services, and their people. They count on others in the organization to deliver on every promise, every time, and then some. If you can’t feel that kind of confidence, you’re working for the wrong outfit. When something goes wrong, take personal responsibility for making it right, right away.

4. Patient

A hunter will sit in the trees for days waiting for a clear shot. Less than 4% of sales are made on the first call, over 80% are made after the eighth call. Great Sales People are always on the lookout for the next need cycle and strive to be there when the need arises. So stick with it. Keep mailing out your brochure.

5. Assortment

The old days of Henry Ford, when “you can have it any color you want, as long as it’s black” are long gone. Great Sales People offer a wide variety of goods and services, and adapt their offerings, their terms, even their delivery schedules to meet the customers’ needs. Look for the new, the unusual, the unique, and add it to your offering. Ask customers what they’d like to see. The more flexible you can be, the better. The more options you offer, the more people you can serve, and the more successful your company will be.

6. Subsequent

Great Sales People are in this for the long haul, and getting the order is only the first step. Great Sales People spend 10% of their resources educating the universe, promoting the business to the community at large. They spend 30% of their time marketing to prospective customers. But they spend a whopping 60% of their time, energy and money marketing to people who have already bought. Why? It costs five times as much to sell a new customer as it does to make the same sale to an existing customer. Great Sales People sell and re-sell and re-sell the benefits of their offering.

7. Measurement

Any behavior that is rewarded will tend to be repeated, so Great Sales People reward every customer and client for the opportunity to serve them. It’s the thirteenth doughnut in the baker’s dozen; it’s doing everything you promised, everything the customer expected, and more. And because expectations are constantly changing, Great Sales People are always asking “how are we doing?” and “how can we improve.” Survey your customers. Get out in the field and talk to them. If you do exactly what they tell you, you cannot fail.

8. Convenient

Great Sales People are both receptive and responsive. They know that they have to be “user friendly.” That means easy to reach, east to talk to, and easy to do business with. They return their calls. They give out their numbers at home, at the office, in the car. They keep phones staffed at night and on weekends, even if only by an answering service. They are in touch. Be available. Lend a near to your customers when they have a suggestion, a question, or a problem. And do everything immediately.

9. Excitement

Great Sales People are enthusiastic, and militantly optimistic. They have a good word for everyone, and never complain about the weather, the economy, or the people they work for. Their passion spreads like a wildfire. People love to do business with people who love their business. Spread good news and cheer about your people and your industry to everyone you meet. Start a one-sales person revolution to turn your corner of the economy around. Launch a success conspiracy. Enthusiasm is contagious.

10. Commitment

The Great Sales Person is enlisted in a larger mission that just closing the deal and getting the order. They are deadly serious about adding value and serving the community. When a customer complains, the Great Sales Person tracks down the cause and corrects it, whatever it takes. They have no time for excuses and apologies, and they never argue with results. They treat every customer as if the survival of their business depended on it, because it does.

Get committed to your marketing effort, and if you’re more comfortable hosting receptions or maintaining membership rolls, assign someone to be your full-time designated sales person.

It’s time we launched a revolution in American business. You have no choice. To survive in today’s brutal economic environment, you must become a Great Sales Person.

Orvel Ray Wilson is an author and speaker on sales, marketing and management, and co-author of Guerrilla Selling: Unconventional Weapons and Tactics for Making the Sale. For a free copy of The Guerilla Selling Newsletter, call toll-free 800-247-9145.

[From Connection Magazine, January 1994]

T1 – Bypassing Monthly Expenses

By Roger Koenig

Telecommunications transmission in North America is now almost entirely digital. Every time you make a call across the country, or across the city, your voice is being converted to digital numbers. Only in the “last mile” (the telephone office closest to your caller) is the digital speech coding converted back to an analog electrical voltage to drive a telephone. The standard means of digital transmission and connection that makes this possible is called T1 or Digital Signal 1 (DS-1). It has become the basic building block of the telephone network and the fiber optic transmission lines that link it.

T1 transmission came out of Bell Labs approximately 30 years ago. For the last dozen years, T1 transmission has been available for business telecommunications users to create private networks, linking sites with voice, data, and video communications. A T1 line appears to the user as a plastic box on the wall. You plug into it at each end with a wide modular plug. Equipment called multiplexers or channel banks convert the T1 digital line into 24 or 48 individual telephone lines or high-speed data channels.

The Universal Communications Pipe: Technically, T1 is a method of sending digital “1” and “0” pulses on two pairs of copper wire at a high speed. The standard speed, or “bit rate,” is 1.544 megabits per second, enough pulses to support 24 or 48 simultaneous telephone conversations in each direction.

You can think of T1 transmission as a digital “pipe.” You put “1” and “0” bits of information in at one end, and the information comes out at the other end exactly as you put it in – whether the other end is in the next town or across the country. As a point-to-point leased line service, a T1 has no connection to the telephone company switch. There are no per-minute charges for calls over the T1, only a fixed monthly charge of leasing the “pipe.” What you transmit on a T1 leased line is up to you – DID lines, remote dial-out lines, data, talk paths, or remote operator connections. The telephone company neither knows nor cares what type of information is being carried in the T1 communications pipe.

Messaging services are profitably using T1 lines that have monthly leases anywhere between $400 and $4,000 per month depending on distance between sites and the number of accounts handled. Lines are typically leased from the local telephone company for consolidations within your Local Access Transport Area (LATA), and from a long distance company (AT&T, MCI, Sprint) for consolidations between LATA’s. There are also 600 independent fiber optic transmission companies in the U.S. that specialize in leasing T1 circuits within specific cities or geographical areas of the country.

Digital Is Cheaper: Messaging services, like the rest of the telecommunications industry, are going digital. The motivation is a matter of saving money while providing a better quality of service to customers. Two pairs of copper wire using digital T1 transmission are cheaper, easier to maintain, and sound better than using 24 pairs of copper wire to do the same job with analog techniques. The monetary savings telephone companies, or “carriers,” enjoy by using T1 is being passed on to customers. Rates for analog private line services, including Foreign Exchange (FX) lines, have been going up while rates for digital private line services (T1) have been going down. In some areas, you can lease a full T1 line – capable of connecting 48 DID, concentrator, or call-out lines – for the same monthly expense as four analog FX lines. Telephone answering, paging, and voice mail services are using T1 leased lines for mergers, consolidations, market expansions, and to reduce monthly FX charges.

Transparent Consolidations: Let’s talk about a typical T1 installation between messaging service locations such as Akron and Cleveland. The overall goal is to transport all of the service lines from the Akron Office to the Cleveland Office. Existing DID, call-out, and concentrator lines in Akron are connected to appropriate cards in Channel Bank 1. The channel bank converts or “multiplexes” all of the 24 analog line signals into a single high-speed digital signal – the T1. At the Cleveland end of the T1 line, Channel Bank 2 converts the T1 signal back into 24 analog lines. The lines are then connected to the Cleveland Switch exactly like local DID, call-out, and concentrator lines. All customer accounts from Akron are transported to Cleveland combining the two services into one larger service.

To the messaging service customers, the consolidation of Akron into Cleveland is transparent. Connecting (or “cutting-over”) the Akron lines to the T1 Channel Bank is typically done late at night. Customer answering, voice mail, and paging accounts are immediately handled in Cleveland after the “cut.” All current Akron customer account information and messages are entered in Cleveland before the cut. Due to the T1 digital technology, there is no loss in speech quality by transporting the Akron lines to Cleveland.

Most significantly for the messaging service, there are no per-minute toll costs for DID or call-outs from Akron to Cleveland. All communications traffic goes over the messaging service’s private T1 network. The economics of T1 lines has paid-off for consolidating messaging businesses from 10 to 300 miles apart.

The Sum is Less than the Halves: Every business has costs considered “fixed,” such as rent, office equipment, insurance, accounting, and overhead management. Other expenses are “variable,” depending on the volume of customer accounts handled, such as operations staff payrolls.

The major motivation for messaging service to consolidate or merge with T1 lines is to cut expenses both fixed and variable. For fixed expenses, operating one office is obviously cheaper than the overhead associated with two offices. One switch, voice mail system, and paging terminal costs less than two. Not everyone realizes, however, that variable expenses are lower for larger messaging services than smaller ones.

The statistics of telephone call traffic dictate that the bigger you are, the more efficiently you use operators, equipment, and trunks. This is due to the averaging effect of telephone traffic coming from large groups of callers. In a large group, each operator or voice mail port can handle more calls on average. Callers have a lower probability of waiting on hold or getting a busy tone. Airlines, credit card companies, and insurance companies learned this a long time ago. Reducing payroll and overhead costs is the reason that customer service operators for these high-volume companies are typically at one large site in the country.

[From Connection Magazine, January 1994]

A Novice’s Guide to Marketing & Sales

By John E. Hudson

Marketing has long been a fancy of mine. The reason I find marketing so interesting is that it deals with the way people develop and react to different concepts. It also provides insight into the process a particular individual uses to develop the rationale for the decision they just reached. The key to a good market program is to focus on, and exploit this human trait. Creating a plan to suggest consumer acceptance before the targeted prospect develops the sense of need is a great skill.

While this may sound like a subliminal message, it really isn’t. Today’s technical name is pro-active marketing. You can really call it what you want. The bottom line is to create a market need using your strengths in order to capture a position of leadership. After you have done it, you tell the world about it and they stand in line to give you money.

Sounds great doesn’t it? You know the market really needs what you have to offer. Are you ready to start tomorrow? Why not?

These are the key attitudes necessary to create an aggressive marketing campaign that will increase your sales volume and profit dollars. A common mistake of business is the belief that price management allows you to maintain a level of business that is necessary for long term success. To develop long term business success you must provide value to a select group of individuals who truly believe you are the only source for what they seek.

There are several items critical to the development of a successful, aggressive marketing plan: Market Leadership, Risk Management and Selling Tactics. Without these essential skills it is difficult to control the business environment because you don’t have a complete picture of how outside influences affect the market.

Market Leadership: If you are not willing to define the industry accepted criteria for a specific product or service offering, your competition will. The prospect will always have an opinion of what they want to buy and how much they are willing to pay. They will also have an opinion on the perceived value of your goods and services to their business or to them personally.

Selling Message #1, Perception. Create an industry need only you can fulfill!

To lead the market it is necessary to teach it about the benefits of purchasing goods and services from you. The consumers are influenced by what they read, see and hear. Rarely do you find an independent thinker. People want things that make them successful. So, your objective is well defined. Create a message that is believable and is verifiable by references in the market segment.

Risk Management: Aggressive campaigns must be measurable. The primary goal is to take control of the market. Other elements that must be influence dare, the content of services offered, the proper price structure, and the acceptable standards for conducting business. These are the goals. To be successful you must have criteria for measuring your success at reaching these goals. Risk management consists of many elements. Each of these issues deals specifically with the elements that affect your potential for success. Also, each has an associated out-of-pocket expense. This makes it mandatory to manage the effectiveness of the program.

Selling Message #2, Value. By tailoring our products to the requirements of their market, we have helped our customers succeed.

I believe the two most critical issues in a pro-active marketing campaign are the “time line for success,” and the “barriers to entry.” Many business planners deal with these issues separately. In my opinion, it is mandatory that these two issues be dealt with as a set. This is especially true in a small business that has limited resources in time and money.

The “time line for success” provides a schedule of events that must occur during the campaign. You manage the campaign with a series of milestones. Each milestone has a set of goals associated with it. The milestones will change with each new campaign. As you approach the milestones at the end of the schedule, you should have specific goals for capture rate and customer acceptance.

If you are meeting your goals on the time line you set, you are on the road to success. As soon as you sense that you are having trouble meeting the goals, reevaluate both the goals and the timing for success. You may find that the market is not what you expected, or your goals are too ambitious. Apply the rule of “time versus money.” Will the project create the income I want in a time frame that is acceptable to me and by business? If the answer is no, or maybe, you should consider abandoning the project. If you do closeout the project, you need to know why it did not succeed. Some parts were successful, some were not. It is equally important to know why elements of any project succeed or fail.

Selling Message #3, Need. The market needs your services because you told them they did!

Entry barriers have a major effect on the time line. The level of market awareness by the consumer, as well as the number and quality of your perceived competitors, can severely impact the timing required to succeed. In either case these are two items that you must understand and factor into your campaign before you commit to spend your business development dollars.

Other issues affecting your decision to enter are; market segment knowledge, your time commitments to other projects, personal and business resources, and the cost of technology to serve the market. The bottom line in risk management should not be viewed as a negative. It is good business to know your strengths and limitations. This kind of knowledge allows you to optimize your personal and business resources. Any time you decide to take an aggressive position you should be well prepared to win.

Selling Tactics: Creating an aggressive marketing plan without an aggressive selling plan is like practicing all your life to hit a home run and then never getting up to bat. If your intent is to attack the market you need to:

  1. Develop the language of the industry
  2. Solve the problem
  3. Manage the selling cycle
  4. Steam roll the competition

These four items are dealt with in sets. Language development and solving problems go hand-in hand. In order to successfully sell in a market segment you must develop their vocabulary and understand how and when to apply it. We have all seen it É someone tries to sell us something and they have no concept of how it’s used, or why we would use it. If that applies to us, why wouldn’t it apply to our prospect? To make the sale, allow the prospect to be the hero. We win because we allowed them to provide solutions to the individuals they are responsible to.

Selling Message #4, Ask for the Order. At some point in the selling cycle you must stop selling and ask for a commitment from the buyer.

Managing the selling cycle and steam rolling the competition are keys to sales success. The only way to steam roll the competition is understand and manage the selling cycle. This means that you, or a sales manager, must take an active roll in preparing the sales staff to be well trained in creating the approach to closing the sale.

The requirements for closing a sale are part of the risk management portion of a marketing plan. To complete a sale for anything certain needs have to be met. The other portion of the sales cycle is managing the flow of the sale. By managing the flow it makes it difficult for competition to invade the prospect.

Selling Message #5, Winning. To win both the seller and the buyer must believe that their objectives are being met.

Remember, the company that defines the buyers needs, presents products to fill those needs, and controls the selling cycle will always win in the long run.


Some industry critics believe that aggressively attacking a specific business segment is risky and leaves a bad image if it is done improperly. To some degree they are correct. The business that is not prepared to actively solve the buyer’s needs will fail and negatively influence the prospect on the value of goods offered to them by another company. The message is be prepared to win. Fill the needs of the prospect at the point of sale.

John Hudson is a Product Director for Comverse Technology, Inc.

[From Connection Magazine, January 1994]