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Telemarketing Firm Survives Do-Not-Call Registry

Posted on: Friday, 30 December 2005, 21:00 CST

By Ken Stammen, The Columbus Dispatch, Ohio

Dec. 29--When the federal do-not-call legislation was about to become law in 2003, many telemarketers predicted bleak times ahead for the industry.

Andrew Jacobs was one of them.

But two-plus years later, Jacobs' telemarketing company, Influent Inc., is thriving.

The Dublin firm has added call centers and employees, including some in the United States, while many in the industry were predicting that the no-telemarketing rules would cost millions of jobs.

Influent's progress comes at a time when some big players in the industry are struggling.

APAC Customer Services, one of the largest telephone-service companies, has said it will stop making outbound calls. Influent bought two APAC call centers this year.

It's not what Jacobs expected two years ago, when the do-not-call list and other rules restricting telemarketing went into effect.

''We had higher costs, less efficiency and a shrinking market. That doesn't really sound like a great thing for an industry,'' said Jacobs, Influent's chief executive. ''But that's where we were in 2003.'' After the new rules took effect, Influent opened its first offshore call centers in Panama and the Philippines. It closed a Columbus center when it moved its headquarters out of Downtown.

But it since has acquired APAC centers in Illinois and Iowa, and said it will expand its center in New Philadelphia. Employment has grown from 1,728 at the end of 2003 to about 2,100.

Jacobs wouldn't disclose Influent's annual revenues, but said they've been growing between 10 percent and 20 percent a year.

It's not as though there haven't been challenges. Influent's primary business in 2003 was making outbound sales calls for banks and insurance companies.

But the Federal Trade Commission says more than 100 million phone numbers have been added to the national do-not-call list. Most states, including Ohio, have do-not-call laws of their own.

''That's people we can't call,'' Jacobs said. ''That shrinks the overall demand for outbound calls. You add that to other regulations ... (and) it all added a lot of difficulty and cost to doing business.'' Influent has survived by diversifying into inbound and business-to-business calling services.

The inbound business involves handling sales from people who call a number after receiving a mailer or a referral from a customer-service line. Inbound calls now represent 20 percent of Influent's business.

It makes sales calls to businesses for its largest client. Business-to-business calls aren't covered by the do-not- call regulations.

''Businesses are unhappy when their phone doesn't ring,'' Jacobs said.

Tim Searcy, chief executive of the American Teleservices Association, said about 200,000 to 300,000 U.S. call-center jobs have been lost since 2003.

But telemarketers such as Influent have benefited from the new rules as more companies decide to outsource those functions rather than risk violating the complex regulations, he said.

A Direct Marketing Association study has found that the average success rate of telemarketing calls has gone from 5 percent to 8 percent.

''As we eliminate people who are less likely to buy from our call lists, the success rate of telemarketers gets better,'' Searcy said.

But the company decided that it wouldn't abandon outbound calling because it's such a cost-effective way of making sales, he said.

In addition to the do-not-call list, new federal regulations in 2003 required telemarketers to display their phone number on caller-ID units and to reduce so-called call abandonment. That happens when consumer answers the phone and finds no one on the other end.

The rules required expensive software and hardware fixes -- $1 million worth, in Influent's case.

That's why Jacobs and others thought call centers would have to move overseas to cut costs.

''To our surprise, some of our clients only want to be located in the United States,'' Jacobs said.

Some clients prefer U.S. call centers because they think they deliver better service. Others prefer them for patriotic reasons, he said.

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Copyright (c) 2005, The Columbus Dispatch, Ohio

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Source: The Columbus Dispatch, Ohio

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