Telemarketing Leagues: Testing times for contact centres

But there is also a palpable sense of optimism in the air, according to this year's Marketing Direct Telemarketing League Table. Many of the larger outsourcers significantly boosted their turnover this year. Strong performers included The Listening Company, which posted a 50 per cent increase in revenues, Ventura, with a rise of 28 per cent, and Garlands, with a hike of 20 per cent.

The ability to make precise measurements has been hampered by the US Sarbanes-Oxley Act, which means that significant players such as Broadsystem are unable to publish turnover figures.

Contact-centre providers appear to be in a buoyant mood, fuelled by the sense that the move to offshore solutions may have peaked and could even be going into reverse. Several providers say they have conversations with companies disillusioned by their experiences in India and other foreign shores, and which are looking to bring back their customer-service activities to the UK. This is helping to ensure plenty of new business.

But for now the flow of work to offshore destinations continues and Barclays, for one, says it plans to add more seats in India. But the pace has slowed and an opposite trend is becoming equally clear. High-profile returnees to the UK in the past year have included Powergen, Norwich Union and Lloyds TSB, while NatWest has advertised its provision of UK-based customer service as a selling point.

Consumers' reservations about speaking to service agents halfway across the world have finally brought home to companies the importance of quality, which will be good news for the telemarketing industry. Outsourcers have for years bemoaned clients' reluctance to invest in the training and systems needed to ensure first-class service. Now, they say, the message has been put across that cheapest is not necessarily best.

"There is a lot of talk about this," confirms Inkfish managing director Ian Bateman. "Some clients who followed the herd to India two years ago say they are planning to bring back their front line customer service while keeping their back office handling offshore, but others intend to bring it all back," he says.

Quality not quantity

At Teleperformance, managing director Jeff Smith goes so far as to describe a sea-change in attitudes. "There has been a massive dumbing down in the quality of customer service from contact centres. But we have now passed the high water mark of commoditised activity," he says.

The company's relentless focus on quality has ensured every one of 13 major contracts up for renewal in this period, including Sainsbury's, Renault and the Environment Agency, has been retained, and with improved terms or extended activities. Turnover is unchanged at £54m, but a focus on increasing margins has raised profits by 10 per cent. The company has invested in a new £6.5m site in Newry, Northern Ireland, creating more than 500 jobs. And it has bought Newcastle-based Call24Help from United Internet to boost its position in the technical helpline market.

The Listening Company has seen turnover shoot from £17m to £25m, and is undertaking a 40 per cent increase in workstations. Major new accounts have been won in the media, automotive and financial services sectors.

This is tangible proof of the "flight to quality", argues managing director Neville Upton. "Clients have been obsessed with unit costs per hour, when they should have been thinking about the cost of output and the value of the customer relationship, and they are beginning to realise their mistake," he says.

The agency has invested strongly in researching customer needs and expectations, and Upton claims it has demonstrated a direct correlation between customer advocacy of a brand's customer service and profitability.

"There's no point spending millions on advertising that talks about how much customers mean to you, if they end up having to go through a menu system or wait for ages, or if the call centre can't resolve their issues," he says.

Integrated approach

It has been a good year too for Broadsystem. It cannot state its complete figures because of Sarbanes-Oxley, but it reports an increasing uptake on multi-channel activity, as government organisations and other clients increasingly employ email and mobile messaging as response mechanisms. These include the RAF and the government's No Smoking campaign.

"We expected multi-channel activity to have a significant impact, and it has proved true," says Broadsystem head of contact centre Duncan Graham.

CPM has enjoyed high growth with sales rising by 35 per cent. The increase comes mainly from existing clients. But the agency has also won new automotive contracts and Honda, for one, says it has been impressed by the quality of its customer service.

CPM client service director Jane Ingram notes a shift to an integrated approach, particularly the combination of telephone and field visits in which the agency also specialises. "This part of the business is growing and we are finding new opportunities in this area," she says.

It's an active time for suppliers on the technology front, particularly as automation moves up to a new level of sophistication (see box, page 44). For many consumers it is now second nature to search for information over the internet and advanced speech recognition is also helping to extend such self-service actions to the telephone.

Indeed, many clients are seeing automation as a more viable alternative to cheap offshore services. Penny Bousfield, director of outsourcing at consultancy CM Insight, says: "People reject automation if it leads them on a merry dance or fails to understand regional accents. But there is increasingly good technology available, and penetration of self-service technology will still grow."

The trend is also reported by Vertex, which has retained its top position in the table thanks to an increase in turnover of nearly £7m. Private sector managing director Helen Staniszewski says the company is helping clients embrace technology and increase self-service levels.

The past 12 months have seen growing integration between the phone and the web, with customers researching products and services online, or using the internet to answer service questions and then calling contact centres if they need further assistance.

Data continues to play a pivotal role, and contact- centre outsourcers that offer specialist expertise are particularly well placed. 2Touch, whose parent company is Acxiom, says this is always an attractive option for prospective clients. "Good data linked to high-quality customer-service advisers is the best combination," says 2Touch managing director Stuart Gray. "This is where we are looking to grow our business, consolidating the data and the contact-centre piece as one."

At the same time, concerns about data security in contact centres are rising, fuelled by media scares of rogue agents hawking customer details. Contact centre providers are under pressure to prove they are reliable guardians of their client's information. B2B specialist The Telemarketing Company, for instance, has installed CCTV to monitor its servers, in a bid to help insure against theft.

Yet while many larger telemarketing providers have a spring in their step, the picture in the lower half of the table is less reassuring. Senior Response, Blue Donkey and Chorus Direct all showed strong growth, but many smaller providers barely managed to hold their own, fuelling expectations in the sector of more consolidation.

David Payne, managing director of customer management consultancy Maia Consulting, says: "The market continues to offer opportunities for growth, especially for the major and the niche players. However, margins are set to become ever tighter as competition for new business is fierce."

Regulation pressure

The growth of the Telephone Preference Service (TPS) continues to be a concern, as registrations approach the 15 million mark - more than half of UK households. Pressure on the industry to comply with regulations has also increased, as the communications authorities' power to crack down became a reality. Last year telecoms regulator Ofcom was allowed to increase fines for perpetrators of nuisance calls tenfold to £50,000 and in January fined four companies a total of almost £200,000.

Steve Smith, director of Brookmead Consulting and a member of the DMA's Contact Centre Council says it is a pity the media has not made more of this: "For large firms naming and shaming is more damaging than fines, and media coverage is a powerful deterrent."

Some agencies are sensibly making precautions against nuisance calls a priority. For instance, Blue Donkey has invested in technology that pre-screens each call as it is being dialled, instead of relying on monthly batch cleaning.

Managing director Sureya Landini believes that the industry needs to adjust to the reality of the TPS. "Stamping our feet won't achieve anything," she says. "But if we create standards and get behind them there will be no reason for it to keep growing, and it will lose momentum and shrink."

A clear effect of the TPS has been to shift the emphasis away from outbound acquisition towards retention activity and selling on inbound calls. According to a recent report from industry analyst Contact Babel, the amount of outbound calls made by UK call centres has dropped for the first year on record, with the proportion of outbound calls down from 32.9 per cent in 2005 to 29.1 per cent in 2006. For example, Inkfish says that four years ago its proportion of outbound to inbound was 70:30; however this figure has now reversed.

Similarly LBM, which once relied heavily on outbound calls, now says these account for less than half its marketing activity. Of this, around 70 per cent involves calling existing customers and cold prospects account for only 30 per cent, the opposite of what it was three years ago, the company says.

Chief executive Ben Dixon sees the TPS as the ultimate suppression file. "If people don't want communication, then the chances of achieving a result are zero anyway."

However, some suppliers think there is still plenty of life left in outbound, particularly for calling existing customers. Dino Forte, director at Converso Contact Centres, says: "Outbound is still alive and kicking. To a large extent regulation and compliance have driven out the cowboys, leaving the professionals to improve telemarketing's reputation."

Outbound survival

Permission-based outbound will survive as it is still an effective way of communicating with customers, Forte insists. This seems to be confirmed by CPM's success in increasing its sales for a utility client by 30 per cent this year, largely from outbound campaigns. CPM's Ingram says customers are happy to be called, as long as they know their details will not be sold on to a third party.

Meanwhile Inkfish has seen a small increase in outbound calling, successfully marketing Orange's bundled broadband package.

"Where your client has good customer relationships, together with quality data and a strong proposition, outbound can still be a successful way of communicating," says Inkfish's Bateman.

In what can be said to have been a broadly positive year, it is the growing focus on customer satisfaction that stands out. This is summed up by Garland's managing director Chey Garland, who notes "huge" advances in the way organisations go about promoting good practice.

"It's no longer just about being pleasant, but about giving accurate answers, educating agents about the value of processes and encouraging them to speak up when these aren't working," she says.

"It's also about using technology proactively to support agents and improve interactions, and providing the best in training and development."

POWER POINTS

- Clients are putting more emphasis on the value of their customer relationships

- Consumer reservations about foreign agents have brought home the need for quality

- Clients are starting to see automation as a more viable alternative to offshore

CLIENT QUIZ: What is your top tip for telemarketing success?

ADAM RIDER, HEAD OF CUSTOMER SERVICE SALES, EDF ENERGY

Our in-house customer service agents will perform better if they feel valued and are well rewarded. That's a strong focus for us, and we run monthly surveys to measure staff satisfaction levels.

It helps reduce staff attrition and means that agents have a greater chance of gaining experience over time, which in turn leads to higher productivity and success rates.

It's important to avoid a battery-farm environment, where the sole aim is to take as many calls as possible. Agents should be able to work in a pleasant ambience, where consideration has been given to the layout of desks, lighting and the colour of the work environment.

STEVE DYER, MANAGER OF CUSTOMER OPERATIONS, HONDA UK

Callers should not just get their questions answered, but also get the Honda experience, in as warm and rich a conversation as possible.

To achieve that we involve the agents from our call-centre provider CPM, and make them feel part of Honda. We encourage them to take part in events and work on the stands alongside Honda employees. When a new product comes out the call-centre agents attend familiarisation courses here, the same as Honda staff and dealers.

We also make sure call centre agents get as much exposure as possible to Honda products. There are cars available for them to drive, and this summer we are looking to provide motorbikes as well.

THEA QUINN, WINTER FUEL PLANNING AND IMPLEMENTATION MANAGER, Department FOR WORK AND PENSIONS

Our call-centre services provider Teleperformance plays a vital role in processing more than 300,000 applications for winter fuel payments each year.

Regular meetings and monitoring help to ensure the best customer service. But a huge extra benefit comes from us being highly visible to agents. It's good to stop to discuss the campaign with them and how they are feeling generally. Most of them know us by name, even at the most senior level.

This approach has led to a core team of our agents remaining the same, which has proved invaluable for product knowledge and maintaining the level of service.

NEED TO KNOW: CALL-CENTRE TECHNOLOGY DEVELOPMENTS

Customer self-service is a hot topic this year, thanks largely to rapid developments in automation. Clunky menu systems are giving way to sophisticated speech recognition, which many consumers appear to like.

"Quality has improved by leaps and bounds and so has user acceptance," says Isabel Montesdeoca, senior marketing director, Aspect Software.

Given the volumes of contacts, calls are rarely monitored for training, despite what firms say. But speech recognition software could change that, as it enables all calls to be automatically scanned.

Particular keywords indicate how well a conversation is working, while changes of tone in the customer's voice can reveal their feelings. Raised voices may lead to a call being automatically escalated to a supervisor, for instance.

Teleperformance has installed NICE Audio Analytics for its client the National Blood Service, and says it identifies concerns that might not surface any other way.

Nearly two-thirds of companies that use the latest self-service systems are seeing improvements in customer satisfaction, according to technology vendor Eckoh. Cost reductions of up to 95 per cent are common, with no deterioration in service quality.

"The technology can accommodate large and fluctuating call volumes, making them ripe for the mass market," says managing director Jim Hennigan.

Another development is the rapid growth of voice over internet protocol (VoIP). Early concerns with security and quality have been largely overcome, and it has been adopted by a growing number of companies.

This means that contact centres can now be located and managed from virtually anywhere in the world, helping to reduce the pressure on recruitment.

VoIP also enables greater integration of video, SMS, chat and email, which means contact centres are better able to offer customers their preferred channel.

ACTIVITY AS PERCENTAGE OF TURNOVER
Rank Fulfilment/ Tactical Strategic Consult- Other
mailing tele- tele- ancy
marketing marketing
1 Vertex 18 5 70 5 2
2 Ventura 2 0 95 0 3
3 Sitel UK 2 3 57 0 38
4 Teleperformance 5 25 65 5 0
5 Response 2 25 70 2 1
6 Telecom Service
Centres 1 10 87 1 1
7 Garlands Call
Centres 5 75 10 5 5
8 LBM 0 55 45 0 0
9 Prolog 40 30 20 0 10
10 Inkfish 0 6 94 0 0
11 The Listening
Company 0 94 0 6 0
12 CPM
(United Kingdom) 20 30 50 0 0
13 2Touch 46 19 30 0 5
14 Broadsystem 10 1 45 20 24
15 Pell & Bales 5 85 0 5 5
16 Ant Marketing 5 35 55 4 1
17 Arvato Loyalty
Services 20 30 20 10 20
18 Telegen UK 5 95 0 0 0
19 Kingston
Communication 76 19 0 5 0
20 CCA Direct-Dialog 5 38 50 2 5
21 Converso Contact
Centres 0 14 0 0 86
22 Spark Response 74 26 0 0 0
23 Navigator
Customer Mgmt 30 30 15 15 10
24= The Data Base
Factory 85 5 5 0 5
24= The Telemarketing
Company 0 50 50 0 0
25= Europa 5 40 40 10 5
25= Senior Response 0 100 0 0 0
26 Base Connections 5 85 9 1 0
27 Blue Donkey
Intelligent
Telemarketing 0 100 0 0 0
28 Eclipse Marketing 20 25 10 5 40
29 Chorus Direct 0 80 0 20 0
30 Confero 5 10 70 5 10
31 Price Direct 0 100 0 0 0


TELEMARKETING LEAGUE TABLE 2007
UK turnover
(pounds m)
RANK COMPANY NAME 2006 2005 Chg
%
1 Vertex 420?40 413?5 2
2 Ventura 191?00 149?2 28
3 Sitel UK 116?10 109?2 6
4 Teleperformance 55?00 53?37 3
5 Response 51?00 47?00 9
6 Telecom Service Centres 49?30 43?40 14
7 Garlands Call Centres 43?50 36?20 20
8 LBM 40?51 39?54 2
9 Prolog 36?50 35?00 4
10 Inkfish 32?77 31?33 5
11 The Listening Company 26?00 17?40 49
12 CPM (United Kingdom) 15?66 10?66 47
13 2Touch 15?00 15?00 0
14 Broadsystem 14?89*/** 24?80 -40
15 Pell & Bales 13?00 10?50 24
16 Ant Marketing 10?00 8?50 18
17 Arvato Loyalty Services 9?50 8?22 16
18 Telegen UK 7?70 8?10 -5
19 Kingston Communications u/d 7?20 n/a
20 CCA Direct-Dialog 4?80 4?20 14
21 Converso Contact Centres 4?31 4?20 3
22 Spark Response 4?23 6?22 -32
23 Navigator Customer Mgmt 3?70 3?70 0
24= The Data Base Factory 3?10 3?00 3
24= The Telemarketing Co 3?10 3?00 3
25= Europa 1?40 1?20 17
25= Senior Response 1?40 1?00 40
26 Base Connections 1?18 1?22 -3
27 Blue Donkey
Intelligent Telemarketing 1?00 0?65 54
28 Eclipse Marketing 0?92 0?82 12
29 Chorus Direct 0?90 0?64 40
30 Confero 0?75 0?75 0
31 Price Direct 0?50 0?50 0



Activity Number of
as % of turnover workstations
RANK COMPANY NAME In Out Web Other Telephone Web
1 Vertex 70 5 25 0 1000+ 1000+
2 Ventura 87 10 2 1 1000+ <50
3 Sitel UK 75 12 8 5 1000+ 1000+
4 Teleperformance 65 25 10 0 1000+ 1000+
5 Response 63 34 0 3 1000+ 1000+
6 Telecom Service Centres 97 2 1 0 1000+ 501-700
7 Garlands Call Centres 74 20 6 0 1000+ 1000+
8 LBM 35 65 0 0 1000+ 1000+
9 Prolog 50 10 20 20 501-700 401-500
10 Inkfish 70 28 1 1 1000+ <50
11 The Listening Company 49 45 0 6 1000+ <50
12 CPM (United Kingdom) 42 41 5 12 401-500 401-500
13 2Touch 30 19 0 51 501-700 501-700
14 Broadsystem 45 5 20 30 351-400 351-400
15 Pell & Bales 1 99 0 0 301-350 <50
16 Ant Marketing 5 95 0 0 1000+ 701-1000
17 Arvato Loyalty Services 75 15 5 5 151-200 151-200
18 Telegen UK 15 85 0 0 201-250 <50
19 Kingston Communications 79 19 2 0 401-500 401-500
20 CCA Direct-Dialog 54 40 3 3 201-250 201-250
21 Converso Contact Centres 62 38 0 0 151-200 151-200
22 Spark Response 74 26 0 0 301-350 301-350
23 Navigator Customer Mgmt 65 25 10 0 151-200 151-200
24= The Data Base Factory 85 5 5 5 101-150 101-150
24= The Telemarketing Co 0 100 0 0 151-200
25= Europa 0 80 0 20 51-100 <50
25= Senior Response 0 100 0 0 51-100 <50
26 Base Connections 5 95 0 0 51-100 51-100
27 Blue Donkey
Intelligent Telemarketing 0 100 0 0 51-100 <50
28 Eclipse Marketing 70 20 10 0 <50 <50
29 Chorus Direct 50 50 0 0 201-250 201-250
30 Confero 30 55 0 15 51-100 51-100
31 Price Direct 0 100 0 0 51-100 51-100


KEY
(A) Cust services helpline
(B) Web services
(C) Telesales
(D) Mail order
(E) DRTV
(F) Mailing & fulfilment
(G) Sales lead mngt
(H) Market research
(I) IVR, speech rec
(J) Self-service web techs
(K) Consultancy (training)
(L) Consultancy (CRM)
(M) Multi-lingual services
(N) Database mngt

RANK COMPANY NAME (A) (B) (C) (D) (E) (F) (G)
1 Vertex Y Y Y Y Y Y Y
2 Ventura Y Y Y Y Y Y Y
3 Sitel UK Y Y Y Y Y Y -
4 Teleperformance Y Y Y Y Y Y Y
5 Response Y Y Y Y Y Y Y
6 Telecom Service Centres Y Y Y Z Y Y Y
7 Garlands Call Centres Y Y Y - Y - Y
8 LBM Y Y Y Y Y Y Y
9 Prolog Y Y Y Y Y Y Z
10 Inkfish Y Y Y Y Y Y Y
11 The Listening Company Y - Y - Y Y Y
12 CPM (United Kingdom) Y Y Y - Y Y Y
13 2Touch Y Y Y Y Y Y Y
14 Broadsystem Y Z Y Y Y Y Y
15 Pell & Bales Y - Y - Y Y Y
16 Ant Marketing Y X Y Y Y Y Y
17 Arvato Loyalty Services Y Z Y Y Y Y Y
18 Telegen UK Y Y Y - - Y Y
19 Kingston Communications Y Y Y - Y - Y
20 CCA Direct-Dialog Y Z Y Y Y Y Y
21 Converso Contact Centres Y - Y Y Y Y Y
22 Spark Response Y Z Y Y Y Y Y
23 Navigator Customer Mgmt Y Y - - Y Y Y
24= The Data Base Factory Y Z Y Y Y Y Y
24= The Telemarketing Co - - - - - - -
25= Europa - - Y - Y Y Y
25= Senior Response Y - Y - - - Y
26 Base Connections Y - Y - - - Y
27 Blue Donkey Y - Y - - Y Y
Intelligent Telemarketing Y Z Y - Z - Y
28 Eclipse Marketing Y - Y - Y Y Y
29 Chorus Direct Y - Y - Y Y Y
30 Confero Y Z Y Y Y Y Y
31 Price Direct Y Y Y - - - Y


RANK COMPANY NAME (H) (I) (J) (K) (L) (M) (N)
1 Vertex Y Y Y Y Y Y Y
2 Ventura Y Y Y Y Y Y Y
3 Sitel UK - Y - - Y Y -
4 Teleperformance Y Y Y Y Y Y Y
5 Response - Y Y - - - Y
6 Telecom Service Centres Z Y Y Y Y Z Y
7 Garlands Call Centres Y Y X - - Y Y
8 LBM Y Z Y Y Y Y Y
9 Prolog Y Y Y - - - Y
10 Inkfish Y Y Y - - Y Y
11 The Listening Company Y Y - Y Y Y Y
12 CPM (United Kingdom) Y Z Y Y Y Y Y
13 2Touch Y Y Z - - Y Y
14 Broadsystem Y Y Y Y Y Y Y
15 Pell & Bales Y Y - Y Y - Y
16 Ant Marketing Y Y Y Y Y Y Y
17 Arvato Loyalty Services Y Y Z Y Y Y Y
18 Telegen UK Y Y - - - - -
19 Kingston Communications Y - - Y Y - -
20 CCA Direct-Dialog Y Z - - - Y Y
21 Converso Contact Centres Y Y - - - - -
22 Spark Response Y Y - Y - - -
23 Navigator Customer Mgmt Y Y - - Y Y Y
24= The Data Base Factory X Y Y Y Y Y Y
24= The Telemarketing Co - - - - - - -
25= Europa Y - - Y Y Y Y
25= Senior Response - - - - - - -
26 Base Connections - - - - - - -
27 Blue Donkey Y - - Y - Y Y
Intelligent Telemarketing Y - - Y - Y Y
28 Eclipse Marketing Y Y - - Y Y Y
29 Chorus Direct Y Y - - - - -
30 Confero Y Y - - Y Y -
31 Price Direct Y - - - - Y Y

Y - Already provided
Z - Will provide within 12 months
X - Will provide in 12+ months
* Unable to supply figures due to Sarbanes-Oxley
** Companies House data
Co = Company
Cust = Customer
Mngt = Management
Techs = Technologies
u/d = Undisclosed
Source: Marketing Direct Telemarketing Survey 2007.