BI and the Telemarketing Industry - Published in www.businessintelligence.com August 2003

If I were to call you on the telephone and invite you to buy a product that you knew you needed, were already shopping for, were ready to buy, and I offered you features and service that no other provider could offer, wouldn't you buy that product from me? On the other hand, if I were to interrupt your dinner by calling you on the telephone, offer you a product you weren't interested in, that was indistinguishable from the products that my competitors sold, and you had no intention of considering, would you buy that product from me?
There are two implicit business models described in the previous paragraph, and the first one seems infinitely better than the second one. So which one is the basic model selected by the telemarketing industry? The second one.

Does this make sense? Well it might have at one point, when technology developed to a point that made that model cost-effective. In the second business model, the theory goes that if you shoot a billion arrows at a target, eventually some will hit the target. So the approach is to ramp up your arrow-shooting capability and start shooting, your sales will increase and so will your profits. When predictive autodialers are combined with minimum-wage staff reading from prepared sales scripts in boiler rooms decked out in low-rent buildings across your country, it is inexpensive to increase call volume and subsequently, sales.

While this approach may have been successful in the early years of the technology, the low barrier to entry, at least in the US, has made the telemarketing as ubiquitous as it is despised. The industry's use of technology has evolved from the use of autodialers to make voice calls to fax number discovery, behavior modeling (e.g., what time do people answer their phones), and other seemingly devious approaches.

Laws have been enacted at both the federal and the state level to limit the reach of telemarketers, and yet again technology is exploited to find the loopholes. For example, if a telemarketer is not allowed to pitch a product in an automatically dialed telephone call, or through the use of a recorded message, then a message is left indicating that they had tried to reach the target multiple times and that it was important for the target to return the call. Where for-profit organizations are not allowed to make sales via recorded calls, not-for-profit associations are formed in which the target is assured that the not-for-profit agency can help find the right provider for a specific product or service (that is, one of those who has set up the bogus not-for-profit agency).
All this is disturbing, and indicates little respect for the potential customer's intelligence or time. And the establishment of a national do-not-call registry and its overwhelming response should be a warning signal to the telemarketing industry that the current practices are not destined for success.

So what does this have to do with business intelligence? Two things - failure and opportunity. First, the inability to properly understand who the prospective customer is, what that customer likes, and why that customer buys things indicates a failure of the BI industry to gain inroads into the broad scale sales approach of the telemarketer. The opportunity lies in the fact that neither the government nor the consumer will suffer the industry to go on the way it does today, and so in order to survive the industry must take a different approach to making sales - one that should incorporate a more intelligent way of doing things.

Let's go back to the question I posed in the first paragraph: If I were to call you on the telephone and invite you to buy a product that you knew you needed, were already shopping for, were ready to buy, and I offered you features and service that no other provider could offer, wouldn't you buy that product from me? Of course, no one can ever predict the answer to that question with exact certainty, but I presume you would be more disposed to buying something you want and need at the time you need it than something you don't want or need at any time. My question reflects a different approach to direct sales - instead of shooting many arrows at a target and hoping to hit it a few times, select your targets more carefully and learn how to take aim and shoot.

In other words, make use of your data, along with other available information, to build a representational model of the individuals to whom you would like to sell a product to, craft the product to meet their needs, and train your staff in how to sell that product to the targeted audience. Although this requires some commitment on behalf of the telemarketer, the results would indicate to the audience that the sales people respect the consumer and are attempting to reach them only when there is a mutual benefit.
Some of the action items might include:

• Data quality - make sure your information is clean and up-to-date. There is nothing so off-putting as trying to use stale data as leverage for making a sale. For example, trying to get a homeowner to refinance a mortgage that has already been paid off is not likely to work.
• Know your customer - not just as an entry in a database, but try to build a profile of who the customer is, what the customer likes, based on an interaction history
• Use enhanced data - if you have no history with a prospect, try to understand more about the prospect based on enriched data that can be provided by third parties.
• Train your staff and give them a stake in the success - Trying to interact with an automaton on the phone who neither knows what he/she is selling nor really cares does not encourage your prospect to make a purchase. Train your staff in the subtleties of persuasion and influence, and give them a stake in the success of the campaign. If the sales agent believes in the product and understands the prospect's needs or desires, that will go a long way in making a sale.

As a business intelligence professional, you are most likely to want to learn about data enhancement and how information can be used to construct representational profiles for people you have never met. If you are interested in learning more, I suggest listening to my online presentation, "Geographics, Demographics, Psychographics: Using Enhanced Data to Really Know Your Customers" at http://www.datawarehouse.com/tradeshow. In this presentation I discuss the use of geographic data combined with demographic and psychographic detail as a way to get to know more about your customers and those individuals that are similar to your customers.