Forum: The Telemarketing Opportunity for Cable Companies

10/18/1998 8:00 PM Eastern

Telemarketing can expand the horizon of even the most
sophisticated cable, wireless or satellite TV sales operation, providing new subscribers,
upgrading existing customers and saving costs -- all by using the latest technology.

Telemarketing is a multi-faceted communications tool useful
in many different areas essential to cable companies:

* Inbound customer calls,

* Customer retention and upgrades,

* Direct Response Television (DRTV) and radio advertising,

* New customer service,

* Database creation and maintenance,

* Surveys, and

* Routine outbound and inbound calls.


Recently, Penton Research Services noted that 44 percent of
executives surveyed outsource more than they did five years ago, and 47 percent feel they
will outsource even more by the year 2000. It is estimated by the telemarketing industry
that telephone marketing expenditures will increase at a compound annual growth rate of
7.9 percent, to $84.4 billion by the year 2001.

DGY Associates published a study titled, "Trends,
Issues and Opportunities Driving the Teleservices Market," a 154-page document with
contributions from nearly 25 percent of Fortune 1000 companies and teleservices providers.
Companies that fully outsourced their teleservices functions achieved a greater 10-year
average return to investors, a higher average 10-year annual growth rate and a larger
average percentage change in annual earnings per share.

By outsourcing their telemarketing, cable companies can
free lean staffs to concentrate on their own areas of expertise and thus create a more
efficient organization.

In addition, the risk of outsourcing has been minimized by
new charging practices instituted among a small number of telemarketers. Performance-based
pricing charges a client a pre-determined amount for each other generated. While hourly
programs have a fluctuating cost per order, performance-based pricing provides fixed
acquisition costs which allow clients to make more accurate business projections

Also, many labor requirements which telemarketers solve on
an everyday basis cannot e matched by cable companies. For example, it is often difficult
to find quality employees -- that will make sales stick -- to work part-time or just on a
single project which will end in a few months. Supplying mandated benefits to temporary
staff can also be prohibitive for many telecommunications providers.

Telemarketers can attract higher-level, long-term employees
by ensuring their staff will have future employment from other clients after any single
project is completed. They can also use equipment such as predictive dialers which can
increase labor efficiency up to 80 percent.

A reputable telemarketing firm's experience in selling
complements a cable company's knowledge of its product. By forming a marketing
partnership, the two organizations can combine their talents to produce optimal


One reason for cable companies to hire telemarketing firms
involves the telemarketer's more sophisticated equipment which results in greater
productivity. For example, an Interactive4 Voice Response Unit (IVRU) can answer, screen
and route incoming calls.

An IVRU can be used exclusively or interact and support
telephone sales representatives (TSRs). The programming of the IVRU by an application
design team can be customized for each project. This feature ensures that the technology
will conform to the application in which it is used, in this case, both the cable industry
as a whole and each company within it.

Some of the functions that are imperative for the cable
industry and can be accomplished with an IVRU are:

* Distinguishing between customers who know what upgrades
or programs they wish to purchase and those who haven't decided;

* Retrieving basic introductory data needed from new
subscribers without using a TSR; and

* Transferring to a TSR at any point during the
conversation in order to satisfy the customer.

IVRUs can also be used for skills-based routing. The caller
can be transferred to the TSR, the cable company or an expert qualified to meet his needs
depending on the phone button/category selected from recorded options. The cable company
can determine what type of calls it wants the telemarketer to answer and which it would
prefer to respond to internally. Generally, because of their marketing expertise, the
telemarketing company would take all sales calls while the cable firm would resolve
billing disputes and scheduling installations.

Future technological abilities of the IVRU will include
voice recognition and Caller Message Recording (CMR) that will obtain data that can't
be entered by pushing touch-tone keys on a telephone.


In the increasingly competitive cable, wireless and
satellite TV markets where profit margins have dropped compared with previous years, it is
essential to offer quality customer care. Both a steady flow of new customers and customer
retention are paramount.

A telemarketing firm should make several different types of
calls to maintain a cable company's customer base.

Subscription-based calls, special offers good only for a
limited period of time, can be followed up with retention calls designed to proactively
maintain the customer before the services revert to the standard cost.

Inbound disconnect callers can often be dissuaded from
ending service through properly addressing their complaints. Outbound calls can be made to
"downgrade lists" of people who have requested reductions in premium services,
and thus prevent possible future disconnects.

In addition, upgrade calls can be made for digital service,
and new products can be offered such as high-speed cable data modems.


With over 1,000 telemarketing agencies to choose from, a
company must take several steps to ensure finding the one that works best for them. Trade
magazines, the Direct Marketing Association, and watchdog agencies such as American
Telemarketing Association and Telewatch can help your company find reputable firms.

The telemarketing site should be visited while in
operation. The existence of back-up generators, phones and computers, fault-tolerant
systems, and uninterrupted power supplies should be verified.

Technology should include predictive dialers, on-screen
scripting, remote monitoring, bridge and transfer capability, taped or digitized order
verification and on-line billing service connectivity.

A telemarketing firm can be evaluated by the type of calls
it makes and the recommendations of its clients. Telemarketing firms should also conduct
extensive database research, analyze demographic data and conduct test callings. Surveys
can be used to determine prices and packages offered to the consumer.

The key ingredients for effective TSRs are quality,
courteous service combined with specific selling skills. When complemented by a
professional, experienced telemarketing firm, these assets will increase a cable
company's subscriber base and revenue.

Richelle Eckles Litteer is director, cable and interactive
services for DialAmerica Marketing Inc., a telemarketing firm.

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