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WARNING: this book is a PhD dissertation (2000) and contains academic research. It’s made available primarily to aid other academics who are conducting their own industry research. If this is what you seek, here’s an overview:
The telephone answering service industry is maturing and undergoing rapid changes. In recent years, the traditional client has been vanishing, switching to alternative technologies, bypassing their answering service. Telephone answering services have reacted in various ways, such as mergers and acquisitions, pursuing niches, or expanding their businesses’ scope.
The conventional wisdom is that there will always be a need for the human interaction which an answering service provides. It further assumes that answering services will serve fewer clients and generate less revenue unless steps are taken to increase their reach or obtain non-traditional clients. Previous research has recommended becoming a call center to better tap and capitalize on the needs of an emerging non-traditional client base.
The findings of this research effort determined there were the essential elements which should be present for a telephone answering service to transition into a call center. Additionally, there were five items which are common industry dilemmas to be addressed. An inventory of significant call center characteristics was also developed. Most importantly, several areas of focus were advanced.
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Veröffentlichungsjahr: 2023
Turning a Telephone Answering Service into a Call Center
Copyright © 2000, 2023 by Peter Lyle DeHaan.
All rights reserved: No part of this book may be reproduced, disseminated, or transmitted in any form, by any means, or for any purpose without the express written consent of the author or his legal representatives. The only exception is short excerpts and the cover image for reviews or academic research.
ISBN:
979-8-88809-062-6 (e-book)
979-8-88809-063-3 (paperback)
Published by Rock Rooster Books, Grand Rapids, Michigan
TURNING A TELEPHONE ANSWERING SERVICE INTO A CALL CENTER
by
Peter L. DeHaan
Kennedy-Western University
THE PROBLEM
The telephone answering service industry is maturing and undergoing rapid changes. In recent years, the traditional client has been vanishing, switching to alternative technologies, bypassing their answering service. Telephone answering services have reacted in various ways, such as mergers and acquisitions, pursuing niches, or expanding their businesses’ scope.
The conventional wisdom is that there will always be a need for the human interaction which an answering service provides. It further assumes that answering services will serve fewer clients and generate less revenue unless steps are taken to increase their reach or obtain non-traditional clients. Previous research has recommended becoming a call center to better tap and capitalize on the needs of an emerging non-traditional client base.
METHOD
After conducting an extensive literature search for the telephone answering service and call center industries, a synopsis of key differences was developed, along with a call center profile. This provided input for the development of a survey, which would attempt to garner feedback from those who were or would become a call center, contrasted to those who were not and would not become a call center. The result of these endeavor presents a plan for making such a transition.
FINDINGS
The findings of this effort determined that first there were the essential elements which should be present and if lacking must be resolved. Added to that were five items which are common industry dilemmas to be addressed. An inventory of significant call center characteristics was also developed.
Most importantly, areas of focus were advanced. The first was to maintain attention to TSR issues by lengthening training time, increasing training dollars and staffing budgets, coaching, improving retention, enhancing compensation, and implementing telecommuting. Second, was to pursue growth via sales and marketing. Lastly, was to implement key technologies, such as CTI, IVR, ACD, skills-based routing, and workforce management software, along with becoming web-enabled, offering telecommuting, and going virtual.
Turning a Telephone Answering Service into a Call Center
A Dissertation
Presented to the
Faculty of the
School of Business Administration
Kennedy-Western University
In Partial Fulfillment
of the Requirements for the Degree of
Doctor of Philosophy in
Business Administration
by
Peter L. DeHaan
Mattawan, Michigan
© 2000
Peter L. DeHaan
All Rights Reserved
Abstract of Dissertation
Chapter 1: Turning a Telephone Answering Service into a Call Center
Chapter 2: Review of the Literature
Chapter 3: Methodology
Chapter 4: Data Analysis
Chapter 5: Summary
Appendix A: TAS Industry Strengths
Appendix B: TAS Industry Weaknesses
Appendix C: TAS Industry Opportunities
Appendix D: Industry Threats
Appendix E: TAS Recommendations
Appendix F: Twelve Typical Causes Of TSR Turnover
Appendix G: Ten Call Center Trends
Appendix H: Email Solicitation For Survey Participation
Appendix I: User Groups and Associations
Appendix J: Example of Email to Industry Groups
Appendix K: Example of Fax and Letter to Industry Groups
Appendix L: Teleservices/Call Center Survey
Appendix M: Key Survey Dates
Appendix N: Responses by Industry Group
Appendix O: Survey Results
Appendix P: Results For Subsets
Appendix Q: Results For Industry Groups
Bibliography
Introduction
The telephone answering service industry is one which is undergoing rapid changes and a forced evolution. This is due to the combined pressures of the deregulation of the telecommunications industry, ever improving and advancing technology, and low unemployment which is coupled with a shrinking labor force. Once a thriving entrepreneurial, “mom and pop” industry, the closings of bureaus, mergers of companies, and acquisitions by major players have removed some from the industry and forced others to exit. All the while the industry has shrunk, consolidated, and transformed.
Statement of the Problem
By all accounts, the industry is arguably in either the mature or decline phase of its life cycle. Regardless, the end of the traditional telephone answering service industry is likely in sight. What can the industry do to perpetuate itself? For how long will things continue as they once were? What can be done to renew the industry and guide its metamorphosis into a new, different, and better type of business?
With all of these questions and a diversity of possible answers, it is imperative for those within the industry to carefully and methodically consider how to respond to these changing dynamics and the threats they impose.
Industry History
In 1876 Alexander Graham Bell, with the help of his assistant, Thomas Watson, invented the telephone and established the basis for the environment into which the telephone answering service industry would eventually be born. As businesses embraced this new technology, entrepreneurs were given the incentive to capitalize on this communication phenomenon and quickly developed more sophisticated versions of the telephone, as well as switching equipment, long distance service, and other related innovations (DeHaan, 1998).
As more people could make and receive more calls and do so to an ever-expanding list of locations, the need arose to effectively and efficiently handle these calls. In 1917 Genevieve Kidd recognized this need and started the Doctor’s Exchange Service in Portland, Oregon. Kidd, a former nurse, saw an opportunity to serve the medical community by providing a service whereby urgent calls could be quickly and effectively handled when the doctor’s office was closed. As such, her new business was geared to facilitate the communication needs of doctors, nurses, and dentists. Nine years later she expanded the scope of her growing concern and began serving the business community in a similar fashion. While Kidd was not the only entrepreneur to recognize and capitalize on this need to answer the telephones of others, she is recognized as the first and is largely regarded as the mother of the telephone answering service industry (ATSI, 1989).
Coincident to this, but independently, Pearl Forester took a similar step and opened her answering service in Dallas, Texas in 1918. In like manner, Clark Boyton founded the Physicians and Surgeons Exchange in Philadelphia, Pennsylvania in 1921. Up until this time, the budding industry had no technology available to get their clients’ calls to them, so they adopted the concept of “If no answer, call…” The idea was that the medical and business community would publish their answering service’s number after their own number, accompanied with the phase, “If no answer, call…” It was Boyton who is credited with the first technological innovation of the industry, when he convinced his telephone company to build a device he called a “stop board,” the forerunner of the switchboard. He also persuaded the phone company to run extensions of his client’s lines directly to his new device, eliminating the need for “If no answer, call…” as his stop board would allow him to answer his client’s lines directly (ATSI, 1989).
Another budding entrepreneur was J. J. Freke-Hayes who in 1923 also conceived the idea of a telephone answering service. Although he was later surprised to learn that the idea had not originated with him, he did go on to advance several other innovative concepts and original ideas. One such initiative, in 1942, was the formation and organization of a meeting of his peers from around the country to discuss issues of common interest. His premise was simple, yet profound, “If I give you a dollar and you give me a dollar – we each have a dollar. But if I give you an idea and you give me an idea, we each have two ideas” (ATSI, 1989). This was the first effort to bring together the independent and disparate members of the growing telephone answering service industry. At the end of the meeting, Freke-Hayes’ insight was rewarded when he was elected president of their newly formed group, Associated Telephone Exchanges. This organization was the forerunner to the Associated Telephone Answering Exchanges (ATE) and would later change its name to the Association of Telemessaging Services International (ATSI), which is still in existence today. Because of his insight and innovation, Freke-Hayes has been informally bestowed the title of the father of the telephone answering service industry (ATSI, 1989).
The industry’s originating “connection” method of “If no answer, call…” was creative and innovative, as well as simple. Doctor’s offices and other businesses would put their own telephone number in their advertisements, on their letterhead and business cards, and in the phone book. Following their own number, they would add the phrase, “If no answer, call …” followed by a second number. This second number was in fact the number of their telephone answering service. (The concept so pervaded the medical community, that some still use it today, even though technology has long eliminated the necessity of doing so). Although this approach had its elegant simplicity for the client, and was easily understandable to their patients and customers (albeit slightly inconvenient, since a second phone call would need to be made if the first one was not answered), it would become problematic for the answering service as it grew and succeeded. The problem resided in the fact that every caller dialed the same number and there was no way of knowing for which doctor or customer they were calling when the phone rang and was answered. The answering service staff would need to verbally solicit this information from the caller. This was a skill that the answering service staff cultivated and developed, allowing them to subtly obtain the identity of the desired client often without the caller even knowing it. However, as their client base grew it became increasingly difficult to efficiently and effectively determine for whom each caller was calling. Add to this the fact that quite frequently these calls would be placed at a time when the caller was under some degree of distress or concern, causing their own communication to be less than precise or clear. Lastly, simple human error and miscommunication among the staff complicated matters. The end result was that calls would be increasingly given to the wrong doctor simply because the intent of the caller was not, or could not be, correctly discerned or identified (DeHaan, 1998).
As telephone answering services grew and their client base became larger, this problem was exacerbated. Innovative services began to pursue other options, among them, installing an off-premise extension of their client’s lines at the answering service. Each extension was then connected to its own telephone. Since each client’s line would then be independent of every other client’s line, the problem of identifying the doctor or company being called was eliminated. Though this was the primary reason for using off-premise extensions (versus, “If no answer, call…”), there were side benefits as well. With off-premise extensions, a phone call could be answered at either location (that is, the client’s office or the answering service). This allowed the answering service to be a back-up for the office, answering phone calls during the day if calls rang too long in the office and handling all calls during lunch or emergencies. Correspondingly, it allowed calls to be answered directly by the client after regular business hours if they chose to do so. Again, as customer bases increased, so did the number of telephones at the answering service. At some locations, the number of phones grew to comical proportions. Lights were connected to the phones’ bells so that the ringing phone could be quickly identified and answered. Again, innovation stepped in, and multiple-line phones handling thirty or more lines were installed, replacing vast arrays of single line phones. This too would eventually have its drawbacks and limitations, making way for the next generation of technology. This was the cord-board, capable of having one hundred off-premise extensions connected to it. As the size of telephone answering services grew to more than one hundred lines, additional cord-boards were installed. Many services would grow to have dozens of these devices, sitting side by side, in long rows. Though other ideas, concepts, and approaches would be tried and used, the level of innovation and technology that the cord-board offered would serve the industry well for nearly fifty years, remaining largely unchanged during that time (DeHaan, 1998).
Eventually the venerable cord-board would give way to technology. In the 1950s, entrepreneur and inventor, William Curtin would pioneer technology to advance the industry; though his innovative device would be awarded a patent, he was unable to gain permission to actually use it except in very limited instances. To function, his equipment needed to be physically connected to the telephone network, specially to each client’s phone line. Unfortunately, since it was illegal to connect any non-telephone company device to the telephone network, Curtin’s invention would languish in obscurity for years. This legal restriction, which had little technical merit, was largely a political one advanced by the dominant and monopolistic AT&T and backed by a supportive FCC. It was not until 1968 and the watershed Carterfone decision that the FCC began, albeit reluctantly, to allow other non-phone company devices to be connected to its network. The guiding premise was that these devices were to not harm the public and had to be beneficial to those using them. Clearly Curtin’s device fit this description, as would the other many ideas he was considering and advancing. Curtin formed a company, Amtelco, to take advantage of this new opportunity. Since he was himself part of the telephone answering service industry, he had the practicality and first-hand insight of an end-user; as such his products were of great interest to the emergent industry. One such significant product was a “line concentrator,” which would take up to 100 off-premise extensions and concentrate, or funnel, them down a limited number of “talk-paths,” allowing 100 clients to be efficiently serviced. The concentrators could also be placed in other cities. This allowed progressive answering services to expand into new markets and locations while keeping their staff centrally located, which offered the greatest economy-of-scale and optimum management control. Many other manufacturing companies would also make devices for the telephone answering service industry. However, Curtin’s Amtelco, with its early start and innovative products, would become and remain the premier equipment provider for the industry (DeHaan, 1998).
The next wave of innovation would occur in the 1980s. A new technology, called DID (Direct-Inward-Dial) service, coupled with call-forwarding, would ultimately pave the way to replace the need for off-premise extensions. Unlike the normal arrangement for telephone service, where every line has a number and every number has a line, DID service foregoes this one to one matching of numbers to lines and instead matches many numbers to a few lines (more technically called trunks). With DID service, many telephone numbers can be routed to a limited number of trunks, in much the same manner as Curtin’s concentrator funneled many lines to a few talk paths. Quite simply, the telephone answering service would buy DID service from the phone company, assigning a different number to each client to forward their phone to when they wanted it answered. This allowed the telephone answering service to expand their market even more, since anyone, anywhere, who had call-forwarding could use the service; they no longer needed to be in close proximity to the telephone answering service (off-premise extensions where not cost-effective over long distances). Again, Curtin was to lead the way, designing and manufacturing a small piece of equipment which would allow DID service to be integrated into the thousands of cord boards still in use at the time. Similarly, Curtin upgraded his line concentrator to process DID calls, eventually forming an entire line of products. Other manufactures would pursue similar paths, although Amtelco would remain dominant (DeHaan, 1998).
The mid-eighties witnessed the birth of the personal computer and did much to revolutionize the world as it is now known. Curtin and others had already computerized their products, but each device was, out of necessity, a proprietary platform, using a closed operating system, and employing custom-written and highly specialized software. Now they could begin to integrate personal computer technology into their products, making them more open and less proprietary. Virtually all of today’s telephone answering services are computerized. The calls literally ring in on computers, displaying exactly how each particular call should be answered. A computerized version of a message pad, which is customized to the requirements of each client, appears on the computer monitor each time a call is answered. A database holds easily accessible information about the client and also keeps a record of each message, along with substantiation of the subsequent follow-up work that is done. Once messages are in the computer, they can be effortlessly faxed to a client, sent to a text pager, or dispatched over the internet to the client’s email. Many of these modern-day systems also contain integrated voice mail, allowing for special announcements to be played to the caller, routine communications to be automatically recorded, or the actual calls to be recorded in their entirety. By the 1990s, this computer revolution resulted in more flexibility, increased innovation, and a greater ability to tap into the rapidly growing array of telephone company services. One such group of services, advanced call forwarding, allowed for calls to be forwarded if they were not answered at the primary location or if the line was busy. Primary-rate interface, integrated services digital network, or PRI-ISDN for short, allows for twenty-three telephone calls to be handled over a single trunk while also providing a data-channel to facilitate computer to computer communication between the answering service and the telephone company; this allows for an unprecedented level of integration, speed, and network efficiency. Automatic number identification, or ANI, an advanced form of caller ID, is available with PRI-ISDN and is utilized by today’s modern telephone answering service systems. As the traditional monopoly status of the telephone is further eroded and competition increases, even greater innovation will result (DeHaan, 1998).
Coincident to, and contemporary with, the 1968 Carterfone decision (which set much of this innovation and change in motion) was the introduction of toll-free 800 numbers. Toll-free numbers have allowed telephone answering services to again expand their effective geographic coverage area, literally to all of North America. While many answering services have done so or are doing this, toll-free numbers were also the impetus behind the birth and phenomenal growth of the call center industry, which has emerged since their introduction (Mikol, 1997). The call center industry has since ballooned into a multi-billion dollar a year business (Frost, 1999), greatly dwarfing the older and diminutive telephone answering service industry.
Purpose of Study
The author of this research will be the direct and immediate beneficiary of this effort and the derived results. While there is some value in learning for its own sake and there is some basis for the premise that education is its own reward, the ultimate recipients and beneficiaries of this effort to study, research, and compile relevant information, and the conclusions which result, are organizations in which this author is directly involved.
First is the Company in which this author is president and has an ownership interest. The author’s previous research formed much of the basis for the development of the Company’s long-range strategic plan, giving shape and overall direction to the business so that it could purposefully and steadfastly move towards the future with the realistic expectation that its existence will be both long-term and successful. Still, that research was incomplete and as such the strategic plan, while a valuable and practical map to the future, was not all it could be. This research will provide the basis on which to revisit and fine-tune the Company’s strategic plan, giving more shape and greater form than was previously accomplished.
The second organization which will find benefit from this study is the National Amtelco Equipment Owners Association (NAEO). NAEO is a users’ group whose focus is on the products produced by the aforementioned Amtelco. The author is both treasurer and a member of the board of directors for NAEO. The board recently embarked on its own strategic planning project to articulate its desired role in the telephone answering service industry, as well as other markets in which Amtelco equipment is sold. As such, the results of this investigation will likewise assist in that effort.
Third, is the Association of Telemessaging Services International (ATSI). With roots back to J. J. Freke-Hayes’ efforts in 1942 to form an answering service organization, ATSI has an ongoing, deep, and long-term record of both serving and being the focal point for all that goes on in the telephone answering service industry. The author is also an ATSI board member. ATSI has undergone fundamental and significant changes in the past year and is currently attempting to reinvent and redefine itself. This report will be able to provide factual direction for that effort, as well as be able to contrast ATSI members’ views and perceptions to those of nonmembers. (Only about ten percent of the telephone answering service industry are ATSI members; however, a majority of the non-members are smaller companies and less in tune with the rest of the industry.)
Last, but not least, is that the industry as a whole could benefit from the end results of this research. As this information is published and disseminated, in condensed or summary form, it should provide a basis for discussion and comment, allowing others to be exposed to the prevailing attitudes of those in the industry (at least, the attitudes of those who completed the survey), as well as to be presented with other perspectives and points of view.
Company Overview
The Company was founded in 1960. True to the nature of the industry, it was started by a husband-and-wife team who alternated working twelve-hour shifts while the customer base was being established and developed; eventually it was able to sustain the hiring of employees to assist in answering the phones. Like most others at that time, they used a cord-board to answer calls and took messages on paper. Over the years the Company grew, expanded, and made several acquisitions to get to where it is today. With seven locations the Company employs about ninety employees, serves 1,600 clients, and processes over three million calls a year. Today, all work is computerized, with an extensive amount of technology deployed to assist the staff, allowing them the freedom and ability to add the personal touch to an increasingly technologically oriented industry. The Company enjoys the status of the largest and premier service provider in thirteen of sixteen primary markets it serves.
The Company, and its leaders, are recognized throughout the industry, pioneering new and innovative ways of conducting business and serving clients. The Company was an early adopter of Amtelco equipment and has seen the benefits from doing so. The founder of the Company served on the ATSI board of directors and ascended to the presidency of that organization in the mid-eighties. The chairman of the board likewise served on the ATSI board of directors and was a founding member and the first president of NAEO. As already mentioned, the president of the Company has followed this tradition and currently serves on the board of directors for both ATSI and NAEO. The company’s general manager is a leading board member for the Professional Inbound Network (PIN), another industry user group, which is pointing the way towards the call center industry. In the past, the Company has been represented in several other industry groups, including the Michigan Telemessaging Association (MTA), the Great Lakes TeleServices Association (GLTSA), and the Cad Com Equipment Owners (CEO) user group. Whether serving as association leaders, speaking at conventions, or writing industry articles, the Company has been a visible and active industry force.
User Group Overview
The users’ group, NAEO, was founded in 1984 out of a direct need and desire to support Amtelco in the ongoing development and enhancement of arguably the most revolutionary system ever developed for the industry. This system, the Electronic Video Exchange (EVE), was the industry’s first significant computerized system and set the stage, as well as the bar, for all that followed. As with all innovation, EVE was not without its glitches and NAEO was formed, in part, to work with Amtelco to stabilize the platform and move the product forward. Over the years, NAEO has grown and expanded, producing a string of valuable and helpful products for its members. Currently NAEO is the most successful and largest of the industry users’ group and is well positioned should it elect to expand further.
Association Overview
As previously mentioned, the Association of Telemessaging Services International (ATSI) traces its beginnings to 1942. It grew steadily over the years and in 1988 boasted almost 1050 members (ATSI, 1989). Ten years later its membership has dwindled to a fraction of that. The consolidation of the industry has taken a huge toll on the membership numbers of ATSI. To address this problem, ATSI announced that the call center association, ATA (American Teleservices Association) would begin providing management services to ATSI in 1999, with an eye toward merger, in which ATSI would become a subset of ATA, one year later. At the last minute, ATA withdrew its management offer and put the merger possibility on indefinite hold; they cited an immediate and pressing need to restructure internally.
Although ATSI members seemed to view an ATA merger as unavoidable and an inevitable conclusion, they breathed a collective sigh of relief when the deal was cancelled. They had already begun to lament the fact that ATSI was going away and now that a reprieve was given, a renewed enthusiasm and vigor surfaced, this added to the momentum to give ATSI another try and to make it work. Under the present leadership and tireless dedication of ATSI president Raymond Baggerly, the tide has turned and there is renewed interest in an effort to keep ATSI viable.
About the Author
The author started in the industry in 1979. With a technical background and FCC license, he began work as a technician in the company’s pager division (which was later sold, allowing for more focus on the telephone answering division). At that time, AT&T provided one-stop shopping for all aspects of the technical needs of the telephone answering service. AT&T leased the cord-boards, maintained them as needed, made the requisite connections of the off-premise extensions, and repaired the lines when they malfunctioned. As such, there was no need for any involvement of the technical staff with the telephone answering service division.
That all changed with the installation of the EVE system (a non-AT&T provided piece of equipment) and the near simultaneous forced divestiture of AT&T. Suddenly there was an immediate and significant technical need in the telephone answering service; the author assumed this role. A year later he joined Amtelco as manager of their service department. During his tenure there he also worked as a programmer, writing computer code for the next generation of the EVE system, as well as a technical writer, designing several technical manuals.
In 1988 the author returned to his former company as the Special Projects Manager and was later promoted to General Manager. In 1990, he completed work on his Bachelors degree, researching and writing his Bachelors thesis which was titled, “Hiring and Retention for the Telephone Answering Service.” Another significant step occurred in 1995. He was promoted to president and also became a stockholder when the company doubled its size as a result of an acquisition. In 1998, he completed work on his Masters degree and copyrighted his Masters’ thesis, “The Telephone Answering Service Industry: Preparing for the Future.”
During his tenure in the industry, the author has made several presentations before industry groups, including ATSI, NAEO, PIN, MTA, GLTSA, and CEO. He has written dozens of articles about the industry on a vast array of technical and management issues. He has served on the board of directors for MTA and is currently a board member for both NAEO and ATSI.