Now you should be at the point where you have analyzed your situation and have defined the right kind of dialer solution to gain the greatest leverage in your organization.  Now you should start researching specific solutions from the different vendors.  Developing a request for proposal (RFP) is a best practice that makes sure you and your team has clearly defined the requirements of your business.  With your goals and processes in mind you will be much more comfortable approaching the different vendors that are in the market.  You should request a response to your RFP from several companies that offer solutions that are known to offer the capabilities you desire.

Success during the negotiation stage comes from having carefully researched your options. This gives you greater confidence and often cuts the time to make a decision nearly in half.  The vendors will also have greater confidence in you and will put their best foot forward in presenting their solutions and negotiating terms and pricing.  Now you should go further and define your decision-making process, your project plan, your data formats, necessary deliverables, etc.   Set the agenda early on and pre-schedule meetings weekly or sooner to keep the project moving while you narrow down to a short list of potential vendors.

Encourage input, buy-in, and feedback throughout your organization during the entire process.  Gather the needs from your team and define a committee or group consisting of management, executives, technical personnel, and users from both marketing and sales.  Also make sure you have a finance representative involved early on as well.  Use a systems approach that includes a macro view similar to this model:

 Analysis - Design - Implementation - Evaluation

Define all of your current processes and lead sources that will feed the dialer.  Then define the processes that the dialer will feed.  Flowchart the overall system and drill down as needed.  Brainstorm then prioritize your key requirements. 

Here is a list of key question topics that may be helpful as you gather information from your team:

• Premise versus hosted
• Predictive versus Power Dialer
• B2B versus B2C
• VoIP versus TDM (Long Distance)
• Use vendors VoIP/TDM or provide own
• List sources
• Lead sources / source tracking
• Real time lead capture capability
• Skills/geography lead routing needs
• Lead transfer capability
• Lead duplicate check capability
• Time of day / time zone calling
• Call back event scheduling
• Interface design and features
• Remote agent / telecommuting capable
• Reporting and analytics
• Time card tracking / agent stats
• Data import capabilities
• Pre-import data scrubbing
• Maintenance and upgrade policies
• Customization capabilities
• Vendor time in business
• Contract requirements
• Payment terms / penalties
• Customer references (more on this)
• Implementation practices
• Additional modules and functionality
• Consulting and training capabilities
• CRM integration capability
• API / Web Services

Many companies intentionally package their products in a way to make it difficult for an easy ‘apples-to-apples’ comparison.  For example, some hosted dialer companies charge strictly by the minute by elevating their per-minute charge for long distance to include the telephony infrastructure and software costs.  Others break out their charges between dialer port infrastructure, software, and long distance or VoIP minutes.  You should run models by researching your current usage patterns and compare it to the cost models that are presented.

Another tactic that varies between dialer vendors is how they combine the features and functionality.  Some charge more but include more functionality, others break it out and charge for each individual module or feature.  By clearly defining your RFP, you will buy what you need and will avoid paying for things you have not defined as necessary to your organization.

The best vendors typically are very competent at driving the implementation process, but even the best vendors will not make up for poor preparation on your part.  Make sure you have all of the necessary approvals or buy-in from executives, management, finance, technology, and users that will allow you to follow this project through.

One best practice is to measure a baseline of performance in such areas as daily dials, phone time, contacts, qualifications, etc., for a sufficient time (3 to 6 months) prior to the purchase of a dialer solution so that there are clear metrics to determine the early success of the dialer.  Often the effort numbers are the earliest indicators that trends are moving in the right direction, this is not possible if a baseline has not been gathered.

Decision Point:
Define your goals and objectives clearly and well ahead of time through a clearly written RFP document.  Get input from everyone on your team who needs to be involved.  Get approvals and buy-in and set expectations with enough room to make up for delays that will inevitably happen.  And lastly, gather your baseline of performance for several months prior to installation of the dialer.  This holds you and your vendor more accountable to the effort and results you desire.

Research Credibility and Longevity of Vendors

Now it is time to lift the hood and see what is underneath as you narrow your vendors down before you make a final choice.  It is wise to keep two or three viable vendors in the race until the finish line.  Sometimes this isn’t possible because of technical capabilities but it is still wise to do so for as long as possible.  Vendors are more aggressive when they face a known competitor on one hand and a potential customer who has obviously done their homework on the other.

Ask the hard questions first.  How long have they been in business?  Are they profitable?  What background does their management team have?  What are their service philosophies?  How stable and redundant is their infrastructure if they are a hosted solution.  How fast can they respond to troubles if they are a premise solution?   Will they allow you to make a real-life test drive with full capabilities before you have to commit to a long term relationship?  Run the dialer with your live data and lead sources and with enough calls to get a good feel.  This is often difficult in a premise solution, so ask for on-site visits to a customer that is similar to your own solution.  Take the time to test different kinds of scenarios that exist within your own business.  Get managers and users involved to make sure the experience from their point of view is suitable.

Research the entire support package available from each vendor.  Talk to people in their organization besides the sales teams.  Often it is wise to talk to support and consulting personnel before you are committed.  Look for companies who clearly define the boundaries of their capabilities.  This is a much better approach than those who promise everything and can’t deliver.  Support personnel will typically give you a much straighter shooting series of responses than the sales staff.  Ask how they will handle you after you have bought.  Talk about upgrades, integrations, time frames, implementation, ongoing support, escalation procedures, etc.

Decision Point:
Be careful of talking only to the sales staff of a potential vendor.  Watch for vendors who are slow to respond to your requests.  Be especially careful of vendors who do not respond to each question or issue you bring up.  This is often indicative of how they will treat you later.  Larger and more establish vendors will typically have stronger processes but will be slower to respond. 

Look at the Big Picture

Expect that every vendor you work with will have some room in their price.  They expect to go back and forth before they arrive at final pricing and terms.  It is in the terms that you will gain leverage on the overall package that you end up with.  Consider the entire proposal rather than just the pricing.  Some items to consider are:

• Onsite hardware
• Software
• Professional services
• Maintenance
• Upgrades
• Support
• Bug-fixes
• Enhancements
• Documentation
• Training
• Customization capabilities
• Integration capabilities
• Security
• Backup Capabilities
• Hosting infrastructure (if hosted)
• Source code ownership in case of insolvency

Support fees, professional services, and maintenance fees are key areas that are open to negotiations.  There is typically quite a bit of difference between premise and hosted solutions in this area of the discussion.  Industry standards for ongoing maintenance for premise software is just under 20%, while hosted solutions typically roll maintenance and support into their overall cost structure.  Work on negotiating this fee and ask for a ceiling to any rate hikes that surpass the retail price index (RPI) or the consumer price index (CPI).

Sometimes a ‘lite’ version will not include these fees and you have to pay for service and support as you use them.  Clearly define the response times that are included and the Service-Level-Agreements (SLA) that are included in your agreement.

Consulting and Implementation

This is a key area to a successful implementation.  The costs will go up dramatically for customized or integrated solutions, but the cost is often offset rapidly by increased overall productivity when you can automate additional processes and lower labor costs.  Often you can tie down lower costs of customization during the overall system negotiation period.  This is difficult later after you have made a purchase.  Get in writing the capabilities they have agreed to include with the initial implementation.

Be leery of an organization that doesn’t ask a lot of questions, and that doesn’t spend time with each area of your company that will be involved in the final solution.

Decision Point:
The time to include customization and to gain valuable discounts on consulting and implementation is during the initial process, these ‘soft costs’ often make a huge difference in the success of the project and are an easy negotiation point to help you gain more value when considering the overall big picture.
Run the Cost Model

Even the best planning will leave some questions unasked and costs uncovered.  Things like costs for additional lists or leads to keep the new dialer productive now that it helps your agents make three or four times more contacts than before almost always come up.  This, of course, is not the responsibility of your dialer vendor, but you must take this into account for a successful dialer project.

Hosted solutions cost significantly less initially, but may contain hidden costs and licensing agreements.  Hosted solution vendors in this area are being quite disruptive and aggressive as they gain significant market share against the more traditional premise solutions.

Some things that will probably come up with your dialer vendor and should be examined before you purchase include many of the following:

• data scrubbing
• lead import setup
• data storage
• monitoring and recording storage
• field or screen customization
• custom reports
• customer service and support
• escalated service
• emergency response
• termination fees
• integration costs
• onsite visits and travel costs

Premise solutions contain similar hidden costs and delays, but they are often in different places.   You will need to plan for your internal equipment hosting, power, backup, security, bandwidth, and fiber connections, which often take several months to plan and deliver, especially if redundancy is considered. 

You should check references from current vendor customers in the areas of hitting deployment deadlines and responsiveness to onsite or remote support.

Decision Point:
Make sure you negotiate a trial period of 30 or 60 days where you can opt out of an agreement if the vendor you have chosen has not been able to deliver up to your expectations.  This is also a time in which you can fine tune your relationship and make sure things are working.

Anticipate Growth or Cutback

Very few organizations are able to plan effectively for one year, let alone two years into the future.  With this being the case, make sure that you negotiate for price protection and reasonable limits to increases in fee structures going forward.  And give yourself room to reset commitments on at least an annual basis if your situation changes.  This is much more difficult to accomplish for a premise-based solution than a hosted solution, but still you need to make sure that you are able to lock in your expectations on pricing going forward if possible.

If your business is growing, and even if it isn’t, now is the time to anticipate the potential for growth and negotiate tiered pricing and volume discounts.  Always leave the option in place that if the market drops future pricing below what you have negotiated, that you have the built-in option to go to the new market pricing with your next level of commitment.

Also take the time to clearly define:

• Price lock and excessive price increases with term renewals
• Pricing application to future growth and new users
• Long term contracts, commitments, and buy-out clauses.
• Service Level Agreements (SLAs), Warranties, and Guarantees:
• Training, Technical Support, and Professional Services:

Talk about future upgrades and product releases.  Make sure that you are well aware of platform changes and legacy technology issues.  This is almost a non-issue with hosted solutions, but is a huge issue that you had better address with a premise-based solution.

Decision Point:
This is an area of consideration that often adds greater advantage to a hosted solution.  Premise-based solutions reduce in value quickly once purchased, while part of the promise of a hosted solution is to always have the very latest and greatest advances in technology, interface, and capability.  This often makes a significant difference a year or two down the road when a premise customer cannot justify the cost of a new platform and has to compete with a hosted solution that offers the very latest innovations in productivity.  And if you decide to cut-back with a premise solution, you still own the extra capacity that now lies dormant.

Understand the Contract Details

Contract terms and definitions vary greatly between different vendors, but many things are fairly consistent.  Make sure you clarify exactly what the vendor means throughout each area of the contract.  As you go line by line with a vendor you will find many additional areas that you can clarify to greatly benefit your organization.  Make sure you understand rights of use as a key part of your negotiations.  Clearly define if there are limits financially or technologically around the number of users or concurrent ports.  Find out if you are charged by login users or concurrent users, by concurrent users or ports, is that in one area, the same server, or the same workstations?  These questions will help you. 

Long Distance Billing Details Make a Big Difference

If you have a hosted solution that includes the long distance or VoIP, find out if you prepay minutes and if they ever expire.  If they supply the long distance make sure you have analyzed the billing increments and the decimal rounding on the bill itself.  Many vendors will charge 60 second call minimums and 60 second call increments thereafter unless you know to ask for 18 second minimums and 6 second increments.  Find out about the same questions for international calls.  These will almost always have a 30 second minimum and 6 second increments.  Dialers inherently make lots of short calls and you can find yourself saving 20% to as much as 30% on your long distance bill if you have been careful in your negotiations.  Ask to make sure that your invoice for long distance isn’t billed in 2 decimals, always rounding up to the next cent on every call.  This can cost you a bundle; always ask for 4 decimal billing.

Request the Right to Waive an Audit

This bit of advice won’t make any cost difference initially, but could make a significant difference to you down the road if you find that you or your IT staff has gotten lax in complying with licensing issues.  If a vendor audits you down the road you can be found owing a lot of money.  This usually isn’t an issue with a hosted solution, but even with a hosted solution it is wise to make sure you monitor your users and ports monthly to make sure you only pay for what you really need.

Decision Point:
We can’t stress this time-proven advice enough, get it in writing!

Perform a Background Check

One of the best places to start checking out a potential vendor is by looking at their press releases and their financial performance.  Ask to speak with their financial executive who will usually share more than you think they will, even if they are a privately-held company.

Things are much easier if they are a public company, but few dialer companies are.

Think like their sales staff thinks.  They have to continually improve sales.  So month-ends and quarter-ends are great times to get them to sharpen their pencil and ask for the pricing and terms they would probably never approve any other time.  And find out when the end of the fiscal year is coming up, if it is close you will want to consider using this time frame in your negotiations.  It probably isn’t wise to wait an undue amount of time if the dialer can make a significant impact on your company now, you would miss out on a lot of productivity while you wait to negotiate. 

Press releases are a good point to steer by because they tell you a lot about the company.  If they are coming out frequently, then this company is growing and expanding and usually very innovative.  If they include hiring, product releases, partnerships, and awards, then you can rest assured that this company is actively growing and improving.  Look for companies that have a disciplined approach to publicity, this denotes steadiness and focus. 

Decision Point:
Sometimes this extra research into financials, press releases, and company trends uncovers more information than you bargained for and will help you steer clear of companies who are struggling.  Watch for consistent growth and publicity for several years in a row to pick companies that probably are what they say they are.

References Offer Great Value, Yours and Theirs

References are extremely valuable in the process of purchasing a dialer solution, and in more ways than you probably think.  First, your reference is of great value to your vendor.  If you offer to become a reference that they can use fairly often, you will gain a great edge in obtaining more value in your negotiations.  Likewise, your vendor will also find them self going the extra mile with their staff to ensure that your reference is going to be a good one. 

The best thing you can do is to offer your reference in printed form, but require in your agreement that if anything ever goes wrong in your relationship with them as a vendor they will need to guarantee to remove your reference statement from where ever they are using it in a reasonable fashion.  They will find themselves having to make doubly sure that you are always a happy and a valued customer.

Ask that they contact you and forewarn you before they actually use you as a verbal reference for a prospective customer to call so that you can be prepared and available.  This also dramatically increases your value to them and brings additional benefits to you.

Conversely, before you buy, ask for at least 2-3 good references of customers that are in similar situations to you.  The problem for you is that everyone has 2-3 good references and they will obviously give you their best.  The next request is the most powerful of all; ask for 2-3 BAD references also.  References of customers who had struggles with your vendor and can discuss how they were resolved.  Here you will still only get customers who now speak well of the vendor, but you will get a better picture than the first set of references.  Check them all and ask the hard questions.  Make a list before you call that comes right from your RFP document.  Be prepared and move fast so you don’t take too much time, remember, you may be on the receiving end of one of these calls soon.

Decision Point:
Offer to become a reference for your vendor, this gives you greater negotiation ability and leverage to ensure a better relationship over time.  Also ask to check 2-3 references that are good, and 2-3 that are bad, particularly references that had problems but that were resolved.  Be ready to bail if you uncover too many potential problems. 
Invest in Your Own Negotiation Capabilities

Enterprise-class telecommunications vendors have long been known for their expertise in training their salespeople to negotiate to their benefit.  Even SMB vendors are very good at this.  They will have done this many more times than you.  But they often come up against buyers who have no idea at all how to proceed through a negotiation process.  When they meet someone who is obviously prepared to negotiate strategically, they will immediate recognize your skills, even if they are minimal and cut right to a better proposal for both of you.

This does not mean you need to invest in a month long course in negotiations, but you should review some of the ample materials just prior to moving into the negotiations process.  It is always best to have one more person with you in your decision making process with a solid commitment to carefully analyze decisions before they are made.

Contracts should not be intimidating.  Instead, look at them as the opportunity to finalize, clarify, and protect.  You can almost bring any form of protection in a contract to become a two-way or mutual barrier of protection by merely asking for it.  Don’t be afraid to redline a document and push for additional clarity.  Check with your key financial and technical personnel and forewarn them ahead of time so they can be expecting to put some time into the process of contract negotiations.

Outside firms will bring a fresh (but expensive) perspective.  If you opt to use one, it is wise to use them for the very first and last round for the perspective they can offer.  Do as much as you can of the busy work and research to save billable hours from an outside firm. 

Decision Point:
Build a time right into your plan to refresh your own negotiation skills.  A simple book or Web site on the topic can be enough to dramatically impact the overall result when everything is done.  Mentally walk through the process and make a plan for what you will ask for in your negotiations so you will be prepared for when the time comes.

But there are as many mistakes make when choose a dialer as there are successes.  Choosing the right dialer technology and the right dialer vendor can make the difference a business model that works and one that fails.  There are very different kinds of dialers for different kinds of business, target audiences, lead sources, and product types.  Mixing them can be disastrous.  Finding the right solution and process can double, triple, or even quadruple the overall effect.  Once you have ‘dialed’ in the right technology, it is just as important to find the right vendor and negotiate the best overall deal.

The underlying purpose of this paper is to help you understand the questions you should be asking your team before you begin shopping for a dialer technology.  After you have narrowed down the specific characteristics your solution requires, we will discuss the different strengths and weaknesses of the dialers that are available, with pros and cons of each.  After we have helped you choose the right dialer for your specific organizational needs, we will provide additional tips and recommendations to help you negotiate the best overall deal that will meet your needs over time.

Enterprise organizations have long invested in telephony technologies to leverage their business, but with lowering cost structures and hosted solutions these technologies are now very accessible to small and mid-sized business (SMB) owners.  Market trends show that SMB are making every increasing investment in technology to find new customers, exploit the internet, and lower costs.   At the same time, more and more vendors are providing dialer solutions, requiring more research.   Included below are tips and suggestions to navigate the options for the most successful outcome.

“Wisdom begins with the definition of terms.” – Socrates

Technologies

In order to communicate effectively, let’s define the variations in technologies that we are talking about when we talk about dialers.  Basic dialer technology consists of the ability to have a phone number dialed automatically.  This is often called ‘click-to-call’ or an automatic dialer.

More powerful dialing technologies include the ability to determine a pace of calls and to allow for loading and dialing from a list of leads in a sequential order.  These are called Predictive Dialers and Power Dialers.  Predictive Dialers dial multiple lines at a time to increase the chance that an agent will find someone to talk to.  They use a computer algorithm to continually adjust the ratio of lines to agents to achieve specific results with time on the phone, etc.  The agent does not hear dialing, instead the Predictive Dialer tries to route an answered call in a split second to a live agent.  Power Dialers have actually been developed and refined more recently than Predictive Dialers and allow the agent to listen throughout the entire dialing process.  We will compare and contrast these two powerful technologies.

Premise dialers are those that are purchased and installed in a physical location, along with the phone lines and data connections that are required.  This typically requires internal resources for maintenance and support.  They require an up-front capital expenditure and the labor cost to maintain but are still very popular for companies who already have a significant investment in IT and telecommunications support staff.

A newer option is the on-demand or hosted dialer solution, similar to the Software-as-a-Service (SaaS) solutions that are becoming so popular with solutions like the hosted CRM offered by Salesforce.com.  This is gaining rapid popularity because of the payment model as well as the benefits of outsourcing to the provider all maintenance, upgrades, and professional services.  This requires very little if any staff to maintain and allows sales and marketing teams to be more self sufficient.

Lastly is the need to manage the lists or leads and the process associated with lead and customer management that typically go hand in hand with a dialer application.  Most dialer applications end up requiring some form of CRM integration or lead database management solution to optimize efficiency and effectiveness.

Auto Dialer

There are typically two kinds of dialers that are both classed as an auto dialer: the click-to-call, and a voice message broadcasting dialer.  The click-to-call dialer is often a simple modem in a computer, or a simple link from a phone number in a hosted Web application to a remote dialer.  The pace is set by the agent, the functionality is minimal, and there is typically only one line available.   This dialer provides very little leverage in that all it does is save the time to just dialer the phone number, and often takes longer with inherent pauses, etc.

The newer form of auto dialer is one that automatically dials a list people and detects a live answer or answering machine and plays a pre-recorded voice message at the appropriate time. Some even then offer the ability to transfer the person who answers to a live agent. This is often called a voice messaging dialer, or voice message broadcasting and is gaining great popularity because it completely automates the dialing process and is able to play a pre-recorded message to hundreds or thousands of people in a short period of time.  This is applicable in communications to groups like school children, sports teams or in prospecting to large groups of people with similar needs like homeowners who want lower mortgage rates.  It is also used during political campaigns to play the candidates message to thousands of people quickly.  It is not overly effective in business to business unless direct dial phone numbers are available since it does not navigate auto attendants or receptionists.

Predictive Dialers versus Power Dialers

Predictive Dialers have been available for nearly thirty years and are the ultimate dialer when volume of dials and overall time on the phone is the main requirement.  Their computer algorithm requires a group of agents large enough to be able to effectively leverage the ‘dial-ahead’ effect with multiple lines.  The group of agents concurrently logged must be at least 8 to 10 with an optimal minimum in the 20 to 30 range.  If this is the case there are documented case studies where predictive dialers are able to keep agents productively talking on the phone from 47 to 52 minutes of an hour.   And number of calls in a full time day in the 500 to 600 range or more.

Predictive Dialers are specifically optimized for Business-to-Consumer applications because they require short and consistent lengths of calls and direct dial phone numbers.  They are best when used in a one-call-close type of telemarketing, short surveys, or pre-qualification of consumers.  They are not designed to navigate the phone systems, auto attendants, or receptionists of a business environment.  All of the leverage gained with a predictive algorithm is lost waiting to be connected in a B2B environment.  It is also not wise to use a predictive dialer to call expensive or valuable leads.

Predictive Dialers specifically optimize talk time by using a computer to dial several lines ahead of when an agent is ready to answer them.  The goal is to have a phone answer at the split second when an agent is ready.  This doesn’t always happen and the computer either hangs up the phone or plays a message asking the person who answers to wait a moment for the next available representative.  If the person hangs up before the call is answered, this is called an ‘abandoned call’.  The telemarketing industry harassed consumers for so long that legislation has been put in place by the FCC that puts limits on their use.  We have included a summary and link to current FCC Legislation for review.

Current FCC Legislation

The following is an excerpt about limits put on Predictive Dialers from the FCC Press Release Dated June 26^th, 2003:

“Hang Up” and “Dead Air” Calls and Caller ID

• Telemarketers must ensure that predictive dialers abandon no more than three percent of all calls placed and answered by a person. A call will be considered “abandoned” if it is not transferred to a live sales agent within two seconds of the recipient’s greeting, although prerecorded messages sent under the “established business relationship” exemption are permitted.
• When a call is abandoned within the permissible three percent range, the telemarketer must deliver a prerecorded identification message.
• Telemarketers must allow the phone to ring for 15 seconds or four rings before disconnecting any unanswered call.
• Telemarketers must transmit caller ID information and are prohibited from blocking caller ID information.
• Call abandonment rules and caller ID requirements will not apply to tax exempt, nonprofit organizations.”

Predictive Dialers are best when rapidly dialing through a large list of people with very few repeat attempts.  The primary concern with Predictive Dialers is the effect they can have on a specific list of people that they are calling.  If you are trying several times to reach a valuable lead, you will find a negative effect occurring even with an abandonment rate of 3%.  For example if the average contact ratio is 10%, that means you need to make 10 attempts to ensure contact.  Then this abandonment rate of 3% multiplies by 10 and you have a 30% chance that your target lead have an abandoned calls and they most definitely will become familiar with your caller ID and have a negative experience.

Predictive Dialers should not be used with valuable or expensive leads that require multiple attempts to ensure contact.  They are best for single-script telemarketing operations and are rarely effective in telesales or inside sales organizations that require a multiple-call or complex sale.  Responsible organizations that use Predictive Dialers are able to gain significant leverage and find them to be the optimal B2C and telemarketing technology.

Power Dialers are optimized in business to business (B2B) applications where more intelligence from the sales agent is required to navigate receptionists, auto attendants, and voicemails systems.  No current dialer technology is able to navigate the multiple options of an auto attendant in a business environment without the guidance of a live representative.  Rather than dialing ahead of the Agent with multiple lines, a Power Dialer automates all of the dialing functions with a single line.  The Agent hears the phone ring and is available to guide the process the entire time.  These technologies have become increasingly popular by avoiding the pause upon answer and the subsequent abandoned calls of a Predictive Dialer.

Talk time and total call attempts are not quite as high as a Predictive Dialer in a head-to-head shootout in a single-call B2C environment.  But place a Power Dialer in a B2B or multiple-call B2C environment, and couple it with guided voice messaging technology and a CRM or lead management database and the Power Dialer really comes into its own.

Talk times in the 40 minute range are possible, but couple a Power Dialer with guided voice messaging, which is the ability for an Agent to pre-record voice messages to leave with the click of a button and net talk times (live and pre-recorded) can equal more than 60 minutes of talk time in 60 minutes of work time.

Since Power Dialers do not use multiple lines dialing ahead of an Agent, they do not require larger groups concurrently logged in to gain the dial-ahead leverage of a Predictive Dialer.  Power Dialers can be used by a single agent with a single phone line.

Power Dialers are best used for telesales, inside sales, or outside sales organizations where the sales process is more complex and requires multiple calls for closure.  It is also optimized for organizations that invest heavily in their lead sources and can’t afford to abandon a single call with the resultant negative perception from the person at the other end.  This translates to all B2B environments and specific B2C call centers that invest in Web-based leads or leads purchased through other media.

Call Output versus Agent Control

Premise versus Hosted

Premise based solutions are the traditional model where you purchase the equipment, install the software, hook up phone and internet lines, and maintain all of it on premise.  Hosted solutions are solutions that you access through an internet connection and you ‘rent’ access for a monthly or annual fee.  They are rapidly gaining ground, especially for SMB companies who want to outsource their infrastructure and focus their IT resources on their core business.

The most recent publicly available industry size and speculation from analyst firm Gartner suggested that the SAAS industry growth will increase to $19.3 billion in 2011. Gartner went on to say that 25 percent of all new business software will be deployed as a service by 2011. A primary reason cited for for SaaS growth was the dysfunction of the client/server era which is now driving alternative approaches to IT development, delivery and management.

The primary question to ask here is concerning your business model and resources.  If you are able to expend up-front capital and already have sunk costs in IT resources, then the premise model may still be intriguing.  If you are growing, seasonal, or want a variable cost structure that grows incrementally then you should investigate the hosted model.  Some other benefits that a hosted model offers include stronger hosting infrastructure for security, risk management, and data backup than the typical company invests in for themselves.  Hosting solutions also allow internal IT resources to spend less time meeting the needs of the sales and marketing departments and typically gives more control to sales and marketing to chart their own course and executive their plans.

Premise based solutions are still in the majority and offer more flexibility and customization if you have already invested in a sophisticated IT staff.

Small and mid-sized businesses are becoming more attracted to hosting solutions that take care of the full software, hardware, bandwidth connections, maintenance and upgrades.  They are also attracted to the remote management capabilities and the ability to deploy multi-site and telecommuting solutions easily.  Hosted applications are more of a ‘pay-as-you-go’ solution that charge month-to-month or annually.  You typically can choose the exact level of functionality for the current needs of your business with a hosted solution.  And when you need to move, add, or change users you can often re-negotiate the monthly rate as you grow.  Hosted solutions typically allow for smaller increments of expansion and less commitment and are more flexible if there is a reversal in growth.

Divisions of larger enterprise companies are turning to the Software-as-a-Service or hosted model more and more because marketing or sales wants to have control over delivery dates and execution of internal projects.  This tends to make them more self-sufficient and nimble in executing their marketing plan swiftly.

Premise solutions are all paid-up-front with ongoing maintenance agreements.  Costs may be lower over time with a premise solution, but hosted solutions are narrowing the gap and in many situations already make more sense financially.  Premise solutions typically demonstrate a more favorable cost structure after the third or fourth year and provide more control for sophisticated operations over specific application features, security, and management of data.

Decision Point:
If your organization has already invested in a sophisticated IT staff, has very customized business processes, owns multiple systems that require integration together, and has the ability to handle the up-front capital expenditure, then a premise solution may be a better solution.  The hosted solution has typically become the decision of choice otherwise.

VoIP versus Long Distance

While hosted solutions are rapidly gaining ground on premise solutions, we are finding that the much-anticipated growth of VoIP solutions against more traditional long distance is not receiving nearly the same reception.  A recent article entitled, “Hosted VoIP struggles to take off” in the December 2007 issue of Telecommunications Online says “The expected big bang…hasn’t happened.”

The primary problem with VoIP has been consistent voice quality and service reliability.  And the perceived costs savings are almost nullified when the increased cost of bandwidth is taken into account.  Many organizations who have sampled VoIP have gone back to TDM or plain dedicated long distance solutions because they can’t afford poor voice quality in their sales or support call centers.

VoIP is becoming a stronger solution where companies can control the quality of their bandwidth, but the cost differential shouldn’t be the decision point.

CRM integration

A dialer is much like a Gatling Gun, and the CRM, lead database, or a basic contact manager is the source of ammunition of leads and lists that is often required to get real value from a dialer.  In additional to the management of the lists or leads is the importance of real-time lead capture, lead routing, and lead transfer to make sure that the correct agent is calling the list of names or leads that are most appropriate to their skills or location as fast as possible.

Close behind lead management has become the importance of responding quickly to leads that are generated by the marketing department.  Many companies have developed a ‘hot transfer’ capability which transfers a lead while they are still on the phone to the most appropriate sales agent, others can check schedules and set appointments for sales agents while they are on the first call with a lead.

Visibility, lead tracking, reporting, and return-on-investment (ROI) analytics are becoming more and more important to senior marketing management to allow them to justify themselves within their organization and to continually optimize their success ratios.  The ultimate solution is one which is able to track closed sales revenue back to the original lead source.  This requires a CRM solution.  A dialer solution typically is instrumental in increasing contact and qualification rates, but a CRM solution is required to track the results of the lead when it closes into revenue.

Integration between the quantification-heavy data of a telephony dialer solution and the qualification approach of a well designed customer relationship management database offer a new level of sophistication and capability never available before.

Web marketers are continually gaining greater capability for demand generation and lead conversion and are becoming a more important resource to the sales teams.  In many organizations the lead generation and conversion processes are moving over to the marketing department.

CRM integration often becomes the very next question after a dialer solution is implemented in an organization and becomes the data management solution that ties sales and marketing together.

Decision Point:
Does your organization require the integration of a dialer solution with an existing or future CRM solution?  Does the dialer come with a list or lead management database?  Does it offer an API or Web services capability to easily move data in and out as required?  Does your dialer vendor have existing clients who have integrated their dialer and CRM?  These are key questions you must ask your potential dialer vendors when you explore an engagement with them.

Recent research shows that quite often the ‘optimal’ time is immediately.  But many companies spend thousands of dollars monthly to generate clicks to their website.  These same companies invest tens of thousands in building a website to attract visitors.  They use analytical tools to analyze how to convert these visitors to leads.  Then they send the lead to the sales department.

The lead often sits 24 to 48 hours before it gets called back.

A recent survey done by Dr. James Oldroyd while at the Kellogg School of Management at Northwestern University shows that the majority of companies expect 4 to 5 attempts are made by their reps to contact a lead.

Why spend thousands of dollars on generating clicks, high conversion websites, and powerful analytics if you are going to let your leads sit for 2 days and only contact roughly half of your potential prospects?

The question is almost insulting, yet that is what most organizations do.

More research by Dr. Oldroyd shows that calling back a lead quickly has dramatic effects on actually making contact with and qualifying that lead.  His research says that if you can call back a lead within 5 minutes, you are 10 times more likely to contact a lead, and 6 times more likely to qualify a lead than by waiting even 30 minutes.

And if you wait more than 20 hours to contact a lead, you actually hurt your chances of contacting and qualifying your lead with each successive attempt to make contact.

Technology now exists that can trigger callback attempts within seconds.

Technology can also schedule callback attempts at different times of the day and different days of the week to boost contact rates above 85%.  Also, these solutions can automatically market to leads and continue to generate prospects every 3-4 weeks for 2 years or more.

We at InsideSales.com coined the phrase ‘Lead Response Management’.  To us it means wringing every last ounce of value out of leads by responding quickly and consistently.  Interestingly, sometimes responding at just the right time is more important that responding quickly.

The marketing department almost always wants the sales department to report results, link campaigns to toll free number and track the search engine keywords that bring in the most sales but it rarely happens. However, knowing the sources of your successes and failures will help you streamline your marketing and ultimately tap your most profitable sources of prospects and profits.

Very few companies track a lead from capture to conclusion or interview prospects and customers to find out why they do or do not buy. However, a sales team that fails to track why it wins or loses each sale is like a sports team that refuses to watch film of its competition before a game to prepare and then film of the actual game to improve for future wins: real progress is impossible unless it takes the time to learn from past successes and failures.

Best Practices: This time-waster covers nearly every area of the lead management and sales processes but it is also very simple to eliminate. The key is to start simple: pick 5 to 10 Key Performance Indicators (KPI’s) to track for 30 days. Once you have a baseline to work with, begin making changes and tracking them to see how they affect performance and profits.

You can begin be picking the most important Key Performance Indicators (KPI’s) such as:

Internet-based Leads

Counts: Impressions, Clicks, Leads, Prospects, Customers

Ratios: Impressions to Clicks, Clicks to Leads, Leads to Prospects, Prospects to Closes.

Cost per: Click, Lead, Prospect, Customer

Cold-Calling Leads

Counts: Dials, Contacts, Presentations, 1^st Appointments Set, 1^st Appointments Held, Demonstrations, Proposals, Closes

Ratios: Contacts per Dial, Closes per Proposal, etc.

Cost per: Dial, Contact, Demo, Close

Revenue

New Revenue per month, Revenue lost per month, Average Revenue per Account, Average Revenue per Sales Rep.

Ranking and Dispositions (from surveys)

Top 10 reasons why: people click on your site/ad, people bought, people didn’t buy, people called your support team, people quit your service.

Top 20 Accounts

Top Sales Representatives

Many reps recorded unimportant information. We recommend recording information that:

• Provides a memory link back to the discussion;
• Records action items with associated date and time information;
• Clearly notes elements of a needs analysis or qualification. 

Rather than re-typing information sent to the customer in the notes, simply link the actual emails, faxes, and proposals to the customer record in the database. Not only will you have a copy of the actual document, you will drastically reduce the amount of time spent in note-taking.

Best Practice: Invest in the systems that allow sales reps to tie copies of information sent to the customer directly to the customer record. Encourage the reps to practice typing notes and linking information throughout the phone conversation to reduce time spent after the conversation taking notes by as much as 75%.

Rather than waste time between calls with these repetitive tasks, automate the process with templates. Create a flow chart for your typical sales processes and find the places where e-mails, faxes, mailers, proposal and other typical media are needed. Create a template for each one, provide them to your sales representatives and watch the sales process for 30 days. Analyze which templates worked and which ones didn’t, refine the process more and you reduce your wasted time by 50% and cut the time spent on each sales process by as much as 80%!

For example, it took an average of 45 minutes to prepare a proposal in our own office.  We took the time to create a template for the proposal process and cut the average time down to 2 minutes.

Best Practice: Look at the standard emails that go out, create a template library, use a database that merges personal prospect and product information, and send them with a click of a button. Get rid of expensive and time-consuming mailers and go electronic.

• Leads generated on a website sit in the webmaster’s box until she checks it.
• The webmaster checks her box once each day and sends any accumulated leads to the sales manager’s box until he checks it.
• The sales manager checks his box once each day. He sorts the leads and sends them to the appropriate sales rep.
• The sales rep types the lead information into a tracking system—a spreadsheet or contact manager—before calling the lead. After making 4 or 5 attempts to contact the lead, she moves on to other leads.

The process from lead capture to first contact attempt often takes between 48 and 72 hours. The time to first contact can often be as long as two weeks—plenty of time for the prospect to forget your company or sign up with your competition.  Lead management is nearly as important as sales yet it is often the most overlooked process.

Why?

The lead management process is often where the marketing department hands off the leads it generated to the sales department. Leads are often lost in this “gray area” and neither department wants to take responsibility: marketing blames sales for failing to follow-up and sales blames marketing for sending them unqualified leads.

Another failure in most lead management processes is found in the lack of automation. Leads are routed through a slow pipeline that could easily be replaced by technology and reduce the time between lead generation and first contact from days to minutes.

Best Practice: Effective lead management includes such disciplines as:

• Lead Capture
• Lead Routing
• Lead Response Management
• Lead Qualification Skills
• Lead Tracking
• Lead Reporting
• Lead Source Analysis

Create a clear process for each aspect of lead management. Invest time in the process and money in the systems to leverage the ability to quickly and effectively qualify and sort leads and you will find hidden increases in productivity.

A 17% increase in sales is a great return on a relatively small investment. While analyzing and designing an effective sales process is not difficult, implementing it can be. Sales reps who prefer their “home-grown” approach may fight the process and actually hurt overall productivity. An effective customer relationship management system must appeal to the sales reps by solving immediate pains and by making it easier for them to stay organized and keep promises to their customers and co-workers.

A typical Sales Process usually involves the following steps:

• Introduction
• Qualification
• Demonstration
• Proposal
• Overcome Obstacles
• Closure
• Follow Through 

It is critical to analyze and formalize your sales process. If you don’t feel competent enough to do this on your own, hire one of the many sales consulting firms that are only a few clicks away on a Google search.

Best Practice: Invest the time and money in formalizing your sales management processes and implementing the underlying technology to optimize it for your sales reps.

We recommend a better way.

Sales coaching or mentoring are much higher forms of training. Coaching methodologies employ ongoing, two-way, interactive training and learning and focus on sustained productivity increases through constant repetition and rehearsal.

Sales coaching is similar to sports coaching: the coach doesn’t show up to lecture for a day and then expect his players to win the championship on their own.  A good coach works with his team every day. He watches them during practice and on game day to guide them as individuals and as a team. A sales coach does the same thing. He or she spends time on a regular basis working with sales reps individually and as a team to help them hone their skills and work together better.

Best Practice: Ensure that each sales rep spends 1 to 2 hours each week reviewing and rehearsing sales and lead qualification methodologies with a designated coach or mentor.

Up to 60% of all calls a sales rep makes can go to voicemail or an answering machine, either directly or when routed by a receptionist. If a lead generation rep makes 200 calls in a day and 60% of these calls go to voicemail, he or she could leave 120 voice messages that average about 1 minute long. A single rep could waste 2 hours leaving messages—and that doesn’t include the time spent dialing and being transferred to a decision-maker’s voicemail box!

Most reps don’t make that many calls and don’t bother leaving nearly that many messages, but what if they could?  We have seen call-back ratios that range from less than 1% to as high as 22%. Clearly, there is a potential ROI—but is it worth the gamble?

Recent technology allows a sales rep to prerecord an entire library of voice messages in his own voice. When he is sent to voicemail, he can select an appropriate message to leave with the click of a button before immediately moving on to the next call. Since these digitally recorded .wav files are often recorded over the phone and saved to a CRM or dialer system, they cannot be distinguished from a live call.

In one series of tests using this technology, we saw an average call-back rate of 4.8%–far higher than other forms of direct marketing. What’s more, the prospects never suspected that they had received a pre-recorded message.

Best Practice: Provide voice-messaging technology coupled with dialers to increase your sales’ reps effectiveness without taking any additional time.

Also see our paper on Impression Marketing^TM for more detailed information on effective techniques that use this technology.