The great disconnect

Telemarketing has received plenty of bad press in the past, which is partly due to bad practice in consumer marketing creating a poor reputation for the industry. Having been labelled ‘nuisance calling’, B2C telemarketing was largely cleaned up by the introduction of the Telephone Preference Service (TPS).

In light of this apparent success, the Corporate Telephone Preference Service (CTPS) was established two years ago for the B2B world. The service has the same aim and was developed for SMEs: smaller companies that were apparently sick of being ‘hassled’ by telemarketers selling their wares.

Both services allow number registration on a ‘do not call’ list, which is then available for telemarketing companies to buy. Any company ringing a number on either list theoretically faces a fine and even a custodial sentence.

However, from its first inception, critics have argued that surely one company ringing another company cannot be seen as a ‘nuisance’? After all, the call may provide useful information and even lead to sales and the provision of services¨. Isn’t one business contacting another the entire nature of B2B? Are these restrictions therefore creating a major barrier for companies and undermining the competitiveness of the economy?

In an ideal world, most people would probably agree that allowing any individuals or companies to opt out of marketing calls that they are not interested in receiving is a good idea. However, receiving calls at home from window salesmen is vastly different from companies ringing at work to offer respective products and services.

Nick Martin, general manager at Mardev, comments, There’s a real argument that listening to new ideas and being open to engaging with a small percentage of phone calls with relevancy, innovation or fresh thinking is something that should be considered as part of one’s job.

In this light, the CTPS facilitates more targeted telemarketing activity, which is more likely to result in a positive response from prospects, who are known to be interested in receiving calls.

Martin continues, ìThe intrinsic worth of the CTPS is of value. This relates principally to one group: small businesses, e.g. micro-businesses and corner shops. If they choose to be registered on the CTPS because being called for commercial purposes is damaging, then it’s fine. Calling these types of businesses is not beneficial for marketers anyway, as they will usually receive an unhelpful answer.

In theory, therefore, the notion and aim of the CTPS is valuable. Despite this, there are still many criticisms.

 

Even before the launch of the CTPS, observers foresaw that the service might render telemarketing obsolete. According to the DMA, by June 2005 (one year after its launch) 336,000 numbers were registered. The number now stands at approximately 775,000: an increase of 130 per cent between the first and second years of its existence.

Mike Lordan, director of consumer services, compliance & accreditation at the TPS, comments, Our statistics show that the CTPS is growing but that the rate is slowing. The year-on-year growth stands at over 100 per cent, but 72 per cent of this occurred in the first six months. The number of companies – owning over 1000 telephone lines – registering has gone up from 69 to 105 in total: an increase of 52 per cent. An increase in registrations amongst this group is particularly significant, as the CTPS was not intended to enable them to register; it was designed for companies at the opposite end of the spectrum. Despite this there is a small but growing trend towards utilising it.

Lordan, meanwhile, prefers to accentuate the positive news that growth in overall numbers is slowing. ìThis may be due to the need for CTPS renewal,î he comments. ìUnlike the TPS, companies have to renew their registration on the CTPS, which may explain why the figures are slowing. This suggests that some companies are not renewing their registration on the CTPS, which would only be good news for the telemarketing industry.

Although it may be too early to say whether or not registration renewal is blunting the impact of the CTPS, it appears that the proportion of business lines already barred to telemarketers via the service is already significant. According to telecoms regulator Ofcom, there are 9.150 million business lines in the UK, 775,000 of which are CTPS registered; in other words 8.5 per cent of the total. Given that this has been achieved within two years, with no significant publicity, it is surely very worrying for telemarketers.

 

One of the most prominent possible explanations for the growth in registrations, particularly amongst 1000-employees plus companies, is the lack of guidance or restrictions surrounding the registrations process. Specifically there are no regulations stopping any member of staff within a company from registering any number, regardless or seniority, rank or approval.

Catherine Murphy, marketing manager of software house Version One, which has been particularly vocal on this issue, believes this is ridiculous. ìMy frustration lies in the fact that anyone can register a number, including switchboard operators and receptionists. The decision to register is taken arbitrarily at a low level rather than being viewed as a proper business decision. These management figures are being blocked by junior members of the business who are taking a strategic decision for the company. This is where the system absolutely falls down on its knees.î

Martin Smith, business development manager at Maximum Impact Marketing, concurs, ìThe CTPS needs an urgent review to prevent receptionists or any other members of staff, apart from the most senior decision maker within that business, from registering numbers to this service. The decision to block all unsolicited calls isn’t to be taken lightly and should be considered and made by business decision makers and not a receptionist having a bad hair day.

 

A further complaint of telemarketers regarding the CTPS is how they themselves remain compliant. The issue is not that the process is difficult or time-consuming, but because information on how to facilitate it have not been well-publicised and are difficult to find.

Murphy at Version One is amongst those who have had difficulties. ìThe initial problem was that we knew little about CTPS and came across it by accident. The service was not out there with a proactive marketing campaign. We were worried initially that we might be fined or sent to jail for non-compliance, particularly as we discovered it by default and weren’t shown it.

Due to the nature of its business, Version One did not have any trouble developing the software to upload the list onto its CRM system. However, it points out that other companies may not have the facilities to do this so easily, or effectively.

 

Could these badly-enforced regulations render telemarketing obsolete? When the CTPS was introduced in 2004, many in the industry felt that telemarketing was doomed, but has it had that much of a drastic impact?

Martin Smith of Maximum Impact Marketing anticipates a worst case scenario. ìCommerce is set to hang itself with the new length of rope called CTPS. I personally think it is insane to consider that a business cannot contact another business to initiate a negotiation. On a larger scale how can we expect industry to survive, let alone thrive if we continue to strangulate the essential communication channels?

He continues, ìI believe that there is no place for CTPS, it’s a bureaucratic fantasy that should never have made it off the notepad! Businesses should be able to contact businesses about business matters.

Meanwhile, Niall Habba, MD of the Telemarketing Company, is not so doom-and-gloom regarding the future. The CTPS doesn’t mark the death of telemarketing at all. The TPS has caused problems in the consumer sector and while the CTPS is flawed, it is better implemented as you can renew on the CTPS every year, so there is the opportunity to opt out. If you are conducting business within the DMA code of practice, then it shouldn’t be a problem.

Which scenario proves more accurate will be proven in the coming years. However, one thing is certain, if CTPS registrations continue at the current rate of 130 per cent per year (and the Companies House figure of 1.8 million limited companies in total in the UK is accurate) then the entire business audience will be barred from telemarketing within six years. Should this nightmare become a reality, at least it will force practitioners to sit up and take notice. Telemarketing is a tool which B2B marketers cannot afford to lose.

Related content

Access full article

B2B strategies. B2B skills.
B2B growth.

Propolis helps B2B marketers confidently build the right strategies and skills to drive growth and prove their impact.