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March/April 2003

Pardon the Interruption
A Look At the Use 
of Telemarketing In 
the Auto Glass Industry

by Kristine Tunney

 

You know how it goes. You’ve just sat down to a nice, hot meal with your family and no sooner have you picked up your fork and shoveled the first morsel into your mouth than the phone rings. At first you try to ignore it, but eventually curiosity gets the better of you and you pick up the receiver.

Your family has heard your side of the conversations for years. “No, sir I don’t need any insurance,” “Thanks for calling, but I already have a cemetery plot,” “No ma’am, I have enough credit cards,” or “Well, I’d love to give money to People for the Ethical Eating of Fruit, but it’s just not a good time.” 

You’ve always considered yourself a telemarketer’s nightmare.

Telemarketers have tried to sell everything from family photos to cemetery plots and you’ve been there every step of the way, answering calls from people you don’t know offering you things that you don’t need. But every so often you do get a call about something that does interest you.
 
This time, the voice on the other end asks if you have a windshield that is chipped or cracked and if so, the company is able to offer you a quote on a repair or replacement. Your ears perk up and you realize you’re being telemarketed by a competitor’s shop. Interested in the caller’s spiel, you continue to listen, engrossed by the familiar pitch.

You have now become a telemarketer’s dream.

Ringing Off the Hook
But if you dare to think for a minute that nobody could possibly field as many calls as you, think again. According to Lorenzo Deherrera, manager of outbound telemarketing for Speedy Glass in Seattle, the company completes about 100,000 calls a day, which generate an average of 200 to 250 leads per day for shop locations around the country. The company has been using telemarketing for three years and has experienced measurable success through its teleselling 
program.

“Auto glass is a very competitive market and you can’t just stand in the corner and wait for people to come to your shop. You’ve got to get out there and find business yourself, because if you don’t, somebody else will,” said Deherrera. “Just like ads in the paper or in the phonebook, calling people directly is just one more way to drum up business.”

Why Use Telemarketing?
As with Speedy Glass, numerous auto glass companies have been turning to telemarketing as one more way to reach consumers who otherwise may not be proactive in getting a windshield or other piece of auto glass repaired or replaced. And while some consumers may be turned off by companies’ assertive sales tactics, some auto glass companies are saying that the competitive nature of the auto glass industry requires that shops go out and find their own business. 
One East Coast auto glass retailer who preferred to remain nameless, acknowledged its own success in calling potential customers directly.

“We began telemarketing three years ago and initially had an incredible response, but over time the pool of respective customers is shrinking, because of the number of regulations that are now beginning to govern this sort of marketing, ” he said. 

This company president has good reason to be concerned about the future of telemarketing as rules put in place by the Federal Trade Commission continue to put a strong-hold on the telemarketing industry. At the end of December, the FTC announced plans to establish a national no-call registry that would allow consumers to register their names to the list via a call to the registry’s toll-free number.

Many say they understand the need for the ruling but worry that it may limit marketing possibilities. 
“Nobody wants to call people who have reasoned out that they don’t want calls. But if you do it this way, it can be a knee-jerk reaction to one phone call,” said Jon Hamilton, president of JHA Telemanagement, in an interview in DM News, a weekly newspaper for direct marketers. 

Although he realizes that the ease of joining a national no-call list could change the way telemarketers do business, Doug Call, owner and vice president of DialMark based in South Jordan, Utah, believes that the FTC’s ruling could actually work to businesses’ advantage. The new ruling would have a bit of impact on his company, as DialMark provides telemarketing services to the auto glass industry.

“We don’t want to waste our efforts calling someone that isn’t a welcome recipient of our services. As far as telemarketing in the auto glass industry is concerned, I think it’ll only make us more efficient,” said Call. 

DialMark’s Auto Glass Marketing Association (AGMA) works to generate leads for other companies by setting up inbound and outbound call centers for businesses, as well as offering on-site training in areas pertaining to legal requirements, phone-dialing systems, employee motivation and teleselling tips. 

Call explained that there are definitely some benefits to telemarketing that set it apart as an integral part of a complete marketing plan. 

“Telemarketing is a great way to get a company’s name out there, making other types of advertising and print media more effective,” he said. When a new location of a shop opens, the name recognition that occurs from telemarketing really helps the shop gain popularity more quickly. There are definitely certain areas and demographics that respond better to telemarketing than 
others.” 

The Evolution of the National No-Call List
The Federal Trade Commission (FTC) recently decided it would institute a national no-call registry designed to eliminate telemarketing calls to consumers who do not wish to be solicited for business over the phone. Telemarketing firms fear that the FTC’s stringent ruling will eliminate large portions of potential customers and make finding updated lists increasingly essential. According to a recent article in DM News, the FTC’s plans to put its registry into action may occur sooner than some firms realize, as follows:

• In four months, consumers will begin registering for free online or by calling a toll-free number;

• In six months, telemarketers will have access to the registry and will be required to scrub their lists at least every 90 days; and

• In seven months, the FTC will begin enforcing the registry’s provisions. Violators are subject to a fine of up to $11,000 per violation.



The Anatomy of a “Pick-up” Line
But Call realizes that as consumers get wiser to their own options concerning teleselling, especially with the availability of no-call lists and inventions such as the TeleZapper™ (a device that fools auto dialers into thinking a number is disconnected) the industry’s selling techniques have to adjust to meet the continual evolution of its customers. 

“Auto glass companies need to focus on generating leads in an unobtrusive way,” he said. 

At DialMark, Call said that objectives focus not only on outbound calling and generating leads through telemarketing, but simultaneously training a call center staff or whoever answers a company’s phones, enabling the company to evolve from an auto glass company into a real sales business. He further stresses that any sort of advertising a company does isn’t going to be profitable if the customer service representative or administrative assistant who answers the phone doesn’t have the skills to turn leads into sales. 

“Telemarketing really permeates every aspect of the business—and businesses that accept a solid telemarketing plan need to be prepared to sell their company better than ever before,” Call said.

Blurring the Lines
Now consider an auto glass company that experienced such success with its own telemarketing campaigns that it decided to expand its business outside state lines by setting up campaigns for auto glass shops throughout the country. With 51 shops of its own (chiefly in Illinois), Glass Specialty Co., founded in Bloomington, Ill., does exactly that–—currently arranging campaigns for auto glass businesses throughout much of the South. According to Glass Specialty’s website, each personalized campaign averages approximately 30 leads per day and “depending on your ability to handle new business, [it] can provide you with additional prequalified leads on a per-day basis.” 

Company representative Tyler Book explained that Glass Specialty’s prequalified leads are gathered from customers who have a chipped or cracked windshield and expect to be contacted with a no-obligation quote within three to five days. According to the company, “each lead is provided with all necessary customer and vehicle information, best time to call and footnote information about the vehicle and customer.”

Book further explained that Glass Specialty itself uses telemarketing regularly and has had measurable success with it. 

“The only really negative reaction I’ve heard was in the case of the company in Wisconsin, in which a group [that] solicited consumers for auto glass repair and replacement needs used another company’s name.”

Dialing Costs Dollars
We’ve all heard the old “you have to spend money to make money” adage, but when it comes to telemarketing, how much does a company really have to spend to make it worthwhile? According to Doug Call of DialMark, an extensive call center can costs thousands of dollars to set up (see his conservative estimates below), but if used correctly it can result in even larger profit margins. 

“While the technology is necessary, being able to sell glass on the phone is the key that starts the engine. I’ve seen companies spend hundreds of thousands of dollars on telemarketing equipment and lose twice as much as they invested in six months,” Call said. “I’ve also seen a company spend hundreds of thousands and triple their business and grow their bottom line in the toughest telemarketing areas in the country.” 

Conservative Estimate Costs for an Average Call System
Auto/predictive dialer software $40,000
Auto/predictive dialer servers $20,000
PC workstations $700 each
12 agents with one manager $9,000
Call list numbers (per million numbers) $15,000 to $20,000
Ongoing costs (per month) $15,000 to $30,00

Although the cost of installing a personal call center is expensive, contracting an external telemarketing firm to make live calls can cost a company a good deal of cash as well. Many telemarketing firms charge in upwards of $1.50 per call for their services. That can cost a company more than $300,000 for only 200,000 calls, the amount of calls many call centers make daily.

“Use Your Own Company’s Name”
The case to which Book is referring is that of Auto Glass Specialists (AGS). With more than 63 locations throughout the upper Midwest, the Madison, Wis.-based company discovered that someone was using the company name and its motto, “We’re the guys in the little red trucks” to telemarket to consumers. Avid opponents of using telemarketing to generate leads, AGS stated in its newsletter, Newsbreak, that “we do not, nor have we ever engaged in telemarketing for the purpose of soliciting business. We find this practice offensive, and it is not part of our corporate marketing culture.” 

“Our research shows that consumers have major issues about solicitation over the phone. Given all the other marketing programs available we do not see it necessary to use this type of approach to the consumer,” said John DeGraff, AGS’s director of marketing. 

According to Wisconsin law, “any company that knowingly misrepresents itself during a telemarketing call to consumers could be subject to penalties.” Through a ruling by the 
U. S. District Court for the Western District of Wisconsin, AGS received a judgement and permanent injunction against Franklin Auto Glass for trademark infringement, unfair competition, passing off and deceptive trade practices pursuant to the trademark laws of the United States.

AGS says it has worked to restore its good name with irritated consumers by running ads throughout its coverage area to denounce the practice, letting consumers know that AGS was not behind any of the calls that may have disturbed dinner, family activities or any quiet time spent at home. The company’s “Call Us Because We Aren’t Calling You” newspaper ad campaign was put into effect after the company began documenting phone calls from upset customers and employees.

“In the company’s history, we have never used telemarketing to receive business and the practices going on by Franklin Auto Glass were tarnishing our image,” said Robert Birkhauser, president and chief executive officer of Auto Glass Specialists. “We stepped up against a company violating trademark laws and got a positive result that should help protect all companies in our industry,.”

But as managers at companies such as Glass Specialty Co. and Speedy Glass would tell you, telemarketing often gets a bad rap for being nothing more than just another way to attract customers. But as another East Coast auto glass retailer, who preferred not to be identified, admits, telemarketing is by no means as simple as it used to be. With the addition of no-call lists and strict penalties applied to violators who call consumers registered on the lists, telemarketing is entering a new era. “While we’ve had luck in the past with telemarketing, we’re planning on stepping down our teleselling operations in the next 12-18 months,” said the East Coast shop owner. “The number of regulations that govern this sort of marketing make it particularly difficult to continue the practice.”

Whether your company successfully uses telemarketing or prefers to attract potential customers through other means, one thing is certain, no matter how soon the FTC puts a national no-call registry in effect, chances are it will be an even longer time before we’re able to eat dinner in peace. 



Kristine Tunney is the assistant editor of AGRR magazine.

 

 

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