The dawn of the call center industry: and a brief biography of the industry founder, Nadji Tehrani.
It seems as if it was yesterday when I was sitting in my office trying to figure out how I could possibly increase the effectiveness in the sales and marketing area. In 1979, TMC, which was a fledgling start-up company, had four publications in the energy-efficient nonpolluting and material-efficient technologies industries.
They were as follows:
a. Journal of Radiation Curing
b. Journal of Waterbourne Coatings
c. High Solids Coatings
d. Powder Coatings
At the time, the energy-efficient, material-efficient and non-polluting technologies were very much needed by the industry. As an entrepreneur, I realized that there is, indeed, a tremendous need for such publications.
What was the spark that led you to establish TMC?
Prior to starting TMC in 1972, I had worked with four major companies, three of which were Fortune 500 types and one was a midsized company.
At every one of these companies, I looked for the most challenging project and I approached management to give me those projects and let me come up with solutions for them. In the summer of my third year of college, I got a job at a company called The United States Bronze Company in Flemington, New Jersey. As the name implies, this company manufactured bronze powders. Upon preparing a batch of 50,000 pounds, the company had to wait 24 hours to figure out the percentage of the pigments; namely bronze was composed of 85% copper and 15% zinc. This fact bothered me very much and I went to the President of the company and asked for his permission to try and speed up the evaluation process in the laboratory so that the production could proceed practically upon completion. The president gave me the green light and, to make a long story short, I developed a new electrolyte solution that would speed up the analysis of copper and zinc within the powder to less than 20 minutes. Obviously, this was a major achievement. The president of the company wanted me to consider becoming the laboratory and research director. Since I was unable to accept that in order to complete my college education, I gratefully acknowledged his interest in me and shared with him that if there were any other major problems, I would like to help. And, I wanted to continue working for US Bronze using my research project at the college and to try to develop a technique for a satisfactory plasticization of bronze powders into vinyl plastics. To the extent that 85% of bronze powder was copper, during the traditional heating and pressurizing, oxidation will occur and, therefore, the bronze pigments would lose their decoration value within the vinyl plastic. My project, therefore, was to find a solution to prevent the oxidation and allow bronze powders to be used within vinyl plastics so that the company would expand its market share by going to tabletops and furniture-tops of all kinds with a generally white background of vinyl accented by golden sprinkles of bronze powders.
I took this project to the University and, in 30 days, I was able to come up with a new solution to prevent oxidation and keep the glitter of the bronze powders. This discovery was written in many newspapers around the country and, of course, in Virginia, where my college was. Shortly thereafter, I was contacted by the Iranian Embassy in Washington, D.C. and the cultural attache told me that his majesty, Muhammad Reza Shah Pahlavi, wanted me to join him in his palace in the summer of 1964. I asked the cultural attache, "Why does his majesty want to see me?" He referred to my humble discovery at the University. At this point, I was engaged and I asked my fiancee, Julie, to join me and she was very happy and she was pleased to meet with his majesty, the Shah (or the King) of Iran. (See photo above.)
Going back to what sparked me to start TMC, immediately after college, I was hired by a Fortune 500 chemical company at which time two of the most difficult projects were given to me and the assignment was to find solutions. To make a very long story short, I was able to invent a new process to eliminate the discoloration of a solvent (DMAC) during the purification process. Given that the cost of the solvent was $40 per gallon (in 1962), this was a major achievement and the company gave me a 10% increase which was approximately $60 a month. Then the next project was given to me. In this particular case, the name of the project was "waste reclamation process." The company was trying to make Polyurethane textile fibers and, because of the sensitivity of Polyurethane fiber spinning, generally about 30-40% of the produced yarn was classified as waste. Considering that this fiber could be sold at $40 a pound, one can imagine that the amount of waste produced per month could be very close to millions of dollars. Again, this project was given to me with 6 months of feasibility studies followed by 5 years of process development. I was very excited about solving the number 1 problem of the company, but I didn't want to wait that long to get it done. I went to my supervisor and I said "Len, I don't want to wait 51 years to solve this problem. I'd like to solve it in one month." He said, "Rookie, I like your enthusiasm, tell me what you need to do to get it done in one month. "I'd like to run three shifts, round the clock; this way one month would be equivalent to three months and hopefully by then I would get the project done." He was slightly hesitant but went along with me anyway. He gave me two additional technicians and I found that we could add 25% of the wasted yarn into fresh yarn while not only minimizing the amount of wasted yarn but also preventing the fiber from yellowing upon washing in the washing machine. In other words, we solved this problem by using 25% of the wasted yarn into 75% fresh yarn and making a perfectly acceptable product. Obviously, my achievement saved the company millions of dollars and I was only getting 10% increases. That was not fair to me and the idea came to mind that if I can achieve so much for other companies and get so little in rewards, why not start my own company and that's how it served as a spark that gave me the encouragement to start my own company in 1972.
What was the name of the first TMC magazine, and what were the areas of coverage?
"Radiation Curing" was the first magazine that we started and it basically dealt with energy and material efficiency as well as non-polluting technology. For example, if the conventional technology which used solvent in preparation of polyeuration products and while consuming 100 watts of electricity per pound. By radiation curing the amount of electricity needed and preventing the need for evaporation of the solvent it would then pollute the atmosphere. At that time this type of technology was very much in demand and prompted me to add the other publications, namely The Journal of Radiation Curing, Waterbourne Coatings, Powder Coatings, High Solids Coatings, etc.
What did the contact center space look like 30 years ago?
I think if I explain how we came up with the idea of Telemarketing[R] magazine that might help to answer that question very clearly.
In the late 1970s, our publications were flourishing; I noticed that there was a major deficiency in advertising and marketing sales areas. In fact, we had two outside sales reps who were traveling door-to-door trying to sell advertising and submitting significant expense accounts every week and they were hardly justifying the expense. One day, the idea came to me. What if I used the phone and tried to sell some advertising? And lo and behold, while working one hour a day, I sold three pages of advertising in the first day. I continued this process for the rest of the week, namely spending one hour a day and, by the fifth day, I was able to sell 15 pages of advertisements without car allowance, expense account, food and beverage and the rest of the nonsense that was going on with outside selling. I said wow, my God, this technique can be a new way to sell and execute marketing.
I brought both of the outside reps, put them on the phone and they both quit. At that time I didn't know why but today I know why. The reason was that the techniques you need to sell in person are completely different from techniques you need to sell on the phone. In person, you need charisma, wining and dining, body language, etc., whereas on the phone, you have none of that. The only thing you could have is wonderful communication skills, product knowledge and a likeable presentation technique.
I interviewed in person the people that were supposed to sell on the phone. That one did not work and I was beginning to get a bit discouraged because I couldn't be the only person in the company that could sell on the phone. What a dilemma. We had a secretary who was with me for 5 years that knew all about the publications. Not necessary scientific questions, but things such as the audience difference, circulation difference, etc. So I asked that secretary to come to my office and I said, "Geri, I have a $500 reward for you," she said, "Before you continue, I am the world's worst salesman." I said, "You didn't let me finish." I said, "Everything I have done so far has failed so you are my only hope. The reason is that you have product knowledge and, more importantly, you have the most pleasant conversation technique on the phone of anyone I know. You have to be able to do it." Then I said, "We have a $500 reward for you and just to relieve the tension, you don't have to sell anything." She said, "I don't have to sell anything?" I said, "No, all I want you to do is sit down, I'll get a customer on the speaker phone and you notice how I make the presentation and you just do what I do on the phone and you will be surprised how successful you will be." Of course, this was in November near the holidays and she needed the money, therefore, she gave it 100%. Lo and behold, after 3 months, sales went up by 50% with no car allowance, no F&B expense, and no lodging expense. I said, "Now we have two people who can sell by phone." I still didn't know why. Today, I know why. In order to sell on the phone you need a pleasant voice, you need to be articulate and you have to have product knowledge, industry knowledge and competitive knowledge. Having worked 5 years for TMC, Geri had just about all of the above. And that's why she was successful. Three months later, a trade show came along in Boston and I took Geri with me to the show. At the end of the trade show, within a month, sales went up an additional 60%. And the business was rolling. All I had to do was to find other people and train them. So, the first thing I did was I filed for registration for telemarketing. Registration was given to us. Shortly, thereafter, my editor of Telemarketing[R] Magazine came to me and said, "Mr. Tehrani, are you sure this is an industry? I can't find anything to write about." I said, "I am not sure, but this is called the pioneering project. We are trying to go to uncharted territories."
Then I contacted John Weinman who was the VP of long lines at AT&T. I went to his office and showed him the first issue of Telemarketing [R] magazine and told him that we needed his advice and support if this magazine was to exist. John said, "If you do a good job, I will support you." Then I showed him a few copies of Radiation Curing and some of the books that we had written at that time. I said, "John, if we can do these sophisticated chemical publications, I think we can do the telemarketing publications more easily." He agreed and called 5 of his assistants and asked them all to find telemarketing articles in various companies such as MCI, Uniroyal, and others who were just beginning to try telemarketing. In addition, John brought to my attention that in Chapin, South Carolina, there was a man named Chilton Ellett who also started a small telemarketing company in his garage. So, I was grateful for John's assistance and, upon returning to the office, I called Chilton Ellett and asked him if he would like to write an article about his success in telemarketing? Chilton laughed at me and said, "I didn't finish high school, I don't know how to write and I don't know how to read but I have a successful tiny telemarketing operation. I said, "What if I develop a bunch of questions, put it on a cassette, you play the cassette and then you answer on the cassette and send it back?" He said, "That is easy and I can do that." I said, "Chilton, you are very clever." He said, "Dinosaurs weren't flexible they vanished; mankind was flexible and they are still here."
Getting back to the question, so 30 years ago, except for bits and pieces of small contact centers scattered around the country, that was really state of the art at that time. I later discovered that Omaha had the potential of being the capital of telemarketing in the future. So, I got on the plane and went to Omaha and met with Gary and Mary West who were running their business in very humble surroundings similar to an enlarged garage. Mary took me around and showed me every department, how they worked, what they did, etc. And, by the way, that company grew and expanded and was recently sold for about 2.4 billion dollars. Across the street from Gary and Mary West's operation in Omaha, was another division, the outbound division, which was run by a young aggressive man, named Steve Idelman. I spent about a week between these two companies and learned whatever there was to be learned.
At that time, the TSRs (Telephone Sales Reps) were sitting about 2 to 3 feet from each other and calling people until 11pm. I felt that I got quite a bit of information from two companies, which eventually turned out to be the number 1 and number 2 in the country. Steve Idelman's company ITI was sold for 120 million dollars several years ago and I was fortunate enough to learn from such leaders as Gary and Mary West and Steve and Sherri Idelman so that I could build on it. These folks helped me throughout the decades. West Corporation advertised in Telemarketing[R] and Customer Interaction Solutions[R] magazine for 20 years with a 2-page spread located on the inside front cover and the page across from that.
Steve Ideleman, on the other hand, also supported the magazine by placing an ad on the back cover of the publication for several years.
These folks have been extremely loyal and appreciative to me and, in fact, whenever I travel to Chicago, Steve and Sherri Idelman would fly from Omaha to Chicago to have dinner with me in their penthouse apartment.
The bottom line is that the call center industry, at that time, was very primitive. Namely, there was no technology except for recording of orders which happened on a tape recorder and basically that is it. There was no other technology.
How did its evolution lead you and the TMC team to evolve the call center/customer care magazine over time?
Obviously, Telemarketing magazine was a pioneering publication. In fact, in 1982 we submitted for registered trademark of telemarking and the US patent office granted me with a trademark for Telemarketing[R] magazine.
Having said the above and as the leading publication of the industry, our editors and I kept up to date with practically every event in call center, telemarketing and customer interaction areas. It was our primary responsibility to share with our readers the new changes and new technologies that were forthcoming and prepare them for being early adopters of these technologies. Therefore, as the industry evolved from telemarketing to call center to customer interaction center and CRM center, we also developed the magazine to address all of these new changes and so on.
When was the magazine renamed Customer Interaction Solutions[R] - and why?
Approximately 10 years ago, in 2002, the industry had evolved to customer interaction and past the outbound only or inbound outbound only, which defined telemarketing at that time. As the industry grew, the users found more and more solutions for which telemarketing was used and customers and vendors began to name themselves as customer interaction technology or service providers. That is how we came up with the name Customer Interaction Solutions. In plain English, it was more appropriate for the leading publication of the industry to stay with the changes in the industry and, therefore, we adopted the name Customer Interaction Solutions.
What do you see as the prevalent trends in the call center today?
Around the year 2000, an evolution started out in the call center industry, namely, that by using IP communications technology, countries such as India and Philippines and others had access to a very cheap long distance price and coupled with very low labor cost, which, in some cases, was as low as $1 per hour as opposed to $6 to $10 an hour in this country. That meant that a lot of the companies were at the direction of the accounting departments and decided to send practically all of the call center requirements into India, Philippines, Latin America near-shore and offshore, etc. At that time, I was uniquely against going to those places, particularly in the area of customer service and customer care and customer interaction. Against all odds, I predicted that these companies, within a few years and after they lose plenty of their customers, will return back to the United States. At that time, everyone thought that I was crazy. But today, I am happy to say that many of the people who went to some countries as India and Philippines and others have returned back to the United States for many reasons including:
1. Differences in cultures
2. Significant time differences between those countries and the United States, for example, daytime in the US is equivalent to nighttime in India and elsewhere. Therefore, you have TSRs who have been working 1 to 2 shifts and particularly those who worked in the night shift were tired and sleepy and, to make matters worse, they were treated extremely poorly. For example, the TSRs in those countries had to produce by making a significant number of calls and when they left their offices, they had to walk 1 to 2 to 3 miles to get home. On the other hand, we learned that in India approximately 100,000 people speak proper English so the American public could understand them. The rest of the TSRs did not speak proper English and it was difficult to understand them. All in all, the offshore evolution of the call centers turned out to be nothing but a disaster for many.
Therefore, at the moment, the main trend is that the call centers are returning to the United States in order to get proper service and professional treatment of their customers.
Other trends I see are that now call centers are beginning to embrace such areas as digital lead generation and social marketing among many other areas.
What do you see as the prevalent trends in customer care/customer experience today?
In my judgment, one of the most important parts of the business is customer retention. To that end, one might say that, if you have a bucket of water that has several holes at the bottom, you will never be able to fill it up because as fast as you add water, by the same speed the water goes out of the bottom. That scenario works well in the business community: if you do not focus on customer retention, customer satisfaction and the overall customer experience, the company will not succeed. In my humble opinion, companies live or die from repeat business. Henry Ford once said that, "A good design sells the car but quality and performance bring them back." This concept certainly works in every aspect of business. Customer care and customer retention are all major parts of business.
Another most important part of customer care is lead generation. The sad part of this is that the Universities' marketing or sales divisions do not even address lead generation as a viable part of education. In fact, one might say that companies will grow as much as high quality lead generation will permit them to grow. And in my humble opinion, one of the best kinds of lead generation is through webinars and white papers that TMC specializes in.
In fact, one might add that the best quality leads are obtained from digital lead generation and webinars. Here is why: suppose your company produces predictive dialers; if you sponsor a webinar under effective selection of a predictive dialer, your quality should be exceptionally high because the people who sign up for this webinar should be 100% interested in predictive dialers or else they will have to see a psychiatrist! Consequently, for high technology products, lead generation via webinars is as good as it gets.
How does that relate to what's happening in marketing?
As a student of marketing for the last 40 years, I have learned a number of things, among them:
1. If you don't market, you don't exist.
2. If you're not on the 1st page of Google under your keyword, you don't exist.
3. If your marketing is not a cutting-edge type, namely, if you're not involved in digital marketing, online marketing, social marketing, then your company will not be going anywhere.
As far as the impact of customer care on marketing, the job of the marketing department is to create leads for the sales department to sell to and/or convert them to customers. In that case, I see a strong relationship between marketing of today and lead generation that goes along with customer retention, customer acquisition, etc.
How does it--and should it--impact decision making by corporate executives?
Some 15 years ago, I wrote an article titled, "The Sad State of Marketing in Corporate America." The way we came up with that topic was the fact that I had developed a marketing test for candidates who applied for a marketing position. I would consider that test to be a simple one--the first question was, define marketing, and the second question was define sales.
Would you believe that 90% of the candidates could not provide a clear definition for marketing or sales. I remember in one case a Columbia graduate with a Master's Degree in Marketing and 20 years of experience with a Fortune 500 company, could not pass our marketing test. So I began to wonder, what are they teaching these marketing students today that we can hardly find anyone who understands marketing the way they should and remember that if you don't market, you don't exist? How could these corporations ever survive? So knowing that, in general, most of them don't have a clue about marketing, it really doesn't matter what they think about what we have written so far.
Where do you see the call center/customer care industry going from here? As I have indicated in many of my past editorials, no company can exist without the telephone. And with the telephone, one would do inbound and outbound calling. I know for a fact that in our company, if you take the phones out, there will be no company. And, I believe that will continue. Yes, emails have a role to play. Yes, social marketing has a role to play, but when that telephone rings someone has to pick it up. And that could be a prospect, a customer asking for help and that is where customer care and customer satisfaction come in. As for where customer satisfaction and customer care and the call center industry are going, it is my judgment that all of these industries will continue to flourish, as long as our basic business remains the same.
If there's just one thing you've learned over the years about customer interactions that you'd like to share, what is that one thing?
In my judgment, the most important fact that one learns from years of experience is the quality of performance. As I have stated in the past editorials, "quality and marketing are not part time jobs!" I recall in the mid to late 1990s there was a tremendous amount of interest for call centers on Wall Street. Company after company would go public. A given stock, for example, began at $15 per share as an IPO (Initial Public Offering) and would go up as high as $80 and split 2 for 1 and the split would go up as high as $80 again. It was a flourishing market for all of the call centers because of the rapid growth, etc. At that time, in the telemarketing tradeshows of ours called TBT (Telemarketing and Business Telecommunications), on many of the keynotes at our shows I reminded the attendees that "all good things will come to an end." And about the only way you can keep this marketing environment is by having an outstanding quality because quality brings back customers and creates customer satisfaction. Therefore, the industry would be in high demand. Indeed, many companies listened to my advice and kept the quality extremely high. On the other hand, approximately 30-40% ignored my comment and, shortly thereafter, they vanished. The most important thing I learned in the last 30 years was that there is no substitute for quality and quality and marketing are not part time jobs!
Today, a lot of advanced technology is available to help call centers vastly upgrade the quality of service.
RELATED ARTICLE: Other Major Events
Excerpts from Nadji Tehrani's Editorials
25 Years of Moving CRM and Contact Centers Forward
"In Just 25 Years, We Went From Non-Existence To A Proud Industry That Laid The Foundation For Every Corporation In America And Around The Globe"
"As I have stated in many of these editorials, every company is a call center, and if you take the telephone out of any company, it's only a matter of time before that company will go under."
Some industry leaders honored with Lifetime Achievement Awards
"Our proud industry started with humble beginnings, affected many lives positively, heavily impacted the world economies, touched millions of lives and supported millions of families around the globe."
"The combination of all of the new technologies will enable call centers to drastically reduce the cost and vastly improve quality and overall performance to the point where there should be no need to look at offshore for cost savings in the very near future!"
"To be sure, much has changed in CRM contact centers, telemarketing and customer interaction centers in recent years. What worked yesterday, doesn't work today."
I would classify the performance of our call center, CRM and contact center industry as follows:
"The great ones elevate their preformance in times of need That is precisely what our industry has done in times of need, and that also explains why our industry continues to prosper in light of limiting legislations, abuse of our industry, offshoring, etc."
How the Industry Has Changed
"In the 1980s, which I call "the growing up period," the application of telemarketing, which was the founding father of today's customer interaction/CRM centers, was limited to outbound calling, prospecting, sales and sales support. Indeed, the growth of outbound was far exceeding the growth of inbound in the 1980s and this trend continued throughout the 1990s regulations came about, i.e., do not call and others. The outbound growth gradually slowed and in fact as we know it the business-to-consumer section of the industry was practically eliminated. On the other hand, since there never was any objection about the inbound, frankly, I cannot see any condition where there could be any problem with the inbound, because the consumer and/or the end user us' laity initiates the call based on their own needs. Around the turn of the 19th century the growth of the industry reversed so that now the inbound sector was outperforming the outbound sector in terms of growth. However, outbound sectors such as find-raising credit collection and the like are still viable business and they continue to grow at a very healthy pace"
"Then came the opportunity to go global. I was invited to take the show and the magazine to various countries, among them, Mexico, Brazil, Japan (twice), The Netherlands, Belgium, Canada, London, Hong Kong and France. In fact, our Telemarketing[R] magazine was translated into Japanese for several years, and into Portuguese for use in Brazil."
Magazine Founder Nadji Tehrani Hands the Baton as Contact Centers Meet Social Networking
"Thank you Nadji for allowing me to contribute in the space you have written in for decades. While filling your shoes will never be easy - what I have learned from you should help guide me, TMC and our readers well into the future." - By Rich Tehrani, CEO, Technology Marketing Corporation"
Along The Way We Developed TMC
While we were busy developing the telemarketing and customer interaction industry, much was going on in the development of TMC. With the assistance of Rich Tehrani and extremely important contributions of staff, TMC today is a global media company. Our website: www.tmcnet.com covers anything and everything about cutting-edge technology and communications.
Our TMCnet website draws 2-3 million unique visitors per month. Please visit our TMCnet website for more information.
And, I am deeply grateful to all of the TMC team, customers, advertisers, consultants, speakers and trainers.
All the best ... Nadji Tehrani
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|Title Annotation:||COVER Story|
|Publication:||Customer Interaction Solutions|
|Date:||Jul 1, 2012|
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