Inside Sales Blog

I am surprised to discover that I am fascinated by some of this stuff I’m learning at my new job. I would not have thought that dialers would be so interesting. Did you know that there are different kinds of dialers? And that is why sometimes when you get called by a telemarketer there is no one there. I hate that…so much worse than just talking to them for a minute and finding out if I want what they got, ya know?? Anyway, I guess that kind of dialer is called a predictive dialer. It actually dials several numbers at once, and it does this before the phone rep is even on the line, and basically blindsides them with calls, relentlessly. That doesn’t sound like a fun job at all, by the way. And no wonder they sometimes sound a little disoriented when you answer! This dialer just pounds through the numbers, losing a lot of them along the way because so many of the calls are placed and then the dialer hangs up on them before they’re answered.

Another kind of dialer is called a power dialer and it seems a bit more sophisticated–like it could have cocktails with visiting diplomats, or whatever. Haha! But when compared to the predictive dialer, it is more refined, truly. It allows the phone rep to choose when to place a call. This dialer calls one number at a time, and it’s still pretty time efficient but it doesn’t waste leads or waste people’s time.

          Of the several varieties of dialers, power dialers are the most refined and the most customer-friendly. For a call center whose goal is to churn through thousands of numbers a day, this may not be the best tool for the job. However, if a business hopes to foster deeper customer relations, to make calls to senior management, or to live by a quality-over-quantity motto, then a power dialer is the luxury vehicle required for that purpose.

          A power dialer is the first step toward streamlining the entire process of making business-to-business calls. This dialer automates a significant amount of the process by managing the list of numbers and dialing, which allows for up to 30% increased productivity over manual dialing. Although predictive dialers automate the entire process, the power dialer is superior for several reasons.

 
There are many types of dialers on the market and each has their place and purpose.  I am writing this to help people understand the differences and hopefully help people choose the correct systems for their business needs. 

There are the following types of dialers:

1. Predictive Dialer
2. Ratio Dialer
3. Message Lay Down
4. Message Lay Down with Connect
5. Power Dialer

Predictive Dialer – A predictive dialer is used to call consumers at home, not businesses.  It works as follows.  The manager will load a list of names into the dialer and start the dialer based on a desired abandonment rate.  The way the predictive dialer work is it will call a contact’s phone number.  If the contact picks up, it will then connect the agent to the contact.  If the dialer detects an answering machine, it will leave a pre-recorded message and then move on to the next call.  If it gets a bad number or busy number it notes it in the contact management system and then moves on.  An abandonment is defined as a hang-up from the contact before they hear anything.  This can occur of the software is not quick enough to connect the agent and the contact after the contact picks up, or if there are no agents available.  In the scenario that there are no agents available, the system play a message asking a contact to wait until and agent is available, this avoids the abandonment status.  Currently in the United States, it is not legal to have more than a 3% abandonment ratio.  A good predictive dialer will keep you just below this number.  Anything lower means that the dialer is not aggressive enough and you have sales reps waiting for calls.  Anything over this is against the law; the penalties are very expensive.  The dialer uses a simple algorithm to define how many lines to call out at any give time.  Good predictive dialers will adjust the outbound call rate based on short term trends.

There are trick and techniques that make this more effective.  However, this type of dialer is very frustrating to people, and can be detected by contacts when they pick the phone up (there is the delay as the software detects whether it’s a live person, finds the next available agent and patches it through to that agent).  People often hang up on the dialer when they hear this.  This kind of dialer is still used heavily, especially overseas.  Though less and less in the US.

Ratio Dialer – A ratio dialer is also used to call consumers at home.  It is purpose and approach is almost exactly the same as the predictive dialer.  However, instead of an algorithm defining the number of outbound call and any given time, the ratio dialer will call based on a predetermined ratio to agents.  This means that a manager can determine how many outbound calls to make at any given time based on the number the choose times the number of available (not on a call and available to take a call) agents.  So, a 2:1 ratio would mean that for every available agent, the dialer will make 2 outbound calls.

There are no controls that prevent a ratio dialer from exceeding legal abandonment ratios.  It relies solely on the sales manager’s management and monitoring of the system.  The ratio dialer also has the same delay in connecting to the agent and as such has similar reaction from contacts.

Message Lay Down – A message lay down dialer is a voice message broadcast tool.  A sales rep or manager can record a message, select a list of contacts to call and play the message to, and then start it.  When the contact picks up after being called, the system simply plays the message and hangs up.  If it gets an answering machine, it can play a different message, or the same one as is played to the live connect.  It will report back to the contact management tool the results of every call.

This dialer is not often effective when used to call people that do not know you or your product.  However, when used to call a “friendly” list of contacts (i.e. Customers, opt-in lists, employees, etc) it can be extremely effective.

Message Lay down with Connect – The message lay down with connect capability is the same as the message lay down with a option of the contact to press a number on their phone and then connect to a live person.  For example, a message can state – “InsideSales.com has rolled out a new message lay down product, press 1 to talk to a sales representative and learn more”.  Additionally, it offer the option through a push of a different number to have information email, or to be removed from a call list.

This type of dialer is also extremely effective of calling opt-in list.

Power Dialer – The power dialer (also called preview dialer) is more often used to call businesses (though recently is being used to call consumers to avoid the delay experienced with predictive and ratio dialers).  The way a power dialer works is a sales rep will connect to the phone system, and then begin calling contact from a defined list or criteria.  The major difference between a power dialer and a predictive dialer is the with the power dialer, the sales rep will always hear the contacts phone ringing.  This means that the sales rep hears the contact answer and the contact will not experience any delay because the rep is already on the phone.

The advantages of the power dialer are that the rep does not need to dial the phone, can leave prerecorded messages when they hear an answering machine, will have prepared emails and faxes that can be send without having to go anywhere else.  The main time saver is that the rep does not need to go any where else when dialing.

I hope this is helpful to people.  Please let me know if you have any questions or have found any in-accuracies.

I work with a Hosted CRM application provider the focuses on the inside sales space (InsideSales.com).  Our entire application is build and designed to help sales reps (not necessarily telemarketers) effectively sell over the phone.  This includes cold calling.  I agree with the masses, cold calling is not fun.  If done effectively, it can generate effective and somewhat cost effective leads. However, I have found that leads generated by cold calling are on average between 2x to 4x more expensive that a company or sales rep can generate via the web (if also done effectively).   This is not the whole story though. 

An example:

We have a customer that uses our system to power dial a list to generate leads.  They were able to generate around 1 lead every 1.5 hours.  Considering the cost of employees, systems and overhead, they were paying around $100/lead.  From the web (using PPC, SEO, and lead providers) they were paying around $20/lead.  This seems pretty straight forward, go with the web leads.  What’s more, the cold call leads seemed to be less qualified than the web leads.  The web leads generated actual buyers.  The leads generated from cold calling identified companies that were at the beginning of the interest cycle.  Thus, in the short term the web leads closed better and seemed more effective.  However, they saw an unexpected reversal of value in lead sources.  Even though the web leads were smaller opportunities and they closed faster and more often.  The leads generated from cold calling we very targeted to the industry and size that that worked for this customer.  This customer began to close deals greater than the sum of the smaller deals that came from the web from the same time frame.  So in the end, cold calling generated more revenue and held its own compared to web leads.