The History of the Predictive Dialer

The earliest predictive dialers, primarily located in banks, were extremely primitive standalone systems that were used tor telemarketing or collections. These dialers required contact centers to go through the painstaking process of loading tloppy disks containing the names and contact information for the people they wanted to call. Groups of agents would physically sit next to the dialers in tour-hour shifts.

The initial dialers didn't allow for updates and weren't integrated with any other systems. As a result, sometimes during their four-hour stints at the dialers, telemarketing agents would call customers who already owned the products or services they were trying to sell, or collections agents would contact customers who had already made payments on their debt. Companies quickly realized that agents were wasting a lot of time on unproductive activities, and that customers became agitated when they received these unnecessary phone calls.

At that time, Davox was manufacturing and supplying terminals with telephones. Our clients included a number of financial services companies and, one day, a large bank approached us about the possibility of bringing their predictive dialing systems online. As this has always been a part of our history - helping our customers achieve their specific objectives - this was a challenge we gladly accepted because we felt we could help our customer fill this technological void. In retrospect, we see the impact that this decision made on the contact center, particularly in the sales and collections markets, which makes us proud.

Davox first approached Melita, a company that at the time was making big strides in the development of the predictive dialer, and told them that we wanted to partner to develop a full predictive dialing solution. We provided Melita with product specifications, and they subsequently became the original equipment manufacturer (OEM) for our design. .

A few years later, in 1987, Davox bought TBS, the leading dialer company at the time, and together we launched Unison, a new, high-powered predictive dialer. Unison helped ensure that agents maintained a steady, busy pace throughout the day.

As with any new technology, the initial power dialers had some flaws. They would dial telephone numbers regardless of whether agents were available to handle the calls. When a dialer initiated a call and all agents were busy at the time the customer answered, the dialer would put the customer on hold until the next agent became available. The industry quickly learned that customers found this practice to be annoying and intrusive. We refined the algorithms until they became significantly more precise, and we were able to help companies prevent contacting their customers and asking them to hold.

Drastic increases in efficiency - generally a 300 percent productivity improvement - encouraged many companies that were once solely focused on outbound contacts to use their predictive dialers to explore the possibility of call blending. Soon, we saw traditionally outbound centers handling inbound and outbound contacts with one agent pool and dynamically optimizing their agents based on inbound or outbound needs.

At the same time dialers were gaining in popularity, telephone call costs were declining. Companies that were looking for new and effective ways to market their products began to see the telephone as an extremely cost-effective tool. The number of companies making telemarketing calls was rising, while the number of telemarketing calls that companies were making was also drastically increasing. It didn't take long before consumers began to complain about the number of phone calls they were receiving.

As a result, in 2003, the Federal Trade Commission (FTC) stepped in to begin regulating telemarketing activities. They developed new legislation that required telemarketers to become more selective about who and when they were calling. The telemarketing community was suddenly forced to look into other applications to maintain their livelihood. They began working more closely with customers with whom they already had existing business relationships and abandoned their shotgun attempts to acquire new customers. In my opinion, this legislation has been a step in the right direction for the industry and for consumers. It has forced companies to constantly finetune their calling lists and has resulted in more contacts to the right people - people who want the products and services the companies are offering.

Predictive dialers have also been vitally important for collections. While the first dialers simply ran down call lists and contacted customers in the order their names appeared, today's dialers allow companies to reach out to their customers at the times that are most convenient for those customers. This process is one of many that have helped to drastically streamline the collections process.

We are now seeing a new use for predictive dialers: customer service, believe it or not. Many companies are using dialers for high-touch applications; for example, you might call your favorite retail store to place an order and ask the agent a question that he can't immediately answer, but he vows to find the answer and call you back. Rather than placing a reminder sticky note on his computer, the agent schedules your call-back with the predictive dialer. The dialer automatically initiates the return call from that same agent at the time you specified and at the phone number you provided. You are guaranteed to get your callback, and when you do, your opinion of this retail store will most likely increase.

Some contact centers today are using predictive dialers to call their customers back when hold times are too long. Others are developing and implementing proactive customer care strategies. Take, for example, a large cell phone company. The company regularly contacts its new customers to make sure they understand the features of their phones, and simultaneously asks customers if they have questions about their service. These activities are geared toward improving customer satisfaction and retention rates.

We are beginning to see the integration of predictive dialers and text-to-speech capabilities as companies use their dialers to call their customers and then pass the calls to a speech self-service application rather than to agents. Customers speak their responses directly into their phones, and the automated systems respond appropriately, engaging customers in "conversations." For example, if you're 30 days delinquent on a payment, a collections agency might call you and ask you for the last four digits of your social security number. You speak the digits into your phone. The system then asks you to submit payment and offers you the option to speak with an agent.

Just as we developed our initial predictive dialer to meet the needs of one specific bank nearly two decades ago, today we are working with our customers to continuously fine-tune our offerings. I am proud of our solid understanding of contact center technology, and even more proud of our customer and our industry knowledge.

We have certainly come a long way when it comes to predictive dialing. I have not only witnessed it, I have lived it. I envision even greater change on the horizon for companies that are always looking for ways to improve the customer experience they deliver. I am proud to be a pioneer in this part of the market, but I also look forward to being a continuous innovator in the industry. Needless to say, I look ahead to the future with great anticipation.

Copyright Technology Marketing Corporation Jun 2006
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