Posted: 4/2003

Proof Positive
Third-Party Verification Analysis
Spots Sales Process Problems

By Josh Long

While
third-party verification of telephone service orders is mandated by federal and
state regulations to curb slamming and fraud, it also can provide telephone
companies with data needed to analyze the performance of telemarketing
representatives, weed out parts of a script that raise a red flag for consumers
and evaluate other variables that may help boost sales.

The Verification Company, of
Dunedin, Fla., has developed software called Lost Sale Analysis to help
companies audit poor-performing sales reps and discover precisely at what point
during the verification process a sale is being rejected.

"We can consider the interview
by an independent third party to be a test of how well the sales representative
did his job. There are several specific things a customer must understand and
agree to in order for a sale to be effectively completed. We check the
customer’s understanding and agreement to these points and make a digital
recording of the agreement," says David Figueroa, vice president of
business development, The Verification Company. "If the customer doesn’t
pass verification, it usually means the sales representative didn’t ensure the
customer understood and agreed to the terms of the sale before sending them to
us for verification."

The company says by using Lost Sale
Analysis software, the live operator verification procedure can provide clues as
to how to change sales training and procedures to improve results.

The Verification Company’s software
has helped "identify specific areas of trouble as it relates to increasing
our verifying percentage," says Sherman Beard, operations manager of
Irvine, Calif.-based Legent Communications Corp., a service bureau that offers
resellers billing, customer service, provisioning and sales support, and
wholesale network services from major providers.

Beard says he and the telemarketing
agencies review the reports and share ideas on how to improve the sales process
for their clients, the telephone companies. For Legent, limiting the number of
rejected orders is particularly important because the company pays for each call
that is transferred to the third-party verification center, Beard says, adding
his company "has a high verification percentage."

Beard says not all phone companies
have the same high results or expectations. "Everybody has a different
program and everybody has different expectations within their program," he
says. "Some of the people that are marketing from what I understand …
their programs are such that they expect a lot of fallout" due to the
volume of calls they are making.

It would seem that verifying a sale
would be a mere formality, but many companies report that as many as 50 out of
100 consumers transferred to a third-party verification center change their
mind.

On top of basic information required
by the FCC, there can be state requirements, such as mandates that verification
companies recap the plans, says David Goldstone, director of sales and
marketing, Altamonte Springs, Fla.-based Third Party Verification Inc. (3PV).

Telcos themselves may have
incremental mandates to include various terms and conditions, such as rates,
sources say. More details added to the verification process can lead to
customers bailing out of the sale, says Cindy Hamilton, vice president of
Charlotte, N.C.-based VoiceLog LLC.

Goldstone says the most common
reasons why customers reject an order or hang up during the third-party
verification process include simple buyers remorse, their sales rep didn’t
properly prepare them and technological glitches when the call is transferred to
the third-party verification center.

Hamilton adds another reason: If a
customer has to wait a long time to connect to a third-party verification
operator.

Goldstone says 3PV will provide its
customers as much detailed information on the records as they want. "It’s
what the customer wants to know," he says. "If there is a problem, we
call them almost immediately. You can use our reports and systems absolutely to
improve sales."

At the CompTel Annual Conference
& Exposition in February, Goldstone and his colleagues sported lapel buttons
reading 50 percent with a red slash, says Goldstone, explaining that 3PV was
making the point that a 50 percent rejection rate of third-party verification
orders is unacceptable. Goldstone says 35 different companies — ranging from
telcos to attorneys to consultants — approached him and his colleagues at the
show, saying they or their clients are experiencing similar rejection rates.

"We don’t feel like 50 percent
is acceptable to anybody," he says. "The only thing that 50 percent is
acceptable in is baseball."

Since 3PV’s inception in 2000, it
reports that it has handled more than 4 million verifications with a success
rate averaging 80 percent to 90 percent. Goldstone says 3PV’s largest client is
averaging 97 percent success rate.

He attributes the high completion
rate in large part to its technology, which allows a customer to answer
questions much in the same way as if they were talking to a live agent rather
than responding by touch-tone keys. The system then identifies the spoken answer
and responds by repeating the question, proceeding to the next question, or
routing the customer to a live agent.

"Most [other systems] just
record the customer’s verbal or touch-tone answer and go on to the next
question," he says. " In most cases, if a customer makes a mistake,
they just hang up and start over again. That’s really not an issue for us."

Hamilton, of VoiceLog, says her
close rates vary widely — from 50 percent to 99 percent — depending on the
requirements. A simple and short script generally translates into a higher close
rate. By contrast, a longer and more complicated the script results in a lower
close rate, she says.

Hamilton says companies hiring an
outside sales team may have more comprehensive scripts to protect themselves
against fines from regulators while providers familiar with their sales team may
not worry as much about the script contents.

Hamilton says VoiceLog also
interacts with its clients to give them feedback on the records, such as a
consistent pattern of one sales rep’s potential customers being constantly
confused and hanging up during the verification process.

Hamilton says her company also can
do other things to improve sales, such as setting up a system whereby a live
agent is able to call the customer back if the call is disconnected or hung up
during an automated third-party verification process. In February VoiceLog
disclosed completing more than 500,000 live operator verifications calls in the
year since it announced a live operator offering,

Asked whether live vs. automated
services has any bearing on the number of sales that close, Hamilton says the
"close rate is still a function of how the sale was handled, what’s being
sold and the script that was used to verify the order."

"What produces the best close
rate isn’t a black-and-white issue and, therefore, it’s important to go with a
TPV provider that has experience and can help you choose the highest close rate
method for that particular campaign. Otherwise you can waste a lot of sales
trying to figure it out," she adds.