In Sticky Sales and Marketing, Peter Lyle DeHaan, PhD breaks down sales and marketing strategies in a coherent story-driven process and highlights what works and what doesn’t. Through personal stories and eye-opening insights, he shares how businesses and organizations can promote their products and services more effectively for long-term growth.
Strategically grouped in four parts, Sticky Sales and Marketing takes a holistic look at sales management, sales tips, marketing management, and marketing tactics.
Peter Lyle DeHaan is an entrepreneur and businessman who has managed, owned, and started multiple businesses over his career. Recurring themes included customer service, sales and marketing, and leadership and management. He shares his lifetime of business experience and personal insights through his books and posts.
Earlier this year Vince Vitale, marketing director at Startel, interviewed Peter Lyle DeHaan about the future of the call center industry and learned about his best content marketing tips.
The result is a two-part series.
The first piece, titled “Peter Lyle DeHaan: Contact Center Futurist,” appeared online in March this year. In it, DeHaan looked at the industry’s past to get a feeling for where it’s headed. “I see a bright future for the industry, limited only by our imagination and creativity,” said DeHaan.
His advice to get there is to “Invest in people, for frontline staff is our essential difference and our future distinction. Then support them with the best technology tools possible.”
He warns against posting content on social media which limits what your audience sees and can summarily shut you down at any moment, for any reason. Therefore, post on your website, which you own and control.
“Once you have a professional looking and visitor-friendly website, consider content marketing for engaging prospects and for search engine optimization (SEO),” added DeHaan. Yet he noted that “Writing is easy. Writing well is hard. It requires practice.”
Call centers can produce content internally. Their staff knows the industry but may struggle with writing. Or they can outsource the writing part, but those experts may struggle with understanding the industry. It’s a difficult balance to achieve.
Regardless, “Start by producing quality content with a visitor-first perspective. Don’t write for search engines because they can’t make a buying decision. Only after you’ve written it should you factor into the piece good SEO practices.”
“In a very real sense, this book has been two decades in the making,” said DeHaan, “It started when I launched AnswerStat magazine in 2003. I’ve taken what I’ve learned about medical contact centers since then and combined it with a lifetime of call center experience to produce this book.”
In addition to writing and publishing magazines and books about the call center industry, DeHaan’s lifetime of experience includes managing a multi-location call center, employment with a call center vendor, and consultant for healthcare call centers, medical answering services, and telephone answering providers.
The result is the book Healthcare Call Center Essentials.
Healthcare Call Center Essentials is designed for those who want to manage a more effective medical contact center. From daily operations to long-term success, this essential guide will help readers create a thriving contact center that meets the urgent needs of both patients and the medical community.
In it, you can discover how to better manage your team and support achievable strategies to meet goals and support patients and healthcare centers. By implementing the strategies and tips in Healthcare Call Center Essentials, you can improve your daily systems and perfect your contact center operation.
Determining an appropriate valuation for a telephone answering service (TAS) looms as a challenging task, one that many outside the industry don’t fully appreciate. This paper details TAS distinctives and explains how to best determine the value of a TAS.
A common valuation method for most businesses is to use a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization). This general approach can be adapted to apply in most situations, but it fails to appreciate the nuances inherent in the telephone answering service industry.
When it comes to determining the value of a TAS, the EBITDA approach often falls short, underestimating the true worth of the answering service.
Multiple of Monthly Billing
An alternate telephone answering service valuation methodology, which has proven itself over time, is a multiple of monthly billing. Most TAS business sales are to others in the industry or to investment groups that understand the industry. In this case, call center valuation knowledge doesn’t apply and leads potential purchasers astray, undervaluing the property.
Answering Service vs Call Center
By definition, a TAS is arguably a subset of the call center industry. But the TAS industry is substantially different. It also predates the call center industry, which started circa 1980, whereas the answering service industry first emerged in the 1920s.
While EBITDA works as an effective evaluation tool for call centers, this methodology doesn’t translate nicely to answering services. An outsourced call center typically has a small number of large clients, whereas a TAS has a large number of small clients.
If a call center loses just one client, their whole operation plunges into disarray and their future viability is questionable—unless they can replace that one client in short order.
When in answering service, however, loses one client the impact on the bottom line is negligible and usually not even noticed.
Given this dynamic, EBITDA works well for call center valuations, where the business’s future viability is unknown, even questionable. Even those call centers that attempt to lock in clients with long-term contracts, still lack the confidence of those clients remaining with them should they become determined to leave. Given this reality, outsourced call centers typically sell for a low multiple of their EBITDA.
Contrast this to a TAS with their high number of low priced clients. From a financial perspective, the TAS operation becomes a numbers game. The astute business manager knows how long an average client will continue using their services. Some will stay longer, and some will be shorter, but the average is a number they can confidently rely on hitting, month after month, year after year. They also know the average monthly billing for a typical client.
What this means is answering services have a predictable and measurable volatility that is both small and understood. When a client cancels service, which happens every month, their marketing department and sales team has scores or even hundreds of realistic prospects in its sales funnel.
This means that another client will soon take the place of the one that just cancelled service. This isn’t hard to do with a monthly cost of using a TAS starting at just shy of $100, with a $200 to $300 range being common.
Given these dynamics, EBITDA calculations underprice answering services, with a multiple monthly billing being a much more realistic and actionable figure. Yes, you can valuate a TAS using EBITDA and back into a reasonable approximation of its value. But doing this requires adjustments and assumptions, which takes too much effort to be practical. And it still often undervalues the property.
That’s why most in the TAS industry have persisted in using a multiple of monthly billing to guide their initial telephone answering service valuation efforts. It has worked, and it continues to work.
Adjusting the Multiple
Just as with the EBITDA valuation methodology, the multiple of monthly billing approach determines the multiple based on other business factors. A well-run optimized TAS will command a higher multiple of monthly billing then a poorly run, mismanaged, or ignored operation.
Given this, however, is that some answering service buyers purchase only the client base. This renders all other valuation factors as largely irrelevant. For them, the monthly billing is the only thing that matters.
Others purchase the entire operation, either to run independently or to merge into one of their existing answering services.
A Seller’s Market
The TAS industry is currently experiencing a seller’s market. It’s been in this mode for several decades. Based on what I hear from buyers and sellers is that sales often occur for a monthly billing multiple in the mid to high teens. And selling at over twenty times monthly billing isn’t unheard of.
Sellers, of course, are pleased with the payout, yet buyers continue to willingly make acquisitions under these conditions. They do this to pursue an economy of scale, which only the bigger players can fully realize. This has resulted in a decades long TAS industry consolidation.
The actual size of the TAS industry is hard to pin down with any degree of accuracy, yet when I researched my MBA thesis in 1998 the estimated size of the industry was 10,000 answering services, which soon decreased to 5,000 by the time I did my PhD dissertation a couple of years later. I now estimate the number of services to be one tenth of that number, probably lower.
This is not to suggest the industry is shrinking. It is not.
The demand for answering service is great and appears to be larger than ever in terms of overall sales. It’s merely that the number of services has decreased.
This means that those providers who want to grow through acquisition—which is much faster and often easier than growing via sales and marketing—have fewer viable services to select from.
This is the main factor in driving up monthly billing multiples and keeping them there. I expect this dynamic to continue for the foreseeable future.
Do you lose customers about as fast as you gain them?
It doesn’t have to be that way. The Sticky Customer Service book will show you how.
Customer service isn’t a once-and-done effort. It takes ongoing work to truly meet your customers’ expectations. In Sticky Customer Service, unearth practical, action-oriented insights to help you turn customer service from an embarrassing weakness into a business strength.
With over three decades of business and entrepreneurial experience, Peter Lyle DeHaan, PhD, offers his prescriptions to serve customers better and stop driving them away.
The three key areas where customer service occurs and why they must work together.
How to avoid common errors that too many business’s make.
Why delighting customers is not the best approach and sets up future failure.
Based on a lifetime of real-world examples, the Sticky Customer Service book reveals customer service gone wrong and customer service done well.
Customer service is not a set-it-and-forget-it initiative. Never lose sight of this. Sticky Customer Service will keep you moving forward and on track.
Uncover helpful customer service tips through this compelling read, encouraging you to do better and celebrating what you do best. Learn how to meet your customers’ expectations every chance you get.
Sales and Marketing Tactics Change, but the Need to Close Sales Doesn’t
By Peter Lyle DeHaan, PhD
In the early days of the telephone answering service industry, most all clients were local. This was because a physical off premise extension of the customers’ phone line needed to be installed in the answering service. If the client wasn’t local to the answering service’s office, this was cost-prohibitively expensive.
This meant that hiring an answering service was a local buy. And the only effective competition—if any—was another local provider. My things have changed.
Then came along call forwarding, local DID numbers, toll-free numbers, and toll-free DID numbers. These provided the potential for every answering service across the country to compete with every other answering service. Even so, the marketing focus of most answering services remained on their local city.
A subsequent advancement came with VoIP (Voice over Internet Protocol), which completely opened the market. This made every answering service with this technology a competitor to every other service in the country.
Marketing that Worked Then
Some of the common marketing efforts when the focus was on the local community included yellow page ads, local print advertising, direct mail, direct sales (cold calling, lead follow-up, or both), networking, word-of-mouth, and referrals.
Of course, individual results varied, but most answering services found success in one or more of these strategies. These techniques worked then when the focus was on the local market, but they don’t work so well now, especially when pursuing a broad geographic area.
Marketing that Works Now
When casting a net over a wider geographic region, the common go-to solution is online advertising. The ability to target ads to specific areas and prospects is an attractive option, especially when contrasted to yesterday’s broadcast marketing solutions.
Running effective online marketing campaigns is a skill people best learn through doing. Expect to make some mistakes and lose money in the initial stages, but with practice and intention you can run successful online advertising campaigns.
The goal of marketing is to find prospects, that is, leads. The goal of sales is to close these leads. For an answering service to grow, it must excel in both aspects of the sales and marketing equation. Just as you track online marketing effectiveness by the number of clicks, you track sales effectiveness by the number of closed deals.
Generating leads is just the first step. Closing leads is essential to have an effective sales and marketing campaign.
In the next issue will look at online ad targeting strategies.
Empower Employees to Excel Regardless of Where Their Office Is
By Peter Lyle DeHaan, PhD
We are now approaching one year since many businesses sent employees home to work. Though some staff have returned to the office, either all the time or on select days, many workers continue to toil from their homes. Some have set up fully functional workspaces, while others persist with cobbled together solutions that mostly work, most of the time. These workers—or the company that employs them—persist in this mode, hoping to return to their office accoutrements any day. Until this occurs, their customers suffer through less-than-satisfactory outcomes.
When businesses first decided to, or were forced to, send workers home, many sent out Covid-19 response emails to their customers and stakeholders. These were both unhelpful and repetitive, providing little useful information. The essential message was for us to lower our expectations because their employees were working from their homes.
One email I received, however, delighted me. This company said their employees had always worked from their homes, so I could expect the same high quality of service and responsiveness I’d always enjoyed. As far as they were concerned, it was business as usual.
This business-as-usual message should have come from every organization, whether accomplished at having home-based employees or pursuing working from home as a new initiative. Yet I still hear companies apologize for their poor service and delayed responses because their staff struggles with the limitations of their home-based offices.
On the onset of this development to send staff home, I offered tolerance for a week, even a month, as employees adjusted their perspectives and equipped their offices to provide full-functional support in all they did. Yet for them to remain mired in this mindset eleven months later is unacceptable.
Although some jobs require face-to-face interaction, most work occurs at a distance using the telephone, email, and video. Office location shouldn’t matter. And it certainly shouldn’t be an issue after all this time.
Though we hope that employees who once worked in an office will soon be able to return, the wise approach is to proceed as if this might never happen.
If you’re working from home, look at your office configuration. Is there anything you can’t do or can’t do as well from home as you could in your office? What do you need to do to correct that? Don’t let the limitations of your home-based office affect your staff or clients any longer.
And if you have employees working from home, are they fully functional or partially provisioned? What do you need to do to close that gap? What must you do to ensure their location isn’t an issue?
It shouldn’t matter to your stakeholders where you work from. They deserve the same quality of service and responsiveness whether you’re at home or in the office.
The potential to have remote operators work off-site from the main answering service location goes back to the 1990s, when I made a presentation about this topic at the ATSI convention. I covered the two key aspects of having a distributed workforce. One was the technology to make it happen and the other was managing a dispersed staff.
The technology aspect of remote work was, at best, convoluted, not nearly as stable as being on site, and it involved a great deal of planning. It required having a data connection and an audio connection. Both had to work well to answer calls. Technology has changed much since then, with remote access being as simple and as flexible as a good internet connection.
The management concerns, however, remain unchanged. It’s still challenging to manage and supervise remotely located employees. Yes, we now have more tools to tap into to do this, but the human difficulties of managing someone we can’t see is still fraught with problems.
Given the risks associated with not having staff conveniently working in one place has caused many answering service owners and managers to dismiss remote operators as an option. In other cases, the inability to find and retain a local workforce has driven other answering services to embrace remote operators as a requirement.
Until recently, most who have pursued off premise employees have done so out of necessity, not principle. This has changed.
With lockdowns, restrictions, and limitations placed on most people across the United States and around the world, allowing staff to work from home has become the only way for them to answer client calls. For many it was go remote or go out of business.
Some who have gone down this path have celebrated the flexibility and embraced it as a new business model, perhaps one even superior to what it replaced: a centralized answering service operation. Other industry leaders, however, look at remote operators as a necessary solution that they one day hope to retreat from. They long for the days of walking into their operation room and seeing all their staff in one place, busy working.
Though returning to a centralized operation may one day be possible, we must consider that we may never be able to fully revert to this traditional operational model. We should, therefore, learn to embrace having remote operators for the long-term, whether it’s our preference or our only option.
And even if this current crisis abates to where we can again safely gather in an office, with cubicles not quite six feet apart and staff unable to wear masks, history could repeat itself with another pandemic forcing us to send people home to work.
Though having remote operators was once optional, it’s now a necessity, both for the short-term and for future flexibility.
Article Repository Consolidates Industry Resources
By Peter Lyle DeHaan, PhD
I published my first article in 1982. It was about pagers. Remember them?
It was also the hardest piece I’ve ever written, but it set me on a journey for a lifetime of writing. Over the years I authored a couple thousand articles, some of which have been forever lost, but most are still available online. And I’ve written even more blog posts. That’s millions of words.
I write a lot about the telephone answering service and call center industries. Each year I publish twelve columns for TAS Trader and another six each for Connections Magazine, AnswerStat, and Medical Call Center News. That’s thirty new pieces of industry related content each year, with over 500 in total.
Now, for the first time ever, these are accessible for you at one location. Altogether I’ve posted more than 1,400 articles that I’ve written over the years.
In addition to them being online, I will compile and update the best, most relevant articles for upcoming books. With a dozen book title ideas in mind, I’m already working on the first one. The working title is Customer Service Success Stories. I’ll let you know when it’s available.
My next title will cover the telephone answering service industry. I think I’ll call it The Best of TAS Trader. I can’t wait to share it with you.
Do you measure your hiring process in terms of weeks, days, or hours? How often do you lose a promising employee because you didn’t react quickly enough?
5. Optimize Operational Processes
What does your policies and procedures manual look like in your answering service? If you don’t have a manual, how’s that working for you?
6. Optimize Agent Training
What steps can you do to make your agent training more efficient and more effective?
7. Optimize Billing
How many steps are involved in producing invoices? How much time do you take between billing cut off and sending invoices? The longer it takes, the more you hamper cash flow.
8. Optimize Collections
What is your average days payable (also known as days payable outstanding)? Seek to collect more of what’s owed to you faster.
9. Optimize Accounts Payable
How quickly do you turn around invoices? Seek to pay faster to win your vendor’s appreciation and build a buffer for times of tight cash flow.
10. Optimize Tech Support
Is the technical aspect of running your answering service a strength or weakness? Regardless of your answer, look for ways to make tech support better.
11. Optimize Admin
When it comes to overhead effectiveness, look for what you can eliminate, delegate, or streamline. Make sure everything you do counts.
Pick the item on this list that deserves the most attention and will produce the biggest positive change for your answering service. Then pursue it. Once you have one item done, pick another one to work on. Work through this list until you have streamlined your entire answering service.