Would you like to book a tennis court in Hibya Park? Just dial the Tokyo Sports Facilities audio response booking system and key in your reservation. Do you need information on ground transportation for your visit to London? Try the fax-on-demand service operated in Tokyo by the British Tourist Authority. Interested in insurance? Sending sweets to a special someone? Looking for luxury lingerie? Simply pick up the phone and....
Getting information, goods, and assistance wasn't always this easy in Japan. Widespread use of the telephone for sales, marketing, and customer service is still a relatively recent phenomenon here, first heralded by the founding of the Japan Telemarketing Association in 1988. The hoopla which followed JTA's establishment included annual telemarketing conventions in Tokyo, reductions in nationwide free-dial rates, expansion of digital switching and optical fiber networks, and the introduction of automated call centers across the country. But despite such innovations, consumer telephone usage remained flat in the early nineties, and was even falling as a percentage of household expenditure, until 1995 and the introduction of the now ubiquitous "ketai denwa."
Mobile phones (ketai denwa) are believed to account for the unprecedented 11.1% leap in annual spending on home telephone bills in 1997. Indeed, the number of mobile units, including cellular phones, personal handy systems, and car phones, rose from just over four million in 1994 to nearly 21 million in 1996 and over 30 million by March of this year, closing in quickly on the saturation level of one per household.
Much of the increased call volume is personal in nature. But the dramatic rise in phone ownership and usage also equates to business opportunities for telemarketers.
"The telephone wasn't looked on as a socially acceptable medium," says Jeff Humphreys, a 28-year resident of Japan with over two decades of experience in telemarketing. "Now you see young kids using it, older people using it, and using it everywhere."
Humphreys, who is the senior managing director of Marketing Partner Co., Ltd., a company specializing in telemarketing consultancy and outbound call services, points out that today's 15- and 16-yearolds are growing up with phones. Even toddlers have toy cell-phones to emulate their elders. "Ketai denwa is having a permanent impact on society and lifestyle here. The effect this will have on telemarketing is quite good."
Willingness to call and be called is what drove the United States telemarketing industry to more than 500 million in-bound and out-bound calls a year, generating as much as $150 billion in annual sales revenues. Toll-free dialing also played a big role in that growth, contributing approximately half the current business call volume in the U.S.
"NTT realizes there is a need to increase toll-free calls," says Humphreys, whose company has been assigned by the telephone carrier to sell free-dial "0120" numbers mainly to small and medium-size businesses. He notes that Japanese consumers are becoming increasing spontaneous. Toll-free numbers used in conjunction with response-provoking advertising can turn that spontaneity into business contacts.
Companies wishing to use free-dial numbers to promote products and services may establish in-house departments to handle the calls. Most airlines, car rental agencies, hotels, and travel agents have taken this route, as have some catalogers. Land's End Japan is a case in point. They chose an in-house solution to their call center needs, primarily because they sought full control over the voice of the operators and the image they project to callers. Having telemarketing operations on-premise has also given the company flexibility to respond to changes in customer lifestyles.
According to John Butler, newly appointed president of Land's End Japan, "We've expanded our opening hours till midnight, for example. These people (customers) work late. They have a long commute. They need to put kids to bed, then they can shop. They can't shop in department stores because they are closed. Our call center is open till midnight and that fits the Japanese life style."
Another multinational who has taken an in-house approach in Japan is Microsoft. They staff their own customer service and support center, although they relied on a specialist telemarketer, Sitel of the United States, to help set up their systems and train their operators.
There are cases, however, when reliance on an outside vendor makes more sense than investing in telemarketing infrastructure and personnel. According to Mary Ann Falzone, president of a Pennsylvania-based call center consultancy, three of the best reasons to outsource are "to test new programs, to provide capacity for short-term, off-hours, seasonal or spiked response promotions, and to provide disaster recovery or back-up for overflow calls.."
She adds that, "Once you have made an informed decision to outsource, there are several key criteria to consider when selecting the right vendor." Four of Falzone's main considerations are: "A proven ability to support applications that are similar to yours; membership in reputable industry trade associations; a solid foundation for developing an open, truthful partnership; and the required internal program development experts, staff/capacity, and account management to launch and enhance your campaign."
She also adds that technical capabilities, such as remote call monitoring, fulfillment resources, and reporting systems should be considered. "Don't just take their word for it," she cautions. "Ask to review sample scripts, training schedules and reports.... The keys to working with a teleservices outsourcer are preparation, honesty, cooperation, and -- most of all --- constant vigilance."
Fortunately, there are quite a few experienced telemarketing companies in Japan now to handle heavy call volume. Among the largest are NTT Telemarketing, BellSystem 24, and Telemarketing Japan. All of them are capable of handling online order-taking and customer service for American entrants to the local market. L.L. Bean, for example, chose Telemarketing Japan because of their capacity --hundreds of workstations and trained operators -- and their expertise in similar work for Benesse, a huge Japanese purveyor of correspondence courses.
One of the fastest growing and most successful of Japan's outsourcers is Prestige International, Founded in 1986 to handle calls for credit card and insurance companies, they quickly built an international expertise and landed several blue-chip multinational accounts: Neiman Marcus, Victoria's Secret, Hanna Andersson, and BMW, to name a few.
Shinichi Tamagami, executive vice president of Prestige, says the high cost of developing and maintaining an in-house infrastructure is what leads clients to choose an outside supplier, although many Japanese companies still resist. "The economy is bad now," he says, " and it may not see an upturn soon. But even in this difficult business environment, many Japanese companies still want to do everything themselves. Their minds are not open to change, even when they need to be more efficient and economical. It is actually easier to work with foreign companies."
Some 30-40 percent of Prestige's clients are non-Japanese. Tamagami notes that the recent weakening of the yen has detracted somewhat from the business volume of foreign catalog companies, but demand for 24-hour-a-day service hotlines and the diversifying needs of customers for telephone support are making up the difference. As an indication of just how handy the telephone has become as a business medium, Prestige lists dozens of opportunities for companies to use the phone for marketing (see box).
Much of the call volume is inbound, serving consumers or businesses who access publicized hotlines. But an increasing amount of call center activity is outbound, and experts here point to the experience of other countries as an indication that even more outbound activity can be expected.
According to Marcus Hickman, associate director of British Market research firm The Henley Centre, outbound calling is becoming increasing popular worldwide. Research has shown that a majority of consumers are more likely to buy again from a company that keeps in contact with them. As a case in point, Hickman cites a 1996 study showing that 39 percent of customers had an improved perception of a certain European bank after a customer-service call, while only 17 percent felt the call had lowered their opinion. And in a 1997 study, the incidence of insurance buying by phone was up 22% over the previous year, which Hickman describes as a "massive shift." The risk of outbound calling, he indicates, is well worth the reward.
One company that has found this just as true in Japan as in other countries is Time magazine. Outbound calls to subscribers, reminding them to renew their subscriptions, are a key component in the renewal process and account for a high percentage of reorders. Time's outbound telemarketing in Tokyo is handled completely in-house using teams of part-timers.
Not everyone views outbound calls with favor, however. Quite recently, readers of the Ashai Shimbun have been bombarding the city news division with faxes and letters expressing their suspicions and displeasure over "phone calls from strange companies (that) urge these people to buy things from studying materials to condominiums. The callers also know about the residents' age and family members."
In one such case, a 26-yearold office worker in Saitama Prefecture complained of receiving sales phone calls on her mobile phone and at her unlisted home number. She reckoned that a certain company had released to others her telephone numbers and personal information about her age, address, annual income, car ownership, and hobbies, after she had unsuccessfully applied over the phone for a job there.
"I suspect this company simply sold my information," she told the newspaper. "By recruiting, the company can obtain personal information free of charge, so it's very convenient for them. After I answered all these questions, I was told I did not meet their conditions. They said they would simply register me in their files. I felt strange after the phone call. About ten days later, we began to receive a lot of sales calls. We are now thinking of changing our phone number."
This is the dark side of telemarketing, where unscrupulous data collectors and overly aggressive salespeople prey on unwary prospects. The Ministry of Posts and Telkecommunications warns against indiscriminate exchange and/or sale of personal data, but there are no teeth in the guidelines. Kaoru Nomiyama, executive director of the Japan Direct Marketing Association, which consists of 297 major mail order companies, has noted that his association maintains a mail order preference system by which individuals can have their names removed from member companies' lists. But again, the system has no bearing on non-members.
Unless the telemarketing industry carefully polices itself, there could be legislation in the offing to protect personal privacy and limit the availability of telephone lists. Aware of this, Japan's leading telemarketers are hurriedly developing their own data files to ensure access to names and numbers in the future. One credit card company is reportedly calling each and every one of its over ten million cardholders to create individual profiles for use in future marketing activities. The process is expected to take several years.
With such huge undertakings as this going on, there are plenty of jobs opening up for telephone operators. For inbound calls, college students and housewives are the primary work force, with the average age being around 26-30. They like the flexibility of the working hours, and the pay, at Yen1,200 and up per hour, is competitive with part-time wages in other industries. For outbound calls, operators tend to be a bit older and even better paid. Marketing Partner's Humphreys says that "in business to business calling, we prefer operators aged 40 to 60. They know the polite language which is needed in a business call, and they get more respect from the prospects than younger operators would."
Some believe that new technologies will help make telemarketing less labor intensive. Interactive voice response systems and the internet are pointed to as possible machine solutions to industry needs. Sears, for example, is pioneering voice recognition answering technology in the world of retail stores, allowing callers to be connected with the department of their choice at the mention of a word, such as "menswear" or "shoes."
But users and vendors in Japan believe the day of widespread automation here is still far away. "Clients just aren't ready for non-operator systems," says Prestige's Tamagami. "They want an agent on the phone, even if it is not the most cost effective solution. They believe machine response is not good customer service."
Gary Steuck, former president of Land's End Japan, echoes this view that telephone processes cannot easily be automated, "This spring, we used an English language commercial and dubbed it into Japanese with a response phone number and our internet address. The internet is just a startup for us. We launched it in January and are using it for public relations, e-mail and catalog requests. We tell browsers who we are and where we are. We don't sell products on the internet, but we field catalog requests on it. Customers use e-mail to ask questions and make inquiries." The phone and fax will be the primary vehicles for business at Land's End Japan for many years to come.
What can be expected in the near future, however, is increasing integration of telephones and computers to create "virtual call centers" that join networks of far-flung service providers. An example is AT&T's over-the-phone interpreting service, Language Line. By using a toll-free number, clients can access interpreters in 140 languages, 24 hours a days, with an average wait for connection of just 45 seconds, even though the linguists are not all located under one roof. Language Line claims a 98.5 percent success rate in fulfilling interpreting requests, and the service has been booming along at 5,000 percent growth over the past seven years, handling hundreds of thousands of calls monthly from some 10,000 clients.
Perhaps the biggest current undertaking of this nature is the Iridium project. In September of this year, Iridium Systems is expected to introduce a subscriber-based global wireless communications network. Using Motorola-designed personal telephones and pagers, Iridium users will be able to communicate to and from virtually anywhere in the world. The project will be served through a "virtual" 24-hour call center developed by Sprint, with hubs in Australia, Florida, and the Netherlands. The center will provide assistance in 13 languages, initially, with 200 customer service representatives. By 2005, the center will employ over 1,000 reps. Brian Craven, a spokesman for Sprint Telecenters, says the goal is "seamless integration," to be able to "route calls immediately, transparently, and efficiently."
The only major deterrent to including, say, U.S. and European services in virtual call centers in Japan is the cost of international calls. But there is some relief on the horizon. The U.S. has been pressing Japan to lower call-completion charges which companies such as AT&T and MCI must pay their Japanese counterparts in order for Japan-bound calls to be connected to NTT's domestic exchanges. According to U.S. Deputy Trade Representative Richard Fisher, Japanese phone rates are roughly three or four times what they are in other countries. "The purpose is to make the market more competitive," said Fisher, noting that lower rates could mean billions of dollars a year in additional sales to all companies involved. "Japan is stuck in the water in terms of economic growth and in this case both our interests meet."
On May 15th, Japanese negotiators reached an historic agreement with their U.S. counterparts regarding deregulation of international telephone rates, promising to cut the call-competion charge in the year 2000 to 15 cents a minute from the current level of 42 cents. When the cost of phoning internationally is almost as inexpensive as a local call, offshore call centers can be expected to pick up some of the demand being generated here, in what is rapidly becoming a mature telemarketing environment.
Are you having trouble coming up with ways to use the telephone in your business? Scan this list of functions used by other companies and see if it doesn't stimulate some new ideas.
Advertising response fulfillment
Airfare and timetable information
Airport information
Airport transfer arrangements
Answering and message services
Appointment setting
ATM locator
Car and limousine rental
Catalog order-taking
Cellular phone rental
City information
Coach tour reservations
Communication with embassies/consulates
Competitive business analysis
Concierge desk
Corporate, convention, group tours
Credit card authorization
Cruise bookings
Currency exchange information
Customer service support
Delivery service arrangements
Dining recommendations
Doctor referrals and appointments
Emergency assistance
Entertainment and sports event ticketing
Feedback hotline
Frequent customer hotline
Golf reservations
Help desk
Hotel and resort reservations
Information on hospitals/physicians
Insurance claim processing
Insurance policy information/guidance
Interpreting services
Itinerary preparation
Legal referrals
Lost document tracking
Lost/stolen credit card reporting
Market research
Morning calls (wake-up service)
Operator assistance
Product warranty registration
Registration hotline
Relocation assistance
Reminder calls (birthdates, etc.)
Retail shop locator
Roadside (auto) assistance
Sales support services
Secretarial support
Stock market reports
Telephone surveys
Translation services
Transportation information
Travel club
Trip planning assistance
Urgent message relay
Weather information
Source: Prestige International