It was argued that most are simply in denial, hoping they’ll sell their companies for 3x revenue and then retire before the shit hits the fan.
In reality, without adopting cloud software they’ll only be able to sell for 1x revenue or less, meaning many of the 38,000 accountancy firms in the UK will go out of business when the owner retires, leaving many unemployed and the owner without a golden goodbye.
The ones in denial say, “If I use an automated system to do bookkeeping, I’ll be able to bill by clients fewer hours per week and I’ll make less revenue per client”.
The best ones are adopting cloud tech and doing really well, solving more problems for more clients and not actually needing to cut people or bill fewer hours.
Like accountancy firms, some of the telemarketing firms I’m going to are a little bit in denial about how software is about to change the industry. Real quotes include, “If you make me more efficient, my clients will pay me less because I bill per hour”, and “I wouldn’t want to introduce this to my current client relationships because even if they do better I won’t be able to bill as much”.
Technology like ours won’t go away if you stick your head in the sand. If it’s not us it’ll be someone else with similar technology who’ll change the economics of telemarketing. This does not mean the end of telemarketing, just as Xero doesn’t necessarily make accountants redundant or the ATM kill front-line bank staff. (There are more front-line bank staff today than in the 1970s when the ATM was introduced; they’ve just moved up the value-chain into advice rather than drudgery.)
This technology does change the economics of telemarketing. If some firms are able to be much more efficient by adopting this software, they will simply outcompete the others who are not. It just means they’ll have to bill by performance rather than by hour. If someone comes along with something that drastically changes the efficiency of the activity, you can’t keep billing by the hour just because that’s what you’ve always done.
Payment by performance, not by the hour, is the future. Even law firms are being disrupted by competitors who bill a fixed fee for specific jobs (helping a firm raise finance, writing an employment contract, helping with a visa application for an employee). The new firms are driven to boost efficiency with technology and their clients love the certainty. About 50% of the legal work we’ve bought over the last year has been fixed fee. It’s no surprise that lawyers at major firms who haven’t adopted this new way of billing tell me they’re pretty worried.
By making telemarketing more efficient we change the cost of acquisition for the channel and make it economical for a greater number of companies. Where telemarketing was previously too expensive, once we can choose who to target with smart technology it becomes a brilliant option. You can’t beat humans speaking to humans for richness and nuance of communication. So rather than threatening telemarketers, GrowthIntel and similar firms are actually their allies.
Like many other people-based industries going tech, they’ll have to change the way they price to pay-on-performance. But the technology increases the size of their market to such an extent that it will eventually become prohibitively costly not to make the switch.
In the meantime we’ll be doing our utmost to introduce people to this technology – and us as their allies – in order that they’re able to reach every corner of their market using human-to-human communication.