Is Knowing the Marketing Source of Your Phone Calls Good Enough?

A simple answer to a complex question. 

A simple answer to a complex question. 


Knowing The Marketing Source Of Your Phone Calls Is Not Good Enough

Companies investing in lead generation Internet marketing frequently (and surprisingly) fail to track phone conversions, since Google Analytics and other backend website management platforms don’t support it.

But even companies that have set up phone tracking, to determine the marketing source of the phone conversion (SEO, PPC, etc.), are still missing a crucial piece of the puzzle: Lead validation.

Lead validation is the process of listening to recordings of phone conversations and reading website form submissions to separate sales leads from non-leads. As you’ll see in the presentation below, The Critical Importance of Lead Validation in Internet Marketing, validation makes all the difference in the world because about half of all conversions are NOT leads.

The culling of non-leads from campaign data and campaign testing has enormous implications on lead production and marketing ROI. Read the presentation now:

Aaron Wittersheim is an accomplished entrepreneur with more than 20 years of business and technology experience. He is a partner and COO at Straight North, a Chicago-based Internet marketing company.

Three Strategies for Call Center Optimization

Artist's rendering of Michael Cho dictating a blog post.

Artist's rendering of Michael Cho dictating a blog post.

Next Caller Philosopher-King Michael Cho was recently asked by Execs in the Know, a global network of customer experience professionals, to put together some thoughts for a guest blog post. You can read Michael's insight on optimizing the call center not only for excellent customer service, but also to increase revenue below:

Michael's Guest Post at Execs in the Know

How do you "Know Your Customer" in a B2B Environment?


By: David Schwartz

In our fast-paced world, the challenge of reaching customers in the most productive manner has become more and more interesting. Companies have looked to various customer relationship management (CRM) systems to increase their sales and retention. As a direct result of CRMs, many businesses have indeed managed to boost sales when it comes to direct-to-customer outreach.

Salesforce, the world’s largest CRM company, released the Lightning Partner Community cloud capability back in 2013. This cloud allows customers to access information on their account, as well as to make purchases directly.

For a long time, however, a major challenge has remained with regard to companies selling to companies (B2B). These customers, which are actually companies themselves, want to know more about the end-customer. In order to address this challenge, Salesforce recently introduced a new layer of Lightning Partner Community cloud.

In a recent article, Natalie Gagliordi discusses this new capabilities of the cloud. As Gagliordi explains, the layer will enable the B2B customers (i.e. the reseller) to access the same information as the original seller.

Perhaps this new development will allow the B2B sales process to become smoother, a much needed improvement in a constantly changing era.

6 Takeaways from the RoboCall StrikeForce

Yesterday, the FCC RoboCall StrikeForce presented their final report, actions, and recommendations. Next Caller Account Executive Tim Prugar sat in on the webcast, and here are his takeaways.

There are few greater pleasures in life than taking a seat in a cozy chair, slipping on some headphones, and watching an hour-long livestream of a government hearing. Yesterday, at 1:00 PM EST, that’s precisely what I got to do. Believe in yourself kids…dreams really do come true.

Before getting to the meat of the presentation, a solid recognition, admiration, and appreciation of the work that the StrikeForce members put in is in order. The StrikeForce was assembled in Late July, and over the course of 60 days the committee engaged in over 100 meetings, produced a 47 page report, and rolled out an aggressive timeline for continued action steps. From my estimation, this committee worked at blazing speed, and should be commended for that.

Now, onto my key takeaways:


1.     The FCC Has Fantastic Taste in Music

The waiting music the FCC plays on its website before the livestream kicks in? A soft jazz version of Michael Jackson’s “Man in the Mirror”, inarguably one of the greatest songs ever recorded.



2.     Both the FCC and Carriers Will Focus on Increasing Consumer Information

 One of the largest tangible outputs of the StrikeForce was the launch of a brand new FCC website:

The site approaches RoboCalls from a perspective of lessening their impact. The site gives consumers information on what RoboCalls are, the legal regulations surrounding telemarketing, remedies that customers can take to protect themselves from RoboCalls, as well as a clearly identified place for lodging complaints.

As technical solutions are much more difficult and costly to build, look for both carriers and government actors to create better-educated consumers, particularly those consumers that fit demographics that are at-risk for phone fraud.


3.     VOIP Throws a Wrench in the System

 One of the trends that came up multiple times during the report is that any technical solution to be launched by Carriers to stop RoboCalls and Call Spoofing needs to be able to detect both calls that originate from traditional landlines as well as internet-based VOIP calls. AT&T stated explicitly that the majority of call spoofing originates through VOIP, so being able to analyze and detect these type of calls is of primary importance. Look for Carriers to heavily invest in R&D or vendor solutions that can analyze landline, mobile, and VOIP to detect spoofing…preferably real-time.


4.     Info-Sharing and Cooperation Among Carriers is a Must

One of the most celebrated outputs of the StrikeForce was the “Do Not Originate” (DNO) List. The DNO list, as documented here, allows organizations who do not make outbound calls displaying their inbound number (IRS, 911) to petition to have their number blocked by carriers when it displays as the outbound number. The IRS made written DNO Requests for a series of numbers, and reported a 90% reduction in reports of IRS scam calls following the deployment of a DNO.

To be fair, it’s unclear how much of that reduction was due to these raids in India, but it is still an impressive result.

A successful adoption of a national DNO Registry requires cooperation across Carriers. In addition, the StrikeForce made recommendations to increase sharing of information on “bad actors” across networks, effectively creating a “telecommunications profile” of a phone scammer. The committee also suggested creating “Call Categories” as an industry that will limit false positives when blocking spoofed or potentially fraudulent calls.


5.     The Government Has a Tolerance For False Positives

One of the largest concerns for Carriers when cracking down on RoboCalls and Call Spoofing is pretty straightforward: what are the legal and business ramifications for blocking flagged calls that are actually legitimate?

The FCC made it clear that, if Carriers are doing their due diligence and making a good faith effort when blocking calls, the FCC will push for “safe harbor” to protect Carriers from litigation, either criminal or civil.

As Commissioner Rosenworcel stated, “If you need to break things to get this done, just ask.” This was my second favorite quote of hers on the day, finishing slightly behind “I DON’T BELIEVE IN PARTICIPATION TROPHIES.” The FCC should hire Mike Gundy.


6.     The Carriers are Expected to Foot the Bill


So it’s easy to agree in theory that RoboCalls and Call Spoofing are bad. It’s even somewhat easy to agree on the technology that’s most effective for stopping said calls. Where things get tricky is identifying how, and who, exactly, will be paying for the R&D, technology, training, and deployment. Luckily, FCC Chairman Tom Wheeler laid out the government’s position pretty clearly:

The Carriers will be expected to foot the bill, as stopping RoboCalls is “the cost of doing business” and falls under the umbrella of supplying a high-quality service.

It will be interesting to see what impact that stance will have on timelines, innovation, and deployment. 

The FCC vs. The Proliferation of Robocalling


By: ShirWan Little


Lets face it, few things are as annoying as answering the phone and being immediately greeted by a recording trying to lure you into handing over your credit card information. This increasingly common situation is a result of robocalling.  Currently, robocalling scams account for over $350 million in financial losses every year in the United States.  Moreover, the robocalling scourge has become the most common complaint that the FCC receives from the public. The “Do Not Call List” was created over ten years ago to resolve this very problem.  Unfortunately, the Do Not Call list has failed miserably at this goal. Let’s dive into why the DNC List fails to stop these fraudsters, why robocalling has become so popular and what the FCC is doing to try to stop it.


Do Not Call

At the creation of the “Do Not Call List,” the majority of robocalls were legitimate telemarketers selling real products.  Against those calls, the “Do Not Call List” has remained largely effective.  However, a lot has changed since the “Do Not Call List” went into effect in the early 2000s. In particular, the widespread availability of commercial Voice over Internet Protocol(VoIP) services.  The advancement of VoiP technology made international calling, and phone spoofing (falsifying caller ID information) very cheap.  Consequently, the majority of modern day robocalls blatantly ignore the “Do Not Call List” in attempts to commit fraud.


Tricking the Caller ID

Today, anyone with a laptop and an Internet connection can flood millions of phones with robocalls from any location in the world. Spoofing is perhaps the most nefarious aspect of this type of fraud; people are more likely to answer phone calls when seemingly legitimate organizations appear on caller ID. Furthermore, caller ID is often used to verify one's identity when gaining access to banks.  For that reason, robocalling scams rely heavily on phone spoofing. For instance, one of the more notable scams entails fraudsters masquerading as IRS officials and demanding immediate payment for overdue taxes.  Over the past two years this scam alone has cost taxpayers $31 million.


"Do Not Originate" vs. Do Not Call

In spite of these findings, many in the telecom industry have been hesitant to adopt solutions to stop robocalling, citing concerns that existing alternatives will inadvertently block a portion of legitimate calls. Nonetheless, the FCC has continued to urge these companies to take action.  FCC Chairman Tom Wheeler even wrote letters to the chief executives of the largest companies in the telecom industry asking them to produce solutions to reduce robocalls. Currently, all of the notable alternative solutions fall into 3 distinct methods; "Do Not Originate" list, Authentication/ Identity validation and filtering.


The “Do Not Originate” list, basically the opposite of the Do Not Call list, would stop robocalls at the VoIP gateways that connect VoIP calls to the traditional phone system.  While VoIP robocalls can be placed from anywhere in the world, all such calls pass through these gateways to enter the traditional circuit-switched phone lines.3 This list would allow commonly spoofed entities such as the IRS, FBI and banks to register their outbound numbers in a database. Calls from those numbers that originate from certain gateways would then raise red flags and most likely be blocked. Additionally, this approach can be implemented without any changes in telephony protocols and does not require cooperation of other phone carriers. Yet it still is no substitute for authentication.


Authentication and Filtering

Authentication is the most effective way to prevent spoofing. There are a few different ways to implement this methods, one of the more promising is through the use of third party APIs to analyze the meta data of callers.  Authentication is crucial to stopping robocallers from impersonating others and to facilitate effective filtration. The main drawback of this method is that it would most likely require the difficult task of gaining the cooperation of the major telecom companies to be successful.


Filtering works by checking each incoming call against a white list of trustworthy phone numbers or a black list of numbers you should reject. Although filtering can be very helpful in reducing robocalling it still has several drawbacks. Most notably, if there is nothing in place to stop spoofing, filtering can be easily circumvented by spoofing a new number.


A Cocktail Approach

In total, the three methods complement each other very well. Each of the methods does its part to reduce robocalling in a different way; if used in combination with one another, these methods could eliminate the current robocalling epidemic. The “Do Not Originate List” eliminates the ability to spoof high-profile numbers like the IRS.  Authentication makes fraudulent calls less likely to pay off by stopping robocallers from impersonating others. Filtering can help block all confirmed fraudsters.

3 Ways to Execute a Data-Driven Marketing Plan

by: David Schwartz

For every marketer in the world, the question that is often most prevalent is: “What next?” We have all this customer data, we sell certain types of products. What can be done to make the two connect? How can our offerings meet the needs of our customers, knowing what we know about our specific market?

In “How Marketers can use Data to Target and Connect, Intelligently,” Renzo DiPasquale sets out to solve the puzzle. He lays out three ways for a company to successfully create a marketing strategy that relies on the data readily available:


1. Get Personal.

First, DiPasquale suggests getting personal with customers. Creating content that fits a customer’s profile will make the customer happy to shop at your company. It will also ensure that the customer comes back to shop with your company in the future.


2. Go Mobile.

Next, DiPasquale urges companies to go mobile. It is absolutely crucial for companies to market to customers on their smartphone, particularly as shopping continues to move from brick and mortar to phone.


3. Get Educated. 

The final suggestion is possibly the most important: educate thyself. Learn what technology is out there that can help you improve your data. Possessing and utilizing the best marketing tools can often make or break a company.

In 2016, there is so much data available. The only question that remains is: how will companies use the data to ensure optimal customer experience and retention?

Next Caller Takes On LeadsCon NYC

This coming week, Next Caller will be attending the biggest conference in performance marketing and lead generation, LeadsCon...and it's right in our backyard!  If you are in New York and interested in learning more about our advanced customer intelligence and enriching leads, stop by our booth #332 in the Exhibition Hall.  Next Caller offers the most profound insights into your customers - over 50+ data points of contact, demographic, and home information - from an email address, phone number, or name and physical address.

We’re also delighted to extend an invitation to our Taste of New York Networking Reception in the Exhibition Hall on Tuesday, August 23rd, from 5-6 PM.  Come join us for a bottle of red and a bottle of white as you take in a true New York experience.  We’re looking forward to meeting you.

We're excited to partner with the LeadsCon Community, and to give visitors to our city an exhaustive list of things to do, places to eat, and subway directions!

Comprehensive LeadsCon information can be found here.

Get To Know Your Caller: The Power of the First 30 Seconds

Jenny is the Visitor Support Manager for DMV.ORG. With over a decade of customer service experience, Jenny has been recognized through social media channels as a thought leader. She is co-founder and a regular contributor on the Customer Service Life Blog ( She can often be found on the beach in San Diego, California.  Follow here on Twitter: jennysuedempsey

Jenny is the Visitor Support Manager for DMV.ORG. With over a decade of customer service experience, Jenny has been recognized through social media channels as a thought leader. She is co-founder and a regular contributor on the Customer Service Life Blog ( She can often be found on the beach in San Diego, California. 

Follow here on Twitter: jennysuedempsey



You have 30 quick seconds to make a million fast decisions.

First impressions about a company via customer service channels make lasting impressions to the customer and whoever the customer decides to share them with (friends, family, social media). When Sir Patrick Stewart waited 36 hours for his Time Warner Cable appointment he took his thoughts to Twitter on their initial customer support. It resulted in a media backlash that had the TW social media team on their toes.

In most cases, the single point of contact with a company is when they reach out to customer service.

How will you, mighty customer service representative, measure up to the clock?


1. Be Prepared

If you’re a customer service agent that is provided with a technology to pull customer data, such as a name, phone or account number, address, etc. on your computer screen before every call, consider your job made 10% easier. If you don’t, you still have the ability to do one simple thing: ASK. By referring to the customer by name throughout the entire call, as well as opening their account to read through any previous service notes, you are a step ahead of the game to kindling the fire on a great call.


2. Be Kind

You’re on the customer’s side. Your job is to have their back. When you answer the phone, are you answering in a tone that you’d use with your best friend? Setting and keeping a genuine and friendly tone during the conversation welcomes your customer to your company, starts to build trust and showcases your brand voice in a positive manner. Not only that, it will benefit the bottom line. According to JitBit, businesses lose upwards of $84 billion per year due to poor, untrustworthy customer service.


3. Be Purposeful

The customer called for a reason. They may voice their frustrations immediately, not caring about your kind voice or that you know their name. What actions do you take then? By listening to the customer speak and release their dissatisfaction, you can zoom in on what the larger issue is at stake. You can then hold the reigns to define the purpose of the call to keep things on track and help your customer get to their desired resolution.  


Here’s a Customer Service MadLib Style Script for you to act as a baseline on how to keep the empathy in your word choices when you may be challenged by a difficult customer:

[After listening quietly to customer on phone]

______________  thank you for sharing your experience with me. I completely understand why you feel   

(Customer Name)             


(Customer Emotion)

I am disappointed that _____________ has happened. Our company takes ownership of this and apologize.        (Sum up customer story)    

My goal is to resolve this. I will _____________________ and I look forward to working with you!

             (Realistic Customer Expectations)


In a nutshell:

  • Be Prepared.

  • Be Kind.

  • Be Purposeful.

Write that down on a Post-It and stick it to your computer monitor, friends!

All of this happens within the first 30 seconds of the call. And the power is all in your hands.

The Perils of Omni-Channel and Social Media Marketing - A Philosopher's Look

A member of the Next Caller team, Zach Shaw holds a Philosophy degree from Princeton University with a certificate in Computer Science. Every so often, Zach shares his musings about the intersection of big data and technology with some age-old philosophical questions. 


In her recent book Reclaiming Conversation, Sherry Turkle explores the effects of our constant use of social media on our mobile devices.  Originally, the constant connection brought about by new technologies was seen as an extension of our personal identities.  However, as Turkle notes, there are many adverse effects from these information communication technologies (ICTs) - foremost the replacement of face-to-face communication by digital interaction.  People do not learn empathy through the use of social networks.  They learn how to get the most likes on their profiles.  Our self esteem is intimately linked with our popularity on such websites, and we'll do everything in our power to boost that popularity, including sacrificing an intimate conversation with a friend or family member.  Even when we are conversing face-to-face, our mobile devices make it possible for us to be 'alone together.'  We can be physically together with another person, but completely inattentive to them as a human being.  As a society this is a major development, and, in the eyes of Turkle, a major problem.  


Not lagging behind, the customer service space has adapted to such technologies.  We can tweet about our bad experience on an airline.  We can email the customer service department about our phone malfunctioning.  We can online chat with a representative about our order on  Communication to address our concerns with a product or service has been extended by these ICTs; consequently, as customers, it is easier than ever to solve our problems.  Yet, when we really are frustrated we still resort to the phone.  


A customer service phone call is uniquely outside the grasp of distracting mobile technologies because both individuals on the call are focused on achieving the same goal: solving the customer's problem as quickly as possible.  You, the customer, want your concern addressed, and, until it is, you will give your undivided attention to the phone call.  Conversely, the representative will lose his or her job if not engaged.  So in this one case, the ability to have limitless distractions and data at your fingertips does not hinder the quality of your conversation.


Let's compare this to a typical conversation with a friend.  You both have several different goals.  You each want to improve your status on Facebook.  Maybe one of you wants some encouragement to work harder at your job from the conversation.  The other friend wants to talk about the latest gossip.  There is somewhat of a prisoner's dilemma here.  Because you both took the time to hang out, let's assume that you both enjoy hanging out more than going on Facebook.  Given that assumption, let's give the value of 1 happiness point to each of you for the action of going on Facebook, and the value of 5 for the other two activities of face-to-face conversation.  However, if you choose to go on Facebook, you are guaranteed 1 point whereas, if you choose to engage in the face-to-face conversation where you both are pursuing different goals, it is likely that one of you will not achieve your goal.


This analysis assumes that you cannot have a conversation where both your and your friend’s goal - in the example provided, encouragement and gossip - can be accomplished simultaneously.  Although they are not mutually exclusive, with the developments of technology and our need for immediate gratification, a conversation achieving both goals and yielding a ‘5/5’ level of happiness is becoming increasingly rare.  Moreover, there is the possibility that neither person’s goal is accomplished by staying engaged in the conversation, yielding a ‘0/0’ level of happiness.  This possibility gives further impetus to go on Facebook.

This analysis assumes that you cannot have a conversation where both your and your friend’s goal - in the example provided, encouragement and gossip - can be accomplished simultaneously.  Although they are not mutually exclusive, with the developments of technology and our need for immediate gratification, a conversation achieving both goals and yielding a ‘5/5’ level of happiness is becoming increasingly rare.  Moreover, there is the possibility that neither person’s goal is accomplished by staying engaged in the conversation, yielding a ‘0/0’ level of happiness.  This possibility gives further impetus to go on Facebook.

Even if you are very risk-averse, you would probably choose the conversation at first - that's why you both are hanging out.  But if the conversation starts to veer off course of your individual goal to another topic (I assume in my model your friend's goal instead), it is more beneficial for you to stop paying attention to the conversation and to go on Facebook.  If there is a more comfortable, egotistical alternative to genuine empathy, we will take it.  Therein lies the dilemma of being 'alone together.'


Conversely, returning to customer service calls, the conversation is actually improved by recently developed ICTs.  Certain technologies allow representatives to access demographic information about their customers which these representatives can use to better meet their customers' needs.  With new innovations like omni-channel integration, representatives can specialize their knowledge to specific products or services, and thus better achieve the joint goal of any customer service conversation: addressing the customer's concern.  Instead of destroying the quality of these conversations, new technologies are enabling better communication in the customer service space.  


In spite of the stigma arguments like Turkle’s have started to propagate against ICTs, customer service providers and call center professionals need to take advantage of these new technologies in order to maintain customer loyalty.  The average person’s patience is dwindling because of the immediate gratification these technologies have brought to us.  As a result, customer service needs to be better than ever before, and these new technologies are the only way to meet consumers’ rising expectations.  Without adapting to this changing landscape, customers will go on Facebook if they aren’t satisfied within a couple minutes - and choose a competitor.


Interested in more of Zach's philosophical musings? Contact the author -

TCPA Compliance: What Spokeo Means for Robocalls and SMS Marketing

By: Ryan Cash (



 In an earlier blog, we discussed the Spokeo v. Robins case, which sent Mr. Robins, tail between his legs, back to the Ninth Circuit to make a stronger case for how Spokeo violated his rights under FCRA. With his standing not established, there has been considerable debate on what this means for alleged TCPA violations moving forward. Would Spokeo make it incredibly difficult for new plaintiffs to establish harm from a TCPA violations? Got Warranty, Inc. is saying, “if only…”


Diana Mey v. Got Warranty, Inc.

Plaintiff Diana Mey is enacting a TCPA lawsuit against Got Warranty, Inc. for receiving unwanted “robocalls” to her personal cell phone from Got Warranty, when her number was on the Do Not Call registry. For those unfamiliar, a robocall is that annoying call you receive from a robot that I’m sure you hang up on the second you realize it’s not a real person. These are legal for specific purposes, like emergency notifications, but under TCPA, businesses cannot make these phone calls for non-emergency purposes to your cell phone without your expressed consent prior.

Got Warranty, Inc. filed a motion to dismiss the case under the same premise as Spokeo (see our earlier blog for further information), that the unwanted phone calls did not cause “concrete and particularized” harm. The court denied Got Warranty’s motion on the basis that the phone calls did in fact cause concrete harm. They assert tangible harm in two ways:

1)            For those who have prepaid cell phones and minutes, these calls waste those minutes and are thus a tangible monetary harm

2)            Robocalls deplete an individual’s phone battery, which costs money to charge, and can be cumulatively substantial.

They also assert intangible harms that can still qualify as “concrete,” which include an invasion of privacy, occupation of your personal cell phone, and wasting your time answering the phone.


Impact of Spokeo

 This ruling sheds some light on what Spokeo’s impact will be moving forward. As a reminder, the Spokeo “ruling” was merely a remand. In other words, it did not decide anything concrete (sorry for the bad pun), but merely required further justification to allege that a harm constitutes concrete injury and, therefore, a plaintiff has standing.

It was unclear what impact this decision by the Supreme Court would have on other similarly situated cases (especially in the realm of TCPA), but as this court notes, the Supreme Court “issued a narrow ruling” so the Ninth Circuit could “conduct a proper analysis.” In this court’s view, the unwanted phone calls did cause concrete harm for the aforementioned reasons. In other words, the Supreme Court’s analysis in Spokeo had no bearing on the analysis of this particular situation. In layman’s terms, other courts are free to interpret concrete harm how they see fit for new cases that arise.



Spokeo v. Robins dealt with an alleged infraction of FCRA. The claim that was that misinformation about Robins’ personal information materially impacted his job prospects. In my view, Robins came from a more difficult position to establish concrete harm and thus standing. How many different things can impact one’s job prospects? A bad interview, a bad hair day, misinformation on my Spokeo profile… The list goes on. In other words, the direct link between the misinformation and harmed job prospects is a bit more difficult.

In contrast, with the TCPA violation, Diana Mey receives robocalls from Got Warranty, Inc. If there is a voicemail and a call log of this infraction, it takes no logical leap to assert the direct link. A call originating from Got Warranty, Inc. wasted my phone minutes, and cost me money, and therefore causes me concrete harm.


Final Thoughts

 I would like to be clear and say that the preceding analysis does not mean to ignore FCRA. I simply aimed to show that the hope that Spokeo would make it difficult for plaintiff’s to establish harm in TCPA cases has already been proven to not hold water. If the effect on my electrical bill from making me charge my phone can be a criterion for concrete harm (a bit of a stretch, in my opinion, but “Ryan Cash said so” probably won’t hold in a court of law), who knows how courts down the line will rule in this respect. Will they all be as liberal in their interpretation? Probably not. But the point is, as a business, do not take chances.


For further thoughts from a TCPA lawyer, read this post from Tatango, here. You can find a link to the entire court document here, for those who like to break a mental sweat.

Segmentation Marketing: Do You REALLY Know Your Customers?


by: Tim Prugar (

In Childless Women to Marketers: We Buy Things Too, the New York Times points out that the overwhelming majority of marketing and advertising aimed at women is through the lens of motherhood: either being a mother, or aspiring to be. As Karen Malone Wright, founder of, indicates in the article, this advertising is towards two specific female demographics: "hot and single" or "a mom with more than one kid." This strategy stemmed from the traditional view of the mother as the individual who does the bulk of the purchasing for the household. The mother as decider, if you will. 

However, as society shifts, so too does this "conventional marketing wisdom" about how to get the largest ROI on advertising and marketing efforts. As the Times notes, 15.3 percent of women in the United States are childless, and the percentage of women ages 15-44 without children increased from 2012 to 2014 (46.5 percent to 47.6 percent, respectively). This demographic shift was accompanied by a shift in spending patterns - according to a report by DeVries Global, cited in the article, childless women spend 35 percent more on groceries than women with children. Marketing and advertising executives who are unaware of this trend, and are relying instead on outdated schema, are likely leaving piles and piles of money on the table. 

So which marketer are you? The one who relies on conventional wisdom that may not apply to your specific customers? Or the one who has taken the time to drill down and truly KNOW your customers? And if you're the former, how do you become the latter?

Keys to Marketing Segmentation

The process for knowing your customer and meeting needs you may not even know existed are simple. 

1. Get the Demographic Data

If you're like most marketers or business owners, your customer list is just that - a list. Maybe it's just anonymous phone numbers. Or an email list. Or maybe, if you're lucky, you can add name and address to that combination. But have you captured household income? Gender? Presence of children? How about whether or not your customers have net worth of over a million dollar? 

Gathering all of this information is the first step towards finding out who your customers really ARE. Need help with that? Contact the author!

2. Define Your Target (and Missed Target!) Audiences

Now that you have a picture of who your customers are - what correlations can you draw? What household incomes are spending the most? Which gender is frequenting your business the least? Is there an age group whose use of your product surprises you? Is your product flying off the shelves in Flagstaff but laying fallow in Cleveland? 

Before you can even get into the why, you need to have a solid picture of what is happening. Building a portrait of your "ideal" or "consistent" customer allows you to target your outreach. Building a portrait of the customer who avoids you at all costs is helpful as you can figure out why!

3. Retarget!

Now that you've segmented your list - find how to target your outreach towards people you know will value your offering. Selling Men's Navy Peacoats? Perhaps coordinate an email blast to existing male customers ages 20-40 in the Northeast. 

4. Attribution

If you've run a phone, email, or SMS marketing campaign, you can probably judge its efficacy by the ROI. But you're a savvy, segmenting can do better than that! 

What demographic profiles contributed to that ROI? Where did you miss the mark? Were you surprised by any of the results? Or, better yet, how did individual people interact with the campaign? After all, knowing "what" someone did in response to your campaign and "why" is much more powerful than simply knowing "who" did it. 

This data driven reflection will really move the needle for your campaigns. 

Remember: marketing is good. Knowing your customer is better. Using your knowledge of the customer to fuel your marketing efforts, engaging in data-driven reflection after the fact is BEST. 


So Sayeth The Times: 3 Reasons Why Biometric Authentication Should Give You Pause


In Tuesday's New York Times, the Room for Debate blog took on concerns surrounding the growing use of biometric authentication in the banking sector. Typically these arguments are more polarizing, with a traditional "A IS GOOD vs. A IS TERRIBLE!" style of debate. But when it came to Biometrics, something interesting happened: both sides agreed that Biometric Authentication is an imperfect, and sometimes deeply flawed, science. They merely disagreed on the implications of that for banking security. 

Look, Biometric Authentication is LIGHT YEARS ahead of static passwords and easily-researchable security questions. It's here to stay. The debate isn't whether or not banks should utilize biometric authentication - the debate is whether these financial behemoths should be relying on biometrics as their sole, or even their main, first-stage fraud solution. To make a football analogy, the Carolina Panthers would never say to their quarterback "Hey, Cam, you're revolutionizing the quarterback position and doing things we never thought possible - we can just rely on you and don't need to have an offensive line, or receivers, or running backs - I'm sure you can do it all and won't fail." No coach would ever say that. Of course not. After all, that's the Chicago Bears' patented offensive strategy. 

                                Not Funny, Tim.

                                Not Funny, Tim.

So let's take a deeper dive into the challenges presented by Biometric Authentication:

1. Just Because It's Biometric Doesn't Mean It's Not Data

Target. Snapchat. Ashley Madison. Data breaches that have exposed the personal information, home addresses, credit card information, or even Social Security Numbers of customers and employees have made front page news on dozens of occasions. As Claire Gartland of the Electronic Privacy Information Center points out, citizens have action steps they can take when this type of information is released. They can cancel cards or apply for new SSNs. But what recourse do people have when biometric information is leaked? The Office of Personnel Management has already admitted that 5.6 million fingerprints were stolen in a recent data breach, and hackers have already shown their ability to replicate fingerprints and iris scans to game security systems. Voice biometrics has similar flaws. If your customer data can be breached, so too can your biometric data (regardless of the encryption or tokenization).  


2.  Do Your Customers Trust You?

Just because I'd let my friend hold $100 for me doesn't mean I'd trust him to hold onto my fingerprints and DNA. I've seen enough Law & Order to know better. Biometric authentication brings about very real Orwellian concerns on behalf of consumers. What are you going to do with this information? What assurance do I have that this will only be used for authentication? While James Lewis of the Center for Strategic and International Studies writes these concerns off as "nervous dystopian projections" and "irrational" (ouch!), the comments show a very different perception of this development in technology. 

                   "I, for one, welcome our new Biometric Overlords!"

                   "I, for one, welcome our new Biometric Overlords!"

3. Impact on Customer Experience

The number one concern for Fraud Analysts is "Catching and Stopping Fraud." However, "Limiting False Positives" and "Ensuring a Seamless Customer Experience" finish a close second and third. Biometric Authentication can have serious impacts on both of those exceedingly important CX metrics. Will MasterCard spring for me to become better looking if my face is consistently judged not to be my actual face? Voice biometrics necessitate 15-30 seconds of analysis at the time of connection on a call - increasing average handle time and also increasing customer frustration at the outset. Biometric authentication also requires certain technologies that can serve as a barriers-to-entry for customers that may not be able to purchase smart phones. Are banks going to be in the business of only offering security to those who can afford it?

So What Now?

While the debate in the Times cast a significant amount of doubt on the viability of Biometric Authentication as the sole solution for banks, we should refrain from throwing out the baby with the bathwater. Biometric Authentication is an enormously promising development in the world of security, but it is a mistake to view this development as a panacea, or a reliable sole method for thwarting fraudsters. Banks who are looking to increase first-stage fraud prevention at the payment and call center level would be wise to combine known fraudster block lists, Biometric Authentication, and carrier and transaction level metadata to best defend against nefarious attacks and protect their customers' assets...and peace of mind. 

By: Tim Prugar (


Leading with Agent Happiness - A Next Caller Interview with Patrick Russell

Patrick has been a leader in the contact center industry for nearly fourteen years working as a vendor, a BPO leader and managing an in-house operation. His experience has been focused on leading teams in Client Services, Operations and acting in a consultative manner. His deep understanding of all of the WFO components paired with real world leadership experience in contact centers adds tremendous value to his organization. Patrick holds his bachelor’s degree in Accounting and spends the majority of his free time traveling or taking part in various adventure sports.

NC: Why are call centers still relevant in today's age of social media?

Patrick: I think part of it is that people still want to talk to businesses because that's what they're accustomed to. I personally think that the majority of people calling in are on the older side of millenials or older, basically people born after '85. There is still a desire to have someone on the phone to get a quicker resolution. I think that there is and is going to be a pretty massive shift away from phone and towards everything else: email, chat, and social. If businesses do it correctly consumers can still get immediate resolution through any other channel. More of the masses need to start shifting that way, which I'm sure will happen as the younger generation takes up a greater share of the market. 

NC: How do you ensure a frictionless customer experience?

Patrick: Frictionless is tough because there are outside factors. To reduce the friction the person needs to sound pleasant and happy. The person needs to be knowledgeable, respect the caller's time, and I guess get to a resolution, whatever the situation is, quickly. 

NC: What are your largest challenges in providing excellent call center service?

Patrick: Before the call even gets to a person, that consumer has already engaged with the brand at least a couple of times - billboards, online ad, went into a store, etc. There are already areas that can create friction or excitement or just general interest. And then the person has to call in and go through an IVR, which hopefully is simple, but has additional areas to create friction. If you call a large company, the IVR can be a maze, and by the time they get to an agent there can be outside factors that have caused the individual to escalate. The agent's job is to come across right out of the gate as if they know what they're doing. The most difficult thing for an agent is to take 30-50 calls a day, sound pleasant on every call, and get all of the issues resolved. It's a difficult job, and in a lot of cases the training is minimal. The "how tos" and "what tos"...most trainings don't arm the agent with the soft skills that are necessary to be really good at the job. That's one of the reasons why you see such high burnout and turnover rate in the call center space. 

NC: How does knowing more about your caller improve the customer and agent experience?

The more information you have about the last time of interaction with a customer and what the interaction was about, the faster you can reach a resolution - it allows the agent to say something in the opening period to make them feel that their time is respected and that you're fully informed and knowledgeable. It inspires confidence. Think about situations where you're transferred to someone else. That second person has no idea what's going on. To me, that's super frustrating. The technology is there for all of the information to be passed in a transfer scenario, the majority of that information should be at the fingertips of that first agent - happier customer and happier agent. 

Some call centers lead with agent happiness, and everything falls into place after that - Zappos and Southwest Airlines, for example. 

NC: In one word, what is your guiding value for your call center?

(Ed. note - enormous pause, Patrick is clearly a very thoughtful guy!) I think, ah man, (longer pause) I guess the guiding value would have to be customer-centric. And to expand on that essentially all things have a purpose- we have contests for cubicles and all sorts of incentives- all of those things have a thought towards how is COULD impact your customer, not how it does. Nowadays it's called gamification, but it's been around for awhile- these activities should have benefits for the agents who then pass their experience or happiness on to the customers. There should be some sort of feature within that activity which helps the agents get better at serving the customer that day. All the things you do can impact the mood of your individual agent, which impacts how your customers perceive your business.  

Four Things Startup Founders Can Learn from Twilio's IPO


By Ian Roncoroni | CEO, NextCaller


Measured growth is greater than growth for growth’s sake

One of the most persistent debates for founders today revolves around growth vs profitability. More specifically, which metric is more important to attract funding. Truthfully, it’s a complex question dependent on multiple variables, including how the economy is performing, how liquid the fundraising climate is, how big the market opportunity is, what your competitors are doing, and so on.

In Twilio’s case, there’s no doubt that VCs, who have valued the company at around $1 billion, pegged their belief (and their checks) on the startup’s growth. Despite not posting a profit since its inception, Twilio’s revenue (up 78% YTD) and customer base -- which boasts the likes of Uber, Facebook and WhatsApp -- continues to grow at a steady clip.

While different investors will weigh different factors when deciding whether to invest in your company, if you’re able to show that you can capture your market through steady growth, they’ll certainly take notice.


A Bird in the Hand

In general, most startup founders want to stay private longer, simply because of the red tape and scrutiny that comes with going public, not to mention the risk of having your stock prices moored down when going public because of a perceived inflated valuation -- hello Square. I once heard the CEO of a privately held unicorn respond to the question of whether or not he’d ever go public by saying, “Go public? Why would I go public? I already have a pocket square.”

Because of this, some have speculated that Twilio might not have received the valuation they wanted from private investors, and were prompted to go public sooner than they would have liked instead of seeking additional private funding.

While this is purely speculation, there is a lesson here for founders. During times where capital is harder to come by, it’s better to make a reasonable compromise on valuation than risk running dry altogether, or making a deal that almost certainly sets you up for failure down the road, especially if you aren’t turning a profit that can help you sustain dryer times.


Friends in High Places  

As a Twilio partner, their IPO filing is very exciting for us; it gives us quick exposure and legitimacy, much like going through a top-notch accelerator like YC. For any startup, integrating with such a high growth platform and brand is a way to reach more customers than you might have been able to do with an early stage sales force.

Twilio is no stranger to this philosophy themselves. The company’s rocketship growth has in part been driven by integrations with some of Silicon Valley’s most prized unicorns. Uber’s mobile app uses Twilio to update riders with mobile messages, while WhatsApp uses the service to verify the 1 billion+ users on their platform in a deal that drives more than $28M a year in sales for Twilio.

One of a startup's biggest challenges lies in crossing the chasm between early adopters and the mainstream market. Companies like Twilio are great vehicles for startups looking to make this leap because they understand that small companies can (and often) do things larger companies can’t, and therefore are more apt to seek partnerships with other young startups. At the same time, these companies are big enough to be respected and even feared by some of the biggest companies in the world.


A Rising Tide Lifts All Boats

While an IPO by a company like Twilio is a positive signal for telecom startups that enterprises continue to adopt cloud-based technology, I believe there could be bigger picture implications here.

Many have been lamenting the cool IPO climate thus far in 2016 and pointing to it as further proof that we are entering dark times. Others say we just need a rock star IPO to open the window and rally companies to go public again.

Whether or not Twilio will be that rockstar to reenergize the IPO market for 2016 remains to be seen, but there’s no shortage of folks who are betting that their stellar business model, consistent performance, and strong leadership will get the waters churning and create a spillover of funding for startups throughout the rest of 2016.


The Endangered Customer - A Next Caller Interview with Richard Shapiro

Richard R. Shapiro is Founder and President of The Center For Client Retention (TCFCR) and a leading authority in the area of customer satisfaction and loyalty.  For 28 years, Richard has spearheaded the research conducted with thousands of customers from Fortune 100 and 500 companies amassing the ingredients of customer loyalty and what drives repeat business.  His first book wasThe Welcomer Edge: Unlocking the Secrets to Repeat Business and The Endangered Customer: 8 Steps to Guarantee Repeat Business, was released February, 2016.

You can order a copy of The Endangered Customer, a Next Caller favorite, here.


NC: What inspired your interest in customer service, and ultimately, to write this book?

Richard: In the book, and this is true, it came from my dad, working in his store. Age 10,11,12. My father was the ultimate salesperson and he clearly believed in relationships and treating people as people first. I was in retail until after college, every summer through high school and college I worked in a retail store, and I think retail is the best way to learn about customer service. Retail can be hospitality or working at a department store. Both of my sons worked in the local pizza parlor starting at age 14 and both are very, very passionate about service. If I’m hiring somebody I love to see that they worked in a pizza parlor or a gas station or anywhere where they talked to consumers one-on-one.

NC: What do you see as the largest challenges facing businesses attempting to provide outstanding customer service in this day and age?

Richard: Budgets are very tight. In any business there’s always money for some things and not money for others, so it’s a challenge to work within a budget. They’re penny wise and pound foolish – to me, the strongest loyalty is to a person – not to a company and not to a brand. Under that basic premise you need to hire good people and treat them well and keep them because these days, products and services are very complicated and if you don’t keep the people who really are knowledgeable- that’s a tremendous asset that you’re losing. As a company, look at where you’re spending money and continually invest in hiring the right people, training the right people, and making sure that they’re customer friendly. That’s one of the ingredients of generating repeat business. Coupled with that, companies think they can save money by having customers shop online, but unless they’ve set up their site to be people to people instead of people to computer they’re turning their products into a commodity. My eight steps are really good for call centers, brick and mortar or eCommerce. That’s the exact same thing for a call center. Unfortunately in the call center, most of the time companies are paying their employees very low wages and many times they’ll leave for another dollar an hour – it just doesn’t make sense to have them go for another dollar an hour.

NC: In your opinion, what differentiates "great" from "outstanding" customer service?

Richard: The great are kind of like my first five steps – the customer really feels that they had a really good customer experience. Their rep was friendly and knowledgeable and engaging, all those things make it a really good customer experience. I’m going to say that makes it great. Where it goes outstanding are my last three steps – getting them to return, showing them they matter, and surprising them in good ways. The customer experience continues. It should not be "one and done." That experience can be great, but if you want it to be outstanding and you want to generate repeat business you have to continue the customer experience. Tell them you want to see them again, call them again, let them know that they matter. Especially in a call center environment, the company many not know them before, but now they reach out to the company so you can collect that information, once you have that customer in your database, you can show them that they’re a loyal customer and they count. That’s what makes the call center so important, after you solve the problem how you continue to communicate with that customer – through email or promotions or letters – is really critical. That way you can continue to build upon that database.

NC: How can companies use enhanced customer information to improve their customer service?

Richard: Number one, if they do the first step which is make them feel welcome, which is why I love Next Caller’s information. It’s really hard, even for the best rep, to enter all that information while also having a personal conversation. The more that the fields are populated with information, then I think that it does allow psychologically, physically, and mentally for the rep to establish some kind of personal relationship at the outset of and during the call. Then three or six months later reach out to the customer again – we know you had an issue, we wanted to let you know that we appreciated your business and care about you, things like that really help. In addition, so many companies that keep good track of their consumers and have it categorized. Sometimes a product is discontinued, and knowing who those consumers that would care about that to reach out to them is important.

NC: Any parting advice for call centers regarding customer service?

Richard: Yes! So many times in a call center environment somebody will say "Thanks for you help!" and the rep will say “No problem” – and they should never be saying that – they should always be saying “No, my pleasure.”


Like what Richard has to say about customer service, call centers, and knowing your customer? Check out his book here.

Law of the Land: The Spokeo Decision

Law of the Land: Spokeo, Inc. v. Robins

By: Ryan Cash

The recent Supreme Court case involving Spokeo, Inc. and Thomas Robins has implications for data providers and companies handling consumer information. Next Caller takes a deeper dive into the case, decision, and importantly, the dissent, to evaluate what this means for the industry moving forward.


One can search Spokeo for personal information (address, marital status, age, economic health, occupation) about an individual via his or her name, phone number or email address. The case invokes the Fair Credit Reporting Act of 1970, (FCRA), which applies to companies that provide information bearing on someone’s credit standing, character, reputation, etc. Given the nature of the information Spokeo provides, it is alleged to be subject to FCRA. Companies subject to FCRA must follow “reasonable procedures to assure maximum possible accuracy of” consumer reports. To make sure reporting agencies follow FCRA, Congress grants consumers the right to sue noncomplying agencies.

Thomas Robins’ Spokeo profile contained inaccurate information. He was unemployed and claims the misinformation affected his ability to get a job. By presenting wrong information, Robins says Spokeo willfully violated FCRA’s requirements. The key is establishing whether Robins has standing to sue. To have standing, he must show that Spokeo’s conduct caused him “injury in fact” which requires “particular and concrete harm.” In English, Spokeo’s conduct injured Robins himself, as an individual, not the greater public, and the injury is real, not hypothetical. The District Court ruled Robins’ did not meet the requirements. The Ninth Circuit reversed saying Spokeo violated his rights under FCRA, and the mishandling of his information harmed him as an individual, so he has standing to sue. The Supreme Court evaluates the Ninth Circuit’s decision.

Decision and Reasoning:

The Supreme Court rules the Ninth Circuit’s analysis was incomplete. This rests on a distinction between the terms “particular and concrete.” According to the Supreme Court, the Ninth Circuit wrongly combined the two independent requirements, and their analysis only satisfied one of them: “particular.” They successfully showed that the handling of Robins’ personal information affected him as an individual, rather than the greater public (ie. the wrong information in Robins’ profile did not harm you or I). However, their analysis did not take up the question of concreteness. They did not adequately address whether the FCRA violation resulted in real harm. Justice Alito provides examples of where FCRA violations may cause no harm, such as if Spokeo gives an incorrect zip code, it would be a rather innocuous violation. It’s important to understand the Supreme Court is ruling on the Ninth Circuit’s analysis, not the case itself. The Court takes no position on whether the Ninth Circuit’s conclusion was correct or not. They simply rule that the analysis is incomplete, and send the case back to the Ninth Circuit.


Justice Ginsberg leads the dissent, and her reasoning rests on two arguments. One is historical precedent. She provides multiple cases where the terms “concrete and particular” were combined in the ruling. In other words, historically the court has not needed to discuss “concrete” and “particular” independently, as this ruling claimed it did. The second, and in my opinion, more interesting argument, is that Justice Ginsberg believes the violation of FCRA’s requirements in this case did in fact cause concrete harm, and that Thomas Robins has standing to sue. She essentially finds the court’s observation to be a red herring. The opinion stated there are cases where an FCRA violation would cause no harm, such as providing an incorrect zip code. However, in Ginsberg’s eyes, this case is fundamentally different. Spokeo misrepresented Robins’ education, economic status and family situation, which could create an impression that he is overqualified for the positions that he is seeking and materially affect his job prospects. FCRA’s requirements were designed to prevent situations exactly like this. Therefore, she sees merit in Robins’ complaint and would affirm the Ninth Circuit’s decision.

Discussion and Implications:

Okay, enough legal jargon. So what does this mean? There are important considerations embedded in this ruling. First, the Supreme Court did not officially rule in favor of Spokeo or decide on the merits of Robins’ allegation. They gave the legal equivalent of a “maybe, but I’m not convinced yet; go back to the drawing board.” In other words, this case is very much alive and not settled. Second, Justice Ginsberg’s dissent gives an indication of the type of reasoning that will be used moving forward. She says there is concrete harm here. The misinformation from Robins’ Spokeo profile constitutes real and concrete harm to his employment prospects. The Ninth Circuit’s judgment simply did not address it in full, but if they do, they can reaffirm their decision. Hopefully they do not just copy and paste, but you never know. 

For data companies, it’s important to be aware that protection of consumer information is top of mind for litigators and the courts. Companies need to take extra precaution to ensure that they are carefully, responsibly and accurately handling consumer information, and they are compliant with relevant statutes, like FCRA. If you do not wish to fall under FCRA, know that a disclaimer alone is not enough to exempt you. Know who is using the information you are providing and how they are using it. Ensure that those using the information are aware of the requirements of legislation like FCRA, because if they use it in a way that violates said requirements; the hammer comes down on the agency. If you provide information that could relate to credit, character, personal characteristics, etc. make sure it is not being used for discriminatory practice or creditworthiness evaluation (ability to pay bills, employment, etc.). For further reading on best practices consult the FTC Big Data Report here.

Don't Call it a Call Center - A Next Caller Interview with Jeremy Watkin


Jeremy Watkin is the Head of Quality at FCR, one of the most respected outsource providers. He has more than 15 years of experience as a customer service professional.  He is also the co-founder and regular contributor on Communicate Better Blog.  Jeremy has been recognized many times for his thought leadership.  Follow him on Twitter and LinkedIn for more awesome customer service and experience insights.


Why are call centers still relevant in today’s age of social media?

Call Centers are irrelevant in this day and age, but thankfully “Contact Centers” aren’t. That single change in word really points to the way contact centers have evolved along with technology and the growing needs and preferences of both businesses and customers. While phone is still king, email, chat, social media, and SMS are definitely gaining steam and the evolution is far from over. That being said, supporting customers over the phone is still a much more effective channel for clear communication and de escalation of customers.


How do you ensure a frictionless customer experience?

This starts with contact centers realizing just how important their role is in the overall customer experience. Many interactions with customers occur because there is friction in the customer experience. Observations gained on the front lines from talking directly with customers along with feedback from customer surveys is a gold mine of insight for reducing friction in the customer experience. Customer service needs to work with all other departments in the organization to make sure those insights are shared and acted upon. This must become a regular discipline.


What are your largest challenges in providing excellent call center service?

From the perspective of the agents, the largest challenge is having the tools, training, resources and support to solve problems. The better leadership does at putting those things in place and having enough engaged customer service professionals to answer the calls, the better customer service will be. From a leadership standpoint, the temptation is to live in “fire fighting mode” all of the time and never step back and find ways to become more efficient and really improve customer service.


How does knowing more about your caller improve the call experience, both for the customer and for the agent?

In a contact center, the more you know about your caller BEFORE they call, the less you have to ask them during the call. Looking up an account and verifying the caller’s name and number takes a minute on a good call. I’ve listened to calls where english wasn’t the primary language and it took several minutes just to look up the account. When you talk about reducing handle times by minutes there is real cost savings associated with that. Besides that, what customer actually wants to spend any more time than they have to talking to customer service? You should see improvement in customer satisfaction as well.


In one word, what is your guiding value for your call center(s)?

People! Focus on your people first. As a leader, you should embody the same great customer service skills that you expect from your agents on every customer interaction. Listen to them, learn what frustrates them and do something to improve that. That will absolutely trickle down to customers.


As Credit Cards Migrate to EMV Chips, Expect an Increase in Phone Fraud

EMV Chip.jpg

This article originally appeared in the March 2016 issue of the CFCA Communicator.

by: Jeffrey Kirchick ( and Tim Prugar (

In Steven Kerr’s On the folly of rewarding A, while hoping for B, Kerr points out that change agents often unwittingly undermine their own efforts to solve a problem by rewarding behaviors that run counter to the agents’ ultimate goal. To make his point, Kerr references basketball coaches who espouse the value of teamwork but readily hand out MVP awards and Universities who desire professors who are strong teachers but only hire or promote according to research and publication. The current EMV migration project being undertaken by American credit card companies follows a similar challenge – hoping to eliminate credit card fraud while only addressing the type of fraud that involves the physical card (“Card Present” fraud). In this article we will discuss the specifics of the EMV migration, the lessons we can learn from Europe’s experience with this migration, and the extreme likelihood that the United States will experience a significant surge in “Card Not Present” fraud during and after the migration – specifically, an increase in phone fraud.


The credit card industry is no stranger to the law of unintended consequences. Outside of de-railing theft, credit cards offered customers the ability to not have to carry one’s money around or risk having it lost or stolen. However, with the rise of the credit card also came new challenges: merchants memorizing customers’ credit card numbers, fraudsters sifting through the mail to find newly-issued cards, and even criminals sending applications using other peoples’ information to obtain credit in their name. Criminals have even mastered the art of cloning the magnetic strip from the back of a card or wholesale counterfeiting strips in order to make fraudulent purchases. As all of the members of CFCA know intimately – where there is money to be made, there will be fraud.


These are the exact challenges that the credit card industry is seeking to address through the introduction of EMV chips to cards in the United States. To put it in its simplest terms, the EMV chip is computer chip that replaces the traditional magnetic stripes used to make a credit card transaction. The main difference, however, is that traditional magnetic stripes never change, while the EMV chip “changes” with every transaction – every time an EMV chip is used it creates a new transaction code, unique to that transaction. This development (hopefully) makes it exceedingly difficult for fraudsters to commit “Card Present” fraud. In fact, it already has. So difficult, in fact, that fraudsters have reverted to more historically profitable techniques of financial fraud. Specifically, phone fraud.


European credit card companies began large-scale introduction of EMV chips during the 1990s. While this may appear as a technological acceleration on behalf of Europe, it was actually a response to significant legal, cultural, and technological differences between Europe and the United States. At the time of the European introduction, American credit card companies were significantly more advanced and effective in detecting and stopping fraudulent attempts at the point of sale. Furthermore, European companies were expected to take responsibility for covering the cost of credit card fraud in a way that their American counterparts were not – as they say, necessity is the mother of invention. Lastly, the sheer volume of card users in the United States was significantly larger than the population of cardholders in Europe, making for a much more expensive and time-intensive roll-out process.


While the European EMV roll-out led to an immediate and massive reduction in “Card Present” fraud, it also universally led to an increase in phone fraud and other “Card Not Present” techniques. After the roll-out, France, England, and Australia all experienced statistically significant increases in CNP fraud, and Cifas (a European fraud prevention agency) estimated that 36% of internal fraud was taking place through call centers. The image of a balloon works well: by squeezing the “Card Present” fraud side of the balloon, the “Card Not Present” side swelled with fraudsters and criminals looking to commit financial crimes and identity theft via phone fraud.


We have every reason to believe that the United States will experience a similar increase in phone fraud and other “Card Not Present” scams – and financial institutions, telecommunication providers, and health professionals should all be prepared. With the rise of VOIP, it has grown significantly easier to execute telephonic scams through spoof tactics. These scams include, but are not limited to: commercial phishing, swatting, consumer phishing, and outright impersonation/identity theft. Businesses, merchants, and providers can all expect to see a significant increase in non-spoof scams as well, including cramming, subscriber fraud, and PBX hacking.


So where does this bleak picture of the next five years in phone fraud leave us? Namely, that it is never too early to start preparing for what inevitably lies before us. Securing phone systems should be a top priority for Chief Security Officers or any individuals involved in IT Security Infrastructure. The response to these attacks that are growing increasingly technologically-enhanced and automated in nature will not be single-channel. A strong omni-channel approach to preventing phone fraud that includes a combination of state-of-the-art spoof detection technology, biometrics, agent training in social engineering tactics, and predictive analytics to identify irregularities in billing or network usage will all be necessary to combat this coming threat. An ounce of prevention is worth a pound of cure, and well-prepared firms will be equipped to address the challenges that will accompany the EMV migration.

image courtesy of