New regulations, end user requirements to protect against litigation, and a need to improve staff performance are all factors that have created unprecedented demand for high margin call recording solutions.

With margins as high as 50 per cent, along with installation, maintenance and leasing opportunities it's ‘criminal' not to include call recording in the sales pitch, believes Steve Cobley, Retell's Head of Business Development. "Resellers have been known to lose PABX sales because their competitor offered recording and they didn't. Many sales people ignore the opportunity because they don't want to move away from their area of greatest knowledge. Also, they have been put off by the price in the past. But if they choose a supplier that offers not only pricing options including rental but also a wide range of products they might even see call recording overtake their traditional sales."

"Resellers selling solutions can achieve even higher margins by adding value"

Key factors influencing demand for call recording are price, increased regulation, the drive to improve customer service and the litigious nature of society, points out Cobley. While the Financial Services Authority (FSA) ruling that brokers, traders and dealers in the financial markets must record their calls has catalysed the market for recording solutions, the underlying demand has been created by SMEs, say Cobley. He also cites new demand from second time users where long maintenance contracts have come to an end or where their old systems cannot cope with older technologies such as DAT tapes.

As a result, call recording is migrating away from being an incidental add-on to a business critical ‘must-have'. Cobley added: "Even more so now because companies need to hold onto their hard won customers and ensure that the staff are well trained and motivated to up sell, and that they perform to the highest standards. Many companies are now regulated and to fall foul of rules on telephone selling can result in huge fines."

Phil Reynolds, joint CEO at Oak, also believes that more businesses have wised up to the need for dispute resolution, especially at times when customers will query everything. "Businesses are realising the full benefits of call recording. These benefits extend to monitoring the quality of service offered to callers as well as a training tool to develop front line staff telephony skills. Oak has developed new brochures for resellers that focus on the business benefits as opposed to the underlying technology. These are driving new sales for resellers."
Reynolds recommends that every PBX should include a call recorder, especially smaller businesses where a dispute could have serious consequences if not resolved quickly. "It's possible that sales staff are afraid of the technologies but these days it's much more straight forward," he said. "A typical margin is about 50 per cent which equates to about a 35 per cent discount of our SSP, but if resellers are selling solutions they can achieve even higher margins by adding value."

According to Reynolds, if a single switch goes out the door without call logging and call recording then a big opportunity has been missed. "Call logging and call recording are so affordable it just doesn't make business sense not to have them. My recommendation would be to sell solutions only as resellers will make far more money and will have a higher rate of customer retention," he commented.

Oak has identified what it calls ‘huge opportunities' for resellers to upsell beyond call logging. "We include powerful real time wallboard displays as well as screen popping customer database or contact management applications," said Reynolds. "We've brought these all together in our Comms Suite so that there's always the opportunity to upsell every customer. It would be madness in the current economic downturn not to."

Sales of call recording products could have been stunted in the past by an erstwhile healthy demand for system sales, believes CTI Group's Head of Product and Marketing, Warren Drummond. He commented: "Because switch sales have been so buoyant there wasn't the need for added extras. But with switch sales now on the decline call recording should be seen as an opportunity for high margins. The technology is now widely available and is much less costly than many sales people imagine. The proliferation of IP-based solutions will drive the change. Demand for more services at a better price point will prompt sales people to offer the best packages. As the call recording market and pricing develops, more and more new PBX sales will include call recording."

CTI Group has reviewed its strategy to put resellers at the heart of its marketing decisions, said Drummond, and he aims to motivate the call recording market with initiatives such as rebranded literature to create leads for the channel, as well as designing call recording products suitable for all sizes of resellers and end users. "Our resellers have established and trusted partnerships with their customers and we want to be able to support their efforts. We aim to provide any size of business with the benefits of voice recording and storage, from small SoHo clients all the way to hosted solutions for hosted VoIP providers and large enterprises."

The biggest driver for call recording across all sectors is to improve quality, especially in helpdesks and small call centres, says Andy Cowhig, Sales Manager at Storacall Voice Systems. "The cost of staff justifies any tool that leads to improving the performance of workers," he commented. "Nowadays, even small helpdesks are able to invest in a voice recorder with a fully integrated quality monitoring tool, enabling the supervisor to take a random sample of recordings for an agent, mark their scores against a balanced scorecard of quality measures such as listening skills and product knowledge. This approach provides the agents with a clear development plan, improving quality and improving staff retention, while providing a clear audit trail for HR purposes."

Cowhig notes an increase in demand for integrating the voice recorder with a company's CRM package. "This used to be the domain of the large call centre with expensive professional services costs and lengthy timescales. However, due to simple integration technologies this is no longer the case, with integration taking days rather than months."

In 2008 call recording specialist Liquid Voice had its most successful year with growth of over 100 per cent in key areas of the business. Chris Berry, Business Development Director at the Leeds-based company, says the market is continuing to expand. "The wider business community now seems much more attuned to the idea of call recording. In a market where businesses cannot afford to make mistakes, organisations are using call recording as a form of indemnity in order to back up sale or purchase transactions," he said.

Liquid Voice attributes much of its growth to IP recording, both SIP trunk and IP end-point, which is a more affordable proposition to TDM recording, says the firm. Because of the software-only nature of this type of recording it reduces the cost of sale which Liquid Voice in turn passes on to dealers. "In terms of margin for resellers, we offer anything from to 45 per cent dependant upon annual value of call recording sales. Then in terms of the sale, we supply all of the collateral a dealer needs, pricing calculators to assist with specifying the products and attend demonstrations as required to support the whole process," Berry said.

However, he concedes that it is sometimes difficult for a reseller to be price competitive where PBX sales are concerned: "I can understand that resellers are sometimes reluctant to try and force too many additional products and services on top, despite the obvious prospect of additional margin. That said, where there is a clearly identified business benefit for a voice recording solution, especially one which could potentially offer efficiency gains or cost savings, it's certainly worth a try."
FSA legalisation requiring mobile phone calls to be recorded is inevitable and will force many companies to invest in new call recording solutions that can handle mobile phone call recording, highlights Mark Shane, Sales Manager at ICON. "This can be a burden for the SME. An alternative to replacing the existing FSA compliant call recording system is to use an FMC solution with the legacy call recording product. This makes the mobile phone part of the company's telephone system no matter where the user is, meaning that phone calls can be recorded for compliance or training purposes using the company's central call recording solution, just like the calls made and received on the fixed line extensions."

Chris Berry at Liquid Voice sums up the reseller opportunity: "More businesses see call recording as a must-have these days. In an economically frail marketplace, businesses can afford even less than before for transactions to go wrong. Call recording is increasingly recognised as a form of indemnity against mistakes with order processing and transactions over the telephone.

"Nowadays, call management is a bi-product of the call recording system so we invariably find it works the other way round. While not everyone is ready for call recording, we find that giving our resellers an affordable call management offering to ship with their PBX sales offers an ideal platform for them to up sell the call recording."