Is telemarketing dead? For consumers wary of constant dinnertime interruptions, it may be tempting to think so. Nearly 50 million Americans have placed themselves on the National Do Not Call Registry, in an effort to keep the phone solicitors at bay. What's more, the government's new Telemarketing Sales Rule requires marketers to undertake the onerous and costly task of checking their lists against the Do Not Call list each quarter and purge any proscribed numbers. They also must ensure that company names and phone numbers appear on caller ID displays. The penalties are stiff: some $11,000 in fines per errant call.
Many of these provisions--which had been scheduled to take effect Oct. 1--remain up in the air, pending challenges to the legislation. But in the wake of the overwhelming response to the Do Not Call list, some kind of telemarketing reform is inevitable. "Consumers want it, they vote, and they're going to get it," says Chris Selland, managing director of Reservoir Partners, a Cambridge, Mass., consulting firm.
Still, many telemarketers are refusing to hang up the phone, even in the face of higher costs and bigger headaches. Why? Because telemarketing works. Depending on who's making the calls, the tactic turns in a response rate of anywhere between 2% and 20%, according to the American Teleservices Association. So while the majority of those called slam the phone down, a steady supply of takers respond with a purchase. The question for legit telemarketers is how to keep a proven tactic in the arsenal without running afoul of the Feds or making consumers even angrier. Here's what you need to do:
Branch out. Plenty of telemarketing territory is untouched by recent regulatory efforts. Companies remain free to call their existing customers, other businesses, and consumers who have not blocked their numbers. Stuart Discount, president of Philadelphia-based Tele-Response Center, says he's trolling for new clients among nonprofit organizations and B2B firms, since both categories are largely unaffected by the new regs. William Blundon, co-founder of Extraprise, a Boston consulting firm, is encouraging clients to target office phones. Selling an upscale product? How about targeting the work numbers of a firm's top officers? "We are rapidly trying to figure out ways to market over the telephone at places of work," Blundon says.
Upgrade your technology. Or partner with a firm that has. Scrubbing your own list against a Do Not Call list every three months takes time, effort, and database management skills that many small companies lack. And it's not cheap, either. Experts say that upgrading even a small telemarketing operation with the technology it needs to comply with the new laws can cost tens of thousands of dollars. Those upgrades include predictive dialers, which can help cut down on the hated "dead air" calls--in which a consumer picks up the phone, only to hear silence because an agent is not on the line--which are also illegal under the new rules despite the recent court challenge. New caller ID technology can ensure your company name and phone number are properly displayed to consumers.
We are trying to market over the telephone to people at work," says one longtime telemarketer.
Diversify your tactics. Worried that new technology, list management, and phone rep training will make telemarketing more expensive, many companies are seeking cheaper marketing tactics to supplement new customer acquisition. Dennis McGarry, CEO of Personal Legal Plans, a seller of prepaid legal plans based in Charlotte, N.C., is accustomed to getting 95% of his customers through telemarketing. McGarry has hired a marketing consultant and is investigating new advertising media, including newspapers, radio and direct mail, to bring that percentage down. "It won't be easy," McGarry says. "It took me years to get telemarketing right."
Finally, experts warn that moves against phone-based marketing are just the beginning. Fueled by the positive consumer response to the Do Not Call list, Washington watchers expect all forms of marketing to come under fire, one by one, by eager politicians. "It's really a no-lose situation for a politician," says Reservoir Partners' Selland. Already, he points out, members of Congress are exploring a do not spam bill that would attempt to block the flood of e-mail marketing. Look for that legislation to be a reality in 12 to 18 months, Selland predicts. "Then we'll have do not call, do not e-mail, do not put anything in my mailbox," Selland says. "Washington is absolutely going to jump all over this." Leaving marketers hanging on the line.