Understand what has changed, and change marketing practices accordingly.
Posted Aug 1, 2005
State and national do-not-call registries, while wildly popular with consumers, have created countless headaches for marketers who want to continue to deliver their messages in a personal way. Many are in a quandary about whether they can, or should, continue telemarketing efforts. Certainly they know that telemarketing delivers high response rates for advertisers, but is it possible to navigate through the potential legislation minefields?
Not only is it possible for marketers to continue their telemarketing services, but they will discover that they can actually obtain better results by working within the confines of the legislation. I encourage clients to thoughtfully market to Do Not Call (DNC) registered customers. The key to success lies in understanding what has changed, and how to change your marketing practices accordingly.
Understanding Why There Are Do Not Call Lists
Telemarketing's abuse of consumers' trust brought on the need for the DNC lists. By ruthlessly calling at all hours, with irrelevant offers and messages, some telemarketers devalued customers' time and privacy. By pressuring customers on the phone and not removing their names from call lists, they produced a suspicion of fraud with almost every call.
Before DNC lists, there was no system in place for customers to avoid marketers. Nor was there anything to enforce company accountability. Consumers felt under siege.
These practices explain why an astounding number of people have signed up for DNC lists. There are more than 7.5 million names on the Direct Marketing Association's TPS list, 27.5 million names on the state DNC lists, and 64 million names on the FTC DNC list. We typically see 45 percent of a client's customer database erode from DNC suppression. For clients in affluent retail segments, we see as high as 65 percent of their customers suppressed from the DNC list.
Companies electing to not market to their own customers who are on the federal DNC list are clearly passing up huge numbers of potential customers. It makes sense to figure out a way to work within the confines of the DNC regulations and find customers who are willing to accept their calls.
The Wireless Trap
Technology can make DNC lists even more complicated. In October 2004, the government began enforcing a law making it illegal to call a wireless phone for marketing purposes. In the past, wireless companies reserved blocks of numbers for wireless phones, such as xxx-xxx-x000 -- xxx-xxx-x999, which made it easier to recognize them. However, since many people have opted to use only wireless phones, portability (the transferring of a landline phone number to a wireless phone and vice versa) has become popular. Tracking the ported numbers has caused another obstacle for marketers. As of October 2004, there were 808,008 landline phones that became wireless numbers and 9,251 wireless numbers that became land numbers.
What Is the Law?
According to William Raney, a telemarketing law attorney at Copilevitz & Canter, LLC, federal legislation allows marketers to contact consumers if they meet any of these three criteria:
1. A customer has had an existing business relationship (ERB) within 18 months. This could include purchasing an item at the store within 18 months, or paying a credit card bill within 18 months.
2. A customer has requested information within 90 days. This can be through an information request card, a customer contact card, a contest registry, etc.
3. A customers that has opt-in to receive communications.
There are certain cases when DNC suppression is required. These cases include a company's internal list of opt-outs (customers who have requested that they be removed from a specific call list), and wireless phones, unless the customer has opted in with explicit language that customers will receive phone solicitations from you on their wireless phones.
Ways to Keep DNC Issues at a Minimum
Marketing companies must do their best to keep DNC issues out of the spotlight and regain customers' trust. There are simple ways to help make that happen. You must be your customer's friend and advocate, and speak to them in a voice that makes them feel comfortable. Market only to customers who are interested and being picky on the purpose of a call, so that you don't waste of their time. You must consider yourself the advocate on the customer's behalf. Stop intruding on customers' time, and begin creating a warm welcome.
Another important strategy that may be difficult for marketing companies is to give up control. This is essential to regaining a customer's trust. Make it easy for your customers to opt-out by putting the information at their fingertips. Customers will appreciate this and are more likely to give you the benefit of the doubt and listen to what you have to say.
When calling a customer words are everything so choose them carefully and with sincerity. Different words trigger different reactions. For example, words like alert and invitation can cause a greater response, while some words like we know that you purchased can cause panic. Look for words that enable other words to work harder, like "we really wanted to just thank you--you've been great to us." This will help customers open up and give you a chance to tell the rest of your story.
The most important concept is to be believable. Score your message on a believability scale. There must be truth in your campaign that the customers can see. By putting all of these strategies into practice you are giving your company the best chance possible to succeed.
An Example of How This Works
Recently our company performed a voice messaging campaign for a client with several hundred stores around the U.S. and a database of more than 10million customers active within 18 months. The client had experienced a direct impact on sales due to DNC suppression, with more than a 40 percent suppression rate. The campaign left messages for 2,004,157 customers, of which 507,000 were on the federal DNC list. Complaints were routed to a SmartReply call center, rather than a typical IVR to track results. A control group was also used to measure the lift.
The campaign's response rate and average spend revealed extremely interesting results. The DNC-listed customers responded 35 percent better than the non-DNC customers, and their average spend was greater. The non-DNC customer on average spent $40.17 while the DNC customer on average spent $41.44.
The ROI was an overall positive result for this campaign. The ROI on DNC customers was 1.5 percent better than the ROI on non-DNC customers. The non-DNC customer ROI was 1244percent compared to the DNC customer ROI of 1,263 percent, or a 1.5 percent lift.
Perhaps even more impressive was the number of complaints logged. Out of 2,004,157 calls made during the campaign, only 285 opt-outs were made. For non-DNC customers, there was one opt-out per every 10,000 calls. For DNC customers, there were only 2.8 complaints per 10,000 calls. The most common reason for an opt-out was that an unintended recipient received the message, such as a spouse or roommate of the targeted customer.
Recommendations for Working with DNC Lists
1. Marketers will most likely generate better customer response and transaction lift from among their customer group that is on the DNC. They should begin by calling non-DNC customers first, and benchmark the results. They should then progressively test segments within the DNC list and eventually develop a plan to call all customers, and compare the results among segments and DNC status. Success will grow through experimentation.
2. When gathering phone or customer data, make it clear to the consumers that they will be receiving communications, and give them an immediate opt-out option. Use opt-in whenever possible. (It is required in Canada.)
3. Customers clearly respond to marketers who are relevant, concise, and clear in all consumer communications. Your goal should be to add value, not noise. The content of the call should treat them as high value customers. Strong offers and "thank you" messages overcome many sins and ill perceptions. It is worthwhile to test messages and segments with DNC customers; for example, we discovered that more recent customers and high value customers, whether or not on the DNC, are less likely to be offended or to opt-out.
To prevent any complications, remember that if you are calling only within one state, you may be required to abide by the rules of that state. The laws under federal jurisdiction require close attention--engage a top-notch law firm or work with a company that has such relationships and policies established. Our compliance binder just for voice marketing is nearly 500 pages and changes frequently.
So is the DNC legislation putting an end to calling customers with personal messages? No, it is merely making a change. Marketing companies need to adjust to the changes and remember to practice smart calling. This means making calls believable and relevant both to DNC and non-DNC listed customers. Marketing companies must measure and report on which segments had the greatest positive and negative responses so they can refine the messages (relevance) and timing for negative responses--don't just blast the messages and count the responders. Consider the complaints and the reasons for an opt-out. It also means they need to become the customers' friend by putting them in control and treating them as high value customers. Explicitly telling customers that you value their patronage, time, and privacy will help them realize this and guarantee more effective campaigns.
About the Author
Eric Holmen is vice president of professional services for SmartReply Inc., a North American leader in retail voice marketing. He can be reached at firstname.lastname@example.org
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