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The Fuse Is Already Lit
How to keep Do-Not-Contact compliance risk from blowing up in your face.
Posted Aug 4, 2010
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Violating Do Not Contact (DNC) regulations is an invitation to disaster, and even loyal consumers can become frustrated and angry. Respected women's clothier Talbots recently landed in hot water with some customers and the Federal Trade Commission for a series of marketing campaigns that violated robocall guidelines.

The retailer has agreed to pay a fine, but the financial fallout could have been far worse. Nearly 3.5 million calls were made on Talbots' behalf, and each violation carries a possible fine of $16,000. That's over $54 billion in risk exposure.

Even more troubling, in many cases, is the negative publicity and brand damage that often follow such events.

But in a world of software-as-a-service CRM and sales reps on cell phones, how do you ensure that everyone in your organization adheres to the increasingly complex, ever changing set of compliance regulations?

Federal rules differ from state rules, and state rules differ from each other. There are rules about holidays, and rules about call times. There are rules about what to say, when to say it and when to stop saying it. Understanding all of these rules makes contact compliance a daunting task for any company. And keeping up with changes to those rules makes it virtually impossible.

That said, how can anyone consistently obey this multitude of guidelines? Actually, there are a number of solutions today that can provide compliance protection for your company. Available features include automatic compliance, real time updates, preference management, exemption management, activity reports, legislative updates, and more. These solutions fall into two broad categories: do-it-yourself (DIY) and outsource.

DIY Solutions

The DIY option requires more internal resources in terms of time and expertise, but can be perceived as a more cost effective solution. Some companies have dedicated compliance managers. Others fold those responsibilities into the marketing team (who then take this on in addition to their day jobs).

Although many assume that downloading and periodically scrubbing against the National Do Not Call Registry is sufficient, effective DIY implementation requires work and expertise. For example, there are many exemptions to contact regulations, such as Established Business Relationships (EBRs), that allow you to continue marketing to people who have registered their numbers. Ignoring these exemptions leads to over suppression of marketing lists.

Successfully implementing a baseline DIY solution requires:

  • Leveraging regulatory expertise from in-house or outside counsel, with continual monitoring and adjustment
  • Downloading, updating and matching against federal lists daily, or at least every 30 days
  • Downloading, updating and matching against various state lists and schedules
  • Implementing these same issues for wireless, the DMA list and call curfews
  • Capturing opt-outs and managing an internal Do Not Contact list
  • Updating and merging lists of people who qualify for EBRs
  • Ensuring that marketing and sales organizations use the solution

To further enhance implementation, track opt-ins, opt-outs and exemptions by line of business and marketing channel to reduce over suppression and avoid having people easily take themselves off all of your lists.

Outsourced Solutions

With outsourced solutions, the vendor handles allregulatory expertise, managing and updating the various federal and state lists. Companies must still capture and manage opt-ins and opt-outs, and build processes to ensure adherence to the rules, but all back-end complexity and risk is shifted to the vendor.

Solutions range from simple Web-based lookup tools to those that completely integrate with an established CRM system, such as Salesforce.com. Some tools are strictly phone-based. Others support compliance and preference management across multiple channels. Pricing structures vary, but an outsourced solution can quickly pay for itself in prevented fines and increased sales, as well as by reclaiming countless hours of marketing team productivity.

The point is that an ideal contact compliance solution for your company does exist. To find it, ask yourself:

  • Does the solution work with our existing sales team structure?
  • How can management assess system use and results?
  • What kind of training and support is available?
  • Is there any type of compliance guarantee or legal protection?
  • Will this solution have a significant impact on our current processes?
  • How does the pricing affect our budget?

Understanding your compliance challenges and vulnerabilities will help you choose the right solution. With a little effort, you can protect your company from formidable fines and negative publicity, and improve your sales and management effectiveness along the way. In fact, not finding the right contact compliance solution just might be your biggest risk of all.

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About the Author

Bill McCarthy (bmccarthy@gryphonnetworks.com) is a senior enterprise product manager for Gryphon Networks, and is responsible for building innovative products that address evolving client needs. Gryphon, headquartered in Norwood, Mass., is a leading provider of customer contact preference and compliance solutions.

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For the rest of the July 2010 issue of CRM magazine — which examines the past 15 years in the CRM industry — please click here.

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