• November 18, 2003
  • By David Myron, Editorial Director, CRM and Speech Technology magazines and SmartCustomerService.com

Facing Consumer Privacy Legislation

Two research reports focusing on consumer privacy and protection from unsolicited vendor communiques hit the streets today, addressing existing concerns over Do Not Call and Do Not Spam legislation. Reservoir Partners made available its report, "Do Not Call--An Executive Risk Assessment," which focuses on the national Do-Not-Call legislation and its impending impact on companies. The report comes just two weeks after the Federal Communications Commission levied fines totaling $780,000 against AT&T for do-not-call infractions--calling consumers who signed up for the Do Not Call registry. According to the FCC, this represents the first major penalty for violating the do-not-call rules for telemarketers. The FCC said AT&T made 78 phone calls to 29 consumers who had asked the company to leave them alone. The proposed fine is $10,000 per call. "It shows the FCC is serious and is going to hold companies responsible for their infractions," says Glenn Gaudet, partner and practice head of Reservoir Partners. Gaudet warns AT&T's fines are only the beginning. "It's going to start changing the way people look at their outbound communications. A big component was calling to consumers. Some of the informal numbers state 30 to 50 percent of a company's list will sign up for the Do Not Call registry. That's a big impact on potential business prospects for a company. That's going to change the approach a business takes to reaching out to customers," Gaudet told CRM magazine. He described a particularly disturbing example of a real estate firm with more than 500 different real estate offices that stopped calling customers altogether, for fear of being fined. Why not compare the FCC's customer list against the Do Not Call registry? "Low-tech organizations look at a phone book and say 'go and drive some business.' There are a significant amount of businesses with that kind of low-tech approach to reaching out to customers. The challenge that some companies have is they don't have the infrastructure to cross reference their lists with the Do Not Call registry," Gaudet says. "The impact on these businesses will be large." The larger the company, Gaudet warns, the more important it is to get all its databases synchronized around the data. "When you have several departments with several databases your opportunity for exposure is even greater. So we recommend people do a risk assessment audit and have someone come in and identify the potential problem areas for them," Gaudet says. (Reservoir Partners provides this risk assessment to clients for a fee.) Another problem, according to Gaudet, is that companies are automatically presumed guilty until proven innocent. He says a customer can complain to the FCC about a DNC violation and it is incumbent upon the vendor to prove its innocence. What are the costs to corporate America to defend against the DNC legislation? The answer is still a bit murky. "We're starting to look at those numbers, but they are going to be somewhat significant, particularly if a company isn't prepared for it," Gaudet adds. "This will radically change how companies handle outbound marketing with permission-based marketing." Concern over DNC mounts for telemarketers, but permission-based email marketers are not as concerned by Do Not Spam legislation. Instead, they are more concerned with technology and practices of ISPs that inadvertently block legitimate, permission-based email, according to Jupiter Research. At least that's what a recent survey found, which was conducted during a Jupiter Research Webinar sponsored by EmailLabs. When the email marketers were asked to identify their biggest concern, nearly a third (31 percent) mentioned blacklists and spam filters implemented by ISPs and corporate IT departments. Some 22 percent put bounces and email address changes as their biggest email delivery issue. A similar percentage cited inbox clutter and the toll that takes on open rates as their top email delivery concern. Only 8 percent considered antispam legislation the number one concern, while 9 percent put email client-level filters first. Eight percent also said that obtaining accurate delivery statistics was the most pressing challenge. In response, email marketers are taking a number of steps to address these concerns--foremost of which is increasing or dedicating internal resources to email marketing (27 percent). Another 24.5 percent are deploying ISP-specific strategies (message format changes and buddy lists), 22 percent plan to outsource email delivery, and 13.5 percent are looking to switch email marketing technology service providers. Relatively few are switching to a double opt-in subscription process (8 percent) and even fewer plan to use a sender certification program (5 percent). Organizations initially turned to email marketing because it was cost-effective, offering low barriers to entry, immediacy, reporting, ability-to-test, and the potential for high return, according to Loren McDonald, vice president of marketing at EmailLabs. "Now, after companies have been engaged in email marketing for some time, they are realizing that they have yet to take advantage of the medium's greatest capabilities such as deep personalization, behavioral segmentation, and trigger-based emails," McDonald said in a prepared statement.
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