JRosenfield Article

THE DEATH AND (POSSIBLE) REBIRTH OF TELEMARKETING

James R. Rosenfield

August/September 2002

Before it was the Direct Marketing Association, the venerable American trade group was called the Direct Mail Marketing Association.

Would that it would revert to its former name, for we have unleashed a plague upon the nation, a plague that has nothing to do with direct mail.

"Telemarketing is one of the banes of modern life. The volume of unsolicited sales calls pouring into the average American home is so irritating that many folks would do just about anything to stop it. The calls always come at inconvenient times, often under false pretences ('this is a courtesy call') and usually include bad mispronunciations of your name, or fake familiarity… "

That was Walter Mossberg writing in the May 8, 2002 Wall Street Journal, hardly an anti-business publication.

"…(A)t a weekly strategy meeting for conservatives…a representative from the telemarketing industry bad-mouthed a proposed Federal Trade Commission rule change that he said would expand government power and throttle small business--the sort of thing that normally reminds me of why I'm a right-winger.

"Only this time the government would muzzle unsolicited sales calls, and the small businesses supposedly threatened are the ones whose profit relies on annoying millions of Americans every night, often during dinner. The F.T.C. merely proposes to set up a national 'do not call' list, banning telemarketers from phoning people who put their names on it. This isn't the nanny state's latest pet cause, but a smart and practical idea that will help preserve domestic tranquility in homes across the land.

"Telemarketers have responded with every argument they can contrive. A backgrounder I took away from my meeting warns of limiting 'the amount of information a consumer receives' and 'the ability to shop for the best deal,' as if unwelcome sales pitches were a vital public service.

"The telemarketers say millions of jobs are at stake, including jobs that 'offer flexible hours, allowing parents to spend time with their families'--without noting that these jobs deprive other parents of spending time with their own. The telemarketers even refer to 'an assault on the First Amendment,' confusing the right to free speech with a right to be heard.

"The fundamental problem with telemarketing--apart from its sheer obnoxiousness--is that it's cheap for the callers but not for those flabbergasted on the other end of the line. Constant harassment has persuaded many people to pay monthly fees for services to hamper it. The telemarketers find ways around these, like random-digit dialing to reach unlisted numbers and jamming of caller I.D….

"Libertarians like to say that my freedom ends where your nose begins. That classic aphorism needs a 21st century corollary: Your freedom ends where my phone line plugs in."

That was National Review's John J. Miller, hardly an anti-commerce type, writing in the May 18 New York Times.

Most famously of all, future Supreme Court Justice Louis D. Brandeis and Samuel Warren wrote that privacy is "the right to be let alone," in The Right to Privacy, 4 Harvard Law Review 193, 1890.

And contradicting all of the above, liberal, current, historical, conservative, right wing, libertarian, what have you, devil take the hindmost, is the CEO of the DMA, Bob Wientzen, as quoted in The Wall Street Journal, April 11, 2002, on the subject of telemarketing: "I don't think government's role is to prevent people from being bothered."

A privacy advocate friend of mine sent me an e-mail saying, "Wientzen is continuously shooting himself in the foot with his comments. I'm surprised he has any toes left."

She's right. The DMA seems uniquely public relations challenged, but, on the other hand, it would take the efforts of Edward L. Bernays (the father of PR) himself to improve the image of outbound telemarketing. Here is a mode of marketing that people literally hate, but that continues to be used because predictive dialing technology is so good that it stays right ahead of the curve.

When the phone rings in the U.S. these days, your choices are:

1) Ignore it, wondering if it's something important.
2) Interrupt whatever you're doing to listen to the answering machine, which will probably register a hang-up.
3) Answer the phone and be confrontational with the telemarketer, which will make you feel bad.
4) Answer the phone and be prankish, which will make you feel childish.

A nuisance, to say the least, but a terrible nuisance if you're expecting an important call, particularly if it concerns a family health issue. The phone rings, the heart beats, and it turns out just to be another telemarketer. (This happened at 9:30 am today, by the way.)

Mass outbound predictive-dialed telemarketing is in the process of being legislated against, state by state. California, for example, wants dead calls (the creepy silence that scares lots of people) at no more than 1%, a figure that defeats the economies of predictive dialing.

Does this mean that telemarketing is dead?

TELEMARKETING WILL DIE, LONG LIVE TELEMARKETING!

No, it means telemarketing in its current virulent state will be dead.

The biggest single flaw in telemarketing, as practiced in the U.S. in 2002, is that a classic direct marketing medium (targetable, trackable, adjustable) has been monstrously transformed into a mass marketing medium, through the sinister magic of predictive dialing.

It has all the horror of a small thing made huge, the creepiness of the giant insect in a horror film.

The solution is to restore telemarketing to its proper size and role.

Telemarketing's virtues, as outlined decades ago by marketing guru Theodore Levitt, involve industrializing the person-to-person sales call. Predictive dialing has gotten out of control, and industrialization, rather than enabling the person-to-person element, has replaced it. It's hard to put a human face behind the rote voice delivering its hundredth sales pitch of the evening, save for the occasional feeling of pity when you consider the constant rejection these poor telemarketers suffer. And of course the dreadful computer voice calls have no human face at all.

To revitalize telemarketing, it must be:

--Scaled down.

--Used in classic direct marketing fashion, not mass marketing fashion.

-- Done only on an opt-in basis, with one single exception (to follow).

THE FATAL FLAW IN DIRECT MARKETERS' LOGIC

The DMA, direct marketing spokespeople, telemarketing apologists, the writers of articles, the speakers of speeches, all recoil in horror at the idea of opt-in.

What are they saying? Well, they're saying the stuff we sell is so bad, and the way we sell it is so obnoxious, that no one in their right mind would volunteer to be subjected to us.

This is one of the most ultimately cynical and self-defeating postures in the history of business. If Coca-Cola can sell brown sugar water to happy throngs everywhere, shouldn't decent marketers be able to market themselves, above anything else? And that's what opt-in is, marketing ourselves. Lack of ability to think this way is one of the great divides, I guess, between Madison Avenue and direct marketing.

Here are the two things that can save outbound consumer telemarketing (we're not visiting the business-to-business sphere in this article):

1) Trained telemarketers (note carefully the word "trained," because most telemarketers right now are robots) should systematically make customer service calls shortly after a purchase (provided customers have divulged their phone numbers) to monitor customer satisfaction. These calls have to be legitimate, with action taken if customers have complaints. This is the one time when telemarketing should be done without prior customer permission.

2) During this call, the trained telemarketer should educate the customer on the benefits of opt-in. The result? Maybe 100,000 names to call instead of a million, but a 10% response rate rather than 1%. How do you cost-justify the calls? Nothing wrong with a little appropriate cross-selling in this benign environment.

This process would result in smaller telemarketing factories, fewer employees, but a better and more sustainable bottom line, particularly in comparison with predictive dialing's Roadrunner antics in trying to stay ahead of the Wily Coyote of consumer resentment.

This will assuredly not be business as usual, but telemarketing business as usual can't-- and won't--continue much longer. Unfortunately, jobs will be lost, but we're talking about the coal mines of the Information Age here, not long term occupations, and the economy will come up with replacement opportunities soon enough. Certainly there will be a healthier, more humane, more productive climate, both for telemarketers and consumers.