Concerto e-Newsletter Offers DNC Insight, Recap

July 19, 2005

In Concerto’s corporate e-newsletter, July 2005, Volume 2, Issue 1, the company proffers an article with a bit of insight and a recap of how the FTC’s Do Not Call (DNC) legislation has impacted the telemarketing industry up until now: what companies are seeing from their customers and their smaller pool of potential customers; how companies are reacting; new opportunities gained; and where the industry goes from here, a little more than a year after the edict took effect.

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The article from the e-newsletter isn’t terribly long, and it offers a bit clearer definition of “existing business relationships,” a hole that leaves open the opportunity for telemarketers to call households (for up to three months) that are already listed on the Do Not Call registry.

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The article is below.

The newsletter also offers an article specifically about securing customer relationships while complying with the government regulations, found here.�

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The Power of the "Do Not Call" Movement - What's Ahead for Year Two

"The Do Not Call legislation has had a remarkable effect on the telemarketing industry. The increased demand for privacy protection has created new business opportunities as companies have focused on customer loyalty to ensure growth and profitability." Jim Mitchell, Senior Vice President, Technology Office, Concerto Software�

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Little more than a year after the Federal Trade Commission's (FTC) Do Not Call (DNC) legislation took effect, the edict has proven remarkably durable, weathering numerous challenges from businesses and trade associations. In October 2004, the telemarketing trade group American Teleservices Association (ATA) was rebuffed when it challenged the DNC registry, arguing that it unlawfully violates the free speech rights of businesses while exempting other groups such as charities, pollsters, and political organizations. The U.S. Court of Appeals for the 10th Circuit disagreed and the Supreme Court declined to hear the ATA's appeal.

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In the wake of this ruling, there can no longer be any doubt - the FTC's Telemarketing Sales Rule (TSR) is here to stay. Companies that market products and services through telephone solicitation must continue to avoid calling the more than 82 million numbers now listed on the DNC registry. FTC officials say telemarketers are generally complying with the list, although the agency has received more than 500,000 complaints to date, with violators facing fines of $11,000 per unwanted call.��

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What does this powerful movement mean for the businesses that depend on their contact centers and the industries that serve the contact center market? Rather than cause for alarm, this heightened demand for privacy presents an opportunity for forward-looking companies. Organizations that are sensitive to this trend will reap important gains in the form of long-term customer loyalty and trust.�

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Beyond Compliance: Seizing New Opportunities

As the DNC movement gains momentum, businesses that depend on their contact centers need to look beyond mere compliance to uncover new revenue opportunities and extend existing business relationships. Where some observers see job losses and diminished profits, progressive companies are recognizing opportunities for growth and profitability.��

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These companies have shifted their focus from cold calling to inbound customer service, proactive customer care and technical support. Yet others have re-focused on parts of their business not affected by DNC, such as business-to-business marketing. For example, AT&T made the dramatic move to end all marketing operations to home consumers, an historic departure from the field it pioneered, and shifted its plans to concentrate on business clients.�

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Another upside of the DNC movement is that the existence of the list itself has weeded out consumers who do not want to be called. This leaves a pool of willing prospects that companies can contact, resulting in higher productivity and therefore agent satisfaction as well. One leading provider of customer interaction software has found that although they are making fewer calls per hour, they are realizing better results.�

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Now that telemarketing groups have accepted the inevitability of DNC, there will be more cooperation in the foreseeable future between the public and private sectors. The ATA has promised to work with legislators and the FTC to make federal and state lists more consistent so telemarketers would not need to buy two sets of lists.�

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So What's Next?�

Contact center professionals need to be prepared for more stringent rules, including tightening the definition of "existing business relationship." Currently as defined by the FTC, an established business relationship is created if you make an inquiry to the company or submit an application. This kind of established business relationship exists for three months after the inquiry and during this time the company can call you, even if you are registered on the National Do Not Call List. In addition, enforcement of a non-existing business relationship falls on the consumer - he/she needs to prove to the FTC that they have no established business relationship with the organization making the calls.

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Many consumer organizations are lobbying the FTC to create more tightly define what it means to have an "established business relationship", as well as, eliminate the 3-month customer inquiry rule. In addition, they are also looking for legislation that would ask companies to provide an "opt-in" choice, once an established business relationship is created, so consumers can decide if they want to receive information from the organization.�

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Companies will need to ensure their technological infrastructure is in place to flexibly respond to regulatory change, maintain clean calling lists and demonstrate compliance through proper reporting. Beyond DNC legislation, the issue of email and cell phone outreach is being looked at closely by regulators and could emerge as the next wave of legislation. Issues such as identity theft and telemarketing calls to cell phones continue to be crucial for consumers.�

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"As companies draw a roadmap to telemarketing regulations compliance, they need to keep one important thing in mind: treat people with respect or it will only get worse," said Mitchell "There were several drivers behind these regulations, but foremost they were a reaction by consumers to perceived privacy violations by telemarketers. Whether or not these abuses are real or imagined, it is apparent that the best way to make a sale is to abide by consumers' preferences."

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"Aggressive dialing and abandoned calls simply are not part of a smart sales strategy. A sound strategy, the right technology and respect for customers' wishes will help close deals, maintain customer loyalty and clean up the industry's public image," added Mitchell.�

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Without question, the telemarketing industry will continue to thrive, as it remains a cost-effective way to market products and services. While most accounts of the new regulatory age focus on the negative impacts of the DNC era, businesses have also reaped important benefits, including a more targeted pool of buyers, new opportunities to improve customer service and sustain customer loyalty, and a more streamlined and productive workforce.