Last week, I suggested that marketers reach out to inactive customers before Oct. 1, in hopes of making these customers fair game for outbound telesales after new Federal Trade Commission/Federal Communications Commission regulations go into effect.
House files, however, will only get a company so far – and during the past few years of economic slowdown, they’ve been mined deeply. But the new rules don’t say a hell of a lot about cooperative telemarketing efforts. True, marketers that have assembled a customer database won’t be allowed to sell, rent or lease the actual file. They will, however, be able to make calls on another firm’s behalf.
Imagine a video rental chain with locations across America. We’ll call it Finch’s Film Emporium, in honor of the late Gregory Peck. Finch’s rental club has 35 million members who have rented at least one movie or video game within the last 18 months and are therefore valid candidates for calls. Problem is, Finch’s has relied on mass advertising or the occasional mail piece, and hasn’t done a lot of outbound telemarketing.
In comes a major credit card issuer -- say, Ballantine’s Financial Services. Ballantine’s offers to underwrite an outbound phone campaign to Finch’s customers, ostensibly to generate a few incremental rentals (“Hello, Jimmy Ringo? We’ve just gotten in ‘The Gunfighter’ on DVD. May we put aside a copy for you?’")
At the end of the call, the operator asks a final question. “Mr. Ringo, Finch’s is offering its best customers a credit card with a very low introductory rate. May we give you more information about it?” The credit card, which might even be branded with the Finch’s logo and carry special benefits, would, of course, be issued by Ballantine’s.
Offers coming in through such an arrangement would carry more weight through the host company’s goodwill (it’s here, incidentally, that “goodwill” becomes a quantifiable asset – companies that are not known for satisfied customers assumedly wouldn’t command premium prices for access to their files.) And it’s an opportunity for a company that – for whatever reason – hadn’t explored this channel to do so.
According to Tim Searcy, executive director of the American Teleservices Association, the organization’s in-house counsel feels there is nothing in the regulations that would prevent this from a legal perspective.
But there are a number of caveats. As Searcy notes, “From a practical perspective, if the established business relationship is abused, it is likely that customers will elect to have themselves taken off in-house databases as well.”
He continues, “The likelihood is that companies that look at long-term value will be very careful who they partner with and for what products, so they don’t alienate their customers.”
Searcy points out that these programs already exist. For instance, banks sell travel packages and other programs and clubs. But with the emphasis shifting to finding new sources of acceptable names, industries that have relied on outbound telemarketing should start looking at firms that haven’t – but that nonetheless have large customer files – to conduct pitches for them.
Marketers that attempt this will have to keep the diminishing cost of returns at the forefront of their calculations. Companies that have done telesales will already have an idea as to how many solicitations of any stripe their customers can weather before reacting negatively. Those that haven’t, but choose to do so on behalf of partners will need to research what that point is for their file – and establish a tracking system to avoid fatiguing the list.
Additionally, because any partner offer would reflect the goodwill of the company that owns the customer list, it would be incumbent upon the company – in this case, Finch’s Film Emporium – to negotiate the best possible deal for its customers, much in the way the stampsheet-sold magazine marketers demanded the lowest available rates for their solicitations.
Setting up such a program may not be as critical as last week’s suggestion of reactivating lapsed customers, but it should be considered sooner rather than later: There’s only so much Gregory Peck-inspired goodwill to go around, and marketers with a database full of goodwill are going to be in high demand.
To respond to the opinions in this column, please contact rlevey@primediabusiness.com
