AT&T;, Shaklee Announce Direct Marketing Agreement
AT&T; Corp., in an effort to stem a decline in its consumer long-distance business, on Thursday unveiled a surprise agreement with direct marketer Shaklee Corp. to sell phone services door to door.
The move marks the first time AT&T; will let another company sell its phone services directly to consumers. Shaklee, a unit of Yamanouchi Pharmaceutical Co. since 1989, sells nutritional supplements, personal-care products, and home-water treatment systems through its 500,000 independent sales agents.
The alliance comes as the nation’s largest telephone company struggles to maintain its 60% share of the U.S. long-distance market against rivals MCI Communications Corp., Sprint Corp. and smaller resellers. While surprising, analysts said the alliance is a good one for AT&T;, which must continue to think of new ways to reach potential customers.
“AT&T; needs to do everything they can to shore up their sagging market share,” said Jeffrey Kagan, president of Kagan Telecom Associates. “It’s nice to see them thinking out of the box.”
AT&T; shares were unchanged at $37.125 on the New York Stock Exchange.
The marketing decision represents another new direction for AT&T.; Less than a month ago, it hired former R.R. Donnelley & Sons Chief Executive John Walter to succeed AT&T; Chairman Robert Allen in 1998.
About 25 million Americans switched long-distance carriers last year, Kagan said, indicating that consumers aren’t loyal to a particular brand or company. Instead, they are focusing on getting the lowest prices for their long-distance services.
AT&T; routinely tries to win back customers by calling them and offering money or sending checks in the mail. This has sapped brand loyalty among customers, analysts said. By teaming up with Shaklee, AT&T; will let another company resell its services.
AT&T; called its alliance a “groundbreaking move.”
“Shaklee will help us expand our personal presence in communities exponentially, and create a whole new network of representatives with roots in neighborhoods across the country,” said Joseph Nacchio, executive vice president of AT&T;’s consumer and small business division.
Financial terms of the agreement weren’t disclosed.
The companies said the alliance, Shaklee Connections, will use Shaklee’s independent sales agents to personalize the way AT&T; sells its services to consumers.
San Francisco-based Shaklee’s salespeople will apply to become authorized distributors for AT&T; and will be AT&T; customers.
Salespeople are expected to begin marketing AT&T; services in the first quarter of 1997. AT&T; will continue to bill customers who buy AT&T; services from Shaklee directly.
