Phone Companies Rethink Dinner Time Calls, Rebates
About the only thing people living in Southwestern Bell’s service area hate more than visiting the dentist, sitting in traffic or reporting for jury duty is getting a call at dinner from someone pitching a long-distance service.
About half of 1,000 households surveyed by the company this spring said they would rather undertake the aforementioned unpleasant activities than hear from a telemarketer while they’re eating. The survey was conducted in Missouri, Texas, Oklahoma, Kansas and Arkansas.
This feedback prompted what has become the “signature” of Southwestern Bell’s new 12-pledge marketing strategy: a promise “never, ever to bug you” with sales calls between 5 and 7:30 p.m. The firm, whose parent, SBC Communications, owns Pacific Bell, is trying to position itself as a “friendly neighborhood global communications” company in markets where it hopes to provide long-distance service.
Of course, Southwestern isn’t promising not to call you before 5 or after 7:30, which would seem to take much of the wind out of the marketing campaign. Still, the campaign reflects mounting consumer frustration with telephone sales and a gradual shift in industry sales practices, according to Boyd Peterson, an analyst with Yankee Group, a Boston-based market research firm.
“Traditional channels are no longer as effective because there’s too much noise,” Peterson said. “Long-distance companies are saying they want to move toward loyalty and are backing away from acquisition of customers over the phone.”
For example, Sprint has said it won’t call customers to talk about its flat rate of 10 cents a minute, because it’s easy to understand. Instead, the company is enhancing its visibility this summer through affinity programs, Peterson said. Sprint is also close to signing on as the sole presenting sponsor of the Rolling Stones’ upcoming North American tour.
AT&T; is sharply curtailing its practice of sending $100 checks to customers contacted by telemarketers to lure them away from other long-distance carriers. The company plans to reduce the number of new customers it gains through financial incentives to 20% at the end of this year, down from 60% in 1996.
“Issuing checks is fundamentally incompatible with long-term relationships with customers because they show you feel you have to buy their business,” said Mark Siegel, a spokesman for AT&T;’s consumer markets division.
MCI, the largest telemarketer in the U.S., also has pulled the plug on its check program, and some in the industry say it seems to be scaling back on telemarketing too.
Despite these changes, telemarketing remains a key tool of phone companies in persuading customers to switch, and it will be a hard habit for them to break, Peterson said. But even if consumers can’t wait for it to go away, they can look forward to it becoming more targeted as long-distance carriers move into local markets and the Baby Bells move into the long-distance arena.
“Most won’t choose telemarketing as their primary marketing vehicle. They will use a lot of mailers and a lot of TV advertising,” said Bette Massick-Colombo, a telecom analyst at Bear Stearns in New York. “To date, telemarketing has been focused on price, but that will change as well.”
For instance, AT&T; may call certain residents to offer bundles of services designed for college students or for someone who makes a lot of international calls, Siegel said.
About 63% of telemarketing calls consumers receive are for long-distance service, according to a 1995 nationwide telephone survey of 400 randomly selected households by Reese Bros., a Pittsburgh-based research firm.
The fever pitch these calls have reached has already become fodder for television comedy: When Jerry Seinfeld was interrupted during an episode of “Seinfeld” last season by a call from a phone company telemarketer, he asked if he could call back. When the telemarketer refused, Seinfeld said, “Oh, you don’t like to get calls at home about your long-distance. Well, neither do I,” and hung up.
The backlash has also reverberated through state governments. About 100 bills were introduced in state legislatures during the 1997 session that would affect commerce conducted by phone, said Tyler Prochnow, legislative counsel for the American Assn. of Telemarketing.
Most of this legislation is driven by the twin concerns of fraud--the Federal Trade Commission estimates consumers lose $40 billion a year through telephone fraud--and invasion of privacy, Prochnow said.
There are already federal regulations designed to protect consumers from overzealous telemarketers. The FTC’s Telemarketing Sales Rule, which went into effect last year, limits calls to between 8 a.m. and 9 p.m., makes it illegal for telemarketers to call if a consumer has asked not be called, and says telemarketers must tell a consumer they are selling something and for whom before they make their pitch.
But proponents of the state bills say the FTC rules, which enable consumers to seek damages of $500 per call if called by a vendor whom they’ve told not to call again, don’t have enough teeth.
Times staff writer Jennifer Oldham can be reached at jennifer.oldham@latimes.com
