September 09, 2003

With the Federal Trade Commission beginning enforcement of the national Do Not Call registry next month, companies are turning to customer-relationship management and related analytics software to cope with what some believe could be an industrywide loss of nearly $50 billion in sales each year.

It's estimated that there are 40 million names on the national registry, and that number is expected to grow to as many as 60 million by the time restrictions go into effect Oct. 1, says Matt Garrett, VP of marketing for telemarketing services company Aegis Communications Group Inc.

Companies have had some time to adjust to the changes. Many states in the past two years already have do-not-call lists (which will be combined with the national registry) and have taken action against those who failed to comply. Missouri has levied more than $1 million in fines against companies that have violated terms of its do-not-call effort, according to Jay Nixon, the state's attorney general.

Even so, telemarketing will remain a vital industry, Garrett says. "The cost of acquiring customers across the channel has traditionally been one of the most productive from an ROI standpoint," he says. "About 4% of all sales are made through an outbound telemarketing call."

To avoid getting hit with fines, companies can use CRM software to create "do not solicit" flags in their databases that alert them to individuals who are listed on a registry. CRM software vendors such as Siebel Systems Inc. provide automatic updates of do-not-call lists to their customers, to use in updating their own databases.

With the increasing limitations on the number of potential customers companies can contact, it becomes even more important to create optimized pitches to those customers companies are able to contact legally. That includes customers who have had pre-existing relationships with the company in the past 18 months, and those who've made direct inquires into products or services in the past three months.

To help with that, PeopleSoft Inc. in its August CRM update added the ability for call-center agents to create a customer record when opening an E-mail inquiry from a potential buyer, opening the door to future pitches. "There are going to be some interesting repercussions in October and November, as consumers have this impression that all calls will stop," says Gaye Weinberger, senior VP of business requirements for Aegis.

Most CRM products' predictive analytics capabilities can help call-center agents quickly access customer details, such as a history of satisfaction and profitability. But more important, telemarketers want to be able to define individual customer requirements and present that information to call-center operators.

"We have to be able to leverage and value each customer interaction," Garrett says. "That will require us to know much more about each consumer prior to any call." Often, that means having access to a data warehouse that helps track customers across a company and all its affiliates.

Data warehouses also can be mined to help companies identify when a customer has an ongoing relationship with a division or subsidiary that would open that customer up to solicitation across the company, says Dan Lackner, VP of analytics and marketing at Siebel. But even if a company can legally call a customer with whom it has an ongoing relationship, it must have detailed information to make sure the call is warranted, Lackner says.

"Companies have to come to terms with the fact that when people say 'do not solicit,' they don't want calls on an unsolicited basis," he says. "If you do call, you have to make sure it's important ... and gives the customers something they need."

This article originally appeared in InformationWeek, Sept. 8, 2003.