DNC List Has DMer Eyeing Thin Margins

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Whatever the fate of the national no-call registry, Dennis McGarry is concerned that he might be unable to stay in business if his costs go up.


McGarry is CEO of Personal Legal Plans Inc., a small telemarketing firm in Charlotte, NC, that sells wills and other legal services. The company makes 4,000 to 5,000 calls daily, though it faces a much smaller pool of prospects thanks to the registry.


"We merged our data and found the number of eligible people that we wanted to market to dropped about one-third, though a portion of that is people we've never been able to reach because they've never answered their phone, because of technology changes and so on," said McGarry, one of three panelists who gathered at DM News' offices last month to participate in "Telemarketing in Turmoil," a videotaped discussion about the future of telemarketing.


Other panelists were Mitch Roth, a partner at the law firm Williams Mullen and adviser to the American Teleservices Association, and Ellen Ryan, head of the integrated services division at Wunderman New York and a 20-year veteran of telemarketing.


Personal Legal Plans doesn't actually sell a product or service over the phone, McGarry said.


"All of our phone efforts are to arrange an appointment for an in-home visit with a client or a prospect," he said. "Once we get into the home, 95 percent of our prospects turn into a sale. We've been in business for 22 years, and we have found the telephone to be an extremely powerful marketing tool to acquire clients. The main reason for that is that it's two-way communications. Outside media such as newspaper, radio, direct mail, are one-way communications."


Ninety-five percent of McGarry's clients are acquired through outbound telemarketing, and it costs $300 to acquire a customer, he said.


"Our margins are quite thin," he said. "If we had that $300 cost go up to $400, we may be out of business."


McGarry said he has found newspaper advertising too expensive and less responsive, but he realizes that he will have to look at other approaches.


"We've tried other marketing channels, but they haven't been as successful," he said. "But we are looking at direct mail in all of our markets with an overlay of radio and newspapers. For us as a small business, we're just going to have to focus more on those customers who seem to take advantage of our services more than others."


Ultimately, McGarry said, he sees outbound telemarketing surviving as a viable marketing channel.


"We may have to work harder at establishing business relationships with a client on one type of service and then work our way up for other services," he said. "The telephone is powerful. I hope we won't lose it, and I don't expect we will."


"Telemarketing in Turmoil" is available in DVD, CD or VHS formats for $49. It may be ordered directly from DM News by contacting Charlton Cham at 212/925-7300, Ext. 328, by fax at 212-925-8797 or by e-mail to Charlton@dmnews.com .


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