One of the latest trends in direct response television is the use of low-priced introductory offers that allow consumers to try high-priced merchandise for little money down.
Known kinds of such deals, which are a type of advance consent offer, allow customers to have a $1,000 exercise machine or a $2,000 computer delivered to their homes for as little as $14.95. After a 30-day trial period, customers are then billed higher monthly payments to cover the actual cost of the merchandise.
Traditionally, DRTV offers for high-priced products involve a series of equal payments. Advance consent offers are quite different, often involving complex terms where not all the payments are for the same amount. If additional products are upsold during the call, the terms can get even more difficult to understand.
Advance consent offers are a great way to reduce the risk of buying through DRTV. Over time, they could greatly expand the scope of what can be sold via electronic retailing. However, these programs need to be implemented very carefully at the call center or they simply will not be profitable.
Many marketers have seen call volume and sales skyrocket with the new offer format. The question is whether those sales will turn into actual revenue. If customers get the wrong impression when they respond to these offers, it can lead to very serious problems – both for the advertiser and the DRTV industry as a whole. Returns and nonpayments will be high, and long-term trust in electronic retailing will suffer.
Since the goal of the offer is to drive call volume, there is often little or no explanation of the total payment agreement on the broadcast. That means the low introductory price is embedded in consumers’ minds when they call. It is up to the sales consultant at the call center to explain all the details of the offer and make sure customers know the full price of the product before ordering.
The Electronic Retailing Association believes the issue is so important that it recently issued detailed guidelines on how to present and fulfill advance consent offers. You can see the guidelines at www.retailing.org.
It is critical that advance consent offers are carefully described at the time of sale, not only to prevent a misunderstanding with customers, but also to confirm that callers are indeed qualified customers who will make good on future payments. Any marketer using this kind of offer needs to work very closely with the call center.
No matter how carefully a script is worded, many customers have questions during the call. That makes it important for consultants to fully understand the offer and receive extensive training so that they can answer those questions accurately.
Before taking the orders, consultants must also confirm that customers indeed understand the terms of the agreement. As the ERA guidelines point out, silence does not equal consent.
Even so, these offers create the potential for tremendous customer service issues. Marketers should be prepared to deal with a higher number of customer service calls from customers looking for clarification about billing. It is also extremely important that orders are fulfilled promptly and credit cards billed fairly, so that customers get the full promised preview period before their cards are hit for subsequent payments.
Call centers can take several steps to ensure that both clients and consumers enjoy the benefits of the new, low-introductory offers without suffering potential consequences. One is to use dedicated phone lines to route all such calls to telesales consultants who have received training on the specific product and offer. Calls should be monitored for accuracy and any problems corrected immediately. Also, consultants should be equipped to confirm credit card numbers while callers are still on the phone, to cut down the number of unqualified customers.
Anyone who rolls out an advance consent campaign without planning at the call center is in for a rude awakening. It simply will not work.