Direct marketer Suarez Corp. Industries, North Canton, OH, recently saw a double-digit percentage increase in response to a direct mail catalog when it placed prerecorded telephone calls to customers before they received the mailing. Now, the company, which markets a variety of general merchandise directly to consumers, is hoping to expand the use of automated outbound calling to support additional direct mail efforts.
Paul “Chip” Klingaman, executive director of the telecommunications division of Suarez, said the company placed outbound calls to 5,000 catalog recipients directing them to watch their mailboxes for the cut-sheet general merchandise catalog. The messages were transmitted shortly after the catalogs were mailed so consumers received the catalogs within about a week of the phone message. The company also had a 5,000-catalog control group that did not receive a phone call.
The group that received the telephone call was 14.6 percent more likely to respond to the mailing, Klingaman said.
“This looks like an effective way to lift response,” he said. “Basically, the list [that received the phone calls] generated that many more customers, so we had higher gross profits.”
Suarez used the services of a Boca Raton, FL, company called Phone Interactive, an interactive voice response outsourcer that also places bulk outbound telephone calls using its MegaMessage service.
The cost for the service starts at about 22 cents per call, but users can reduce that rate based on the volume of calls they place. In Suarez' case, the cost was 19 cents per call, Klingaman said.
“I think this is a good service, but we have to get the costs down a little bit more,” he said.
However, the cost of using the automated service is much less than it would have been to use the company's own agents, which he said could have cost about $2 per call.
“The intent was to see if it would lift the results of the sales,” said Phillip Kent, president of Phone Interactive, which also conducted some automated outbound calling for Texas Gov. George W. Bush during his recent national tour for the presidential primaries. “The thinking was that people open their mail over the trash cans and put their mail into 'A' piles and 'B' piles. The objective is to get into the 'A' pile, with the 'B' pile being what goes into the trash.”
Klingaman said he was considering doing additional testing with the service and was looking into the possibility of Suarez' acquiring the technology to perform the automated outbound calls itself so it could take the operation in house.
There are some precautions that have to be exercised when using automated outbound calls, both Klingaman and Kent pointed out. Kent said the service is never used for solicitation and can be used only when there is an existing relationship between the callers and the recipients.
The federal Telephone Consumer Protection Act prohibits the use of prerecorded outbound calls for commercial purposes unless a consumer has agreed to receive such communications from the caller.
The law does permit automated calls to be used for some political purposes, and Kent said Phone Interactive has had a lot of success in using MegaMessage to support political groups, particularly Republicans. He said the company previously did some outbound broadcasts for Elizabeth Dole when she was considering running for office, including one spot in which she recorded a message from an airport phone and invited people to a rally with only one day's notice.
Earlier this year, a California group supporting Bush for the Republican presidential nomination used the MegaMessage service to bring out voters for a rally. With no other advertising, the gathering turned out to be one of the biggest California rallies, according to Donald Parsons, owner of Stockton, CA-based Strategic Research, which organized the event.
For that rally, the cost was a little less than 18 cents per call, he said, compared to previous campaigns in which he used live operators, for which he said he has spent 50 cents to 55 cents per call.
The political group gave Phone Interactive a list of 17,500 Republican phone numbers, and the company was able to connect with at least 11,000 of them, Parsons said. More than 2,000 people ended up attending the rally.
Phone Interactive also has been used by marketers for customer service issues to reduce inbound calls to a call center, Kent said. For example, telecommunications giant MCI used the service to notify customers that they would receive a credit on bill statements to prevent people from calling to ask about the credits.