‘Smart’ Direct Marketers Will Adjust to Regulations

The federal do-not-call registry recently rode one of the most harrowing legal roller coasters ever. One day on, one day off, the next day – who knows? Telemarketers watched in suspense as the courts and Congress played a game of high-stakes constitutional pingpong, the collective fortunes of all telemarketers rising and falling with every volley.

This was big news for telemarketers, but the same cannot be said for e-mail and direct mail marketers. Beyond planning how to spend all the revenue that soon will flow their way from anticipated cuts in telemarketing budgets, e-mailers and direct mailers were riveted by developments on another front: spam.

Much like the no-call frenzy that started about four years ago, anti-spam prohibitions are popping up with alarming frequency as lawmakers latch on to the latest hot-button privacy issue. Most recently, California joined a few other states that set prohibitions against spam by enacting SB 186, which makes it illegal to send an unsolicited commercial e-mail either to or from California.

Meanwhile, the U.S. Senate also passed a spam measure (S. 87, the CAN-SPAM Act), which requires the FTC to deliver a plan to Congress for creating a “no-spam” registry similar (in concept, at least) to the no-call registry.

Can the final nail in the direct marketing coffin, “do-not-mail” registries, be far behind? New York and Massachusetts introduced such legislation this year, and legislators in other states have begun drafting similar provisions. In a political climate offering few slam-dunk issues, the “do-not-this or that” bandwagon has become increasingly alluring.

As the repercussions of these new and proposed rules sink in, non-telemarketing DMers’ attention inevitably will be drawn to the outcome of the American Teleservices Association and Direct Marketing Association case against the federal no-call registry.

Rather than distancing themselves from telemarketing (deemed the “infected limb” of direct marketing by another commentator), e-mailers and direct mailers increasingly will see the telemarketers’ constitutional challenge as their last, best chance to disrupt an unprecedented triple play against the DM industry.

The simple reality is that the fight over the do-not-call list, once viewed as affecting only telemarketers, is the e-mailer’s and direct mailer’s fight as well. All direct marketers need to circle the wagons now or face the long-term negative ramifications of a divide-and-conquer approach by state and federal legislators.

All direct marketing channels, not just telemarketing, have become victims of their own success. The higher response rates achieved via direct marketing over traditional mass marketing attract more and more companies seeking to maximize their advertising dollar. At the same time, greater information-gathering capabilities and decreasing costs have enabled these companies to send ever-increasing numbers of messages. The result is consumers who feel inundated with marketing messages and opportunistic consumer groups and politicians who seek to take advantage.

What can be done? Delivering just the right marketing message regarding just the right product to a consumer who is poised to purchase that product is the underlying challenge of all direct marketing. The challenge facing all DMers is how to use the ever-increasing ability of companies to compile information to better target those individuals most likely to make the purchase. The regulatory climate therefore requires less mass marketing in the guise of direct marketing, and more “smart” marketing.

Smart marketing takes advantage of the best elements of all direct marketing channels in light of today’s regulatory realities. It means deploying information technology to an even greater extent than ever before in order to maximize the probability that the consumer contacted at least will be interested in the product offered.

It also means absolute, no-questions-asked compliance with every element of the new laws in order to stay off the regulator’s enforcement radar screen. A proactive compliance mindset, combined with deployment of new compliance technologies and careful record-keeping, will let smart marketers anticipate compliance issues before they arise and take advantage of exemptions in the laws as well as any safe harbors offered.

With the playing field between telemarketing and other direct marketing channels rapidly becoming level (from a regulatory standpoint), smart marketing also means using the three DM channels in new and complementary ways to maximize client acquisition and retention.

As direct marketers grow more fluent in the nuances of smart marketing, the overall perception of consumers toward direct marketing will change as well, offering a more receptive audience to the messages.

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