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Do-Not-Call List -- Direct Mail Boom

October 2003
By Caroline Miller

Associate Editor

Direct mail printing may be on the verge of a renaissance, thanks in part to the new national "do-not-call list." The result could prove to be a cash cow for many direct marketing printers.

"The Federal Communications Commission's (FCC) do-not-call registry presents an interesting challenge for marketers," says Tim Stratman, president of RR Donnelley Direct in Chicago. "In the short term, we anticipate that marketers will reevaluate their marketing mix and will rely on other communication vehicles, most likely direct mail."

Under the new law, telemarketers who call a listed household can be fined up to $11,000 for each violation. Consumers can file complaints to an automated phone or online system. There are some calls that are exempt from the list. Telemarketing calls for charities, pollsters and on behalf of politicians are still acceptable.

Registered consumers can also give written permission to get calls from certain companies. A company may also call someone on the do-not-call list if that person has bought, leased or rented from the company within the past 18 months. Direct marketers may also call people if they have inquired or applied for something during the past three months.

No More Cold Calls

For most direct marketers, the aspect of their business most impacted by the new law is the cold call. "Consumers do not mind calls from businesses that they have an existing relationship, which is still permissible under the new law," notes Tom Wicka, executive vice president of sales and marketing for the Instant Web Companies in Chanhassen, MN.

For these and other reasons, printers may see an explosion in need for their ink-on-paper services. "Direct mail is the least intrusive form of marketing out there," Wicka asserts. "If you ask people if they like receiving junk mail, they say no. But if you ask them if they like getting targeted information designed specifically for them, then they are far more likely to say yes."

As a result, direct marketers are taking a look at how direct mail can be used to contact new consumers in a less intrusive manner, while still remaining within the bounds of the law.

And not only are marketers looking to comply with the law, but the new regulations require telemarketers to purchase the national do-not-call list annually from the FCC. The annual cost for organizations to access phone numbers in the registry will be $25 per area code, with a maximum annual fee of $7,375 to access numbers for the entire country.

"All of the sudden, direct mail has a real shine and respect to it," Wicka adds. "And, it may trigger a boom for printers and mailers."

While some marketers will attempt to circumvent the new laws, most are retooling their strategies. Some marketers are shifting their efforts to traditional direct mail pieces. Others are developing sweepstakes campaigns that will enable them to contact the consumer by phone once a consumer participates in the sweepstakes. Participation in the sweepstakes acts as a written permission slip for the direct marketer to contact them again.

"Telemarketing is not going to go away. It is still an effective means to cross-sell," reports Wicka.

No matter what strategy a marketer chooses to pursue, the news is still good for printers, contends Xplor International General Manager William McCalpin. "Using the post office is virtually the only way that U.S. companies have to contact new customers that is not becoming increasingly limited by legislation," he says.

While it is still early to assess the long-term impact of the do-not-call list, it does appear that printers will benefit from the new list. "We're hearing mixed reactions at this point," reveals Ted Gaillard, senior vice president of sales for Vertis Inc. in Baltimore. "We've seen everything from take a wait-and-see attitude to acceptance of the list since it helps eliminate wasted telemarketing dollars, which can then be reallocated to more effective media, including print advertising."

However, The Instant Web Companies has already started to see some serious market shifts from its clientele. "We've had three customers within the past 60 days specifically tell us that they are now shifting some money for the fourth quarter from telemarketing to print. We've also had other clients tell us that they are planning to make substantial changes in their budgets for 2004," Wicka reports.

In fact, Wicka believes that the repercussions of the new list will be felt by printers in 2004. Instant Web expects to see a 3 percent to 6 percent increase in direct mail jobs in 2004 among its current customers as a direct result of the do-not-call list. "That is a minor boom and good news for printers and mailers in an environment where there hasn't been much good news as of late," he adds.

The reality for marketers is that direct mail is now considered the least offensive form of marketing, according to consumers. In a recent study conducted by Vertis, it was indicated that instead of telemarketing, consumers would prefer to receive a company's product and/or service information via direct mail (31 percent), newspaper inserts (24 percent), catalogs (18 percent), newspaper ads (11 percent) or e-mail (10 percent). Only 6 percent said "None of these."

All Haven't Signed Up

The survey, which was conducted to gauge consumer reaction to, and usage of, the new national do-not-call registry, also reveals that while 80 percent of those surveyed are aware of the registry, only 30 percent have signed up to prevent unwanted telephone solicitations. However, 68 percent of the 250 adults surveyed said they would likely register in the future. And, as marketers rediscover direct mail, client education or re-education is key. "We are reminding our clients how personalized and targeted their direct mail pieces can be thanks, in part, to new technology. Direct mail has come a long way," Wicka asserts.

Many marketers are becoming increasingly more interested in how they can use targeted, one-to-one printing, often incorporating versioning and personalization.

"The true one-to-one direct marketing approach still remains too expensive for most marketers to implement on a wide-scale basis." Wicka feels that a more hybrid approach, which includes more versioning and segmentation, can still reach its target audience effectively without being cost-prohibitive.

Xplor's McCalpin agrees. The creation and delivery of paper marketing materials is relatively expensive compared to other media, he notes. However, companies can effectively use paper marketing media today by using a combination of sophisticated electronic printers and data processing skills.

"Today's electronic printers can do incredible high-speed black-and-white; highlight color; business color; and near-offset-quality full color, so that marketing departments can balance their message against the cost of production," McCalpin adds. "And the sophisticated use of data processing enables one-to-one marketing messages, customized communications and precisely defined recipient groups."

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