CRM in an Age of Legislation: Privacy Laws Have Forced Sales Callers and Outbound Marketers to Clean Up Their Act and Given Them a Chance to Polish Their Image

By Lager, Marshall | CRM Magazine, August 2005 | Go to article overview

CRM in an Age of Legislation: Privacy Laws Have Forced Sales Callers and Outbound Marketers to Clean Up Their Act and Given Them a Chance to Polish Their Image


Lager, Marshall, CRM Magazine


direct mass marketing isn't the business it used to be, and the days of casting a wide net to catch a handful of customers are over. Several new laws and regulations have been put into place over the past decade that make it harder for marketers to get access to customer information, allow consumers to block unsolicited sales calls, and institute stiff penalties for companies that violate these statutes.

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As the mass marketing environment changes businesses must change the way they manage their prospects, as well as their established customers. But companies are finding that in complying with the new regulations they are rediscovering best practices for relationship care, and are carving out new competitive space. This looks like a job for CRM.

THE PARTY'S OVER

Ask any reputable marketing firm and you'll hear that consumers have, in large part, rejected the deluge of random solicitations that marked the height (or, to most, the nadir) of an unrestricted marketing culture. "The new legislation we've been seeing, on top of the older rules, is part of the larger shift away from mass marketing," says Eric Anderson, director of agency services for Web marketing firm White Horse. "CAN-SPAM and DNC are consumer-driven efforts for individuals to control the environment in which they're marketed to."

Other sections of these laws, as well as other legislative motions, address different aspects of information gathering. CAN-SPAM, DNC, and DNF all contain provisions that limit the sources from which a company can draw prospects, prevent the sharing of information without the consent of the consumer, and give consumers final say over who can and can't call them. The Health Insurance Portability and Accountability Act (HIPAA) prohibits the use of medical and insurance information for any unrelated purpose, and establishes security requirements to keep it out of the wrong hands in the first place. Other recent laws that may occasionally be issues for outbound callers and emailers include Sarbanes-Oxley, COPA, and Gramm-Leach-Bliley.

TACTICAL CHANGES, NEW OPPORTUNITIES

The requirements of the various privacy and security laws have caused a shift in the approach to sales and marketing calls. According to Anderson, even Web advertising has changed due to this: Because consumers perceive possible annoyance and even danger from clicking on throbbing banner ads, less money is spent on them in favor of paying for better placement in search engines. In addition, "our clients have moved away from third-party email services, list rental, and similar approaches. It's had a chilling effect on the mass-marketing technique," Anderson says.

Christa Heibel, CEO of CH Consulting, says this is good: "In telemarketing, for example, it wasn't just the bottom-feeders who were overcalling. These laws are enforcing responsible, more-thought-out, targeted marketing, instead of casting a wide net."

For Rick Buck, director of privacy and ISP relations for email marketing services firm e-Dialog, compliance shouldn't be a big deal for first-rate companies. "From day one everything we've preached as best practices in marketing meets or exceeds current legislative requirements," Buck says, "and that's been the case since before the laws were enacted."

Other companies, however, may simply be missing the point, Anderson says. "Clients haven't taken the time to understand CAN-SPAM. They just did a broad sweep to try and fix problems, so every week we see a prospect who is doing something screwy." One such prospect came to White Horse complaining of a recent email blast that had achieved almost zero delivery and he didn't know why. Anderson recalls, "They had rendered all the text as graphics in an attempt to get around spam filters, and had printed the opt-out message in white letters on a white background." These are immediate red flags for most filtering software, he says, "so, by trying to avoid tripping the spam filters they tripped them all. …

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