Telemarketers fire back - East Valley Tribune: Business

Telemarketers fire back

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Posted: Tuesday, July 8, 2003 12:09 am | Updated: 1:00 pm, Thu Oct 6, 2011.

The national do-not-call list has some East Valley telemarketing firms bracing for its impact this fall, and hopping mad at the federal government for implementing it.

Robert McNamara Jr., president of Mesa-based Innate, said complying with the list is going to create an economic drain. His firm advertises physicians through telemarketing and other kinds of advertising.

“We’ve projected that about 50 percent of the call centers in Arizona are going to either go out of the business, or have to change their shape or form, or product or service,” he said. “I think what the consumer doesn’t understand is that they’re going to be paying for it just as much directly and indirectly, whether it be through their taxes, which is going to happen, or whether it be because of the effect on the economy.”

Starting Oct. 1, all companies that use telemarketing will be required to check the do-not-call list and remove those numbers from the call lists they use to solicit consumers to generate sales. They will be required to check the list and adjust their lists quarterly.

Some East Valley telemarketing firms did not want to comment on how they will be affected, while others referred comment to the Direct Marketing Association, which did not return calls for comment.

But, the American Teleservices Association, which represents telemarketers of all sizes across the nation, expects massive layoffs as the number of consumers available for phone solicitation dwindles. As of Monday, nearly 20 million Americans had signed up for the do-not-call list.

“There are currently 6.5 million people employed in the teleservices industry in the United States and we predict that with the implementation of the do-not-call list Oct. 1, around 2 million of these will be losing their jobs in the next six to eight months,” said Brad Rateike, the association’s manager of member services. “The Federal Trade Commission estimates that 60 million people will eventually sign up for that list, so when you take those people out of the pool of potential people to call, then you no longer need people to make those dials.”

The American Teleservices Association does not have state-by-state information. Many call centers in Arizona won’t be negatively affected by the do-not-call list because they handle calls from existing customers.

McNamara said his company will lose clients because he’ll have to charge them more to cover the cost of compliance.

“It’s obviously going to drive some telemarketers out of business,” he said. “We know that we’re going to lose certain clients. We just raised our rates as a countermeasure in preparation. We’re going to have to work a lot harder to make a dollar. It’s definitely going to handicap us.”

Tito Salgado, owner of Direct 2 Home Satellite, said the law that created the do-not-call list is “nothing but a smoke-and-mirrors scam that the government has pulled over the public.” His firm sells satellite dish service through telemarketing and has offices in Tempe and Phoenix.

“The reality of the situation is telemarketing is a billion-dollar business and the government is like ‘How can we get our piece of the pie?’ ” he said. “All the phone rooms will have to pay to have their lists scrubbed and that’s really how the government is making their money, but they just said we’ll put a spin on it and it will get the support from the American public.”

Companies are required to send their call lists to the FTC, which will charge each business thousands of dollars per year to remove the prohibited numbers from their lists, Salgado said.

About 80 percent of Direct 2 Home’s sales are generated via telemarketing, and it has about 40 employees. In Tempe, many of its workers are Arizona State University students, said sales manager Bryon Ballou.

“If the list does start affecting us where we’re not able to have enough numbers to call and our sales start to drop, we’ll just put people out on the streets selling it door to door,” he said. “That’s our backup plan. And we’re going to also increase our mailings, where we mail out to drum up business. We have done some outgoing mail pieces and they’ve worked somewhat well.”

But, unlike telemarketing, mailings are not proven to be a consistently successful sales vehicle, Ballou said.

Until Oct. 1, it’s wait and see, he said.

“We really don’t know how much it’s going to affect our business until it takes place, until we see how many people register for it,” Ballou said.

Most people don’t realize how many businesses will be negatively affected by the do-not-call list, McNamara said.

“Eighty-seven percent of businesses utilize telemarketing as a very substantial part of their advertising,” he said. “It’s very hard to name a business that doesn’t generate their leads initially from telemarketing.”

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