Network 7's TODAY TONIGHT interview with Dr Stewart Adam, Associate Professor in Electronic Marketing, Deakin University

Of the $20Bn spent on direct and digital (interactive marketing) in Australia, about $1.5Bn is spent on telemarketing.  This lower figure is an estimate of  inbound and outbound telemarketing expenditure which is down by about half following the introduction of the Do Not Call Register Act 2006 which came into effect in May 2007 and was amended in January 2011.

The story is a mixture of telemarketing, scamming and just plain harassment ... not all of it by so-called telemarketers.  Listen to Dr Adam's comments before watching the video excerpt from Today Tonight. Below is a facts sheet with questions and answers.

TELEMARKETING QUESTIONS and ANSWERS

Dr Stewart Adam, Assoc. Professor in Electronic Marketing
Deakin University

 

1.     What is telemarketing?

Direct and digital marketing is rich in tools, from traditional old favourites such as direct mail, catalogues and telemarketing, to the internet and newer digital approaches involving mobile phone networks.

 

Either viewers are invited to call a 1-800, 0055 or 1300 number and place their order – inbound telemarketing – or human telephone operators or computers with voice recognition capabilities ‘cold call’, seeking an order or perhaps a donation to an organisation such as CARE Australia or the Red Cross – outbound telemarketing. Telemarketing covers a broad range of activities, with differing objectives.

At one end of the continuum, it is employed to generate new sales leads and build the database. At the other end lies full account management. In between the two are many other means of employing telemarketing. A major use of telemarketing relates to customer service. Motor vehicle manufacturers make regular follow-up calls to ensure that dealer service and car performance and satisfaction are all at a level that might ultimately result in a repeat purchase of the brand.

Source: Armstrong, G., Adam, S., Denize, S. and Kotler, P. (in press for 2012) Principles of Marketing. 5th edition, Pearson Australia, Sydney. P. 458.

 

2.       Why do many of the telemarketing calls we receive come from overseas?
The unscrupulous companies use cheaper overseas call centres as a way of circumventing the Do Not Call Register Act (2006) and January 2011 Amendments.

 

3.       Should we be wary of telemarketers that cold call and ask for money to provide a service?
Very wary … particularly if they purport to be offering to fix and issue on your computer and mention a reputable company like Microsoft.  The fact is that companies like Microsoft do NOT call customers via the telephone.

 

4.       If you are on the Do Not Call Register, is it ever OK for companies to employ direct marketing over the phone?
Yes, if they are making a designated marketing call (as per Schedule 1 of the Act): Government bodies, religious organisations and charities; political parties, independent members of parties and candidates; educational institutions.

Also, a company from whom you have purchased may contact you, e.g., after a car service you are a known customer and they might contact  you to remind you about the next service or to see if you were totally satisfied with the service. Or a motor company might ring to advise you of a recall notice.

 

5.       We've found that even people on the Do Not Call Register are receiving persistent telemarketing calls. How do companies get around these rules?
The unscrupulous simply ignore the government legislation and the Code of Practice of the Australian Direct Marketing Association at their peril.  The Federal Court has just issued a $120,000 fine for a travel business that made 12,000 calls. The Australian Communications and Media Authority (ACMA), which manages the Act, has also issued nine (9) infringement notices to the value of $438,000 plus 18 undertakings, enforceable in the Federal Court, and issued 10 formal warnings.  Any firm wanting to know more about the Act and its administration might start with a visit to the Australian Government’s ComLaw website and also visit the ACMA website.

 

6.       These companies must benefit from using telemarketing...how successful is this as a direct marketing technique?
Even if they only have a one or two per cent success rate in terms of sales that is a large amount of money.  But if the unscrupulous company gets a username/password, for example, then they might be able to extract more money by buying goods under the person’s name and so on ….

 

7.       How much is spent on telemarketing each year?
Some call telemarketing a part of Interactive Marketing–I call it direct and digital marketing. About $20Bn is spent in direct and digital marketing a year in Australia according to survey data from the Interactive Advertising Bureau (IAB), more than is spent on mass media advertising. The Interactive Marketing Bureau Australia in their August 2010 report conducted by PriceWaterhouseCoopers show the break-up as follows:


 Source: Armstrong, G., Adam, S., Denize, S. and Kotler, P. (in press for 2012) Principles of Marketing. 5th edition, Pearson Australia, Sydney. P. 468.

8.       What can we do to protect ourselves against telemarketers?
While not everyone can afford to do this, many use a simple answerphone and set it to 5 or more rings to answer.  Telemarketers using computer-based dialling sniff the device is connected and disconnect. Others have also installed fax machines (set to answer after nine rings) in conjunction with answerphones.  Others have resorted to paying for Caller ID on their landlines and not answering any calls where the caller ID is not shown.  Many younger folk do not have landlines, and simply use mobile phones. If a mobile phone caller has ID turned off, and the phone number is not recognised as one of your contacts, perhaps don’t answer.

 

9.       Will we ever be free of telemarketers?
It is unlikely we will ever be free of telemarketers. As the Information and Communications Technology (ICT) we use in the home, office and on the fly becomes more sophisticated and offers faster access, then the technology used by companies with consumer interests at heart to communicate with their customers will become more advanced.  Unfortunately, so too will the technologies and techniques used by organisations that simply want to take our dollars by any means and causing pain and suffering for many people.

 

 

Updated 25 August 2011