The “Do-Not-Mail” Threat

By Peter DeHaan

June 2008

Five years ago, the call center industry was confronted head on with the DNC (Do-Not-Call) legislation.  As millions signed up (www.donotcall.gov) to block most telemarketing calls to their home, the pool of prospect numbers shrank dramatically.  Since then, the face of outbound calling in the United States has been unalterably changed.  In the intervening years, many outbound centers switched from calling consumers to calling businesses.  Others exchanged outbound work for inbound, or at least added inbound into their service mix.  Many call centers scaled back as demand and efficacy plummeted, while a few closed their doors.  Some outbound call centers fine-tuned their niche or redefined their business, allowing them to remain viable; only a few thrived.

Today, DNC registration has surged past the 100 million mark, with more residences now on the list than not.  The latest development is that phone numbers on the registry have been made permanent, not expiring after five years as originally planned.  All this adds up to some grave challenges for the outbound call center industry.

Throughout all this, the inbound side of the industry breathed a sigh of relief.  “At least inbound is safe,” many a call center manager or owner thought.  The only tangible change was that some of the formerly outbound-only call centers were now their competitors, bidding against them on RFPs (Request for Proposals) for inbound campaigns.

Given the immense popular support of the DNC legislation, politicians – seeing an opportunity to win votes and generate good PR – began introducing all sorts of bills to further regulate and restrict the manner and mode in which call centers operate, for both outbound calling and inbound response.  These proposed bills stand as future industry threats, but they are not the biggest or the most ominous.  That designation may be reserved for “Do-Not-Mail” legislation.

According to Jerry Cerasale, SVP of Government Affairs for the Direct Marketing Association (DMA), there are currently Do-Not-Mail bills pending in eleven states: Hawaii (both in the house and senate), Illinois, Maryland, Michigan, New Hampshire, New York, North Carolina, Rhode Island, Tennessee, Vermont, and Washington.  Soon, enough states will have joined this initiative that a tipping point will occur, prompting action at the federal level.  (Federal action is not all bad, as it will help usher in a single set of regulations with which to comply, hopefully replacing a patchwork of differing and diverging state requirements.)

“What does Do-Not-Mail have to do with call centers?” you might be asking.  Plenty, it turns out.  Direct mail, the specific marketing vehicle that would be limited or squelched by the Do-Not-Mail bills, is a huge driver of calls to call centers – inbound call centers, the ones who thought they were safe from onerous legislation.

Every direct mail piece is designed and sent to accomplish a specific purpose.  That purpose, or call to action, is for the recipient to do something.  This might include mailing a response, faxing a form, visiting a Web site, or placing a call.  Making a phone call is the most commonly selected, easiest, and quickest option.  That phone call might be to place an order, add a service, make a payment, take a survey, give a donation, ask a question, request literature, subscribe to a service, schedule an appointment, solve a problem, register a complaint, voice support, clarify a question, or pursue a myriad of other outcomes.  Obviously, direct mail prompts and inspires a great deal of telephone activity, virtually all of which ends up in a call center. 

According to the USPS 2007 Annual Report, over 74 billion pieces of mail were sent last year.  Direct mail was cited by Cerasale to account for about one third of that.  Even if just a small fraction of those mailings generated a call center communication, it is still an enormous amount.  Consider what would happen if those calls went away.  Billions of call center contacts would be summarily eliminated.  That’s the big picture. 

Now, look at the view from within your call center.  Analyze your larger accounts to discover how they drive calls to your center.  Is direct mail part of the mix?  To what extent?  Imagine those calls disappearing.  How would that affect your call volumes, your economies-of-scale, and your profitability?  How would you need to adjust your call center to adapt?  Could you make the changes required to ensure survival? 

Lest you dismiss this as an overreaction to an overstated threat that may not occur, outbound call centers found themselves at this same point five years ago.  Yes, Do-Not-Mail legislation is a huge threat to the inbound call center industry – and to your call center.

The Do-Not-Mail bills also pose a more general danger to the cost-effective viability of the U.S. Postal Service (USPS).  The USPS management, staff, delivery schedule, and infrastructure all operate at a requisite level of mail volume.  The revenues generated from that mail supports the current scale of operation and efficiency at the post office.  If revenues drop, then the operational status quo cannot be supported and maintained.  The result would be either that prices would need to take a huge jump or services would need to be drastically curtailed.  This could include the hours that post offices are open, closing smaller, less used offices, eliminating Saturday delivery, or only delivering mail every other day.  (One option is that half the routes would be Monday, Wednesday, and Friday and the rest would be Tuesday, Thursday, and Saturday.  Another option would simply be to pick up and deliver mail every other day, Monday through Friday.)

This is not a far-fetched scenario.  Since about one third of all mail is direct mail, as Do-Not-Mail bills are implemented, the number of households to which unsolicited mail could be legally sent would decrease.  Imagine a national Do-Not-Mail law with the same popularity and registration level as DNC.  A large percentage of direct mail would cease to be sent, the USPS revenues would fall, and huge postage increases and/or dramatic service cuts would be made.  Just as DNC permanently changed outbound call centers, Do-Not-Mail would forever and irrevocably affect postal service.

There are three possible reactions to this situation.  The first is to do nothing, either out of apathy or denial.  The second is to assume that Do-Not-Mail is a foregone conclusion and begin forming contingency plans.  The third (and recommended) option is to get involved.  The DMA (Direct Mail Association) is leading the fight – see www.the-dma.org/donotmail – with the ATA (American Teleservices Association) playing a supportive role. 

Don’t let DNC history repeat itself with Do-Not-Mail.