Posted on Thu, Feb 02, 2012 @ 01:35 PM
By: Melissa J. Fitzgerald, CIPP
As Facebook files for an unprecedented IPO of $5 billion this week, the marketing industry is reminded of the enormous value of relevant marketing data. FB’s prospectus states its valuation at close to $100 billion because they “allow advertisers to select relevant and appropriate audiences for their ads.” Put simply, consumers respond better to marketing that interests them. Consumers don’t mind advertisements and pushy sales tactics when it is regarding something that they want to buy; hence, marketers are willing to pay big bucks for targeted data. Businesses spend billions of dollars each year paying for this type of demographic marketing data—lists of consumers that may be interested in purchasing their goods or services. But this data may or may not be worth the price tag because it is often based on conjecture calculated in the aggregate. Marketers pay an exorbitant fee for marketing data, blast out marketing campaigns, and see a small percent of return on a massive number of contact points. The old adage “throw it against the wall and see what sticks” comes to mind.
More and more marketers are realizing that the consumer’s voice is a fool-proof way to market to an individual consumer. Engaging a one-to-one relationship with the consumer gives the consumer the opportunity to communicate what they want to be solicited about and when. Eliminating the guesswork involved with analyzing aggregated data, consumer preference management not only ensures a higher rate of return on a single campaign but it creates more brand loyalty. Consumers given the chance to communicate their preferences, likes/dislikes, favorable contact point, and frequency of marketing are happier customers.
Last week the European Commission proposed a new data protection framework to replace the 17 year old EU’s Data Protection Directive. While much of the proposed rules deal with the common data protection tenants—breach notification, children online protection, and consumer control over personal identifiable information—the potential impact on the marketing industry is widespread. The potential new EU rules far exceed anything imposed by any other jurisdiction today. Most notably, the new rules require that wherever consent is required for data to be processed, consent must be given explicitly rather than assumed. In essence, this will create an explicit consent (opt-in) requirement for all EU marketing. It is important to note that the EU rules will apply to personal data handled abroad by companies in the EU market or offer services to EU citizens. In other words even if your business is physically located in North America, if you offer your services/products to EU citizens through a website, the new EU Data Protection rules would apply to your business. Similarly, Canada enacted the Canadian Anti-Spam Law (CASL) in late 2010 that requires opt-ins (implicit is permissible) for all commercial electronic messages. Canada’s “opt-in” proposed regulations have yet to be finalized but it is expected that the consent requirements will come into effect sometime in 2012.
Marketers that are already creating a dialogue with consumers and soliciting consumer preferences are well ahead of the curve. Not only will they have a higher rate of return on their outbound marketing efforts and create brand loyalty among their customers, they will be prepared for compliance with the soon to be effective Canadian Anti-Spam Law, and the sweeping EU rules that will likely come into effect in 2 years.
Posted on Fri, Jan 06, 2012 @ 03:39 PM
by Melissa J. Fitzgerald, Esq., CIPP
The Federal Trade Commission issued its biennial report for 2010 and 2011 last week to Congress on the National Do Not Call Registry and while the report confirmed what we already know, it did reaffirm the FTC’s commitment to the hugely successful consumer program and its commitment to enforce against violating marketers. Not only have the registrants increased from 200 million to almost 210 million in just 2 years but the number of consumer complaints regarding unwanted telemarketing calls have increased from to 2.2 million in 2011, up from 1.6 million in 2010.
The Commission’s report reaffirmed its reasoning as to why registrants will not expire from the National DNC Registry despite the 5 year duration that was created when the Telemarketing Sales Rule was originally enacted. However, the FTC has taken a more proactive stance on removing disconnected and reassigned phone numbers, particularly mobile phone numbers, from the National DNC Registry, allowing marketers to market to telephone numbers on the National DNC Registry when they have been reassigned. As more and more consumers become dependent on mobile phones the FTC has seen an immense increase in the number of cell phones registered on the National DNC Registry. The subcontractor that oversees the process for removing numbers from the Registry utilizes directory assistance databases to determine whether the number has been reassigned; however, unlike landline service providers, FCC rules do not require wireless service providers to provide directory assistance data. The FTC confirmed that it will be working with its contractor to push wireless service providers individually to compile disconnect and reassign wireless data so they may be properly removed from the Registry.
Businesses that market to former or existing customers or those consumers with an inquiry should take note that the FTC reaffirmed its stance on the sharing of the established business relationship (EBR) exemptions. Many businesses rely on this exemption to conduct marketing campaigns aimed at existing or former customers, or consumers who have previously expressed interest in good/services. However, consumers often are unaware of the relationship because the seller identified in the telemarketing call and the seller with whom the consumer has a relationship may be part of the same corporation, but are perceived by the consumers to be different because they market under a different names or are selling different products. Consumer expectation is that the marketers are violating their registration on the National DNC Registry. The issue of whether calls by or on behalf of sellers are affiliates and subsidiaries of an entity with which a consumer has an established business relationship fall within the exemption depends on consumer expectations. When determining whether your business may share its EBRs among affiliates, divisions, and subsidiaries, you must ask: would consumers likely be surprised by that call and find it inconsistent with having placed their telephone numbers on the National DNC Registry? Are the goods/services being solicited similar to the seller’s with whom the consumer has a relationship? The greater the similarity between the goods/service sold by the seller and its affiliates and the greater the similarity of their identities the more likely the call will fall within the established business relationship exemption.
The FTC also clarified that telemarketers that utilize lead generators generally do not fall within the established business relationship exemption. The consumer may have an EBR with the lead generator but not with the seller who has purchased the leads. The lead generator must disclose at the time the consumer’s information is collected that the consumer should expect telemarketing calls from the eventual seller as a result of his/her relationship with the lead generator. Again the FTC reiterates the standard that whether a seller may use an EBR created by a lead generator is determined by consumer expectation-would a consumer expect to receive a telemarketing call from the seller as a result of engaging a lead generator? With the appropriate use of notice, a seller should be able to use a lead generator to create an established business relationship exemptions but it is not guaranteed without clear, conspicuous disclosures.
For more information on Gryphon’s patented Phone-Based Solutions, please Click Here.
Posted on Mon, Dec 19, 2011 @ 03:41 PM
By Melissa Fitzgerald
The Federal Trade Commission’s recent actions against telemarketers reaffirms that the Commission considers the National Do Not Call Registry as a viable, successful consumer protection program. Marketers that thought enforcement was a thing of the past are in for a rude awakening—the FTC will not only fine call centers but those institutions for whom they are calling. Marketers and sales teams, even those that only occasionally use the phone channel for soliciting, have the clear responsibility to ensure that not only their agents are in compliance but their third party vendors as well. The FTC has been very clear that anyone on the “marketing chain” is liable for a Do Not Call violation, including non-captive, independent agents as well as corporations responsible for the actions of their outsourced call centers.
Last week the FTC settled with an Illinois-based telemarketing firm, Americall Group, Inc. for violations of the FTC’s Telemarketing Sales Rule (TSR), requiring the firm to pay a $500,000 civil penalty. Americall is a third party call center with clients in a host of industries, including insurance, investment brokers, credit card issuers, retail, and medical facilities. Failing to adhere to consumers’ requests to be added to the company-specific do not call list, the FTC investigated and discovered that Americall had trained its agents to ignore consumer requests to opt-out of future telephone calls. Additionally Americall transmitted false Caller ID information that was intended to mislead call recipients.
Last month the FTC brought suit against a telemarketing service company, Sonkei Communications for allegedly providing substantial support to telemarketers who they knew or consciously avoided knowing were violating the TSR. Among the allegations, the telemarketers were using the defendants’ services to violate the TSR by transmitting inaccurate caller names and dialing numbers on the National DNC Registry. The FTC is pursuing $16,000 per violation that occurred after the violation increase on February 9, 2009, and $11,000 per violation that occurred prior to February 9, 2009.
Just this morning the FTC charged telemarketer Roy M. Cox, Jr. and several of his companies for allegedly violating the National DNC Registry, disguising caller ID, and for illegal robocalling consumers without written permission. It is alleged that the defendents sought to hide their identity by using generic, inaccurate names such as “Card Services,” “Credit Services,” or “Private Office.”
With the enactment of more consumer protection laws at both the federal and state level combined with recent enforcement actions, consumers have become more aware of their rights to express their preferences about who markets to them and when. Adhering to consumer preferences is not only a better way to do business, it is the law with serious PR and financial consequences for noncompliance.
Posted on Wed, Nov 16, 2011 @ 07:46 AM
By Bill McCarthy
The trend to watch for in marketing for 2012 is consumer preference marketing. On a daily basis consumers are bombarded with hundreds of messages through various communication channels. With each year consumers are able to find more ways of opting out of future messages.. Marketers are becoming more aware of the need for new marketing techniques. In an economy suffering from recession, a newfound respect for consumer preference is vital to keep the consumer happy and continuing their relationship with the marketer.
The Customer Experience
Undoubtedly the importance of the customer experience will become more important in 2012. While the customer has so many options in today’s market they have also become more cautious thanks to the recession period. Marketers in 2012 will face the task of taking the customer experience and setting and meeting their expectations. Marketers will first have to ensure that it is okay to contact the consumer then respect the consumer preference for frequency, channel, and marketing content. Marketers will also have to ensure they comply with consumer opt-outs. Marketers must understand what creates customer loyalty and why customers leave.
Social Media
The use of social media in consumer preference marketing will only grow in 2012 even though it is already the norm and in the mainstream. There are more social media platforms that also allow company and brand pages. For example: Google+ launched brand pages in November of 2011. Optimizing consumer preference techniques through social media will only work to benefit the marketer/company.
Cordarounds is a perfect example of social media working for a company. They credit the web with their success. Using social media such as Facebook and Twitter they heavily advertise to their customers. They launch new products on social media first to give their loyal customers a chance to buy the new product first. This in turn allows the company to know who are their loyal customers.
Multiple Channels to Reach Out
Being able to offer multiple channels to reach out to customers based on their permission will become a growing trend. At one time the only way to market to consumers was through direct mail, television advertising, and telemarketing. Now there is Internet advertising, e-mail marketing, and social media marketing. Also with the invention of smart-phones and the use of SMS messaging, the idea of mobile marketing has also become a growing trend in consumer preference marketing. Allowing a consumer to decide what channel they would like to be reached through will allow the consumer to feel more in control and keep their loyalty when they opt-in.
Data Analysis
The use of consumer data and data analysis in consumer preference marketing will also be a growing trend in 2012. As companies and marketers begin focusing more on consumer preference it will become absolutely vital for companies to compile data and evaluate that data to find new trends with their customer base and to improve targeting.
Summary
No matter what techniques marketers use, the growing use of consumer preference marketing cannot be ignored. Consumer preference marketing will only grow more popular in 2012 and the coming years as more and more consumers grow more vigilant to have their preferences respected. The most undeniable trend in 2012 will be letting the consumer have a voice by letting the consumer dictate how and when they be contacted via what marketing channel about the products/services they are interested in. Adhering to those consumer preferences will not only keep marketers compliant but create stronger, loyal customer relationships.
* Source: “Social Media Marketing Best Practices”, crmtrends, http://www.crmtrends.com/socialmedia.html Source: “CRM”, http://www.crmtrends.com/crm.html
Posted on Mon, Oct 31, 2011 @ 11:27 AM
By Bill McCarthy
This past Sunday morning, we had a 7:20 a.m. hockey game. On our way home we stopped in at Home Depot to see if they had any generators in stock. While in the store, no fewer than 3 people stopped to ask if I had what I needed. From the woman at the contractor check out aisle who directed us to the hardware aisle, the man in electrical helping me build the high voltage cable to connect the generator to the house and the last who appeared to ask if I needed help loading the generator into my truck. These people were on their game of customer service. The folks at the Bridgewater, MA Home Depot were great.
In the online world we would expect companies and their marketers to model the store employee behavior. The in store employees could see the look of a searcher’s face, listen to my (their future customer) needs, pay attention to my reply. We expect marketers to use the same behavior in eliciting information to market to consumers directly. Instead company departments become islands of isolation, every department wants to work a different way. Company leaders must insure that the same attitudes should extend into the online world.
There are some companies that have great leaders with very smart marketers who are listening to what their customers and prospects have to say online, allowing them to market directly to consumers much earlier in the decision-making process. Smart marketers intuitively understand how to communicate to their consumer and by using Consumer Preference Management in their marketing; position themselves to deliver the same great customer service just as the Home Depot store counterparts did to exceed this consumer's expectation.
Establish a stellar service model that delights and connects to your consumer, and then deliver outstanding content via established relationships and multi-channel campaigns.
When businesses see an opportunity and are the first to act on it, they beat the competition. While your competitors scramble to adjust, you can seize the initiative, open new channels, and grow your brand.
Posted on Tue, Oct 18, 2011 @ 03:19 PM
By Melissa Bateman
Many in businesses have long condoned the Telephone Consumer Protection Act (TCPA) for its antiquated provisions surrounding the use of automated dialing equipment. The short of the regulations is that the FCC prohibits the dialing of a mobile telephone number with automated dialing equipment or equipment that has the capacity to autodial without prior express consent. This prohibition includes informational or service oriented calls. While these types of calls are permitted to the traditional landline, businesses struggle with contacting the 40% of US consumers who only have a mobile phone number as their primary form of contact. Enacted at a time when most mobile phone users paid per minute, the consumer protection law was intended to protect mobile users from being charged per phone call. Now in a time where more and more consumers are disconnecting their home phone number and pay a flat rate for their service, businesses and consumers are missing out important notifications delivered by automated dialing equipment.
If enacted, HR 3035 will permit the dialing of wireless numbers with an automated dialer for purposes other than solicitation, permitting businesses to notify its customer-base of important notifications in a timely manner. Additionally the bill will eliminate the restriction of dialing wireless phone numbers with equipment that has the capacity to generate random numbers. HR 3035 modernizes the TCPA and provides businesses more capability around the use of automated dialing equipment when dialing wireless phone numbers. Gryphon’s Privacy Consulting Team will continue to monitor this piece of legislation and update its clients should it become enacted.
Posted on Wed, Oct 12, 2011 @ 07:56 AM
By Bill McCarthy
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“Why can’t I just build it myself and use my IT group?” is a question we have heard more than once at Gryphon from sales and marketing teams. It’s tempting to take advantage of an existing resource, keep the whole process in-house and save money. Sounds like an easy, cost savings home run. Yet, after years of experience fixing that system after the fact, or stepping into the process to warn of the consequences, we have seen the same issues show up again and again. Here are four top reasons we advise against deciding to use your IT department for compliance marketing solution.
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1. Privacy Compliance Challenges are Unique and require specialized legal expertise
Contact Governance is a unique regulatory challenge for marketers, very different than the purposes for which most internal B2C IT has been designed. The IT system has been traditionally set up with the top priority of supporting business/customer interactions at customer touch points, since that is the closest point to customers and prospects – B2C bread and butter. Contact governance/compliance requires specialized regulatory expertise with ever changing legislation-our legal staff is currently tracking 630 pieces of pending legislation that would impact marketing privacy, and thousands more globably. Marketing Privacy and contact governance is often outside the scope of expertise of the corporate privacy team who specializes in data privacy, not marketing privacy. These legal experts must maintain critical control as well as maintain system updates on a timely basis to keep the company marketing team in compliance. Marketing needs to change its programs based on customer need and program changes are often delayed compared to daily operations at customer touch points, and almost always treated secondarily whenever competing against customer-facing operations.
2. Valuable Intelligence is Lost.
Secondly, IT is broad. When contact governance is lump-summed into IT, it gets easily lost and misused by the talent that handles hardware, storage, software, and networking. That is a huge loss and potential risk for the company brand. The true value of contact governance needs to be tapped by those who understand regulatory compliance programs and how data is turned into impactful intelligence from meaningless data bytes -- then assemble and align those servers, disk drives, software, and network devices to support those purposes. No matter who you go to – strategist, analyst, database and Internet developers, and network and system administrators, they should all be able to tell you how their work is related to acquiring and retaining loyal good customers for a business.
3. Get the Attention You Need
For any Business to Consumer company looking to avoid a fight with their regulatory, sales and marketing for IT attention or who don’t want to devote the resources needed to make their contact governance operation cutting-edge competitive, going to the right contact governance expert is always a wise and logical choice.
4. Get the Evidence You Need
It is also important to remember that if a chief marketing officer (CMOs) is looking for tangible proof that her/his direct marketing is working effectively. It is unlikely that they will get the priority treatment and expertise from internal IT as they can from a dedicated contact governance provider. Quick wins insured with an indemnified contact governance provider are critical for any CMOs who want a data-driven culture to grow and take hold within their organizations.
Posted on Fri, Oct 07, 2011 @ 07:47 AM
By Bill McCarthy
When direct mail first started, marketers took the approach; “bomb the world” send it to anyone and everyone. Then several things happened: trash bins got fuller, marketer’s budgets skyrocketed and returns on investment did not meet expectations. Marketers struggled to figure out how to target the right population with their message.
Then email came on the marketing radar. Email costs are low and opportunity to bomb the world returned by sending messages to everyone until they subsequently opt-out of all future solicitations. However, marketers continue to get the same results with low open and click through rates. Again marketers are being forced to target their audience while balancing their need to cast a wide net on the consumer-base. Why should marketers pursue this discipline?
With the enactment of opt-in regulatory frameworks like the Canadian Anti-Spam Law, marketers not only are forced to start collecting consumer preferences, they are seeing real benefit and ROI from targeted preference-based communications. In today’s privacy savvy culture, consumers classify any untargeted or inappropriate message as spam, regardless of who it comes from whether it is from the local mom and pop shop or a Fortune 500 blue-chip brand. Today’s marketers must focus on response “lift” while not antagonizing prospects so that even previously loyal customers do not get annoyed with your brand.
To preserve direct mail, email and other future communication methods as a positive communication channel, marketers must target messages through consumer preference management.
Target messages, not bomb the world. Marketers must balance the innate need to bomb the world to "spread the message", avoid the lure of the easy incremental response. While the short-term return appears to justify the higher volume, the sender’s long-term brand image -- harder to measure but more crucial to the business -- is damaged. The brand is damaged because the messages regrettably often end up in the deleted or spam folders, or worse, opted out of by the consumer forever. In a social media rich world, consumers have many avenues to vent their frustrations about your company brand that have spider web effect that can spread with lightning speed.
Psychology 101, People will tell you what they want, if given the proper forum and believe their viewpoint is both heard and honored. Capture consumer preferences, to preserve customer loyalty and to satisfy a consumer’s need for a 1:1 relationship. Marketers must honor how and when consumers want to be communicated with and about what products/services. Tailored communications make happy consumers and happy consumers don’t click the opt-out link. Start the conversation.
From the recent DMA 2011 conference, from the session, The Future of Customer Dialog and Real-Time Marketing", these were just a couple key takeaways:
• According to Macy's, the key is getting customer preferences. Macy's believes that if you are respectful of customer choice, they will gladly share personal information
• Macy's was advised that if they could get every Macy's customer to shop "one more time," by respecting preferences, they could earn 5 billion dollars profit.
Listen to consumers. The Web enables interactivity; email’s aim should be to initiate and develop a conversation that builds a relationship that leads to a sale and repeat sales. Marketers need to build preference centers to start the conversation, let the customers set the level of what they are comfortable and willing to share their own changing needs. Marketers can then introduce suggestions on appropriate incentives and offers for the targeted consumer conversation. Capture consumer preferences, Marketers need to move from broadcasting to listening to develop a conversation.
Posted on Fri, Sep 30, 2011 @ 12:36 PM
By Melissa Bateman
As my colleague wrote in Part 1, setting and meeting consumer expectation is paramount for any business and it also imperative to avoid marketing privacy investigations and violations. Once you have set a consumer’s expectation you have created a binding contract and failure to adhere to that promise may result in what the Federal Trade Commission classifies as an unfair and deceptive trade act. If the promise or preference you have collected is related to outbound marketing and contact governance, you may also be subject to significant state and federal marketing fines, as high as $25,000 per violation in the US and soon to be as high as C$10,000,000 in Canada!
Any business that conducts outbound marketing through any marketing channel should take stock of all their marketing data collection points, such as preference center websites, business reply cards, retail locations, call centers, and social media networks like Facebook and LinkedIn. Has your data collection point clearly disclosed the purpose for which the data is being collected? Are your disclosures and privacy policies in clear, plain language that any consumer can easily digest? What types of promises have you made? Is it clear who is collecting the data? Will the consumer’s data be shared among affiliated companies or third parties?
Once you have completed your audit of how you collect marketing data, you must then determine if your marketing and sales policies are properly adhering to the consumer’s expectation set when they provided their data. Are you deceiving consumers by collecting their data for one purpose and using it for another? It is important to note that whether you have or have not met a consumer’s expectation is not based on the “reasonable consumer” standard but any consumer meaning the burden is on the marketer to defend himself against any investigation or violation. Not adhering to consumer expectation is not only bad business it is against federal and state law. Every business engaging in outbound sales and marketing should consider conducting a thorough audit of all of its privacy policies and data collection points to ensure what guarantees have you made and whether or not your business is making good on those promises. To learn more about Gryphon’s Privacy Consulting offerings, please visit our webpage by clicking HERE.
Posted on Fri, Sep 30, 2011 @ 10:02 AM
By Bill McCarthy
How to meet Consumer Expectations? Build Loyalty by keeping credible promises. It seems simple enough; Offer products and/or services that build customer loyalty by knowing what your consumer expectations are and then delivering on that expectation. Any other premise seems totally counterproductive to a successful company's corporate goals and long term viability, and in some industries, downright nuts. So why do companies wander off the path to success? And what steps do companies take to get back on track?
Explosive growth can be dangerous: Automaker Toyota built its reputation on reliability. Growth in the 1980's and 1990's resulted in expansion and diversification of its customer base, with consumer expectations growing apace with the company's new customer base. Toyota's explosive growth also exceeded available management skills in certain countries and the resulting disconnect with customer expectations resulted in a dramatic downward shift in consumer confidence in the brand. The company's quest for industry market share produced a "growth at any cost" mentality that ended up costing them market share by necessitating an expensive damage control campaign to win back previously loyal customers. The lesson, bigger is usually better, but quality almost always wins over quantity.
What is true on an interpersonal level is true at the corporate level; reputations are easily tarnished, and once tarnished, are very difficult to regain. But it is possible if the company re-commits to meeting or exceeding consumer expectation. In the case of Toyota; rather than try to deny safety and image problems, the company took the high road by admitting its errors and returning to the business model that made them so successful. Just listen to your customer, give them what they want and how they want it.
