The no call list impact

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Tuesday, April 1, 2003

WASHINGTON - Like many other industries that utilize telemarketing to generate sales leads, the alarm industry has been watching the development of do-not-call lists with an eye on how it will affect their business.

In February, President George W. Bush signed a bill that allows the

Federal Trade Commission to begin to develop a national do-not-call registry.

While many states have enacted do-not-call legislation, the FTC’s registry would be the first national list.

“Consumers will have the opportunity to sign up for the registry sometime this summer, and the registry should be fully functional and available to telemarketers by September,” said FTC Commissioner Timothy Muris in a written statement.

Attorney Les Gold, of Mitchell, Silberberg and Knupp, who represents interests in the security industry, expects do-not-call lists would mostly impact the industry’s larger players. “They do a lot of telemarketing,” he said.

One of the nation’s largest security companies, ADT, was recently hit in Missouri with the largest penalty ever assessed for a violation of the state’s do-not-call law (see related story). ADT and more than 20 of its authorized dealers were penalized $275,000 for multiple violations dating back to 2001.

However, while do-not-call lists will effect the major security companies’ marketing plans, the effect lessens for the smaller companies that do not rely as heavily on telemarketing to generate sales.

David Merrick, marketing director for Vector Security, said that his company does not have any organized telemarketing effort on behalf of its entire branch network, and any telemarketing efforts would be a grass root efforts undertaken by an individual branch and not part of a company-wide marketing strategy.

According to Gold, it is common for security companies to rely on an old-fashioned method to generate leads. “A lot of these companies don’t do telemarketing, they go door-to door,” he said.

Steve Doyle, executive director of the Central Station Alarm Association, echoed Gold, saying that many companies depend on face-to-face contact with the customer which can lead to long-standing business relationships, and for those companies “telemarketing is not an answer.”

“These major regional companies or family owned companies who have been in business for quite a while have got a big stake in the local community,” said Doyle. “They have a big personal stake in every account.”

While admitting that do-not-call lists will have an impact on the telemarketing business, national telemarketing consultant Mitchell Eaves said that by making businesses more aware of the consequences of violating the law, the lists can have a positive impact on the industry.

“My opinion is that it’s shaking the bad apples out of the tree,” said Eaves.

According to Eaves, while do-not-call lists will eliminate some prospective customers for telemarketers, it will leave a population that will be more receptive to receiving a sales call.

Ron Davis, managing partner of Davis Marketing Group and former chair of Security Associates, said that while telemarketing will probably never completely be eliminated, he sees companies changing the way they contact customers.

“What will happen eventually is that quality operations will use telemarketing as a result of direct mail,” said Davis. “They’ll start the process with direct mail and then follow up with a phone call.”