by Rebecca Ross Albers

In a memorable episode from TV’s “Seinfeld,” comedian Jerry Seinfeld responds to a call from a telemarketer by saying he’s busy but asks for the caller’s home phone number so he can call him at home.

Most viewers identified with Seinfeld’s predicament, and no doubt countless telemarketers have been treated to that pithy comeback in recent years.

Ben Piltch, a retired elementary-school principal, recently told Newsday in Melville, N.Y., that he gets regular telemarketing calls, “sometimes two or three times a day. It’s reached the point where I can’t have any peace of mind,” he complained.

When Piltch heard about a new state law that creates a “do not call” registry, he was one of the first to sign up. The law, effective April 1, prohibits newspapers and other businesses from making unwanted sales calls, but provides some leeway for calls to current customers and those who have purchased goods and services from the businesses in the past 18 months.

As of April 1, more than 1 million New Yorkers had put their names on the DNC list, according to the state Consumer Protection Board.

The move recently prompted Newsday in Melville, N.Y., to announce that it was shutting its in-house teleservices division and eliminating 92 jobs. Newsday spokesman Stu Vincent said the paper would do targeted telemarketing through an outside vendor but scale back the volume of calls.

Currently, 21 states have DNC legislation (see list). Eight states—Arkansas, Florida, Idaho, Indiana, Kentucky, Oklahoma, Texas, and Washington—exempt newspapers from the laws, but a bill was introduced in Texas this session that would strike the exemption, according to Liz Wooten, NAA’s manager of state affairs. Another 20 legislatures considered DNC bills this session, some still pending.

Click chart to enlarge.

While statutes differ, all require the maintenance of a single list that telemarketers must purchase from the state. Some even charge consumers to have their names placed on the list. In addition, Maine and Connecticut legislators passed laws that require telemarketers to subscribe to the DNC list maintained by the Direct Marketing Association in New York City.

The DMA, the major lobbyist that fights anti-telemarketing legislation, boasts 5,000 direct and interactive marketers as members. While the trade group doesn’t track numbers of telemarketing calls, it tallies growing expenditures to reach U.S. consumers via their phones. In 2000, telemarketers spent $26.4 billion, up substantially from $19 billion in 1995, according to the DMA.

Given the regulatory climate for telemarketing, it’s no wonder that circulation executives reluctantly try to reduce their reliance on this marketing tool. According to NAA’s 2001 Circulation Facts, Figures and Logic study, publishers still depend on telemarketing for 43 percent of all new starts and 58 percent of all solicited subscription sales.

“The regulations are coming thick and fast, and newspapers are the victims of the growing public resentment of all telephone-linked commercial activity,” says Kip Cassino, director of research for Knight Ridder in San Jose.

“We’re spending far more than we had to five years ago just to complete research,” Cassino says. “More than 50 percent of the people we call will not answer a phone survey.”

Cassino, a member of the NAA Research Federation Board, says researchers now study alternatives to telephone surveys and “circulation executives need to look at alternatives to the phone room, too.” Publishers turn to telemarketing because, in the past, it offered a quick fix to declining subscription sales, Cassino says. “To get rid of frowning faces at operating-committee meetings, you just had to go out and get some phone pressure going. Today, [telemarketing] isn’t able to give you that short-term pop you used to get.”

LEARNING THE RULES
Telemarketing prevails as the single-largest source of new subscription orders, so no one plans to junk it yet, executives agree. But the new rules call for more strategic thinking.

First, executives say, if your state legislators have passed or are considering passing telemarketing regulations, know what you must do to comply with these often-confusing laws.

A. Shane Fox, circulation director of the Columbia Daily Tribune, testified in January before a Missouri Senate committee about problems with a telemarketing law initiated by the attorney general.

The attorney general’s office provides the DNC list. It includes phone numbers of consumers who have requested that the attorney general, not telemarketers, put their numbers on the state list. Thus, “[businesses] must maintain two do-not-call lists,” Fox complains.

“Legitimate operators are being placed under onerous restrictions ostensibly intended to prevent consumer fraud,” Fox says. “In practical terms, our state law is vague and confusing. The law exempts those with whom you have a ‘business relationship’ but does not spell out exactly what comprises a business relationship.”

For example, Fox is not sure if he can call a classified customer with a circulation offer if that customer is on a DNC list. What about a customer who receives the Tribune’s free total-market-coverage product, delivered to the home by the same carrier who delivers to paid customers?

“Our approach is to be very conservative, but if you’ve had newspaper delivery in the past or if you receive our home-delivered free product, then you do indeed have a business relationship with us,” he says.

Mark Kukiela, circulation director of The Herald-Mail Co. in Hagerstown, Md., publisher of The Morning Herald and The Daily Mail (evening) testified this year before a legislative committee that was considering a DNC list bill in Maryland.

“Telemarketing is the biggest percentage of our start base, and the moment you take that away, it’s to our detriment,” says Kukiela, whose papers boast a combined circulation of 34,892.

He told committee members that when a newspaper sales rep calls a customer, hometown people “don’t always consider that telemarketing. It’s not MCI or some other company that they don’t have a connection to. They aren’t bothered as much as if they get a call or two [from the newspaper]. If they say, ‘Don’t call me,’ we voluntarily have our own do-not-call list.”

Kukiela signs contracts with telemarketers for most phone work but staffers do some calling, mostly to new residents.

Telemarketing remains the “last great opportunity to sell person to person. People toss direct mail in the trash. They don’t want to answer their doors.”

Besides telemarketing, Kukiela’s staff uses kiosks in retail locations to try to attract new subscribers. District managers also coordinate in-house telephone-order nights when they’ll pitch subscriptions to nonsubscribers who’ve received free samples.

For now, Kukiela can relax. The Maryland bill didn’t make it into law this time. But he won’t guarantee that it won’t come up again.

ENDORSING CHANGE
“I’m not an advocate of increasing telemarketing,” says Patrick Glennon, executive vice president of AsTech InterMedia, a database-marketing company in Denver. “If you can’t manage telemarketing effectively, you can’t migrate from it. You need to take control before you can decide how to incorporate direct mail more effectively, or how to be a better marketer so [you] don’t offend customers.”

Newspaper executives say, “ ‘I hate to see my do-not-call list get bigger,’ ” Glennon says. “I’m OK with that. These people aren’t going to say yes on the phone anyway. Get their e-mail addresses, or send them direct mail.”

Evan Mecak, database-marketing manager at the San Francisco Chronicle, and his analysts no longer try to marry addresses and phone numbers. Instead, they study phone numbers, one thousand at a time, to identify subscription patterns. Staff use AsTech’s Telemarketing Workstation, a computer powered by AnalytiX for Newspapers, a phone-centric database that contains every possible phone number in the areas they serve.

For example, Mecak’s phone number is (415) 777-8781, so a scoring model based on his block would include every number with the last four digits between 8000 and 9000. If it contains a good percentage of subscribers, analysts assign a score to the block of numbers and put it in a future calling rotation.

“There are 88 million phone numbers in our market,” he says. “If there are 300 subscribers in one block and only two in another, [the latter is] probably not an active block. It’s like deep-sea fishing where you throw the big nets overboard and look for fish.”

Mecak concedes that the approach “seems like it shouldn’t work. But where you live is irrelevant. You have to make the leap from the address-centric world.”

A Closer Look at Federal Rules In January 2000, the Federal Trade Commission began a mandated yearlong review of its Telemarketing Sales Rule. At presstime, commissioners had not presented a report to Congress. NAA lawyers filed comments urging the FTC not to add regulations and to roll back the amount of time a customer must be kept on company do-not-call lists from 10 years to three. This law, and the Telephone Consumer Protection Act enforced by the Federal Communications Commission, form the two primary ways that the federal government regulates telemarketing. The Telephone Consumer Protection Act aims to protect the privacy of residential telephone subscribers. It requires companies to maintain DNC lists. The lists should include the names and telephone numbers of the people asking for this service, and requests must be honored for 10 years. A publisher must have a written policy for maintaining a DNC list and make the policy available on demand. The act also sets the hours for residential telemarketing from 8 a.m. to 9 p.m. Officials intend the Telemarketing Sales Rule to stop telemarketing fraud. It requires a caller to disclose his or her name, company represented, address or telephone number of the company, and the fact that the purpose of the call is to offer a good or service. If customers opt for the good or service, they must be informed of the total cost as well as any restrictions or limitations on that purchaseÐbefore they pay. If customers choose to use checks or other debit payments, the companies must have the customers’ verifiable consent, either in writing or recorded on tape, prior to processing the payments. By the end of the year, NAA plans to republish its guide to federal telemarketing regulations and provide greater detail on federal requirements and restrictions, according to RenŽ P. Milam, NAA director of legal affairs and assistant general counsel. For information, send an e-mail to her, or call (703) 902-1815.

The Chronicle started using the block method in April 2000. Mecak contracts for telemarketing with several firms. In the last six months of 2000, telemarketing-sales volume was up 40 percent.

“[Newspaper executives] don’t take a macro view of telemarketing,” he says. “For example, I haven’t received a telemarketing call in three years. I’m never home. Who’s most likely to be at home? People who don’t work and retirees. You’re fooling yourself if you think you can target more upscale people with telemarketing.”

Managing your DNC list is another key, circulation executives say. The federal Telephone Consumer Protection Act requires companies to maintain DNC lists. The list should include names and telephone numbers of the people requesting to be put on the list, and the requests must be honored for 10 years.

The Arizona Republic in Phoenix had four sources of DNC numbers: subscribers and nonsubscribers who ask to be on the paper’s DNC list, and lists maintained by two telemarketing vendors, according to Ann Neff, campaign manager in circulation.

“We combined [the lists], and we had 96,000 do-not-calls,” Neff says.

Only a portion of the lists contained names and addresses. Working with Telematch, a Gannett Co. subsidiary in Springfield, Va., Neff checked this information. Names and numbers that matched stay on the DNC list. Those coming back with different names were pulled.

For DNCs without names and addresses, Neff worked with Qwest, the phone provider, to get current names and addresses for phone numbers.

The effort cut the DNC list in half, and Neff plans to go through the process again in six months.

At Suburban Chicago Newspapers in Plainfield, Ill., Cathy Blanton, senior database-marketing analyst, advocates targeted telemarketing to make “the right offer at the right time to the right person.”

Examples of her campaigns include those to:

• Classified advertisers
• Recently stopped subscribers
• People with specific reasons for stopping the paper
• Those with specific household interests
• Core subscribers.

In marketing to nonsubscribers who have placed a classified ad, the telemarketing script mentions the person’s recently placed ad and offers a free ad as an incentive to subscribe, Blanton says.

Knight Ridder’s Cassino recalls lots of experiments by publishers to replace telephone banks, but describes many as halfhearted.

“Direct mail works, but slowly, and only at a fraction of the return rate we’ve grown addicted to from the phone rooms,” he says. “However, direct-mail starts have been measured to be more likely to last through the critical first nine-to-12 weeks than phone starts, making each one received more valuable.”

Further complicating the situation: Only a few of the biggest dailies publish in areas large enough to allow marketers to systematically deliver direct mail to a wide audience over time. Most smaller markets “burn” their lists quickly, dooming future efforts to failure, he says.

Cassino’s alternative [to telemarketing] is segmentation-based sampling, followed by phone or mail queries. “If you know what identifiable segments of your market want to read, design a wrap that tells them where [such content] is and how great it is in your paper, then deliver samples,” he says. “Follow up, either by phone or mail. Everybody sampled must be contacted while still getting the paper. This method bypasses the problems with both phone solicitation and direct mail. Where we’ve tried it, results have been excellent. The only drawback to the method is that it depends on good segmentation research and precise targeting.”

To accomplish this, Cassino says, researchers and circulation staffers need to spend more time together. “Unfortunately, most researchers spend 90 percent of their time working for ad [sales reps],” he notes.

Cassino and the Chronicle’s Mecak don’t see a rosy future for newspaper telemarketing. “Its value has deteriorated, and it’s only going to get worse,” Cassino predicts.

Adds Mecak, “Telemarketing is a dinosaur, but let’s ride it as hard as we can while it’s still here.”