The federal "do not call" list for telemarketing is already up and running and a "do not spam" list won't be far...
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behind, according to Chris Selland, managing director of Reservoir Partners, a Boston-based consultancy.
"It's such a win for the politicians," Selland said. "They all want to seem like consumer advocates. As a technologist and a business person, I think the cure is far worse than the disease."
The key to adapting potential legislation to stop mass e-mailing will be identifying the difference between customers and prospective customers, Selland wrote in a new report. Selland told SearchCRM.com he expects a national anti-spam bill to be passed in the next 12 to 18 months.
What's important to realize is that none of this legislation is aimed at companies sending e-mail messages to current customers, Selland said. Companies who want to continue growing need to focus on people who have already done business with them. Anyone who has done business with a company in the past 18 months qualifies as a customer, Selland said.
"Ultimately this will force companies to focus on their existing customer bases," he said.
The report found that existing customers are already the most profitable, requiring less time and expense to earn a sale. To take advantage of this, companies will need to focus on cross selling and upselling.
That does not come without its dangers, however. "Eventually you may turn some people off," Selland said. "It's a fine line to walk."
Not everyone is so sure that a "do not spam" bill will make it through Congress. Michael Ellis, privacy manager for Internet dating site date.com, said the "do not call" list is managed by a group of telemarketers whose job it is to maintain the list. Spam, on the other hand, is spread over a large group of advertisers and more difficult to track.
Such legislation may in fact prove a benefit for companies such as date.com, Ellis said. While most of their marketing is directed at people who have visited their site and signed up for information, about 35% of the company's marketing is done through outbound e-mails. There are two methods by which advertising goes out: by affiliates who earn a commission by generating traffic to the site or by media buyers who advertise with their own way of reaching people, whether through pop-up ads or newsletters. Date.com tracks the performance of these strategies but doesn't know until afterward how successful they are. Companies that use "dirty" or "fraudulent" lists are terminated, Ellis said -- but only after the spam is out there.
"It's bad for our image, but not only that, it does not perform well," Ellis said. "We track how successful we are with them. If their list isn't any good, it's a waste of our money."
A "do not spam" list could therefore cut down on these types of advertisers, but only if stiff fines are included, Ellis said.
Many companies are taking a wait-and-see approach to the pending legislation, Selland said. "Right now, people are just very confused. Companies are still trying to learn what this means."
For smaller companies, the easiest way to deal with the potential legislation is to find a partner, such as an outsourced marketing firm, which will stay on top of the legislation. For enterprises that invested heavily in CRM during the heyday of the industry, synchronizing their data needs to come first, Selland said.
In addition to monitoring legislation and segmenting customer data, Selland recommended that companies recognize that it is the customer who ultimately knows best how to communicate with them. Offer options and let the customer manage their relationship and communications, Selland said. Additionally, he said it is imperative that companies understand their costs when determining how often to communicate with their customers and what functions to do in-house and which to outsource.
"In a lot of ways it's a business strategy more than a technology solution," Selland said.
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