Life After Legislation: Expert

The Age

Tuesday August 22, 2006

By DAN HARRISON

THE introduction of "do not call" legislation need not spell death for Australia's telemarketing industry, says a visiting US expert.

Legislation to create the register passed through Federal Parliament in June and the register is scheduled to start early next year. It will allow people to opt out of receiving calls from telemarketers but there will be exemptions, including charities, social researchers, government bodies and companies that already have a business relationship with the person. Companies that defy the register can be fined up to $200,000.

When a Do Not Call register was introduced in the US in 2003, 10 million people signed up in the first three days. At last count, it contained 125 million numbers.

Tim Searcy, chief executive of the American Teleservices Association, which advocates on behalf of the US call centre industry, said the register's impact on the US industry had been severe. "It was definitely a very big deal in the States, and the fallout continues," said Mr Searcy, who is in Australia this week as a guest of call centre operator Contact 1-2-1 and technology company Noble Systems.

Mr Searcy said the register reduced the supply of numbers available to telemarketers by 76 per cent, and the industry, which employed 6.5 million people when the register was introduced, shed 1.2 million jobs in less than three years. Some companies went out of business, and those that survived now spent 6-8 per cent of their revenue on complying with federal and state regulations.

But the register did produce some good news for the US industry. Average response rates - the rate at which calls convert to sales - rose, from less than 4 per cent in 2003 to between 6 and 8 per cent now.

"We've been able to weed out those individuals who are very unlikely to buy by phone anyway," he said.

Mr Searcy said he expected the impact of an Australian register to mirror that in the US, where the register proved a boon for some call centre specialists, as companies such as banks outsourced their call centres to avoid the costs and challenges of complying with the legislation.

But the register was likely to lead to a decline in the number of telephone sales, and marketers would have to put more emphasis on other tactics, such as direct mail, electronic and face-to-face efforts, Mr Searcy said.

He warned that the overseas experience showed Do Not Call registers were usually only the opening salvo in a regulatory war between legislators and industry.

"Teleservices companies make good politics," Mr Searcy said. "Every country that has started with a Do Not Call list has not stopped there. They continue to pass additional legislation."

He urged Australian companies to lobby to ensure the register was administered fairly and that their voices were heard in debates about regulation.