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Do Consumers Really Want a National Do Not Call List?

Tuesday, June 25, 2002

Are consumers really that annoyed by calls from telemarketers? At both the federal and state level, there is a lot of interest in limiting their activities. However, the Information Policy Institute recently conducted a study that reveals there is a significant disconnect between what consumers say about teleservices and their behavior and satisfaction with them.

The Information Policy Institute recently surveyed 1,000 persons in six states that currently have statewide"do not call" registries. The survey was designed toassess attitudes about calls tothe household for commercial purposes, as well as charitable and political solicitations. The survey also sought to gauge public opinion about existing state laws that regulate telemarketing, as well as proposed federal rules and regulations, such as those advanced by the Federal Trade Commission (FTC) last January.

Key Findings

Frequency of Calls Lower than Expected: A majority of respondents said they had been contacted at least once during the past two weeks, while most had been contacted at least three times. Interestingly, almost half of those surveyed received less than one call per week on average. The other 50% received two or more calls per week on average from all sources – charities, nonprofits, local and national businesses, and politicians.

Consumers Highly Responsive to Telephone Solicitations: Surprisingly, eight in ten responded to at least one solicitation during the past year, while five in ten purchased a good or service. A full three in ten purchased three or more goods or services. Support for charities or nonprofits was the single most successful form of telephone solicitation, with four in 10 respondents indicating that they made a contribution over the past year.

Consumers Spending Freely: Not only are consumers responding to “outbound” telemarketing calls (calls to a consumer’s household), they are spending lavishly. On products alone, consumers spent more than $50 on average. In addition, there was considerable distribution in spending, with nearly 10% spending between $250 and $500, and another 10% spending more than $500.

Consumers Are Satisfied: Seven in ten reported being satisfied. Only one in ten were dissatisfied. The remaining 20% were neutral. These results are consistent with satisfaction levels in other media, including online, catalogs and in person acquisitions.

It’s a “Need to See Product” Not “Privacy” as Reason Unlikely to Buy in Future: Somewhat puzzling, given the frequency of purchase and the high level of reported consumer satisfaction, was the fact that only one in seven of those surveyed believe they will make a purchase in response to a call. Respondents offered these reasons: They like to see what they purchase (23%), they dislike sales calls (19%) or they do not make purchases over the telephone (19%). Very few respondents (7%) cited privacy concerns as a reason for not making a purchase.

No Clear Mandate for National Do Not Call Registry: While a majorityexpressedsupport for such an option, a substantial segment (50% percent) favored permitting calls from local and community organizations. Forty percent would permit national companies with an existing business relationship to call. Thus, consumers’ preference for policy solutions is complex. They would permit calls from different sources under different conditions.

State Do Not Call Lists Are Effective: Although awareness of state do not call registries was high, participation varied dramatically across the six states surveyed (NY, IN, KY, CT, FL, GA). In general, participation was highest in those states that recently debated, enacted and implemented do not call lists (in NY, IN, KY state legislators actively promoted participation), while those states where the issue is more mature, rates were lower (Florida implemented its do not call registry in 1987). Florida and Georgia also charge an administrative fee for participation. In all states, however, the lists were effective. Eight in ten reported a reduction in the number of calls to the household.

Not a Grassroots Issue: Only one in eight has ever contacted an official to voice their opinion about calls and less than one in 12 have ever voted for a politician based on his or her position on calls. Many consumers contacted officials to complain about a specific experience rather than a general predilection against the medium.

Finally, while four in ten reported frequent requests to have their name removed from individual company call lists, an equal number (four in ten) reported that they rarely or never did so. The remaining two in ten asked to have their name removed from company call lists from time to time. These numbers are much lower than expected given the perceived widespread antipathy for telemarketing.

Conclusion

Consumers say they are unlikely to respond to telephone solicitations, yet they do so in great number. They favor regulation, yet they prefer exemptions and seldom take action to voice their opinion on the matter through official channels.

The focus on both what consumers say and what they actually do distinguishes the IPI’s study from previous examinations of these issues and makes it more policy relevant. The IPI hopes that as the FTC and state legislators consider further telemarketing restrictions, they balance consumer attitude with consumer preference. Policy is best guided by objective, transparent analysis. Not by unsubstantiated assertions advanced by those claiming to represent a homogeneous consumer block. As our study demonstrates, consumer preference and behavior is complex and nuanced.

The Institute released its study -- "Consumers, Citizens, Charity and Content: Attitudes Toward Teleservices" on June 4, 2002. Institute President Michael Turner presented the study's key findings during a three-day FTC workshop focusing on proposed rules changes to the Telemarketing Sales Rules. Copies of the study and accompanying press release are available at the IPI’s Web site – www.infopolicy.org.

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