Competitive Intelligence

"Don’t-Call-Us-We’ll-Call-You" List Now Law of the Land… Well, Sort Of...

When I was in college, I was a telemarketer for a while to earn extra money. I know - it's a shameful admission, but it's true. My mother always used to respond to telemarketers that called her with, "I'm not going to buy whatever it is you're selling, sonny, but good luck - I know it's hard work. My son used to do the same job."

Let me tell you, it's not easy to try and sell lawn care, cable television or a membership in your college alumni club to somebody trying to sit down to an evening meal - I know, from experience, in all three lines of product. But that line of work did provide me with honest employment at a time when a stagnating economy kept pushing back on my ability to finish my four years as an undergrad at UW-Madison... as I'm sure it does for countless others, most of whom are, I suspect, not nearly so temporary in their commitment to a career in telemarketing. I can think of worse jobs, but not many... Still, silver-lining worth considering: it paid well and it taught me how to sell - an education I now look back on with some gratitude.

Despite the fact that the Federal Trade Commission was questioned - and ultimately restricted - on its authority to develop the new law enforcing the federal "Do-Not-Call" list, it would appear that federal regulators are fighting the telemarketing industry's legal challenges every step of the way. All this just as Federal Communications Commission Chair Michael Powell commented that his agency, while hampered by court rulings that deny the FTC from sharing its data with the FCC, would press on to enforce do-not-call rules.

In a Washington Post article I found, we can see a recalcitrant telemarketing industry try to half-heartedly comply with the new rules; even as the FCC began to see the first 250 complaints materialize over the confusion caused by a 20 to 30 percent drop in the more than 100 million calls that would normally be made in a telemarketing day.

In an ironic twist of fate, Powell's FCC had to ask the Direct Marketing Association for an electronic copy of the list - something I'm sure the DMA was loathe to comply with and ultimately refused to do - following U.S. District Judge Edward Nottingham's ruling last week to block the FTC from sharing the list with the FCC itself. Powell also asked for a list of DMA members that had downloaded the DNC database - presumably for enforcement and penalty purposes on any infractors.

The stakes are high - violators could stand to be fined $11,000 for each number on the list they might call. And, over the first six months of the year, the daily complaint rate received by the FCC for telemarketing calls has averaged only between 35 and 40 per day, so the 250 complaints received in the first 24 hours of the new law could only be the start of something a lot bigger.

Despite the fact that the DMA says millions of telemarketing jobs will be sacrificed in the months ahead, should the DNC move forward, all I can say is, at least I didn't have to listen to any pitches for Disney cruises or switching my long-distance over dinner tonight. What do you think? Are we just putting people out of low-wage, boiler-room jobs that they're better off without, or are we instead freeing up the massive productivity that could be had from applying telemarketers to new, more important (and less annoying) work?

- Arik

Microsoft's Entry into the Anti-Virus Market Has Rivals Spooked

A short entry today about Microsoft's ability to "embrace and extend" Windows into the AV market - check out the article by BusinessWeek here - largely because one of its chief competitive weaknesses lies in Windows' battered reputation for being an easy target for viruses. Here's an excerpt:

...since Microsoft's (antivirus) products probably will be bundled into Windows, it will have a big advantage. Few believe that including antivirus software in Windows will violate antitrust laws. What potential rivals fear is that Microsoft will use its market power to thwart them. "The question is, will they play fairly or will they abuse their monopoly position?" asks Symantec CEO John W. Thompson. He and other rivals know they are facing a force more ominous than any virus. "When Microsoft enters an industry and includes the software in Windows, the sector disappears," says Steve Chang, CEO of antivirus software maker Trend Micro (TMIC ) Inc. It's a lesson the software industry knows all too well.

I guess I'd just as soon be able to get the updates right from the Windows Update site, like I do all the other patches I need for my PCs... right? Especially if I didn't have to pay anything extra for it. The AV crowd had better start thinking of better ways to differentiate themselves - a la Real Networks in the media player market - 'cause if Microsoft enters the business, their scorched earth policy won't leave many standing alongside them.

- Arik

Fees & Surcharges Replace Selling Price as (Apparent) Sole Means of Corporate Profitability

I was wondering where all the inflation had gone to lately – jettisoned with any pricing power in a post-recession jobless recovery, perhaps?

Not hardly! In a great BusinessWeek piece ("Fees, Fees, Fees"), we learn that customer fees and surcharges are the real engine of profitability at far too many (mostly big) businesses… Is this just deceptive marketing, or a way for everyone from banks to airlines to telephone companies to stay in business in the Internet era where everything’s a commodity, price transparency makes for powerful consumers and competitive differentiation is hard to come by?

My opinion: it's a rip-off to pay $100 change fee to switch a flight, $2.50 to use an ATM, or pay $4 bucks a gallon to get my rental car refueled... and don't even get me started on my phone bill!

My prediction: upstart competitors will use the consumer backlash against surcharges as a real differentiator for themselves, to the detriment of their larger competitors.

- Arik