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The Challenge and Opportunity of Telemarketing Laws

Any company that depends on telemarketing sales to drive new business has faced a steep challenge in recent years, in the form of an increasingly restrictive legislative environment. This challenge has required telemarketing companies to be resourceful, but ultimately it presents an opportunity for companies to adapt to the new laws.

Further complicating the challenge is the fact that the regulatory environment is something of a moving target, with new laws being layered on top of old ones and often with overlapping jurisdictions. However, there are some general approaches that can keep telemarketing sales a part of the marketing mix.

Legal Landscape for Telemarketing Calls

How have restrictions on telemarketing calls become tighter over the years? There are several examples:

  • Curfews. These are rules restricting the hours in which telemarketing calls can be made.
  • Do-Not-Call Lists. These are registries of consumers who do not wish to receive telemarketing calls. Telemarketing companies are obligated to confirm that any numbers being called are not on the list, unless other exceptions apply. There is a national Do-Not-Call registry, and several states have started independent lists as well.
  • Licensing of telemarketing companies. This does not apply in all states, but some states have started requiring licensing and even bonding of telemarketing companies, creating another level of compliance paperwork and fees.
  • Required transmission of caller ID information. This facilitates call screening.
  • Restrictions on content. Limitations on what offers can be made via telemarketing, and how they can be made, pose an additional monitoring burden on telemarketing companies.

Telemarketing restrictions tend to have a strong populist appeal, which is why there has been fairly bipartisan support for them in recent years.

Facing the Challenges of Telemarketing Laws while Maintaining Sales

With the regulatory deck stacked against telemarketing, how can companies still maintain a telemarketing sales effort? There are several ways to respond to the regulatory environment, including the following:

  1. Leveraging off of prior relationships. Telemarketing rules make exceptions in situations where there is a prior business relationship, even if the person is on a Do-Not-Call list. This puts added emphasis on cross-selling, and in the long run may encourage the introduction of low-cost, loss-leader products in order to broaden the contact base in anticipation of future sales of more profitable products and services.
  2. Coordinating with other marketing approaches. Leading with other media, such as mailings or Internet promotions, has always made sense, but in this context it can also pave the way for telemarketing calls.
  3. Obtaining consent. Besides a prior business relationship, another way to gain an exemption from Do-Not-Call restrictions occurs when the consumer agrees to take calls from a given company. Special offers, contests, and affinity promotions are among the ways of obtaining this consent.
  4. Professionalism. Since telemarketing laws are partly a response to the boiler-room tactics of some operators in the past, increased professionalism on the part of telemarketing staff can help raise consumer willingness to entertain future calls.

Hidden Opportunities of Telemarketing Laws

Adapting to the laws can be more than just a necessary evil. Given how crowded the telemarketing field had become, companies today can benefit from telemarketing approaches which effectively distinguish them, allow them to survive in a thinning field, and obtain consumer buy-in. High-quality telemarketing companies are best positioned to take advantage of these hidden opportunities.


The Federal Trade Commission

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