They seem to come at the most inconvenient times - during dinner, sleeping, hurrying to leave the house - and it's hard to find anyone who likes them.
These unwanted solicitors are telemarketers, individuals making up to 50 calls an hour, selling their wares over the phone. And despite their reputation as an annoyance, the industry and its influence are growing.During the 1980s, Utah has become a nationally recognized center of telemarketing. Much of that reputation can be attributed to the NICE Corp., based in Ogden and considered a pioneer in the craft of pitching products via the phone.
Also lumped in with the sales operations are nationally known companies, such as American Express, AT&T, Delta Air Lines, Sears and J.C. Penney, that have established telephone banks in Utah. These so-called "inbound" telemarketers use their Utah facilities to take orders from customers across the nation for products ranging from airline tickets, hotel reservations and traveler's checks to mutual fund shares, credit cards and catalog merchandise.
But it's not the companies taking calls that irks Utahns when they hear of telemarketing. Instead, it's the relatively small number of "outbound calls" - sales calls from telemarketers to the consumer - that has caused controversy.
Three bills have been introduced to the Legislature this year dealing with outbound telemarketing as lawmakers attempt to slap regulations on the growing industry.
Although outbound telemarketing raises the ire of many Utah consumers, the method of selling goods and services over the phone works, and business is booming for those firms providing the service.
The reason for its popularity among sellers is that telemarketing is considerably less expensive and much faster than dealing person-to-person or relying on a mailed-in response, said Brent Rasmussen, executive vice president of Automated Phone Exchange in Salt Lake City.
He said a personal sales visit in the United States can cost up to $300, when travel costs and wages are considered, and the typical salesperson will make five to 10 personal visits a day. Meanwhile, a telemarketing representative can contact that many customers in a matter of minutes _ actually up to 40 to 50 an hour _ working the phone for an average $4-$5 an hour (in Utah).
Even cheaper are operations that employ a tape recorded voice and automatic dialing equipment. But, if the current legislation passes, the recording-auto dialing method may become extinct.
The success rate for outbound telemarketing varies, but most firms report an average 20 percent positive response rate for every 40 calls.
As for those who complain about the calls, they may not realize that they have been carefully selected to assure a sale.
A company that uses telemarketing, such as a bank marketing its credit cards, doesn't just open the phone book to page one and start dialing. A telemarketer will develop a list of potential buyers from existing customer lists or other information available to the seller. A script is drafted, along with responses to anticipated rejections, that the telemarketer will read off the computer screen.
"We always use a targeted method. It's too expensive to do the shotgun approach," said Brent Welch, executive vice president of NICE Corp., which provides clients across the country with inbound and outbound telemarketing services.
The shotgun approach has also misfired on the industry, prompting legislation restricting the use of computers and recorded voices that randomly go through the phone book listings. Consumers have complained that the recorded sales pitches come early in the morning or late at night, when rates are cheap, and sometimes drone on for 10 minutes tying up phone lines and message machines even after someone has hung up.
At least one of the three bills placing tight restrictions on this kind of telemarketing will most likely pass. But, Welch said, lawmakers must be certain the bill deals specifically with the auto dialing and recorded voice type of telemarketing, so that the legislation doesn't touch "legitimate" telemarketing operations.
Don't be misled that NICE Corp. and the industry are battling the state. The situation is actually quite the opposite. Telemarketing has become somewhat of a sacred cow to state officials, who have warned lawmakers not to draft legislation that would make the industry feel unwelcome. One piece of legislation that proposed restrictions on live voice telemarketers as well as recorded has been soundly defeated in committee, because it sent "a negative message" to the industry dominated by inbound telemarketers, a state economic development official said.
The industry's protected status stems from the thousands of jobs it has produced in recent years (see related story). Also, companies such as NICE Corp. perform their services for clients across the country bringing in revenue from out of state. Welch said about 90 percent of his company's outbound calls go to out-of-state customers.
A fiercely competitive business, telemarketers decline to disclose their out-of-state revenues or other financial information. But they claim that even with profit margins of less than 10 percent they are making a lot of money and annual growth has tripled in recent years.
Welch agrees there are some operations hurting the industry, and NICE Corp. and others support legislation that would get rid of or restrict competing auto-dial operations and recorded voices.
As the industry continues to become more successful at targeting positive responses and finding the right people, the annoyance problems associated with telemarketing will decrease, he explained.
But, as that process continues, Utah should be careful to make telemarketers feel welcome, Welch said. "The annoying call should be dealt with specifically without hurting the industry."