Call and Tell
The zip code tells the U.S. Postal Service where to deliver the mail.
It also tells direct marketers what to deliver. Combining the zip
code with census and other data provides marketers with a rich vein of
demographic information concerning your income, buying habits and
socio-economic preference for squash instead of handball.
If all this is not enough, the past decade has given direct marketers
another wedge into the collective psyche of American consumers: your
telephone number. Combining the resources of massive computer data
bases with the ability of an emerging "smart" telephone network to
identify callers, the direct-marketing industry is using the telephone
number to track down a person's name, address--and life-style. If
your household is deemed "desirable" to a marketer--perhaps one of the
"Pools & Patios" crowd, as one telemarketer puts it--an 800 or 900
line service representative may know it before the call is answered.
Target direct marketing is not new. A company that subscribes to an
800 or 900 service can receive a monthly listing of the numbers of
callers, which can then be matched with names and addresses using a
reverse telephone directory. Correlating that information with
demographic data produces valuable mailing or phone lists. (An 800
call is toll free, whereas the caller pays for dialing a 900 number.
A caller interested enough to pay a fee is more likely to buy a
product, marketers reason.)
To the consumer, all this means that products can be more closely
matched to personal tastes, with the result that the junk mail might
just contain something worth buying. What's new is that
information-age marketers have begun to acquire the technology to
carry out this screening process instantly and without the caller's
Beginning this year, Telesphere Communications, Inc., and Oakbrook
Terrace, Ill., company with $550 million in annual sales, will offer a
service to 900 subscribers that can peg the location of an incoming
call using an are code and the number's three-digit prefix. Knowing
where the call originates allows a salesperson to prepare a pitch.
Later a reverse directory can be used to identify the caller, and a
data base can determine which of 40 demographic "clusters" fits that
person. In the near future, these services may be provided while the
caller is still on the lines.
Telesphere gets in demographic information from PRIZM, a data base
owned by Claritas Corporation in Alexandria, Va. PRIZM can pinpoint a
neighborhood for virtually everyone in the U.S. using census and other
public demographic information. "It works on the theory that birds of
a feather flock together," says Harvey B. Uelk, a Telesphere sales
So if you are lucky, the pitchman will know if you fall in the fifth
cluster in the data base: "Furs & Station Wagons." This group is
described as "'new money' living in expensive new neighborhoods....
They are winners--big producer, and big spenders." A not so fortunate
caller might be lumped into the "Emergent Minorities" cluster. These
people, says a promotional report, are "almost 80 percent black, the
remainder largely composed of Hispanics and other foreign-born
minorities.... Emergent Minorities shows...below-average levels of
education and [below-average] white-collar employment. The stuggle
for emergence from poverty is still evident in these neighborhoods."
The risk that a household, through clustering, might become the
telemarketing equivalent of a bad credit risk has not escaped the
notice of the American Civil Liberties Union and other public interest
groups who fear that minorities might be excluded from mortgage and
credit opportunities or a gay neighborhood may be blacklisted by an
insurance advertising campaign. A telemarketer might display
different sales pitches on a service representative's computer screen,
depending on whether the incoming caller hails from the "Money &
Brains" or the "Coalburg & Corntown" cluster.
Marc Rotenberg of Computer Professionals for Social Responsibility
likens calling an 800 or 900 number to walking into a store. "A
person should have a right to enter a store without disclosing
creditworthiness, residence or annual income," Rotenberg asserts.
Lobbying by privacy groups has focused so far on supporting national
legislation that would, in effect, allow a caller to keep his wallet
in his back pocket until he decides to make a purchase.
The law would give the caller the option of blocking a number from
being displayed immediately bya receiving party. This would be done
by pressing "*-6-7," or a similar combination of numbers, before
making a call. (Marketers could still get callers' 800 or 900 numbers
with their statements each month, however.) Although the law failed
to pass Congress last year, it is scheduled to be reintroduced this
Individual states are not necessarily waiting for Congress. A
Pennsylvania court has banned "Caller ID" service--a decision that is
on appeal--and a number of state public utility commisions have
ordered that blocking be offered free of charge. For the moment,
states' actions may not affect most telemarketers, whose 800 and 900
calls are usually routed over the long-distance phone network and
displayed to a clerk using a service called automatic number
Support for blocking has come not just from privacy advocates but from
the White House's Office of Consumer Affairs, four of the seven
regional Bell companies and the Direct Marketing Association in New
York City. As with junk mail, the direct-marketing industry
acknowledges that the consumer should have the right to choose not to
receive unsolicited information.
On the opposite end of the line, a number of telephone companies
contend that caller identification services are a clear boon to
subscribers. Bell Atlantic, an ardent opponent of call blocking, has
compiled a list of subscribers who have used the Caller ID service to
stop obscene phone calls or fake pizza orders and to track down
For their part, some direct marketers assert that fears of
misappropriatio of personal information are greatly exaggerated: they
are interested in patterns of group behavior, not the personal
preferences of the individual. "We try to identify market segments
that are most likely to respond to a particular marketer's products or
services," explains Philip H. Bonello, director of corporate planning
for Metromail, a Lombard, Ill., firm that owns a data base of 86
million households that supplies the direct-marketing industry.
But the public is clearly concerned about electronic privacy. In
January Lotus Development Corporation, a Cambridge, Mass., software
company, and Equifax, Inc., an Atlanta-based credit bureau, withdrew
plans to market Lotus Marketplace on compact discs after some 30,000
people asked that their names be removed from the files. This data
base contains demographic information on about 120 million
The public debate over privacy could grow still more heated if
telephone companies try to market their internal data bases of
information about residential customers. Limited attempts to do so
have sometimes met with resistance. Recently New England Telephone
and New York Telephone dropped a service offering residential and
business directory listings when hundreds of thousands of customers
asked that their names be taken off the lists.
Legislation may help stem abuses. A public outcry may force companies
to lay low. But the irresistible lure of knowing name, phone number
and lifestyle means that computerized telemarketing is here to stay.
Caveat salutator: let the caller beware.