Tuesday, November 11, 2014

Article Number: 9959




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



knowledge.





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



director.





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



year.





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



identification.





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



burglars.





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



individuals.





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.


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