Ready those pocketbooks. If you haven't put a curb on your phone call solicitations yet, you could be forking out big bucks to the Federal Communications Commission and Federal Trade Commission after Oct. 1, 2003. That's when new rules take effect for phone solicitations (fax restrictions have been postponed until Jan. 1, 2005). Consumers who no longer want unsolicited phone calls have been signing up on a national do-not-call list — 41.7 million of them as of the end of August. Once an individual has signed up, that restriction exists for five years, at which time the individual may renew his or her no-call status. If you violate the rule by calling someone on the do-not-call list, you could end up paying an $11,000 per call fine.
“It's going to be devastating,” Tim Searcy, executive director of the American Teleservices Association, says about the effect of the new rules on businesses that do solicitation by phone.
The new rules could put a real crimp on a lot of health clubs' efforts to follow-up on member referrals. To find out whom in a service area is on the do-not-call list, club owners must purchase the do-not-call list by area code (the list became available this month). Club owners can gain access to up to five area codes before being charged. After that, the charge is an annual fee of $25 per area code. The list must be updated quarterly. The updates do not cost. It will cost $7,250 to get the nationwide list, something national chains will have to purchase since each club can't purchase its area codes individually for a national company.
While the list purchase expense may be greater for larger clubs, the actual implementation costs may be greater for smaller clubs, particularly those that don't already have an automated system in place or who do not use an outsourced telemarketing company to make the phone calls.
“The larger companies are going to be organized in such a way that they can take advantage of technology,” Searcy says. “The smaller firms are going to be hard pressed to come up with a means by which to comply and not have to spend a whole bunch.”
Searcy suggests making calls through an outsourced telemarketing company since most telemarketers are set up with the technology to “scrub” the list on a quarterly basis. Clubs not using outsourced telemarketers and not using an electronic format will find compliance difficult since the list only comes in electronic format as a download from the Internet. If a club is simply calling people using the phone book, it will be difficult to keep an up-to-date list.
All of this means changes in the way that clubs do business. While telemarketing may not go away completely, Searcy predicts the rules will decrease telemarketing by 40 percent to 50 percent. Specific rules are given on the FCC Web site (www.fcc.gov), but following are suggestions for how you can deal with these changes.
Seek legal counsel. “Without legal counsel, they run a tremendous risk,” says Searcy. Legal counsel can ensure that you are in compliance with all the rules. ATA provides legal counsel, and clubs can join with the association to fight the rules if they desire, he says.
Watch outsourcers. If you outsource any of your calling, make sure that the company you use complies with the federal rules. Otherwise, you could be held liable.
Remember the other rules. The rules are broader than the do-not-call list. If you use predictive dialers, you can't have an abandonment rate of greater than 3 percent. If you currently block your phone number from being seen on caller ID, you'll have to change your tune come Jan. 29, 2004, when that practice becomes illegal for solicitation calls. In addition, you will have to leave your company's name and number if you get an answering machine. Your club still must maintain a company-specific do-not-call list of individuals who have requested that you not call them even though they do business with you. Your company may not contact that individual by phone for five years.
Check out the state of each state. Federal guidelines aren't the only ones to be concerned with. You must also pay attention to any state rules that apply. Currently, 36 states have their own do-not-call lists. Some of the state rules are even more stringent than the federal rules. Become familiar with the rules of the state(s) in which you operate.
Go back to the old-fashioned methods. All of this doesn't mean that you must forego member referrals. It just means that rather than getting phone numbers of referrals, you'll want to get mailing addresses. You can send a direct mail piece asking the receiver to return a card giving the club permission to call them. You could also simply mail a friendly letter and pass to a member's friend to entice them into the club.
You could also ask members for the e-mail addresses of their referrals, but then you must deal with perceptions of being a spammer. In addition, your e-mail efforts might be short-lived considering there is an effort right now to create anti-spam legislation.
Look for the exceptions. While many new contacts may be unreachable by phone now, you still may solicit to individuals with whom you have an established business relationship as long as the relationship is within 18 months of a purchase or transaction and three months from an inquiry or application. That means that current members are still reachable by phone.
If you want to be really sneaky, you can still contact individuals at work (the federal list applies only to home and wireless numbers), but keep in mind that many people resent sales calls at work even more than at home.