IT resellers could find their ability to sell to new customers severely hindered by plans to extend Australia’s Do Not Call Register to include business and government telephone numbers.
Amendments and expansion of Do Not Call Register legislation are currently under inquiry in the Australian Senate. If approved, the proposal will limit a company’s ability to make marketing and sales calls to potential business customers listed on the registry. The inquiry was launched on November 30 and reports are due next week.
If passed, managing director of marketing company, Direct IT, John Anderson, claimed the new legislation could massively affect any IT company’s ability to use telephone sales to generate new business and customer leads. Telemarketing is one of the most common methods IT reseller organisations use to source customer opportunities.
“It’s a disaster,” Anderson said. “It’s not just going to affect IT, but all sectors because so much business is done over the phone.”
Anderson said telemarketing calls were annoying, but pointed out many organisations relied on the process to find new business. If prospective suppliers are precluded from calling customers on the register, it could also impact the customer’s potential to get better deals. Anderson, who has been in the industry for more than 20 years, estimated businesses could lose about $380 million per year.
“The way the government is trying to overcome this inconvenience will end up having a serious impact on business,” he said. “In a large part of the reseller market, sales people ring local businesses to see if they need to upgrade their printers, or if they want a scanner attached, and so on.”
In addition, Anderson claimed companies that weren’t on the register would get “hammered” by telemarketing.
“This is going to impact the Australian economy if it is introduced,” he said.
In January, the Australian Information Industry Association (AIIA) responded to the Senate, stating intentions to extend the Do Not Call Register (DNCR) could greatly reduce the ability of all businesses to access significant market segments. In its letter, the industry group highlighted the fact many companies used various methods like telemarketing to contact potential new customers.
“As a small IT business of 15 people, the administrative overhead of checking every phone number with a DNCR before we make a marketing call will reduce sales productivity by about 25 per cent,” an AIIA member stated. “This will increase sales costs accordingly. In the real world of business, the telephone is the only effective marketing tool.”
The Australian Direct Marketing Association (ADMA) also slammed the proposal as ‘unworkable’ and cited an Access Economics survey, which found changes could have far-reaching consequences including reduction in revenues, employment, competition, innovation and market efficiency.
If the Do Not Call Register proposal is passed, the extension would allow business, government, fax services and emergency service numbers to be placed on the list.
ADMA CEO, Rob Edwards, said it was hard to quantify how much it would costs businesses if the proposal was approved.
But an Access Economics report indicated ongoing compliance costs to the industry would be in excess of $100 million.