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900 numbers: getting down to serious business.

It's late--maybe one or two o'clock in the morning. A sensuous brunette slinks across your TV screen. She wants to talk to you. She wants to know your problems and tell you her secrets. Most of all, she wants you to call her private 900-number telephone line. And she wants $3 for every minute you cry on her lovely shoulder.

Like it or not, this scenario fits the perception many consumers have of 900 numbers. Now, however, that perception is changing. Today, 900 numbers sell everything from cars to cookbooks. They provide information, offer coupons, promote sweepstakes and fill you in on your favorite rap star.

While the adult and gab lines that paved the way for 900 services are still a big part of the 900 landscape, they're quickly losing ground to sale-hungry direct marketers who see 900 numbers as the consummate marketing tool for the 1990s.

"As the industry has developed, the good have begun to drive out the bad," notes Brad Magill, vice president of the Direct Response Broadcast Network, a Philadelphia-based direct response agency. "The marketing applications of 900 services are drawing reputable companies into the industry, and people are beginning to forget the more unsavory applications of 900 lines."

In the last few years, 900 numbers have attracted a wide spectrum of marketers. Companies as diverse as packaged-goods giant Beatrice/Hunt-Wesson and Avis Rent-A-Car have succeeded with 900. A recent survey by Strategic TeleMedia, a New York-based market research firm, indicates revenues generated through 900 services in 1990 topped $871,000. This year, Strategic predicts revenues will exceed $1.2 billion.

Unfortunately, the nearly exponential growth of the 900 industry has drawn its share of fly-by-nighters, and with them, the wrath of federal legislators. Currently, the House of Representatives is considering a bill (HR 5671) to limit how interactive 900 services can be used.

Proposed by Rep. Bart Gordon (D-Tenn.), the bill would require that an introductory message be appended to all interstate audiotex services. The message would describe the service, state the charge, and give the caller the option to hang up at the end of the message without incurring any cost. The bill would also allow the caller to avoid charges for the call for at least one telephone billing cycle. Additionally, it would require that print and television ads using 900 numbers clearly explain to consumers that their telephone bills will be charged for the service and that parental consent is needed for callers under 18 years old.

The Gordon Bill is relatively soft on legitimate 900 service providers, but it may be a precursor of stricter laws. Despite the threat of adverse legislation, though, marketers are entering the 900 arena in record numbers. In 1989, 2,600 programs were up and running in the U.S. Last year, that number rose to 10,100. By 1995, as many as 45,000 900 services may be available to consumers.

The industry's phenomenal growth has been accompanied by technological advances that make 900 a multi-dimensional marketing weapon. By marrying Automatic Number Identification (ANI) with existing database technology, marketers can use the 900 line to capture as much information as they give out.

A prime illustration of how database and audiotex technology can combine to form a powerful selling tool is the PRIZM 900 service offered by Telesphere Communications, a provider of 900 network services, based in Oakbrook Terrace, IL. Telesphere teamed with Claritas, an Alexandria, VA-based database marketer, to create a system that captures a consumer's telephone number on the inbound 900 line and runs it through a demographic clustering analysis. "Callers are profiled as to their behavior, including what they buy, what they watch on TV, what they read and where they live," explains Dennis Houlihan, senior vice president of Telesphere. "The system also targets the market potential of a program by indentifying markets where consumers with similar profiles are located."

Telephere's PRIZM 900 represents the direction in which 900 services are headed. Although the industry is still dominated by information and entertainment services, there has been a marked shift toward transactional, direct response uses.

The four long-distance carriers that offer 900 services--Telesphere, AT&T, MCI and Sprint--are all amenable to creative uses of the medium and are devising ways for telephone technology to facilitate direct response applications. Already, a variety of interesting possibilities have emerged. Here are some of the fastest-growing areas:

SWEEPSTAKES. 900 numbers and sweepstakes seem to be a match made in heaven. A host of companies, notably packaged-goods firms, have had great success using 900 numbers as the response mechanism for sweepstakes.

Alberto Culver, manufacturer of Alberto VO5 shampoo, is one of the latest marketers to jump on the 900 bandwagon. This month, the company launched a sweepstakes offering to pay winners' 1990 taxes. Marketed through point-of-sale displays and bottle bursts, the promotion invites consumers to call a 900 number for a chance to win. The call costs $1, for which each caller receives $3.50 in coupons. One-hundred callers get a randomly selected win message.

Slated to extend through June, the sweepstakes will generate more than revenue for Alberto. The company expects to gather thousands of qualified sales prospects, as well.

VALUE-ADDED SERVICES. For years, Gardener's Choice, a cataloger of bulbs, seeds and gardening tools, had used an inbound 800 line for ordering and customer service. Recently, however, the company added a 900 information line offering gardening tips to its customers. In addition to creating a new revenue stream, the 900 line prompted customers to hang onto the catalog just to have access to the help-line number.

Similarly, Parents magazine recently created a 900 advice line for parents. The magazine's "As They Grow" columnists provide pre-recorded problem-solving tips for parents of kids between one and six years old. The expense of the line is offset by a 95 cent per call cost, and the magazine has generated good will, as well as renewals, through the service.
900 Applications Breakout for 1990

Application                                 % Use


Personal/Datelines/GAB                        24
Sports                                        15
Financial                                     10
Games                                          8
Adult                                          5
Misc.                                         10

Total:                                        72

Direct Response/Transactional:

Promotions/Sweepstakes                         7
Polling/Surveying                              6
Fundraising/Cause Related                      3
Couponing/Sampling                             2
Consumer Consulting/Customer Service         1.5
Order Entry/Fax                                1
Misc.                                        7.5

Total:                                        28

Source: Strategic Telemedia

Even the The New York Times is using a value-added 900 line. Dial 1-900-884-CLUE, and you can request an answer to the vaunted Times crossword puzzle.

PRODUCT DELIVERY. Digital Publications, a PC software designer, has developed an interesting way to make a 900 line work as a product delivery tool. Rather than sending diskettes through Federal Express, the company is selling and delivering software over a 900 number. For $1 per minute, a caller can download a PC program by linking the 900 line to a modem. So a caller can get a 266,000-byte program for about $35, and Digital is guaranteed payment.

CUSTOMER SERVICE. Lotus 1-2-3, another software manufacturer, is using a 900 number as a customer service device. After returning the warranty card for the Lotus 1-2-3 software package, buyers are given an 800 number they can call for free support services. In six months, however, the free support runs out, and Lotus offers its customers the option of paying an annual subscription fee of $49 for an 800 help-line or paying $2 per minute for a 900 help-line.

CATALOG REQUESTS. A number of catalogers have set up 900 catalog-request lines to qualify leads and pay for shipping their catalogs. Telesphere, in fact, has set up a national catalog request service that allows catalogers to pay a $125 set-up fee and have qualified leads delivered to them on diskette in three to four days.

FUNDRAISING. A variety of fund-raising groups are using 900 lines to facilitate payment on donations and build donor databases. The Red Cross, for instance, set up 900 lines to raise money for victims of Hurricane Hugo and the San Francisco earthquake. Callers who used the lines automatically donated most of the $20 calling fee to disaster relief.

The San Francisco Society for the Prevention of Cruelty to Animals added an informational twist to a recent fundraising effort by setting up a 900 PetLine that offered callers the latest scoop on pet health and behavior. The cost for the call was a donation to the society.

DEALER LOCATION. New audiotex technology makes it possible for callers to use a centralized 900 number to patch into dealers and distributors in their immediate calling area. Sneaker and sporting equipment manufacturer Spaulding used a dealer-locater device to hook consumers into a recent sweepstakes giveaway of a Jeep Wrangler. Participants were given a scratch-off game card and asked to match the colors on their cards with those displayed at participating Spaulding footwear retailers. A 900 dealer-locater line was set up to help participants find the nearest participating retailer.
COPYRIGHT 1991 North American Publishing Company
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:Target Marketing
Date:Feb 1, 1991
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