New DTC toolkit   //   December 2, 2019

‘Chase you until you purchase’: The rise of the DTC telemarketer

By Cale Guthrie Weissman

Telemarketing is no longer relegated to scammers, insurance companies and debt consolidation firms. Unsolicited calls and texts are becoming a mainstay of the e-commerce marketer playbook, too — and they rely on crossing personal communication barriers that many companies have historically avoided.

The last few weeks especially seem to have opened up the floodgates for these unsolicited messages in the runup to Black Friday and the holidays. A number of tweets have revealed various companies either calling or texting people who visited their websites but didn’t make a purchase. Put together, it seems that retail businesses are increasingly looking toward old — and sometimes spammy — tactics to boost customer acquisition.

A month ago, for example, a writer named Ariel Dumas tweeted that furniture retailer Wayfair called her up while she was browsing the website. At the time, Wayfair confirmed that it made such a call, saying that it tests outbound calls with a small subset of customers to “assist them in the shopping process.” (Modern Retail reached out to Wayfair for further comment about the overall strategy, but did not receive a response.)

It’s not just calls either. Others have taken to Twitter to note texts they’ve been getting — either related to shopping carts they abandoned on a website or a proactive message about an upcoming Black Friday sale. Modern Retail spoke with multiple people who have received texts from hotel brands like Marriott, while another continues to get spam calls from the New York Mets after buying cheap seats over the summer via a third-party platform. Others have been known to get similarly spammy calls after attending New York City’s Metropolitan Opera.

While some categories have become renowned for their cold calling over the decades, the tactic is now beginning to rear its head in the world of digitally-native brands. Some companies are using e-commerce mobile messaging platforms like Attentive to send outbound messages to potential customers. E-commerce platforms like Shopify also include perhaps slightly-hidden consent boxes that let brands send messages to customers after they’ve made a purchase. A phone number, according to DTC brand strategist Nik Sharma, is better for marketers because “they can basically chase you until you purchase.”

Phone numbers are typically obtained either from past orders — which some brands use to market future products (despite the fact that consumers likely only put their phone number in for help with shipping tracking and other issues) — or part of an overall retargeting campaign, where they get the data from other sources.

The thesis behind this approach is simple: Everyone reads their texts. “There’s a low barrier to entry for text,” Sharma said. “If there’s a list of 100,000 numbers, you’re for sure going to see some revenue spike.” But it’s impossible to be able to segment out that data in a meaningful way; What’s more likely to happen is thousands of people will get annoyed and try to unsubscribe from the texts altogether. “It deteriorates brand equity,” Sharma said.

This certainly isn’t a new tactic. Hotels, for instance, have been known to text customers for years; other companies like StubHub have called people it believes may make a purchase. Luxury brands too have a very complex system in place to track digital shoppers, compiling reams of personal data that consumers likely had no idea was readily available to these companies.

But this unsolicited outreach may be reaching fever pitch. What’s more, digitally native brands seem to be trying their hand at it. According to Zak Normandin, founder and CEO of the conversational commerce platform Iris Nova, this is indicative of a soon-to-hit crisis. Texts and calls, he said, “seem like low-hanging fruit for brands that are looking for that pop on the customer acquisition side.”

Well-worn digital channels, like Facebook and Google, are getting increasingly expensive — not to mention crowded. “A lot of this is the circumstance of Facebook and Google no longer being effective,” Normandin said. It’s not only price-related, he said, “consumer behavior is changing — people are inundated with advertising.” As a result, businesses that relied on growth-hack tools to boost sales are seeking out other cheap channels like text for quick hits. The fact that more are adopting this strategy now, means a reckoning may be approaching; “They’re going to find they can’t grow and sustain themselves anymore,” said Normandin.

It is, however, affordable; Sharma explained that retargeting costs for SMS is just what a brand pays to get linked from an original paid media source, which could be somewhere between $0.10 and $2 per click. But cheap clicks don’t presage a sustainable future. While some businesses use text as a way to more seamlessly connect with customers around actions like preorders, others seem to be testing their patience by bombarding them with endless promotions. The more that marketers use SMS and calling in a heavy-handed fashion, the less effective it will likely become.

For Normandin, the key is to not market on these very personal channels at all. “We don’t need to overuse SMS as a way to sell the product,” he said,”we’re not really in a place where we need to exploit the customer.” Not only that, but it’s unclear how effective these outbound tactics actually work; “I can’t imagine someone answer the phone and saying, ‘You’re right, I was looking for a couch,” Normandin went on, referring to Wayfair’s cold call.

As more brands collect data and seek ways to leverage them, they’ll be hit with the question of how far is too far. “From a macro perspective, [blast texting] doesn’t move the channel forward,” said Sharma.

The smart brands, he said, will better understand who the customer is and send messages based on that context. “People get annoyed when you try and push a sale on them when they’re not looking to buy,” said Sharma. Understanding this fine balance is integral. Otherwise, said Sharma, “you become known as an annoying brand.”