Outsourcer Delivers Premium Marketing Data That Keeps Client Out of the ‘Do Not Call’ Dog House and Lowers Costs | Article
When times are tough, you know who your true friends are. The same can be said for the value of an outsourcing provider that consistently demonstrates its worth during hard economic times.
ARO of Kansas City, Missouri, is an outsourcer of marketing back-office services to several industry verticals. It started life 10 years ago as a Customer Relations Management (CRM) and outbound business to consumer call centers using remote agents. It still generates significant revenue from those legacy outbound services, but seldom more than 20 percent of its annual income.
Life changed with the federal and state Do Not Call (DNC) laws. Penalties for such violations can run into the thousands of dollars. With ARO running on thin margins that most back-office outsourcing providers must do these days, not only is stringent compliance a necessity but the data used for its marketing campaigns and that of its clients must be the best available.
ARO COO Michael Amigoni knew outsourcing was his answer to getting the right data. “We’re a lean-and-mean company,” he says. “The expense of keeping these lists up, both for us and our customers, necessitates outsourcing. There are huge financial implications if we do it wrong. And we have neither time nor resources to manage Software-as-a-Service (SaaS) tools.
“Do Not Call registries are part of the general social and political drift towards consumers’ right not to be contacted by companies,” explains Steve Morrell, principal analyst at ContactBabel. “Intelligent use of the available resources to these contacting firms underlines their need to deliver a proactive service, which becomes a strong brand-builder and effective call-avoidance tactic for these marketing providers.”
In late 2005, Amigoni needed a provider of more than just “run-of-the-mill” contact lists. ARO needed a presumptive provider to collaborate to meet the needs of ARO and its buyers up line, many of which also have outbound marketing enterprises.
Using a provider to run leaner and meaner
The solution to Amigoni’s challenge is RedDoor Marketing of Omaha, Nebraska. It provides list development and data hygene or “scrubs.” In this case, the data file it provides to ARO, which it updates daily, consists of all state DNC files, the National DNC file, and several similar files like the one from the Direct Marketing Association (DMA).
“There are essentially two options to address this market segment: SaaS vendors or list development and management outsourcing providers. It’s very complex,” says Stacy Leslie, RedDoor’s president. “The consulting that goes into producing today’s data and future variations is our competitive value.”
RedDoor uses a multitude of databases. Some of that data can get pretty specific and narrow. “We once had a firm that wanted us to find people with earwax issues. What single database allows you to drill down that deep?”
But that’s only part of the RedDoor advantage to ARO, according to Amigoni. “We have to maximize every bit of our outbound contact resources and efforts, especially today, even before having to worry about the Federal Trade Commission’s (FTC) DNC penalties,” he says. “The onus is on us, the contacting firm, to have the best, most compliant, caller information. But we don’t have time or money to subscribe to all the available lists nor interact with DNC watchdogs.”
In short, ARO can’t waste time “pounding nails when someone does it better,” according to its CEO.
Benefits to ARO include a modest amount of back-office and IT management savings by sourcing the task to RedDoor. Amigoni also cites the reduced risk of getting on the FTC’s and other DNC watchdog agencies’ “bad side, though we haven’t figured out how to quantify that because we were sensitive to DNC from the beginning.”
Moving first from vendor to trusted outsourcing partner
ARO’s relationship began with RedDoor in 2006. But it was more of a buyer/vendor relationship until late 2007. Amigoni says things began to flourish about the time the two sides became more “relationship oriented.”
The great part about having a relationship, according to Leslie, is how it empowers providers to be a bit more presumptive to the needs of the buyer when delivering RedDoor’s services.
“We have two different customer types. Those who see us as vendors really don’t understand how we do what we do,” says Leslie. “Then there are those who do. ARO does. That’s why, after working together a bit, we both began to see greater value in the other and how you can’t always judge a good business relationship with a cost/benefit analysis.”
Since ARO is also a marketing consultant to some of its clients, RedDoor’s additional expertise is becoming part of ARO’s service offering.
“Our clients come to us, frequently wanting the same quality lists we get for ourselves from RedDoor,” notes Amigoni. “As both an outsourcing provider and buyer, we understand the importance of quick turnarounds to such requests. He adds that since RedDoor has a better understanding of ARO and its clients’ needs, it allows the company “to be more presumptive than a simple supplier might. RedDoor makes us look good because they take care of the sweat.”
He adds that ARO’s outsourcing relationship is becoming a safe harbor in times of economic storm. “The bottom line is always important. But it’s even more so in a tight economy where companies more closely watch both sides of the decimal point. Red Door’s services greatly reduce our list-management expenditures. And its quality eliminates the painful financial penalties we might incur otherwise,” concludes Amigoni.
“Mike and his people have done a lot of back-end work in first understanding, then communicating their clients’ needs,” says Leslie. By the time he comes to us with a need, we are able to quickly deliver. They don’t need us to hold their hands.”
“Our line of business is not to manage data but deliver service. But service providers need someone to pound the nails, and that’s what we have providers for. And today, good providers are even more important to outsourcing buyers,” concludes Amigoni.
Lessons from the Outsourcing Journal:
- As the relationship between ARO and RedDoor has matured, the provider is finding itself in the role of third-party provider of similar information to ARO’s marketing clients, which helps those third-party clients sustain their marketing enterprises.
- Outsourcing providers that can deliver, even exceed service levels, and simultaneously help their buyers reduce those service costs, are valuable assets to any business enterprise.
- ARO’s savings in outsourcing list management to Red Door include lower employee management time, higher quality contact lists and, by definition, association with list managers and agencies that create and monitor Do Not Call lists. This ‘by-rote’ association tells the monitoring industry that ARO is a rule-player, not a rule-breaker, which creates goodwill for the buyer.