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Firms struggle to reinvent marketing as DNC kicks in

Businesses spending more on alternative forms of marketing, such as social media.

SINGAPORE: While consumers have been celebrating the end of spam SMSes and pesky phone calls since the Do Not Call (DNC) Registry kicked in five months ago, some businesses are struggling to reinvent the way they market their products or services to customers.

And ahead of the Personal Data Protection Act (PDPA) coming into full force on July 2, companies, especially those relying on mass marketing methods to reach consumers, are racking up the cost of alternative forms of marketing.

For instance, Singapore Telecommunications (SingTel) set up a portal last month to allow its customers to opt out of receiving certain advertising material and decide how their data is going to be used.

Some organisations and individuals, such as property and insurance agents, have resorted to developing other marketing tools as they battle slowing business. Top3 Media, which does search engine optimisation and other forms of digital marketing, did just that after it closed down its SMS blast services six months ago.

“The amount of money earned is just not worth the risk involved,” said Mr Michael Ho, managing director of Top3 Media’s SMS services. Its other marketing services that do not fall under the purview of the PDPA, such as those utilising email and social media, have seen a roughly 20 per cent increase in the past few months. This increase includes its services to organise public events, said Mr Ho, who expects demand to grow.

Similarly, Tele-centre, which shut down its telemarketing services at the end of last year, now focuses on providing customer support services for companies.

Property agents have been hit by a double whammy, as they have to contend with higher marketing costs amid a slowing real estate market.

Mr Mohamed Ismail, CEO of real estate agency Propnex, said marketing costs have risen after the company spent S$100,000 to set up a system that screens calls on agents’ phones, allowing only numbers not in the DNC Registry to connect. The company has gone back to “old-school” marketing, recently printing 300,000 copies of consumer guidebooks on the real estate market and holding more seminars.

“We have also been spending more money on advertising and other costs such as booking the auditorium for seminars. These are a few other ways of reaching out to a wider audience, but can be costlier than setting up mass SMSes,” said Mr Ismail.

“Business has slowed with the market sentiment and now we have to adapt to this new environment too,” he added.

Banks – which traditionally relied heavily on marketing calls and SMSes – are shifting to digital channels to reach prospective customers.

Ms Yap Aye Wee, data protection officer at OCBC Bank, said: “The marketing mix between phone-based channels, such as calls and SMSes, and less intrusive digital channels like email, Internet and mobile banking, has always been very balanced at about 50/50. This mix is now about 40/60 and we continue to see this shift as we invest in less intrusive digital channels to avail even more services to our customers.”

She said the bank has augmented its efforts with video walls and interactive touch screens to showcase the latest products at its branches, where staff are on hand to help if customers wish to know more.

A DBS spokesman said the bank has been increasingly engaging customers through social media channels and mobile apps, which allow for “deeper engagement”.

But it is not doom and gloom for all. Financial adviser Flora Tee said that although business expenses have gone up as a result of the safeguards, it is now easier for her to pitch to clients because those whom she contacts are more receptive to her calls.

“My referral-asking process has changed to ensure that everyone whom my clients refer is aware that I will be giving him or her a call and what it is for. This improves the quality of the call as the prospects are aware, more open to meeting (me) and have no suspicions about what the call would be about,” she said.

Ms Lisa Watson, chairman of the Direct Marketing Association of Singapore, said SMSes had been a cheap form of marketing and firms are incurring rising costs as they shift to other marketing channels as well as check phone numbers against the DNC Registry.

She suggested that the Government help cap costs by charging an annual fee for unlimited screening, as what some other countries have done.

She said industries that depend heavily on telemarketing have already taken a big hit in the United States: At trade shows that she attended, call centre organisations have been whittled down to only a few players.

For many companies here, one of the main challenges would be interpreting the new law.

“The challenge is that the law is not 100 per cent specific, so it has been a bit tough for many organisations which want to do the right thing. But these are the growing pains of developing a good personal data protection regime,” Ms Watson said.

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