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reporting on the marketmg pmtession

Oct. 26, 1998 Vol. 32 No. 22 $3

NewsDigestPhone fraud fighters

According to the AARP's FraudFighters, which helps the elderly protectthemselves from telemarketing fr^ud,there are 14,000 fraudulent telemarket-ing^ organizations in the country that bilk-people out of ahout S40 hillion a year.Schemes include fake charities, sham in-vestments, illegal sweepstakes, foreignlotteries and phony prizes.

New Hampshire AARP PresidentRoland Stoodley said the group's re-search has shown most victims are social-ly active, well-educated elderly people.Many victims do not know telemarketingfraud is a crime.

The Fraud Fighters group is giving pre-sentations on telemarketing fraud to olderpeople and their families all over New-Hampshire and educating law enforcementand community leaders ahout the prohlem.

'Poster boy' suesA former model who claims he was

made to he a "poster boy" for gay menwith AIDS has a right to sue over the useof his photograph, a Florida appeals courtrecently ruled.

Paul V. Facchina Jr., 27, said he signedan agreement in November 1994 withMutual Benefits Corp. to use his imagefor advertisements related "solely to thepurchasing of life insurance policies."

Facchina filed suit sued a year later,claiming his photograph was published inmagazines directed to "sexually active ho-mosejnials" and that the text of the ad im-plied he was a gay man dying of AIDS.

Named in the lawsuit are Viatical Ben-efits Foundation, which buys life insur-ance (rolicies on discount from terminallyill pauents, and its affiliate, Mutual Bene-fits, which matches people interested inbuying policies with those wanting to sellthem.

Fringe of the f r i i ^And you thought American politics had

problems.Car freaks, animal lovers, radical envi-

ronmentalists, communists, evangelicalChristians and even vote boycotters havededicated political parties in Germany.

In a TV spot for the Anarchist Slam-dancing Party of Germany, punks dancein the streets and guzzle beer in one shot,and sit grinning in German luxury cars asmen in business suits clean their wind-shields in the next.

The Hamburg-based party, whichclaims to represent "social parasites,"campaigns on such slogans as, "Free beerfor all."

From AP wires

Inside2 Marketing Briefs4 Marketing Views5 Don E. Schuttz6 Bob Lamons7 Thomas T. SemonB 0. Kirk Davidson

9 Jacquelyn A. Ottman46 Conference Caiendar46 Publication Preview46 Books in Briel47 Names in ttie News48 Marketplace

2071222 H-MHEBSCO PUB FULLEDlTOniAL PEPAPO BOX 590IPSHICH HA 01

Internet portals'mad dash for cashSites' success hinges on brandingBy Maricris G'. BrionesSTAFF WRITER

In a six-week'period starting early this sum-mer, Snap.com announced its relationship withNBC, chose an agency, launched a short-termawareness campaign, and filmed and edited sixcommercials for its branding campaign launchedthis fall. By the end of summer, the joint Inter-net venture between San Frandsco-hased CNetInc. and NBC had leapt to 37th-most visitedWeb site from No. 72 just two months earlier,according to New York-hased Internet measur-ing firm RelevantKnowledge Inc.

The speed with which NBC and CNet aremoving to market their on-line property match-es the blistering pace Internet portals have setfor their product Ufecycles: What was innovativeless than 18 months ago is almost a commoditytoday. Now the proliferation of sites callingthemselves portals has players trying to brandtheir way to the top of the heap.

Industry observers estimate that within two tothree years, only a few of the 10 or so significantportal players sdll will he starting points for thegeneral Internet audienceand able to com-mand the premium advertising rates that makesuch sites worth maintaining and marketing.

How well they're able to attract and keep newvisitors will he critical. One challenge is that ofall the Internet surfers, few regularly use portalsites. In fact, the top nine portals only accountfor about 15% of Internet traffic, notes ChrisCharron, an analyst at Cambridge, Mass.-basedresearch firm Forrester Research, and "more

than half of that portal traffic goes toYahoo! and aol.com, the Internet portalsite for on-line service provider AmericaOnline.

"Because (the Internet) is so diffuse, Ibelieve there will be only two to threebroad-base consumer portals that will sur-vive," Charron said. The rest, he said, even-tually will have to find content or audienceniches to serve.

Although the descriptive term "portal"may be new in high-tech vernacular, the sitesthemselves are not. Most of the top sitesYahoo!, Excite, Lycos and Infoseek, for exam-plebecame prortal destinations as they addedto their original search functions such featuresas news chps, shopping channels, and travel andfinancial information.

The portal strategy is popular because theplethora of information attracts sizable audi-ences that attract equally sizeable dollars. Com-pared to more-specialized sites, portals generallyhave a lower CPM, hut because of sheer audi-ence volume, the top nine portals command60% of all Internet advertising dollars.

Portals are "poster children on how to makemoney on the Web," said Bridget Regan, an as-sociate analyst focusing on portals at Cambridge,Mass.-based Giga Information Group.

The portal model varies little from site to site."Feature sets of portals are becomii^ surprising-ly more alike," said Julie Welch, vice presidentof marketing for Snap. ".\t this point, it's all

^ see Portal on page 44

b

Snap(top). Excite and Lycos

are among the top portal sites com-peting for loyal customers.

Some firms see recruit list in welfare rollsBy iames HeckmanSTAFF WRITER

M6shele Jackson, a mother of two, success-fully made the move from wettare recipient toBank of America teleservice representative.

Sitting in a training class of 35 potentialbank teleservice representatives in Dallas lastspring, Meshele Jackson felt a little out ofplace, Two weeks earlier, she had been sup-porting her family with welfare checks fromthe government. But on this day in March, shewas competing for a healthy paycheck and along-term job.

"I felt a little intimidated at first becausesome people in the class already had somebank experience," Jackson recalled recently."But that just made me more determined tosucceed."

With the job market tight at all levels, com-panies are hard-pressed to find semi- and un-skilled workers who will stay on the job longenough to make their training pay off. Com-panies looking to fill entry-level marketing po-siddns, especially in the customer service andtelephone sales departments, are finding for-mer welfare recipients to be excellent recruits.

Employers who have hired welfare-to-work

candidates say they stay longer in the job, ad-just quickly to the corporate environment andmay even become the department stars.

"We've found the attrition rate of peoplewe hired from welfare is about half of what wesee in other employees," said Scott Gilday, di-rector of people services for Elk Grove Town-ship, m.-based United .\irlines. "In a year, wetend to lose about 50% of our first-year reser-vations network employees, but those wehired from welfare rolls have about a 25% at-trition rate."

In a recent survey of companies involved inthe Welfare to Work Partnership, a Washing-ton, D.C.-based coalition of employers pro-moting the hiring of welfare recipients, 79%of executives said welfare hires turned out tobe productive employees, and 31% alreadyhad promoted some welfare-to-work hires. Inaddition, 48% of respondents said their wel-fare hires had equal or higher retention ratesthan employees hired from more traditionalsources, sudi as classified advertisements and

^ see Wlfar on page 45

Where to look for satisfactionOur annual directory of customer satisfaction firms.Page 11.

Listen up, CS researchersMarketers address issues and techniques in customer satis-faction measurement in a special editoriai section. Page 37.

CoveiStoiy Marketing News Page 45

Marketing messages will adapt to economy^ Luxury from page 2

fine jewelry and gifts. U.S. monthly sales forTiffany in mid-September were estimated tobe running at 3% below plan, according to areport by Maureen McGrath, analyst for Sa-lomon Smith Barney in New York. McGrathattributed the slowdown to a decline intourism; however, she also noted that the de-cline continued in the retailer's biggest U.S.stores throughout the month.

To remain effective in the fece of such hur-dles, luxury-goods marketers may change aproduct's marketing message or marketingchannel. For instance, a luxury car's upscalequalities may he emphasized in a strong econo-my; but in a weak economy, the product'sdurability becomes more marketable.

"It's a question of responding to what peo-ple want at the time," Randall said. "Brandstend to be unchanging, but have a combinationof attributes and different facets that can beemphasized at different times."

Not that solidly wealthy consumers changetheir buying habits in a recession. The targetaudience remains the same, even as many man-ufacturers and retailers of those goods changetheir advertising message or allocate marketing

\ It becomes less fashion-able to display wealth. And itbecomes more fashionable tobuy things that are smart,things that last and havepracticality.

Ward Randa l l ' 'managing director

Brand Consultancy, Atlanta

dollars differently."It becomes less fashionable to display

wealth," Randal! said, "and it becomes morefashionable to buy things that are smart, thingsthat last, things that have practicality."

Japanese carmaker Toyota Motor Corp.hasn't scaled back on marketing budgets orchanged its target audience for its nine-year-old Lexus luxury product line, even in reces-sion years, said Holly Ferris, national public re-lations administrator for Lexus's U.S. opera-

tions based in Torrance, Calif.However, "When times get tough, money

may shift to different areas of marketing," Fer-ris said. For instance, "You may take moneyout of the sponsoring of events, and put moreinto TV and newspaper advertising to reachpeople."

Indeed, "A lot of luxury goods also arebought by the 'wannabes' who want to be per-ceived as well-off," said Diane Kutyla, manag-er of research and analysis in the New Yorkoffice of Deloitte & Touche LLP, a Wilton,Conn.-based accounting and managementconsulting firm.

Kutyla noted that many luxury goods shop-pers are those who eam higher pay in goodeconomic times but lower pay in slower years.Broadening the reach of Lexus' message is astrategy for reaching the maximum number ofnew buyers to help make up for what the brandcould lose from its existing base of owners.

The news isn't all bad. Tiffany, for instance,has seen sales in Japan run 8% to 9% ahead ofanalysts' expectations for its FY1999 thirdquarter, ending Oct. 31, according to theSeptember report by Maureen McGrath.Tiffany is doing well in Japan by appealing toconsumers who buy luxury items ded to such

events as weddings and anniversaries, saidIrwin Cohen, managing director of retail andconsumer products manufacturing for Deloitte& Touche in New York.

And Lexus' sales continue to rise comjwredwith last year's results, said Mike Michels, na-tional public relations manager for Lexus: "Webelieve it's important to recognize tliat while alot of fluctuation has been going on on WallStreet, a lot of this is on-paper value changes,and a lot of factors like low interest rates, lowunemployment and continued generally goodeconomic condidoasand of course the verylarge number of baby boomers who are reach-ing their peak earning yearsbodes well."

Even if marketing budgets are slashed nextyear, markedng prof^sionals say they are bet-ter prepared than they were in the '80s whenthe last recession struck.

Now, Randall predicted, companies that al-ready have downsized and learned to workwith a leaner staff will be more resilient if aslowdown in the economy occurs.

"We're in much better shape than we were10 years ago," Randall said. "Overall, our econ-omy is a lot more lean, entrepreneurial, flexibleand able to change more rapidly than it did(before)."

Welfare rolls can help fill entiy-level marketing positions^ Welfare from page 1

job posdngs.Of the companies responding to

the survey, which was conducted byWirthlin Worldwide, a McLean,Va.-based public opinion researchcompany, 44% .said tliey found wel-fare-to-work job candidates throughgovernment social service offices,and 17% used community organiza-tions.

The Dallas office of San Francis-co-based Bank of America set up atraining program earlier this yearwith the U.S. Department of Hous-ing and Urban Development(HUD) and community learningcenters, through wbich it recruitedJackson. Eligible welfare recipi-entstbose with a high schooldiploma or GED anil some comput-er skillsattend a two-week modva-donal seminar underwritten by thebank; they are recruited into thoseprograms by the social workers withHUD and the community learningcenter. After completing the modva-tionai program, welfare recipientsjoined a Bank of America trainingclass with candidates from classifiedads and job postings to learn aboutbank products and software.

"The learning centers would rec-ommend people who fit the profile,"said Nick Lane, the Bank of Ameri-ca recruiter who set up the program."We were looking for people whohad a diploma or GED, some coni-jjuter skills, inidadvc and the abilityto take a challenge."

Once on the iob, the new teleser-vice representatives take customer-service calls, help solve problemsand explain bank procedures andproducts. They earn a monthlysalary of $1,600 to $1,750 widi ben-efits, depending on previous experi-ence.

Lane credits the motivationalprogram for the success of formerwelfare recipients at Bank of Ameri-ca. The jirogram addressed whatqualides made people successful andhow to avoid the barriers that holdpeople back, such as family chal-lenges and lack of self-esteem. Hesaid many former welfare recipients

worried about not fitting into a cor-porate environment, but the pro-gram showed them that they had thecapabilides and talents.

Jackson, in her mid-20s, is themother of two boys, ages 10 and 11,and lives in a public housing com-plex in south Dallas. She has a highschool diploma and worked in cus-tomer service before going on wel-fare. Jackson also had some comput-er experience, and she was attendingcomputer classes in a communitylearning center to upgrade thoseskills when she was recommendedfor the Bank of America program.

"I think the motivational classmade the difference for me," saidJackson, who recently received apromodon and now earns about $50to $100 more per month. "Theytalked about breaking down barriers,from our current situadon to familyproblems. Also, I appreciated thatwe were not stereotyped when wegot to the regular training. We werejust part of the class, and our finan-cial situation was our own business."

According to Lane, making theeffort to reach out pays off for thebank. A nadonal study conducted bythe Dallas Women's Center showed61% of welfare recipients left theirjob after six months, and most didnot stay widi a company undl theirthird job. However, Bank of Ameri-ca found that more than 90% oftheir recruits still are on the jobafter six months. In their first classof 14 welfare recruits, only one quit.Jackson started in March with a classof seven, and all sdll are on the job.

In another example. United Air-lines has a program combining theefforts of government agencies andcommunity organizadons to recruitpeople iji cides around the country.Community organizadons in Chica-go, Denver and Los Angeles, amongother cities, screen applicants fromstate welfare rolls for candidatesmeeting United's employment re-quirements, such as language andpublic contact skills, computer expe-rience and a friendly attitude.

Once hired, the former welfarerecipients join a six- to eight-weektraining class to learn about cus-

tomer service and United's productsand company philosophies. Thewelfare recruits are in the same classas all recruits, and do not receiveany special attendon before or dur-ing the training class, according toGilday.

Since 1997, United has hiredabout 1,000 people fi-om the welfarerolls. About half of those hires workas reservations agents responsiblefor booking flights, changing reser-vations and providing customer ser-vice; they earn about $7 an hour.The attridon rate of welfare hires atUnited are half that of employeeshired through classified ads or otheravenues.

"The low attridon rate may be afunction of welfare recipients havinglittle previous work experience,"Gilday said. "Working for a compa-ny for six months does not show upwell on a resume, so welfare recipi-ents understand they need to staywith a company for a few years toestabhsh a work record before mov-ing on."

Not all welfare-to-work recipientsare hired by large corporations;Miami-based Willow CSN is a pri-vate network communicadons com-pany specializing in handling theoverflow volume for customer ser-vice and telephone sales call centersthrough a netw ork of self-employedhome agents. Its clients include St.Petersburg, Fla.-based Home Shop-ping Network Inc.

Willow works primarily with thedisabled and others forced to stayhometo care for sick reladves, for

Need a testkitchen in Topeka,

a pollster inPoland?

examplebut beginning earlier thismonth it also recruits former wel-fare recipients from a training pro-gram run by the Miami/DadeCounty Public School District. Eachhome agent must work with at leastthree clienK and provide 10 hours ofwork per week. They can eam up to$17 an hour.

Elsewhere, Sprint Corp. for thepast year has worked witb theMetropolitan Community Collegesin Kansas City to train welfare re-cipients for work. The six-week pro-gram, underwritten by Sprint andother local companies, teaches for-mer welfare recipients the basics ofcall center management and tele-phone skills. Sprint made a commit-ment to hire as many graduates ofthe program as it could, and of 60

who have graduated from the pro-gram so far. Sprint has hired 30 forits call centers.

In total. Sprint has hired 180 for-mer welfare recipients for its callcenters in Kansas City, from thisand other programs. The customerservice posidons pay $7.15 per hourto start with a 50-cent raise after sixmonths.

"I've found the biggest obstacle tocompanies hiring welfare recipientsis dispelling the myths," said DarryllFortune, manager of strategic com-municadons at Sprint. "When hired,they face the same challenges asother employees, from child careand transportadon to soft skills suchas dress and office communicadons.But they deal with those challengeshke anyone else would."

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