Doorstep selling has undergone a revolution in the UK during the past five years. Consumers, it seems, are increasingly demanding opportunities for direct communication with the companies behind the products and services they use.
A new report reveals that home calling – whether to sell consumers a product or service, or to distribute marketing material or collect data on likely purchasing – has grown significantly in recent years. A driving force behind the home calling sector are newcomers the utility companies.
The report, Talking to Customers at Home, found that in 1997 utilities were already accounting for 13.4 per cent of direct sales, as reported by members of the Direct Selling Association, and were largely responsible for an 18 per cent growth in total direct sales to £1.27bn (£58 a year per home).
Eddie Phillips, managing director of CPM, the outsourced sales force company which commissioned the report, argues that home calling has grown in importance for a variety of reasons.
“Customers have less spare time than ever before, but have more choices to make. At the same time, companies are finding it harder to reach them, as households fragment and the number of media available mushroom. It’s harder than ever to pin your customers down, and when you do, there’s more competitor noise to combat,” he says.
The research found that the 500,000 people working in the UK direct selling sector were responsible for 85 million retail transactions in 1998. The real figure will be higher, as Direct Selling Association figures do not include a number of industries which are actively growing home calling – for example, financial services companies which are reinvesting in home callers to complement other communications channels.
While the amounts that consumers spend on purchases sold by home callers tend to be small – 43 per cent spend less than £10, while 41 per cent spend between £10 and £50 – they are often on items that have high repeat-purchase levels.
But not all purchases made on the doorstep are of low value. As CPM points out, the growing popularity of home computers (which in itself is likely to stimulate direct from home purchasing over the Internet) is boosting consumer take-up of home computing services. Many computer companies, for example PC World, now offer in-home technical assistance.
The possibility of having someone call at the house to teach how to use the systems – particularly with high-tech products – is an enormous draw to consumers. A Gallup survey found that one-third of consumers would like to have digital TV explained to them, and nearly 30 per cent would like someone to talk them through how to use a home computer. Four in ten would like someone to call round and explain what is available in gas and electricity, while 32 per cent would like help with their telephone service.
Many marketers assume that home calling focuses on and is more used by older age groups. Indeed, the study cites research from Westminster Business School which indicates that the over 55s are very familiar with the majority of companies active in home calling.
However, Gallup research suggests that younger consumers, particularly the hard to reach 16 to 24 year old age group, are also very receptive to the idea of home calling. For this age group, the main plus point is the convenience factor.
CPM argues that home calling offers marketers a number of advantages. It excludes the competition; builds customer satisfaction and drives loyalty building; provides a way to measure marketing effectiveness; allows for data collection; puts a face to an otherwise anonymous brand; provides the opportunity for consumers to experience products; and allows for targeted discounts and incentives.
However, CPM also acknowledges that direct selling on the doorstep does have some negative connotations, and the real challenge for the industry is to overcome these. Any company which plans to adopt a home-call strategy needs to ensure that its programme is properly resourced and managed, otherwise the results could be disastrous. The extremely personal nature of this type of customer contact can cause immense damage to brands if not pursued in a sensitive way.