Public and Ethical Issues in Direct Marketing

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Although direct marketers and their customers usually enjoy mutually rewarding relationships, a darker side occasionally emerges. Key public and ethical issues include:

^ Irritation: Many people find the increasing number of hard-sell, direct-marketing solicitations by phone, television, and e-mail to be a nuisance.

^ Unfairness: Some direct marketers take advantage of impulsive or less sophisticated buyers. Television shopping channels and infomerciab—extended-length, direct-response commercials that appear to be television shows demonstrating or discussing a product—may be the worst culprits. They feature smooth-talking hosts, elaborate demonstrations, claims of drastic or short-time price reductions, and easy purchasing to capture buyers who have low sales resistance.

^ Deception and fraud: The Federal Trade Commission receives thousands of complaints annually about scams and frauds. Some direct marketers exaggerate claims about products and performance, some political fundraisers use questionable gimmicks such as envelopes that resemble official documents, and some nonprofit organizations pretend to conduct surveys when they are actually trying to identify donors.

^ Invasion of privacy: Critics worry that marketers may know too much about their customers' lives, and that they may use this knowledge to take unfair advantage. American Express, long regarded as a leader on privacy issues, does not sell information on specific customer transactions. However, Amex found itself the target of consumer outrage when it announced a deal to make data on 175 million Americans available to any merchant who accepts AmEx cards. The uproar prompted Amex to kill the plan. America Online, also targeted by privacy advocates, wound up junking a plan to sell subscribers' telephone numbers.7

People in the direct-marketing industry are working on addressing these issues. They know that, left untended, such problems will lead to increasingly negative consumer attitudes, lower response rates, and calls for stricter government regulation. In the final analysis, most direct marketers want the same thing that consumers want: honest and well-designed marketing offers targeted only to those consumers who appreciate hearing about the offer.

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