It was to be, for all intents and purposes, an innocent part-time job at a call centre, to help me pay my way through my university degree.? It would turn out to provide a fascinating insight into the world of marketing? and some of the techniques they employ.? What I got was a lesson in the science of marketing.? What I saw has led me to question the most basic assumptions of our society.? The marketers will tell you that they are just finding ways to satisfy the desires of the people - but is this an accurate picture?? Or are they just implementing new and more insidious forms of control?
It was a call centre much like any other I suspect.? A sea of cubicles in which seasoned telemarketers, collections agents and sales reps plied their trade.? You got used to the enormous din after a while - though on my first day I could hardly think it was so overwhelming.? The company was called AVCO finan
? My? boss placed me in an empty cubicle and ran me through the basics of the telmarketing software.? As the call dialed out, the information about the customer appeared automatically on the screen, so I could address them directly and with the illusion of familiarity.? It’s an interesting thing how they come to get that information - but I’ll get to that in a bit.
I was a bit worried that I would have to sell things - and I expressed this worry to my boss.
‘No - don’t worry about it,’ he said reassuringly.? ‘This is not a sales gig.? If anything it’s just a way AVCO says hello to its customers.? That’s why we call it the “Welcome Call”.
He had a script for me to read.? Most calls took? no more than thirty seconds.? The script went something fairly close to the following:
? Hello <customer’s name>,
My name is Dan from AVCO financial services.? You recently purchased a <product name> from <retailer name> using the AVCO interest free loan.? We’re just calling to make sure that you’re happy with the product and the loan.
<listen to customer response>
Is there anything about the contract you would like explained?
<listen to customer response>
Ok, thank you for your time.? Welcome to AVCO financial services.? We hope you enjoy our service.? We thought we might also just check to see if we could interest you in a personal loan.
<if no, end call - if yes, take customers details, then end call>
And that was all there was to it.? I read this dutifully several hundred times a day for four hours from 4 to 8pm.? It was a terribly monotonous job - but it paid the bills while I was studying.? Basically the idea was that a person had gone to their favourite retailer and had bought some big ticket item that was beyond their current budget.? So the retailer would offer them a 2 year interest free loan.? The customer would have to fill in a survey form which was then faxed to AVCO - who would fax back an approval or denial on the spot.? With the loan approved - the customer could walk away with their product, and not have to worry about paying any interest for two years.
I didn’t think there was anything interesting to this process for quite some time.? But after a while I began to wonder a little.? Some customers would ask questions - fairly obvious questions - and I began to wonder why we’d never been given the answers.? For example - some would complain about the product itself.? But I had no idea how to handle it.? ‘Just refer them back to the retailer,’ my boss said.? But then why were we asking - as though there was something we were willing to do about it?? Some customers would actually ask questions about their contract - but again, we had been given no actual training on how to answer them beyond telling them how long the contract duration was for - if it was a question of any substance I was totally stumped.? So why were we being told to ask the question - when it didn’t seem like we were really there to answer it?
There was also the issue of the last question on the script - the one that asked if the customer was interested in a personal loan.? In the script it was given no emphasis whatsoever.? It was just tacked on the end - seemingly as though we didn’t care at all in the asking.? But we soon learnt that our bosses cared very much.? Whenever we had a person express interest in a personal loan, we took down their details and forwarded the lead to a branch, which would then follow up on the sale.? We were given a target such that 1.5 percent of our calls had to be leads.? Those that failed to meet that target would get sounded out, and those that continually failed would be told to move on.? We were all casual staff so it wasn’t hard to get rid of us.
Over time however, our boss grew more comfortable with those of us who had stayed around long enough - and began to share with us some of the details of what the “Welcome Call” was all about.?
? More than anything else, it was designed to sell personal loans.? AVCO made little to no money on the interest free loans themselves.? The key was in finding people that would be interested in personal loans - for these AVCO charged the highest legal interest rate - 29.9 percent.? To do this they used a technique known in marketing circles as Market Segmentation.
Market Segmentation is a process marketers use to divide people into groups.? Many different factors come into play - age, income, assets, time spent in current address, number of jobs worked in the last 10 years, hobbies, recreation, interests - the list goes on and on.? The idea is to build up a detailed picture of what sort of person you are - so they can determine whether you are suitable for the product they want to sell.? In this case, they wanted to sell their personal loans.? So they used market segmentation to determine who would be the best candidates.? Because of the exorbitant interest rates they charged, they wanted the sort of people who were considered to be too much of a credit risk by the banks.? AVCO was willing to take on that risk - but charged the huge interest rate to cover it.
You are almost certainly asking at this point where they get this sort of information.? How do they learn so much about you?? Well - there’s a number of ways.? The easiest is to just buy it from the banks and the credit card companies.? Every time you use your credit card - the record of the purchase is recorded.? They know what you bought, where you bought it and when.? So they can build up a quite a detailed picture about what sort of consumer you are.? ? The banks force you to give over that sort of information when you get a mortgage or whatnot.? Make no mistake - they ARE selling this information.? And they sell it for an enormous amount.? The Gramm-Leach-Bliley Act in America permits consumers to opt out of the process whereby financial institutions sell their data - but consumers have to be pro-active about informing all their institutions, and fewer than 5 percent do.? Here in Australia - there are no laws preventing institutions from selling the information.
AVCO didn’t get it’s market segment data in this way.? Why?? Because it was too expensive.? And that’s why they developed the Welcome Call process.? When the customer goes? in to buy their product from their favourite retailer, they are asked to fill in the application form for the interest free loan.? The customers are told that this is the application form for the interest free loan - but it’s not.? It’s a market segmentation survey - designed to determine who would be a perfect candidate for a personal loan.? The data was then analysed and those that were considerd perfect candidates would later receive a call from the Welcome Call team.
And yes - those who did not fall into the targeted market segment would not receive any call at all.? Only those who would be eligible for the personal loan would receive the welcome call.? It had nothing to do with welcoming them at all.
So why the ruse?? Why dress it all up as a Welcome Call?? Because when people think it’s a marketing exercise of any sort - they switch off.? But if it’s a “Welcome Call” - a friendly customer service call - then they don’t mind at all.? And most people were indeed duped.? I frequently was told by customers how they were impressed that the company would go to such efforts to make them feel welcome as a customer.? Once I learnt the secret to the process - you can imagine how awful I felt every time I heard a customer say it.
So there it was.? It was cheaper for AVCO to lose the income they could earn on the money given out in interest free loans, plus the cost of the staff, the systems - and everything setup around the welcome call process - than buy the information they wanted from the banks.? Gives you an idea of how much the banks charge for it.
One time I had it out with my boss - and told him how I hated being involved in such an un-ethical sales process, the way AVCO manipulated people into handing over their personal information, the way they took advantage of their lower socio-economic status to suck them into personal loans with awfully exorbitant interest rates.
In response - he told me that as marketers they were just breaking down the barriers to exchange, that un-naturally prevented AVCO and the consumer from doing business.? We don’t tell the people what they want - or force anything down their throat, he said.? They are already the sort of people that want a personal loan - our job as marketers is little more than the job of just finding them, and letting them know that we have a product that they want.? There is nothing insidious about it at all.
Some take the argument further and claim to the effect that the western economy depends on the ability of marketers to find and reach their target markets - to encourage consumption and keep the wheels of capitalism turning.
Is this true?? Or have they indeed found new ways to control and manipulate us?? Is it necessary for the corporations to have access to this data?? Is the ideal of an individual unassailed by the logic of the corporations and the marketers just a silly pipe dream?
I get the feeling there are no easy answers.
10 Comments
The Google ads on your post sell personal loans
ah so they do.
That’s too much irony for me - so I’ve taken them down.
There is nothing at all wrong, immoral, or unethical about this — it’s just savvy business. And to be honest, it sounds like fairly gentle marketing compared to some others. Don’t worry about it so much — you didn’t do anything wrong by particpating.
I disagree with David - being savvy business or fairly gentle marketing doesn’t prevent the practice from being unethical.
The script they were asked to read said, “We’re just calling to make sure that you’re happy with the product and the loan.” which is clearly a lie. Lying is ethical in some circumstances, but roping in trusting people to high-interest loans isn’t one of them.
I think that posts like these go a long way toward helping people protect themselves from being manipulated and taken advantage of by marketers. Another good resource is “Influence” by Robert Cialdini. It’s very interesting to go into sales situations and know exactly what compliance techniques are being exerted on you.
Very interesting article - if very naive!
Rather than think of it as being unethical, think of it as being the price for getting something on a very low interest rate.
If these customers didn’t want to get their information into the system, they would pay with cash. Because they decide to use someone else’s money to pay for whatever goods they bought (which is exactly what loans are!) they need to pay for that service! If the credit facilities were not available, the cost of the goods would be higher due to the reduced sales per item (supply and demand), many more people would be living a much less comfortable lifestyle and you wouldn’t have had a part time job!
What you have experienced is the very basic version of telesales - I used to write the scripts for a leasing company and it used to take days working out the exact wording to use to get the very best response.
There is no such thing as a free lunch!
I had a girlfriend who financed a car at 29.9% It was a blessing for her to be able to get one at all. She had written a bunch of bad checks a few years prior and had horrible credit. She paid off the car early, got a credit card and was responsible with it and now has a good credit score. It took having someone willing to risk loaning her enough for a car to get her life back together. Those high risk loans come at a premium and it is an individuals choice whether or not to get one. I personally would never need to borrow money at that rate, but I see nothing wrong or underhanded about selling loans to people who have no other option.
Thanks for the comments everybody.
I guess I find your statement Oli - a little too easy-out. While the post was made in a spirit of naivety - I tend to think there are many that would share it. Most customers do NOT know that their information is being used in this way. They do not understand that they are trading this information for the interest free loan. And you guys know perfectly well that if you told them that this was the real nature of the transaction - they would not allow that transaction to go ahead.
To phil and others - I agree that credit facilities should be available to those that are rejected by the bank. What I find disturbing is that the marketers play on the lower socio-economic status of these people. They are fully aware that these people are much less likely to be well-educated - and therefore less savvy to their methods.
They are also more aware that such people are less likely to be skilled at managing their debt - and more likely to default. This debt is either collected in house - by very aggressive collections agent, or sold at profit to outsourced debt collection agencies.
AVCO had a bad reputation here in Australia before it was bought by GE Finance. There is nothing here that is innocent at all. Here is the story in full:
AVCO penalty credits consumers
The Queensland Supreme Court has ordered Avco Financial Services Ltd to pay $443,500 for breaching consumer credit laws, Fair Trading Minister Margaret Keech said today.
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Tourism, Fair Trading
& Wine Industry Development, Margaret Keech
tourism@cabinet.qld.gov.au
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19/07/04
Mrs Keech said the result will be of great benefit to Queensland consumers as the money would be used to fund consumer programs.
“The penalty is Queensland’s share of a $2.5 million payment negotiated by all states as part of national action against Avco for failing to comply with consumer credit laws over an 11-year period,” she said.
“The money will be paid into the Consumer Credit Fund, which collects fines imposed for breaches of the Consumer Credit Code and court costs awarded to the Office of Fair Trading.
“By paying it into the Consumer Credit Fund, it can be used to help fund Queensland consumer education campaigns about financial literacy, and credit compliance and policy development activities.
“We are committed to increasing Queensland consumers’ awareness of their rights and responsibilities when using credit, and this court result will certainly help us do that.”
Avco has been ordered to pay the amount within 90 days from today.
“This is one of the largest credit payouts made in Queensland, and sends a clear message to all financial institutions and credit providers that they must meet their legal obligations under consumer credit law,” Mrs Keech said.
“Avco Financial Services Ltd, which was taken over by GE Capital Finance Australasia in 1999 and operates as part of that company, is now paying a hefty price for failing to do so.”
Mrs Keech said Avco failed to comply with the consumer credit laws under the previous Credit Act 1987 during the course of operating a money lending business in Queensland during the 1980s and 1990s.
“Avco was a large provider of personal loans to Queenslanders, principally lending to consumers for cars, boats and home renovations,” Mrs Keech said.
“It committed a range of breaches under the Credit Act, including failure to disclose credit charges, management fees and commissions, and overstating the discharge amount of contracts.
“Almost 255,000 of more than one million offending contracts were written by Avco in Queensland between 1989 and 1996. The Supreme Court decision relates to Queensland’s share of these contracts.”
Only morons repeat such sorry propaganda as “there’s no such thing as a free lunch.” Of course there’s such a thing. That’s just propaganda pushed on everyone by capitalists. There has always been such a thing. But if people were to believe it at all capitalists know that the practices like the ones you’ve described here would suddenly be identified as the real problem - not anyone getting something for free. You don’t think there’s such a thing as a free lunch? You ought to learn a little about what corporations get from the government in America every year in terms of tax write-offs, subsidies of every stripe, etc. It’s amazing that despite the fact that the rich get richer and income disparity grows - all of it quite easily demonstrated by cold objective data - there are morons who go around repeating the “money makes money” propaganda of the far right — and quite often the very people who are getting screwed the most! Hysterical.
We say a salesmen has sold his soul. Anyone who was done a sales job knows this. Some folks are more comfortable with it than others.
I, for example, sold telephone service to people who thought they were talking to their current phone company. Many of the buyers were almost intoxicated sounding - either retarded or just plain old. The verbally-coherent would call me a jackass and hang up. Yes, poor + stupid = sale.
Selling makes you feel like everyone else around you is a fucking idiot.
I’ve never suported the marketing, specially the enterpriseal one.
Many people are simply USED in this whole thing. I agree with anon a “salesman has sold his soul” on the other side it also depends of the intentions… a company may seem friedly and be very crude, but also a company may seem very crude and be friendly…I just hope I get to work in the second type. on the other side we are dependent on the companies and marketing in some way. Humans have developed a certain form of symbiosis with the big enterprizes, normal people see the advantages, while they don’t care for the personal information. However as for the rest of the people that do care about what happens to their personal information they should allways be alerted about what happen to the information they give away, in exchange for some benefits.
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