Toll-free Numbers on the Internet: FORTUNE 500^SM Companies

Introduction

The use of direct response is widely integrated throughout all industries, both business-to-consumer and business-to-business. One of the most popular direct response mechanisms is the toll-free number. In the 30 years since the toll-free 800 number was first introduced, the telemarketing industry has grown from seven million calls in 1967 to about 30 billion carried by AT&T in 1999, accounting for nearly 40% of all voice calls crossing its U.S. network². In 1998, over $482 billion goods and services were sold through telephone marketing, while over $429 billion were sold through direct mail. Total direct marketing sales in the U.S. are expected to exceed $2 trillion by 2004³.

Telephone-based, interactive technologies have become one of the most powerful ways to attract, motivate, and retain customers. Telemarketing is an established, cost-effective tool providing personal, two-way communication at a fraction of the cost of face-to-face contact. Telephone media cut through the clutter of traditional advertising, offering more opportunity for consumer involvement than any other medium.

Researchers have found that a properly managed toll-free number offers four principal benefits to a company: confirms customer service orientation; reduces customer service costs; increases customer information; overcomes area code confusion. All of these factors relate to building strong, long-term relationships with customers while keeping costs low.

In addition to serving immediate prospect, customer and company needs, toll-free numbers provide a constant stream of information about prospects and customers, allowing for better database management, customer relationship management, and staffing arrangements. Knowing customer needs leads to clearer and more timely communications with them.

Consumers have incorporated toll-free numbers into their daily activities and use them for everything from ordering products to making financial transactions. Toll-free numbers are free, easy to remember, convenient, and simple to access. Ninety percent of Americans say they use toll-free numbers, with one-third of Americans making 60 or more toll-free calls per year⁴. In addition, a recent study by the Yellow Pages Publishers Association (YPPA) found that 71% of adults have made a purchase using a toll-free number⁵. Use of, and satisfaction with, toll-free numbers increases with education level, as does the propensity to order products rather than simply request information⁶. According to Bank Marketing, 86% of customers associate toll-free numbers with high-quality products, and the YPPA study confirmed that toll-free numbers convey that a company is consumer-focused.

Toll-free numbers have achieved a high level of acceptance with a broad range of consumers in many areas of the marketplace — consumers prefer to do business with companies that have one. Thirteen years ago, only half of the nation's largest firms offered toll-free numbers; today, more than 90% do⁷. More than half a million businesses and government agencies accept toll-free calls. Large businesses receive about 3,500 toll-free calls a week, compared with 260 letters or faxes⁸. 1-800-FLOWERS^TM, a business based on its toll-free number, receives over 9 million calls a year, and Priceline now gives equal if not greater weight to 1-800-PRICELINE as they do to priceline.com in their advertising⁹.

As companies continue to decrease their marketing and sales costs through the integration of technology into their relationships with customers, toll-free numbers will become an even bigger part of satisfying both parties.

Objectives

This study documents the use of toll-free numbers on the Web by companies on the FORTUNE 500^SM list. Our objective was to see how prevalent toll-free numbers were among the world's top-grossing companies, in terms of revenue. We also intended to discover which toll-free prefixes were being used (800, 888, 877 or 866), as well as which types - vanity (numbers that translate into words for easy recall; e.g., 1-800-NEW-CARS) or numeric (e.g., 1-800-639-7543).

Methodology

Data for this study was collected primarily through web research. The data represents toll-free numbers found in any area related to a specific company. Numbers attributed to divisions, subsidiaries, or products of holding companies or conglomerates on the FORTUNE 500^SM list were counted, as well as numbers to any internal department, including, but not limited to, Investor Relations, Retiree Information, Customer Service, Web Support, and Sales. The analyzed data allows for a margin of error of approximately one and a half percent.

For each company, division, or product, the following data were collected:

• Phone number
• Prefix (800/888/877/866)
• Industry
• Vanity or numeric
• Frequency of numbers found

Published July 31, 2001
Copyright © 2001, 800 Response. All rights reserved.

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