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Phone Spam and Scams Part 1: Is the Business Impact Real?

Here at Whitepages Pro, I push the team every day to keep our ear to the ground, listening to the market. We make a point to get our product managers and marketers out in the field on a steady basis. We expect our account managers to be routinely touching their customers. The sales teams are all expected to be out “touching the market” every week. I’m right there with them.

From all those touch points, one message has been building to a crescendo over the past three to four quarters: Phone spam is directly impacting businesses across the board. I’m personally hearing it (as is the market-facing team at Whitepages Pro) from senior executives across our vertical markets.

What’s driving the growth in phone scams and spam?

We see two underlying drivers behind this massively growing problem:

  1. The cost of a phone call is being driven to zero. Whether it’s using Google Voice or IP communication services like Skype or a wireless plan with unlimited mobile-to-mobile calling, the cost of a phone call has become negligible. Just like email spam, this allows the spammers and scammers to pump out huge volumes of voice and SMS communication at virtually zero marginal cost.
  2. Phone numbers can be obfuscated via voice over Internet protocol (VoIP) communications. In the same way that email spam schemes programmatically change IP addresses by use of proxy servers, the same can basically be replicated in the voice/SMS communication market by the growing adoption of non-fixed VoIP numbers and purchasing large blocks of those numbers through a carrier or reseller for less than proper business uses.

Ultimately, the playbook for phone spammers looks a lot like email spam. In certain ways, however, due to the synchronous, live communication offered by the voice communication channel compared to asynchronous email communication, phone spam can have larger impact on businesses and be more problematic for consumers.

Business Impact of Phone Spam

Based on our discussions with executives, some very tangible and hard dollar impacts follow below, and they continue to be exacerbated as the phone spam problem grows.

  • Consumer-facing apps and products: The customer experience and associated brand reputation of almost any business offering a communication-type app or product is now being consistently impacted, with many negative implications.
  • Direct-response marketing (DRM): Spam calls are driving enough volume to inbound campaigns that marketing metrics and the efficacy of campaigns are being questioned by the execs holding the purse strings. This phenomena is causing C-suite decisions to begin pulling back spend from the DRM channel.
  • Click-to-call platforms and agencies: Similar to my DRM point above, certain industries pay large bounties to get a lead on the phone since a live person is much more qualified than an email address lead, especially with the growth of electronic noise in the marketplace. If we look at an advertising segment like the automotive industry, where even smaller brands have annual advertising budgets in the billion dollar range to drive interested buyer leads to call local dealers, imagine the industry ramifications if 10-25% of those budgets start being withheld due to the noise in marketing metrics and the associated drop in efficacy of these campaigns due to massive growth of phone spam.
  • Financial Services: From insurance polices to mortgage financing to credit card applications, one the largest buyers of qualified leads across the board is the financial services industry. There is a pervasive feeling, backed up by solid data, that phone spam is negatively impacting marketing metrics but also wasting huge amounts of agent time in contact center operations. Not only are the marketers in this industry becoming concerned, but so are the risk management teams.

In all of these industries and others, phone spam is having a hard dollar impact that hits both the top and bottom lines in our markets. At Whitepages Pro, we think about these implications on a constant basis. Our job is to better outfit our B2B customers with not only data, but clear decision-making mechanisms that will protect their businesses from phone spam.

In my next post in this series, I’ll share a little about the breadth of our experience with phone spam and also dive into the signals we have feeding our Phone Spam Protection Service.

Till next week,
Rob

Read the rest of Rob’s series about Phone Spam and Scams. Part 2 and Part 3

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