The Advantages of Toll-Free Numbers
The benefits far outweigh the costs for marketers
By Michelle Tirado
for Office.com

April 19, 2000 — No matter where an ad is placed — TV, radio, magazine or billboard — a toll-free number is sure to boost response rates. Marketers who use toll-free numbers know this, but many marketers have no idea how much business they are missing out on by not using the toll-free strategy.

Judith Oppenheimer, president of New York-based ICB Inc., a purveyor of news, intelligence, analysis and consulting about toll-free numbers and dot-coms, says toll-free numbers are a major asset for business-to-consumer marketers.
  "800-FLOWERS spent $2 million in cash to buy a business with $7 million in debt. That means they spent $9 million on a phone number. But look at what it's done for them."
  Judith Oppenheimer, president
ICB, Inc.
 
"The 800 number by itself increases responses," Oppenheimer says. "There are people out there who don't have them and, often times, that's because they're accustomed to the thought that they're going to have a massive phone bill."

The reality is that rates for toll-free services, which now include the prefixes 888 and 877, have dropped right along with the rates for other kinds of long distance service. Not too long ago, a company would have paid between 20 cents and 25 cents per minute for an 800 call. Today, they pay as little as 7 cents per minute.

Toll-free numbers may not always make sense for business-to-business advertising, however. Winter Haven, Fla.-based HydroEnhanced Laboratories, for example, has a toll-free number but does not display it on the ads it buys in magazines like Entrepreneur and Business Start-Ups. Nor is the number included in the firm's direct mail packages.

Matthew Stichter, president of HydroEnhanced Laboratories, a domestic water management company, says management battled over the issue when they obtained the toll-free number earlier this year. Ultimately, they decided to leave it out — after all, anyone truly interested in becoming a certified dealer through its program would be willing to make that first call with their own dime.

"It's a screening process," Stichter says, "especially for business opportunities, when people have a tendency to call and just kind of kick the tires. If we put a 50 cent phone call on there, it keeps some people who are not very serious at all from just calling and getting our material."

The marketing package sent to potential clients costs HydroEnhanced Labs between $7 and $10. Understandably, they want to minimize waste by avoiding sending it to people who are not likely to make good use of it. Once a potential dealer demonstrates interest, or when HydroEnhanced Labs and a client are in dialogue, the toll-free number is used.

Oppenheimer says that, while it depends on the product or service, most business-to-business marketers can count toll-free numbers as a cost effective option. She recommends that businesses invest in one, and that they use it in their advertising.

Vanity numbers, the toll-free numbers that spell out a word or words associated with a product or brand, are seen as more of a luxury item. The ROI for having a good one, however, can be impressive.

Unless you are incredibly lucky, setting one up is not as simple as calling the phone company and asking for the rights to 800-COOKIES or 888-WINDOWS. In fact, it takes considerably more effort. The first option, and the one Oppenheimer suggests, is to call the number you're interested in to find out who subscribes to it and whether they are willing to sell it. The second option is to go through a broker who will handle that legwork (the searching and calling).

Buying a toll-free vanity number can cost a mint. "One of the more publicized purchases was made by Tickets.com, which spent $60,000 for their domain name and $1 million, plus 6 percent interest, on their 800-TICKETS [number]," Oppenheimer says. "800-FLOWERS spent $2 million in cash to buy a business with $7 million in debt. That means they spent $9 million on a phone number. But look at what it's done for them."
Related Links
ICB Toll-Free Consultancy
Federal Communications Commission
HydroEnhanced Laboratories
Michael J. Motto Advertising and Public Relations
ICB Toll Free News

An additional caveat: In 1997, the Federal Communications Commission outlawed the selling of toll-free numbers. "Which is really stupid," Oppenheimer continues. "It makes just about everybody in any kind of business at all a criminal. You can't get one without buying it from somebody."

If a company can get one, they stand to reap substantial benefits. In January 1999, Michael J. Motto Advertising & Public Relations, in Providence, N.J., compared the impact of numeric toll-free numbers versus toll-free vanity numbers in radio advertising. They ran 66 radio commercials on WDHA-FM for a Cedar Knolls, N.J.-based Nissan dealerships. Half of the ads mentioned a numeric phone number, and the other half mentioned a vanity number. Both were aired on an equal rotation. The results: The vanity number received 14 times more responses than the 800 numeric.

To gauge the pervasiveness of toll-free numbers in advertising, consider Super Bowl XXXIV. Response Marketing Group, a Burlington, Vt., consulting firm that specializes in toll-free vanity numbers, conducted a study and found that 16 percent of the commercials that ran during the NFL championship included a toll-free number, and all were vanity numbers.

Further online reading on this topic:

Direct Response in Television Commercials: Super Bowl XXXIV

Internet 800 Directory Resource Page

Vanity Numbers More Popular

FCC Document on Toll Free Service Access Codes: Second Report and Order and Further Notice of Proposed Rulemaking

FCC Toll-Free FAQ

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