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Catalog Choice Executive Director Chuck Teller Talks Opt Outs And Consumer Choice

Cataloging is not dead, but choice is alive. -- Chuck Teller, CatalogChoice

Chuck Teller is Executive Director of CatalogChoice.org , a rapidly growing catalog do-not-mail service. In this podcast, Chuck discusses his non-profit organization and how it impacts the catalog world. Listen to podcast: Chuck_Teller_Interview.mp3

catalog choice Alan Rimm-Kaufman: This is Alan Rimm-Kaufman and it’s great to be here with Chuck Teller of Catalog Choice. Chuck Teller: Hi, Alan. Alan: Hi Chuck. Can you tell me a little bit about Catalog Choice? Where do you come from, what are you doing? Chuck: Sure. I’ll just start with the history of how it started. The concept for Catalog Choice came out of the Overbrook Foundation, a family foundation that provides grants in various areas of environmental aspects. The sustainable production and consumption group within Overbrook had been funding areas around sustainable wood and paper production and consumption. One of the board members came up with the notion: what if we looked at the beginning of the "pipe", around reduction, rather than simply the end of the pipe around recycling and look at the area actually about catalogs and specifically unwanted catalogs. catalogs So they went and did some research about just trying to understand if I was a consumer, you know, how straightforward is it for me to request that I no longer receive a catalog in the mail and part of that research, they found that it really was not very straightforward. We rarely found options on merchants’ Web sites to facilitate this communication and so, you know, they reached out to some resources and said, you know, “How can we make this work?” We actually also looked around in the marketplace and we found that there was a couple of companies who were offering the service for a fee to consumers, that they would go through the process of facilitating the opt-out request and we thought that it really should be free. You don’t pay to get on a list, so why should you pay $20.00 or something to get off of the list? Alan: Sure. Chuck: So that was the the start of the project in ’06, early "07. We did a lot of research in ’07, put together a team of skilled software developers, looked at the business process around the whole merge-purge and built a software application that is unique in the aspect that it’s for consumers, that allows consumers to come in and in a straightforward way kind of set forward this request. But I also decided that you really need to build something for the merchant community for the industry so it’s straightforward for them to accept those requests and to feed it into this merge-purge process, so we built a free service for consumers as well as a free service for merchants to facilitate this communication. Alan: How many consumers have opted out of one or more catalogs with you? Chuck: We actually publish that statistic on the front page of our site. Today there are 683,000 registered users at this moment. Those users have made 8.9 million opt-out requests to date. We launched this October 9 of 2007. Here we are in late March. What we’ve seen is that there really is a pretty significant pent up demand for this type of service. Alan: Gaining two-thirds of a million names in five months is dramatic growth. Chuck: Yes, and we don’t do any advertising. We basically put the service out there. The blogosphere, in fact, has been a tremendous areas for the promotion for the service. Yahoo! has this service that will let you look back at how many links come to your site. The last time I looked a couple of weeks ago, there were over 32,000 backlinks to Catalog Choice. We’re seeing the bloggers on a regular basis, once they discover the site, write about it ’cause they think it’s a great thing. coolibar-cover.jpgAlan: There's a parallel to the Do Not Call list, which was quickly adopted because it met a need in the population. Chuck: Let me just comment on that because it’s really important. I think that this is much more complicated. There was a kind of viral growth around that. One thing that I just want to stress is that we built the service around the whole notion of unwanted catalogs. For my household, your household and many throughout America, there are many catalogs that people want to receive and continue to receive. We’ve heard from users over and over again that they specifically are just making these requests for those catalogs that they don’t want. The ones that they do want, they leave alone. Alan: Two weeks ago at the NEMOA conference, most of the folks in the room were catalogers. One of your colleagues was there representing you guys. There was a little bit of Q&A with a speaker from Williams-Sonoma which got a bit heated. The room wasn’t receptive. How would you describe Catalog Choice’s relationship with the catalog industry? Chuck: Catalog Choice is striving to have a collaborative relationship with the industry. We work hard every day reaching out and having discussions with merchants. There are over 150 merchants who have actually signed up for the service, who are accepting the names, working it into their overall process. We have active conversations with many, many other merchants. So, on one side, it’s positive. On the other side, there are some merchants who, for various reasons, don’t like the service that we’re providing and are really kind of voiceful about that. What we hope that the tension, if you could say, is a byproduct of a lack of understanding and a lack of knowledge and we’re trying our best to truly communicate on a daily basis what our mission is, what our objectives are, what our priorities are. To the degree that merchants come up with ideas or have comments about how we can improve the service, we rapidly push those into our product. We put new releases of this product out every week. A couple weeks ago, we updated a whole bunch of the copy on the site. We rolled out a service this past week that allows you to upload a PDF or a link to a rich media component of your catalog. So I think that with time we’d hope that more and more merchants will understand that we provide a way for the merchant community to really communicate with the consumer community and to meet the consumers at the spot where they want to be met, which is many consumers do not want to receive a paper catalog in the mail. We provide them a way to kind of set forth that request. Alan: I recently moved. Using my old address as a test, I opted out of some catalogs that I may or may not have been receiving at my old address. Does CatalogChoice follow these requests through NCOA? dance-cover.jpgChuck: To the degree that you fill out an NCOA request, that will be taken care of. Alan: So you are running list hygiene against your list? By opting out at my old address, I might have opted out at my new address? Chuck: Let me be clear. We don’t have access to the NCOA list. We provide the name and address as you enter it in to the merchants and the merchant. To the degree that the merchant takes your name and address and run it through NCOA and find that you’ve moved, then they can make that request. Alan: But CatalogChoice doesn't NCOA. Chuck: Right. We look to the merchants. We provide the request to the merchants and then the list flows into NCOA. Alan: As I opted out of these catalogs, I did see there was a space for a key code or a customer number. That’s reassuring. If I have that catalog in front of my with a key code, it’s pretty clear I received it. How do you know that the person’s actually the person – that I’m not unsubscribing my neighbor or some such thing? Chuck: Well, I think there’s two questions there. Many consumers are using the site with the catalog in hand. That’s the way we actually encourage everybody to use the site. Some are going in and making the requests, like as you just did, for catalogs that you believe that you’ve received, you’re being honest about your request there and you may not want to get it. So when we send the list on to Catalog X and you’ve actually made this opt-out request, if you haven’t received it, simply you’re saying to them that as a prospect you do not want to receive this. We do not facilitate a blanket opt-out request. We actually encourage you to go over to the DMA and put your name on the mail preference service that they run if that’s what you want, if you do not want to be mailed ever as a prospect. What we’re focused on is a title-by-title approach. Alan: But to the case of where I am opting out a neighbor… Chuck: Right. So let me answer your second question. It’s one thing for you to go in and say, “I used to live at this address and it’s my name and I want to make an opt-out request.” The second question I think you’re saying is: what about the condition about Alan coming into the service and entering Chuck Teller’s name and my mailing address and making this opt-out request? That’s against our terms of service and that kind of activity is not tolerated. crateandbarrel-cover.jpg To the degree that that type of activity is identified, we have the right to delete the account, the user who’s doing that type of stuff. We could block their IP address in all sorts of ways so they cannot engage in fraud. That’s illegal. We do our best to track these kinds of things. To the degree that users have multiple names and multiple addresses inside their account, we do monitor those to some degree looking for these kinds of conditions. It is difficult to identify at its surface, so we look to the merchants to assist us in identifying what might be patterns that are unusual. I think the real area that people have a concern about is not if you make an opt-out request for me and something that I don’t receive. What I’ve heard is a situation where a merchant is concerned that a competitor would come in and make these requests on behalf of the competitor’s best customers assuming that the competitor’s best customers may be good customers of a given catalog. Is that the scenario that people are focused on here? Alan: That concern was raised at NEMOA. Chuck: Clearly, Alan, that’s fraud to do that and it’s against our terms of service. We do monitor IP addresses looking for these kinds of things. To the degree that these kinds of practices are identified, we can easily reverse the request inside of our service and move forward. One things is to recognize is that in order for a request to be forwarded from our service on to the merchant, the user needs to complete a round-trip email verification. You sign up for the service. We send you an email to your given email address and you need to click back through and verify that you are who you are and you’re accepting the whole terms of service. To the degree that people would go in create fake email addresses to do this, they are breaking the terms of service. That’s against the law. That’s the approach we take. We would hope that an industry would not kind of go back and forth against each other in that way, because I don’t see – we don’t have any indications that consumers are doing this in spite to their neighbors. Alan: What’s your relationship with the list co-ops and the list management houses? Chuck: That’s a good question. We actually have had limited interaction with the list co-ops. Prior to the launch of Catalog Choice, we did some interviews with some of them and talked about the service we were designing and they were intrigued by the service. We don’t have any formal relationships with them. We are focused at this point in time that the mail preference decision is really between the consumer and merchant and – but to the degree that the relationships mature within the industry, we think that we can have some really positive relationships with list co-ops. Alan: You should. You should be talking to the co-ops. Chuck: We have reached out to them in some degree. It really starts with the merchant. They’re service providers to the merchant, so we really need to come to them with merchants in hand. We are building those relationships vis-à-vis the merchant relationship. Alan: I’m really glad you guys capture key code. I’ve spoken to several mailers who have worked with you guys, who have received files from you guys, and processed those files. When you provide a name, address and key code, it’s pretty clear that the opt-outs is someone’s intent. Some mailers I spoke with, round numbers, half of the Catalog Choice inbound file to the merchant matched to acquisition names, non-housefile names. That made sense, as these particular mailers were mailing about 50 percent prospects. These are consumers saying, “Retailer X, you sent me a book and I’m not interested in that.” The really interesting thing from my point of view is when you had 12-month house file names, active house-file names, of people that the catalog would consider active, loyal, best buyers and these folks with a key code in hand (so it’s 99 percent probably they legitimate), and these consumers are saying, “Don’t send me the book,”. Catalogers will say, “We don’t want to mail folks who don’t want our book.” And I think what they really mean is "we don’t want to mail people who won’t order from our book". alloy-cover There's this huge, huge fascinating issue of people who respond to catalogs, are profitable for the catalogers, respond at a 1 or 2 percent response rate, but yet they don’t want the book. Can you comment on the implications to catalogers when a six-month active buyer tells the mailer they want to opt out, using your service? Chuck: I think you framed that correctly. There's a mix of users, many are prospects, someone who has high recency, frequency and monetary value gets a lot of prospecting, right? Alan: If they have recency, they’re on the house-file. Chuck: Well, you know, right. People get a lot of prospect catalogs and they’re coming and using the site on a regular basis to opt out of those. To get to the point of your question is “What about the active buyer?” We've focused on the desires of the consumers to set forth their interests. We’re only promoting the notion of opting out of unwanted catalogs. We actually promote a series of paperless shopping approaches --whether it is a link to the merchant’s site, or the uploading of a PDF version of a catalog pointing to your rich media version of the catalog. We’re making these options available, so to the degree that you’ve got someone who for whatever reason that consumer is making, they don’t want to have this mailed to them, they now have an account. The relationship remains and they can come and make their choice. They never really had those options before and in fact if they went to the merchant’s site or called the customer support line and said, “Please don’t send me a catalog,” the relationship is actually kind of totally broken. Here, at least, there remains a connection with that relationship. We let you take notes about a given catalog. We’re considering a whole bunch of other features that will help you organize those catalogs that you actually like to buy from. Alan: Fast forward five years. Is the catalog industry as we know it today dead? Chuck: I don’t think that it’s a black and white situation, but my answer to that would be no. There are many people who like getting a catalog and our site continues to support the notion of people choosing the ones that they want to get. In fact, we will be very shortly adding the ability to opt in to a catalog should you want it. At the same time, there are many people who don’t want to receive them. What we’re about is really supporting choice and respecting the consumer’s right to say, “This is what I want to receive in the mail and this is what I don’t want.” So we’re really focused only on unwanted catalogs and if you look at this and I mean you know better than I about the size of the mailings of some of these organizations. You know, I believe some of them are, you know, mailing millions of catalogs… Alan: Tens of millions. Chuck: …tens of millions for any given merchant that we have in our service. We’re talking about, you know, for the vast majority of merchants, you know, a couple of 1,000, 10,000, 20,000 names. That is a high number for many of these merchants of consumer who have requested to please not send me this catalog. Some of these opt-outs are deceased. Some of them are receiving more than one catalog. Some of them are saying, “I only want to shop online with you.” Some of them are saying, “I don’t like your products.” And some of them are saying, “I’m making a choice as a consumer that I don’t want to receive this catalog because of my environmental ethics.” And each and every one of those options are truly legitimate and we believe that they should be respected. ballarddesign-cover.jpg So to answer the question, no, cataloging is not dead, but choice is alive. We see choice all over the world. Alan: Choice is alive. I like that. It truly is. Chuck: It is. Choice is alive It’s alive in the way you watch television today. You don’t have to sit there and wait for the TV Guide to find out exactly when the show shows up. You could put it on TiVo if you have that service. Alan: Choice is alive and advertising is dead. You can TiVo out the marketing. Chuck: That’s one, but even more importantly where advertising is truly alive is on the Internet where you watch TV. You can go to YouTube or you can go to various video channels throughout the Internet where advertising is alive as it could be but where consumers can decide when they want to watch something and what they want to watch. And it really is about choice and it’s really about a choice that can drive respect from the consumer standpoint, efficiency into the marketplace, so I think if we understand and embrace choice, this can be a good thing for everybody. Alan: Something discussed at NEMOA was some concept of a Catalog Choice widget that retailers might be able to put on their site to have that third-party opt-out. Is that something that’s under consideration? Chuck: Yeah, very good question, so one of the pushbacks – and we heard this specifically from Williams-Sonoma and so very early on in my discussions with Pat Connolly – that they, the merchant, wants to be where the communication is going on between the consumer and the merchant, that the opt-out request is occurring in the context of the merchant’s site. So what we have done is done the work to white label or provide a hosted service of the mail preference request, so we can publish the various fields that are in our mail preference service but wrap it with your branding, your navigation, your header and your footer. So the consumer comes to your site. There’d be a link on the bottom in your footer that’s next to the one that says “request a catalog.” There’d be another one that says “mail preference.” You can click that. You could come in and walk through a wizard much like what we’ve already built in our site that says, “Tell me your name, your address, your customer number and what is your mail preference request. Do you not want it? Do you only want email?” To the degree that we can get to a notion of frequency, we would love to get there too. We understand frequency is quite complicated, but let all that entire transaction occur in the context of the merchant’s site. Our backend engine will go and deliver the roundtrip email confirmation and take care of registering this request. It all happens in your context. Alan: Having been in the catalog industry, I know so many books are mailed, and sometimes a small number of mistakes are made on the margin. There will always be cases where people will say, “I opted out and I didn’t – you didn’t honor me.” I’m wondering if you folks have considered that if a retailer using your service if they could come into some kind of a white hat or white list notion where you would go to bat for them if someone felt that their request wasn’t being honored. I’m envisioning some sort of "Catalog Choice-certified, good guy merchant seal" such that if someone says, “Hey, I tried to opt out of Sonoma and they didn’t listen to me,” Catalog Choice could defend the mailer, and say “Well, actually, they do listen and maybe it’s a maiden name, maybe the catalog wasn’t to you but was to your daughter,” yada, yada, yada. Would you ever consider a service where you would go-to-bat for catalogers that are playing by your rules? Chuck: Sure. We have a whole process in place where we can facilitate the investigation of subsequent mailings. The consumer can come to us – that’s what’s actually so kind of beautiful about the site that we’ve built. We focused on design and usability and recording each of these requests, so we can tell you exactly what day under what name, address pair you made this request. What happens often is they get a new catalog. The name, address pair doesn’t match. Then they could come in and make a new request. countrycasual-cover.jpg Clearly, we will be happy to a group that would help facilitate this conversation and investigate these issues to the degree that they need to be figured out, be a way for the merchant to kind of pass a note back to the consumer and inquire about, you know, are there really two of these people at this household or not. So there’s a whole kinda communication notion that can go on. We’re happy to be a site that helps facilitate that, all towards the mission of improving efficiency and reducing unwanted catalogs. Alan: On your Catalog Choice for Merchants’ page where merchants can sign up, there’s a little piece of copy that suggests Catalog Choice can be used to acquire customers, a little bit of marketing language there. Do you guys see yourself as an environmental organization? Or is there a business angle where you end up helping catalogers acquire names? Chuck: Well, so our mission is very clear. We’re about reducing unwanted catalogs and improving efficiency in the process. If improving efficiency means that someone makes a request for a catalog so that they can get it mailed to them and they can make a purchase and that’s the most efficient, environmentally conscious way to make that purchase, that’s all within our mission. We started our focus as an environmental organization because we wanted to help reduce the waste of unwanted catalogs. As we’ve moved forward in the several months, we’ve also seen ourselves really as a consumer rights organization where we’re trying represent the rights of consumers to make these requests and have these requests fulfilled. We don’t see ourselves as a marketing organization. But to the degree that a consumer or a merchant can come together and form a relationship through our site, that’s where we’re wide open to having that happen. Alan: As an entity, are you a for-profit corporation or a not-for-profit? Chuck: We are a not for profit, 501(c)(3). Catalog Choice is a sponsored project of the Ecology Center. The Ecology Center is a 30‑year‑old, nonprofit organization based in Berkeley, California that’s focused on direct services. The Ecology Center runs the curbside recycling program in the city of Berkeley and surrounding communities. We have trucks that go around every day picking up recycling. We would much rather reduce the amount of waste that enters the cycle by letting consumers kind of make these requests. Alan: That’s 501(c)(3) is comforting. Looking at other people in the space, for example, ProQuo, they're a venture-backed entity. If you go to their job pages and look at the type of folks they’re hiring, you can see they’re much headed into profiling, data compilation, very different direction, taking a for-profit marketing angle. Nothing wrong with a marketing angle. That’s the industry I’m in, but it seems that if a company had those two missions at once, that there’s kind of a split personality going on. It’s pleasant to hear that you guys are a not-for-profit entity. Chuck: Right. We are a not-for-profit entity. We’ve been funded by a series of foundations. To make it clear, we do have an imperative to have the site be, you know, self sustaining over time. So we’re looking at ways where we can supplement the foundation revenue we get with other forms of revenue that clearly meet our mission of reducing unwanted catalogs. landsend-cover.jpgAlan: But there’s no VC money floating around? No sister for-profit company that’s operating with the team? Again, you are really an environmentally organization at the root. Chuck: Yes. The way it is right now is we have a series of foundations who have funded us to get it to this point. Our mission is clear. Our mission is straightforward. It hasn’t changed and it won’t change going forward. Alan: Giving you the last word, Chuck, if consumers or merchants want to learn more, what should they do next? Chuck: So if they want to learn more, go the site, catalogchoice.org. Take a look at it. If merchants want to learn more, you can contact us at [email protected] or you can contact April Smith, who is our project manager from a merchant perspective. April can be contacted at 802‑496‑5547. Our goal is to work in collaboration with the merchant community so that together we can make this work for the merchants and for the consumers. It’s in our interest that together we use kind of a market-based approach to do this rather than other approaches. We think that this will be the best approach for the industry and for the consumers in the long run so that consumers can set their mail preferences and receive the catalogs that they do want and not receive the ones that they don’t want.

Listen to podcast: Chuck_Teller_Interview.mp3

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