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For many years, people have been plagued by cold calls. Cold calls are commonly from companies who handle PPI claims or accident claims on behalf of customers. The aim is to generate leads for sales by calling people to ask if they might have been mis-sold PPI or involved in an accident. But in September, a ban on nuisance calls came into force. It means that consumers will have to opt-in to receive these calls. Those companies who break the rules will be fined up to a staggering £500,000.
Due to persistent calls and text messages, many people have negative impressions of PPI claim companies. However, this negativity isn’t fair for all companies. In fact, many claim companies work hard on behalf of customers, and some of the best PPI claim companies have never cold-called customers.
Yaakov Smith, director of Logican, works with the best PPI claim companies. He knows that big changes are coming to the claims management market, as the PPI deadline is now just 10 months away and the Financial Conduct Authority (FCA) is taking over regulation of these companies in April 2019.
The combination of these two events, plus the cold-call ban, will have an impact on businesses that use this form of marketing to generate leads. What does the future hold for cold-calling companies?
The Impact on Businesses
Telesales was once a predominant method used to generate sales for businesses. However, after a few successful leads and outcomes from cold calling, many companies started persistently calling and texting people to advertise their services. The calls got worse as a Wales-based claims company would take money upfront from consumers to start a claim. Unfortunately, most customers never saw this money again and the company would disappear. In one of the worst cases, a PPI claims company made 75 million calls in four months. This resulted in it being fined £350,000 by the Information Commissioner’s Office.
More recently, individuals have been scamming customers over the phone. Many claim to be from a legitimate, trustworthy company, but this turns out to be a lie and the customers on the other end of the line have been left out of pocket. Some PPI claims companies have offered warnings on its website of these occurrences.
This persistence and the emergence of many scam companies led the government to its decision to impose strict regulation and heavy fines. For those companies who legally call people to generate sales, it will have a significant impact on their business.
But the fact that some consumers may opt-in to receive these calls could be beneficial. With those consumers who like being called about various products or services, it could present a higher chance of converting leads into customers. Focusing on a more targeted market could be just what many of these companies need.
However, it will dramatically change the way some businesses generate leads. So what will they do instead? While television and radio adverts do well to promote brands and spark interest from customers, some may choose to focus on one of the most popular — and effective — forms of marketing: digital.
Any business not utilising Google and other search engines as a valid way to find customers needs to start. Competition might be fierce online, but this is the best place you can find qualified leads. Businesses need to spend time making their website user-friendly and providing customers with relevant and useful information.
How Will PPI Claim Companies Generate Sales?
Many reputable PPI claims companies have used other marketing methods to generate sales. Having a user-friendly and high ranking website is one excellent way to generate leads. Some of the leading claims companies have used this method to generate sales and leads for a number of years.
Others that are just beginning these digital marketing efforts will be falling behind slightly. But, with less than a year until the PPI deadline, competition is high among these companies to attract as many customers as possible before the impending deadline.
The ban on cold calls is welcomed by many members of the public, but for some claims companies, this could seriously hinder their business and profitability.