The 800-number — for 40 years a part of daily American life — is doomed. Much like what happened to pay phones. And milkmen.
This would be very bad news for phone companies, which rake in $12 billion a year from toll-free numbers.
The 800-number’s destiny first occurred to me a couple of months ago as I stood outside a neighborhood hardware store looking at Weber gas grills. On each grill was a sticker that said if you have any questions, call this 800-number.
Clever, right? Just about anyone who is out looking at Weber grills is probably carrying a cellphone. And a Weber call center person no doubt can explain the grill better than a part-time hardware store clerk, assuming the Weber call center person is not a subcontractor in Mumbai who is also taking calls on the other line about doggy diapers.
Except there’s something odd about this equation. Just about everyone who has a cellphone has a flat rate package for local and long-distance calls. In other words, as I stood there with my phone, there really would’ve been no difference whether I called a toll-free 800-number or a "toll" 847 area code number at Weber’s headquarters in Palatine, Ill. Both calls would’ve cost me essentially nothing.
But if I call Weber’s 800-number, the call costs Weber at least a few cents a minute. Those calls add up to millions of dollars a year for a company like Weber.
Huh, I thought. Why would a company spend all that money it didn’t have to spend?
That lingered until, a couple weeks later, Mike McCue, the CEO of Tellme, came by our offices. Tellme makes many of the voice-recognition systems you might run into on the phone — such as when you call
411, or an airline, or Domino’s Pizza, and get a computer-generated voice that tries to help.
Tellme’s next generation of services, McCue says, will be through a single button on mobile phones. So instead of dialing 1-800-DOMINOS to find the nearest pizza outlet, you’d push a button on the phone and say, "Pizza." And then the phone’s screen would show a list of pizza places in your area. Click on one, and the phone would dial it. If you just said, "Domino’s," the phone would show the nearest Domino’s and dial it.
That kind of service will be another reason a business such as Domino’s or Weber would not need to spend money on an 800-number. If I’d had one of these phones — which are going to start appearing at the end of 2006 — at the hardware store, I would’ve just pushed the button and said, "Weber." I would’ve been connected to that nice grill expert in Mumbai.
Tellme’s type of service — and certainly others will offer similar services — would also threaten the thriving industry of vanity 800-numbers, such as 1-800-PUP-POOP, which belongs to a company called Scoop Masters, "Tampa Bay’s premier dog waste removal service." (Sorry, I seem to be in a pet waste sort of mind-set.)
"If you can pick up the phone and say, ‘Flowers,’ it breaks the 1-800-FLOWERS issue," McCue says.
He ticks off all the forces lining up against 800-numbers. It’s not just cellphones. Most home phone plans these days bundle local and long-distance calling into a flat rate — so calling an 800-number from a home phone isn’t any more free than calling a regular number. Same thing with the growing number of Internet calling plans.
Then there’s the Web. Calling an 800-number and getting routed into voice menus or waiting forever for a live person has persuaded a lot of people to go to a company’s website first. And companies are finding better and cheaper ways to connect with consumers right through their websites — like with IM-style chat help or "push to talk" buttons from Skype and others.
At some point, this will reach a tipping point. Companies will decide they no longer need an 800-number to allow the vast majority of consumers to reach them. When you add it all up, the toll-free-number industry "is just going to collapse," McCue says.
Now, it’s important to note that this hasn’t happened yet, and not everyone agrees with McCue. A just-out report from Insight Research says that "Web-enabled customer services are not displacing toll-free customer services." A graph shows toll-free revenue increasing slightly through 2009.
The analysts at TNS Telecom have a little less sanguine view. They note that the average amount spent monthly by businesses on toll-free numbers dipped about 2% from 2004 to 2005. However, TNS Senior Vice President Charles White says, "Despite the varied ways for firms to receive inbound communication, toll-free service continues to be a trusted option for many firms."
Which, I’m sure, is true. There was also a time when an analyst could’ve said, "Despite the introduction of gasoline-powered tractors, horse-drawn plows remain a trusted option for many farmers."
No doubt the 800-number — introduced in 1967 — will have its place for a while. The forces coming to bear on it are still in a reasonably early stage.
Plus, the 800-number has one distinct advantage: its hold on the consumer psyche. "It does indicate ‘free,’ " McCue notes. If the number to call on the Weber grill had started with 847 instead of 800, would I have been as willing to dial it? Maybe not. Or at least I would’ve thought twice. And a company like Weber can’t yet take the chance that I might not call because I think the connection will cost me.
But give it time. It will sink in for the majority of us that all calls are the same cost. And businesses will start asking why they’re paying these toll-free-line bills or renting a vanity number from some firm such as Dial 800 — a company that licenses 1-800-DUMPSTER to Waste Management for $99 a month and 11 cents per minute per call.
Then a $12 billion industry is going to slip the way of radio dramas.