Direct Marketing In Spain

A Hot Tip about Reaching the Consumer in Spain

Posted on: 24 Feb 2010

 

SPAIN

The different sub sectors of direct marketing are feeling the impact of expanding ecommerce. Some have already been absorbed by e-commerce, and currently many activities previously performed via telephone or regular mail are conducted via Internet.

 

The telemarketing sub sector employs 48,000 permanent employees and is the sector that generates the most positions for the disabled. Banks, insurance agencies, and public administration are the leading consumers of telemarketing services in Spain.

 

Sales for 2007 are estimated at USD1.4 billion, mainly fueled by the proliferation and success of call centers. The sector’s future is brightened by increased sophistication in the telephone services offered by Spain’s largest telecom company, Telefonica, as well as competition by a number of new telecom providers. The five main call center operators in Spain control 46 percent of market share.

 

Television direct-marketing companies have been operating in Spain since 1990, when television was opened to private broadcasters. In this time, it has become increasingly popular and profitable.

 

Mail-order market growth has averaged 2 percent over the last 3 years. Most activity in this sub sector has migrated to e-commerce.

 

Trust is an important competitive factor in this market. Direct-marketing firms that are members of the Spanish E-Commerce and Direct Marketing Association (Federación Española de Comercio Electrónico y Marketing Directo) tend to inspire more confidence in the consumer. Membership implies adherence to a number of ethical codes, including a code of self-regulatory rules for electronic advertising.

 

The misuse of personal data is regulated in Spain by the Spanish data protection law, known as LORTAD as well as EU legislation.

 

EUROPEAN UNION

Legislation

A wide range of EU legislation impacts the direct marketing sector. Compliance requirements are stiffest for marketing and sales to private consumers. Companies need to focus, in particular, on the clarity and completeness of the information they provide to consumers prior to purchase, and on their approaches to collecting and using customer data. The following gives a brief overview of the most important provisions flowing from EU-wide rules on data protection, distance selling and on-line commerce.

 

Distance Selling Rules

Distance and Door-to-Door sales The EU’s Directive on distance selling to consumers (97/7/EC) set out a number of obligations for companies doing business at a distance with consumers. It can read like a set of onerous "do’s" and "don’ts," but in many ways it represents nothing more than a customer relations good practice guide with legal effect. Direct marketers must provide clear information on the identity of themselves as well as their supplier, full details on prices including delivery costs, and the period for which an offer remains valid – all of this, of course, before a contract is concluded. Customers generally have the right to return goods without any required explanation within seven days, and retain the right to compensation for faulty goods thereafter.

 

Similar in nature is the Doorstep Directive (85/577/EEC), which is designed to protect consumers from sales occurring outside of a normal business premises (e.g., doorto- door sales) and assure the fairness of resulting contracts.

 

Distance Selling of Financial Services

Financial services are the subject of a separate Directive that came into force in June 2002 (2002/65/EC). This piece of legislation amends three prior existing Directives and is designed to ensure that consumers are appropriately protected in respect to financial transactions taking place where the consumer and the provider are not face-to-face. In addition to prohibiting certain abusive marketing practices, the Directive establishes criteria for the presentation of contract information. Given the special nature of financial markets, specifics are also laid out for contractual withdrawal.

 

Direct Marketing over the Internet

The e-commerce Directive (2000/31/EC) imposes certain specific requirements connected to the direct marketing business. Promotional offers must not mislead customers and the terms that must be met to qualify for them have to be easily accessible and clear. The Directive stipulates that marketing e-mails must be identified as such to the recipient and requires that companies targeting customers on-line must regularly consult national opt-out registers where they exist. When an order is placed, the service provider must acknowledge receipt quickly and by electronic means, although the Directive does not attribute any legal effect to the placing of an order or its acknowledgment. This is a matter for national law. Vendors of electronically supplied services must also collect value added tax (VAT).

 

Read the full market research report


Posted: 24 February 2010

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