The War on Spam Calls, Volume 1: Follow the Money

Vol #1 of our series on how to fight back against spam calls.

Follow the Money

Let’s face it. You would not be getting any spam phone calls if someone didn’t make some money. A lot of times, spam calls involve a middle-man, a company that will make the calls, get your information, and sell you as a ‘lead’ to the highest bidder. For small business owners, this is often a call that appears to be from your credit card processing company. After a bit of digging it will probably turn out to be another company that claimes it can save you money on credit card processing (unlikely).

Dollar Wad
FreeImages.com/Derek Jones

These types of spam callers typically want to setup a meeting at your place of business, because face-2-face sales is easier than over the phone. They’ll tell you that you are paying fees that are too high, and try and get you to change your provider (Please don’t). Most likely a third-party company, the one that bought the lead from the spammers, will show up at your door.

Spam call cost

Phone calls are cheap, but people are not. The cost of making an automated call is close to $0. The cost of having a machine make the call is probably just a few cents per call, given the amount that needs to be made to get a lead.

Let’s presume a company has to make 1000 calls to get one lead. Let’s assume they can sell that lead for $15, and the cost of the calls is $10. This means their spend is $10 CPM (Cost per Mille = Cost per 1000 events), while their revenue is $15 CPM. A profit of $4. If I were them, I would make as many calls as possible.

If each call takes on average 10 seconds (Because most people hang up), it would take the company 10.000 seconds, or about 3 hours to make the calls (Of course they make a lot at the same time, but if we add it up that’s what it would take). Their cost would be about $0.06 per minute. Their revenue would be about $0.09 per minute, and of course a profit of about $0.03 per minute. Each call would cost them $0.01, and make them $0.015, a profit of $0.005

If the cost of the calls would exceed $0.09 per minute, they would start to lose money and be forced to stop, or get higher bids for their leads.

Continue reading this article in Volume 2: Hang on, just a second