Thursday, October 20, 2005
Interview Free411 SVP Tom Latinovich
Q: 1.) What exactly is Free 411 and what does it do?
A: We provide free, telephone based directory assistance via 1-800-FREE411. The service works for cell phones as well as traditional land lines. We are entirely free to the consumer. By comparison, the average 411 call costs $1.25 when placed through the phone companies and can be as expensive as $3.50. So, if a consumer calls 1-800-FREE rather than dialing 411, they can save as much as 50 cents for each additional digit they press.
Our service is paid for by businesses that sponsor individual yellow pages categories. The businesses pay us only when we connect live, interested consumers with them.
Here is an example of how it works. Say a consumer calls looking for their local Pizza Hut. While we search for the requested listing, we might offer an instant offer (think of it as a virtual coupon) from a competing pizza merchant, like Domino’s. The messages are very short and are directly related to the request that the consumer is making.
Q: What happens when there isn't an advertiser for a particular keyword or category? Who foots the bill for that call?
A: If we don’t have an advertiser relevant to the search request, we don’t play an ad because it would simply waste the time of the consumer. For instance, if someone calls us to request the number of a plumber because their sink is overflowing, the last message they would want to hear is one that can save them money on their auto insurance. By contrast, if we can recommend a merchant that will give them $50 off on their plumbing service, the consumer gets value in addition to the free lookup we performed.
Additionally, we don’t advertise against our residential listings, but we think that providing the entire range of directory assistance is important to the consumer.
Q: If you have two multiple businesses in the same yellow pages category, how do you determine whose to play? Is it a bid model?
A: Great question. It’s not a bid model. We use a fixed rate card so that merchants can accurately budget their lead generation activities. In the case of multiple merchants in a yellow pages category, we play the advertisement that best resonates with the consumers. For instance, if one plumber is offers a 50% discount and the other is giving a 10% discount, all other things being equal, the advertisement for the plumber offering a 50% discount ought to experience a higher response rate. Correspondingly, that merchant will be given priority within our system. Essentially, we let merchants determine their placement through the value they offer to the consumers.
Q: Have you had any issues with not recognizing the words a caller is searching for?
A: We use a combination of speech recognition and live operators. If we can’t immediately interpret the user’s request, we transfer the call to a live, US based agent. Our success rate, using the combination of speech recognition and live agent back-up is near 100%, as long as the number is available.
Q: Do you have any partners using your pay per call technology already?
A: Yes, we have over 35,000 merchants in our network, including many prestigious national companies.
Q: What, if any, patents or intellectual property have you developed to secure your position in the directory assistance market?
A: That’s a great question. Our intellectual property is a central component to our strategy. Having lived this market for the last several years, we know which business models work, and which ones can’t work. Our intellectual property provides very broad protection.
Q: Where are you based?
A: Headquarters is Boston, MA. We also have offices in the Bay Area.
Q: How do you handle call fraud?
A: Obviously, this is a huge problem in the online world of clicks. We go to great lengths to protect our merchants from the equivalent of “click-fraud� through several measures. First, we don’t charge for multiple calls from the same phone number over a 7 day period. Secondly, we don’t charge merchants for calls under 30 seconds.
Q: Who are your competitors in the free directory assistance market? In the pay per call market?
A: Online search and Internet yellow pages are competitors in that they provide phone numbers for free on the Internet. Nevertheless, their’s is a different distribution medium, so some companies you might initially deem competitors are actually potential partners. There are also a few providers who offer phone numbers via SMS including Google (GOOG) and Yahoo! (YHOO). We view SMS more as a feature.
In the traditional telephone world, we occasionally hear rumblings about start-ups interested in a similar model and we expect that others will try over the coming months and years. Given our intellectual property, brand (1-800-FREE411), strategic relationships and consumer satisfaction we know that our sole challenge is to execute our operating plan.
Q: What methods of advertising did you use to initially build up call volume on your system and what methods were the most effective?
A: The word of mouth and press reception has been tremendous. Our call volume and consumer repeat rate has grown each week since our launch. We have a comprehensive advertising campaign with an intriguing viral component coming soon.
Q: Who is funding Free411?
A: We are a venture funded start-up, an announcement about our most recent capital round is coming shortly.
Interview Free411 SVP Tom Latinovich By Jason Dowdell at 01:02 PM
Comments (0)
Subscribe to The MarketingShift Feed
