Market Access Denied


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published July 9, 2003

Having access to customers and markets are a key ingredient to healthy businesses and economies.

Nohria, Joyce, and Roberson, authors of “What Really Works”, report the key strategic reasons for mergers and acquisitions are (1) to gain access to customers and (2) to leverage existing access to customers. Building new routes to markets or leveraging existing routes are fundamental aspects of individual business growth strategies.

Likewise, the US economy grew after building the railroad infrastructure, the highway infrastructure, and more recently the internet infrastructure. Each of these infrastructures helped the economy by enabling businesses to access their markets.

On October 1, when the FTC fully implements the “Do Not Call”, the route to market for many companies will be sharply curtailed.

I will agree that telemarketers can be an annoyance. When attempting to relax with my spouse or, more often, while conducting research for a business article, the telemarketer calls to pitch a new credit card or mortgage. I find the intrusion unwelcome.

However, we also have to consider the “Do Not Call” Registry from the perspective of our economy. Unfortunately, we should anticipate it will have large and negative effects.

With the recent announcement of the ability to list your number at the FTC “Do Not Call” registry, the $80.3 billion telemarketing industry that was growing at 6.9% per annum will soon shrink by a likely 30%. That’s a $24 billion contraction in one sector. While it may be small peas in comparison with our $10.6 trillion economy, it will be felt.

Furthermore, though telemarketing may be unpleasant, it grew because it worked. For some markets, telemarketing was the most cost efficient route to market. As this route to market is closed, industries that have relied upon it will soon face greater barriers to creating new customers. They will have to seek other routes to market that are less cost efficient.

For instance, tobacco and liquor companies are limited in their access to broadcast media. Rather than closing shop, they turn to billboards and magazine adds to communicate their message. Similarly, closing market access through telemarketing or firms that once practiced telemarketing will likely place greater emphasis on traditional advertising and direct mail. Perhaps it will force the creation of many small outlets and kiosks for the good and services that used to be sold over the telephone. These routes are either less effective or more expensive. The long-term result will most likely be a price increase to cover the added costs of alternative marketing efforts coupled with a demand decline.

Limiting market access is an odd choice for a free-market, capitalistic country. As for myself, I registered our household at

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About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.