To reverse a downward trend for 411-based directory assistance (DA) services, BellSouth is conducting a “411 Sweepstakes” whereby callers who register their home telephone numbers qualify to win the keys to a new Pontiac Solstice.

[“You get a car! And you get a car! And you get a car!” Where’s Oprah when you need her?]

There is much anecdotal evidence that the erosion of call volumes from fixed line phones, already estimated at 2% per year, is on a vector to more than double in 2006.

What’s the common first reaction of a regulated monopoly in the face of declining call volumes? Raise the price.

As a result, in the face of rising directory assistance prices, new providers have started offering callers a slew of less expensive (even free) alternatives for retrieving phone numbers, addresses, driving directions and other local information that supports communications, transactions and local commerce.

Since the introduction of these free alternatives to 411 services from Jingle Networks (1-800-Free411) and InFreeDA (1-800-411Metro) and others, incumbent Directory Assistance service providers have (rightfully) grown concerned that the loss of frugal frequent callers may be permanent.

Conducting a sweepstakes is a highly visible way for BellSouth to promote its traditional service to 411 users while attracting other prospective users who are game to try something different. In the United Kingdom, where Directory Enquiry services through the 118 XXX abbreviated dialing plan were made competitive two years, service providers learned relatively quickly that intense advertising can drive call volumes. InfoNXX’s The Number (118 118), for instance, benefited greatly from intense advertising at the time of transition – an easy-to-remember number reinforced by frequent, catchy advertisements made for a very successful product launch.

Call volumes vary widely based on the frequency of advertisements. In other words, calling directory assistance/query services is a media-driven business, much like any premium rate service over the telephone. The benefit of driving more callers to its high-priced 411 service well exceeds the cost of the advertising and offered new car prize.

In an interesting move, many customers of BellSouth’s sister company, Cingular Wireless, received a “free SMS” message promoting the use of text messages to 46645 (or GOOGL) to launch queries to Google. In an anonymous, unsolicited text message, Cingular suggests entering the queries “by city, state or zip.” Though Cingular loses shared revenue that could have been gained through a DA call, it gains upwards of $0.20 of pure revenue for the inbound and outbound SMS required to facilitate this transaction.

Free access to listings and associated information is ready to rule the day. Advertising and promotional gimmicks may serve to provide short-term life extension, but it is unlikely to build a base of repeat users that give rise to the sort of annuity that DA services had been in the past. On the positive side, market managers will be able to measure the “bounce” in call volume that results from an attractive sweepstakes offering. This information will be invaluable in a market that is poised to grow more competitive as new entrants vie for “earballs” and “call-throughs” under massively changed business rules of engagement.

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