A win-win situation

Working Assets, a San Francisco-based long-distance carrier, offers its customers a unique opportunity: Make a long-distance call and automatically help save the planet. The 12-year-old company offers subscribers the option of donating 1% of their long-distance fees to pre-approved nonprofit action groups that fall into five categories: civil rights, peace & international freedom, education & freedom of expression, environment and economic and social justice. As of last year, customer donations topped out at $16 million.

Working Assets targets specific consumer groups through direct mailings, by using lists provided by "progressive" publications such as Nation, Utne Reader and Mother Jones. But the company also uses a less traditional method to attract consumers-word of mouth.

"Direct mail marketing is our largest source of acquiring new customers. But at least a quarter of our new business is generated by word of mouth. These individuals tend to be progressive-minded people who believe single actions can actually make a difference," said Robin Lee Greiner, vice president of marketing at Working Assets.

"Word of mouth is one of the best marketing strategies to have on your side, but it's hard to cultivate," said Tom Kiersted, senior analyst for International Data Corp. "Working Assets appears to be doing a good job of this. They're selling brand differentiality in a way that a large carrier could not."

Working Assets has a customer base of 320,000, with users in every state, but the company has stronger numbers in "larger cities like San Francisco, Chicago and Boston, areas that have a higher concentration of liberals," Greiner said. Highly developed urban environs tend to attract a college-educated workforce, often with similar political interests and social leanings, living relatively close to each other. These are ideal epicenters for the word-of-mouth phenomenon that has been key to Working Assets' success. "But there are progressive-minded people in virtually every location, of course," added Greiner.

The company resells service from MCI WorldCom and Sprint but offers rates that are about 1% lower than the domestic calling plans presented by these and other major carriers. Its rate plan is simple: $4.50 a month plus 9 cents a minute.

According to a Working Assets mailer, international rates are like AT&T's One Rate international plan where the customer pays a set rate per country.

But the rates, which are the same or slightly lower than other carriers', are not the primary attraction. Contributing to Greenpeace, the Gay & Lesbian Alliance Against Defamation or Handgun Control Inc. simply by making calls that, presumably, a customer would make anyway is the real draw.

Additionally, Working Assets provides free limited long-distance service, allowing users to directly voice their concerns to business and political leaders. On each bill, the company outlines two current issues, lists contact information and encourages subscribers to call up to twice a day, every day, for five minutes.

Unlike other organizations, Working Assets makes the donations from company revenues, not from profits. "We take 1% off the top before we pay our costs to ensure these non-profit action groups receive consistent donations. The funds we allocate are not based on how high our profits are," Greiner said.

Consumers are generally happy with their carriers. Voice quality and customer care are usually strong across the board, so it is challenging for a carrier to generate a distinct appeal. Is this grassroots, word of mouth marketing fostered by Working Assets a trend?

"With Working Assets, the company wants you to believe that, in addition to their long-distance service, you are buying a good social conscience when you sign up with them. For the larger carriers, this kind of marketing probably wouldn't be an option. As for the smaller carriers, anything is possible. To date, I haven't seen or heard of anyone else targeting this particular niche in this manner. But that could change," said Kiersted.

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